By and  on April 6, 2010

WASHINGTON — The green movement may lead to stricter regulations for textiles made from bamboo and other products.

As consumer awareness about environmental safety grows, the Federal Trade Commission is paying closer attention to inaccurate labeling and unsubstantiated marketing claims.

“The agency has decided to devote substantial resources to protecting consumers from misleading green claims,” said Michael Davis, an attorney in the FTC’s Bureau of Consumer Protection.

The FTC oversees apparel and textile labels in an effort to ensure that information such as product origin, fiber content and care instructions are accurately represented to consumers.

In August, the FTC charged four companies with selling clothing and textiles that were deceptively labeled as bamboo. The agency said the garments were actually rayon and should be labeled as such. The allegations hinged on the process required to turn bamboo into a soft textile, which requires extensive chemical processing. The FTC charged that the process involved turns the raw material into rayon, a man-made fiber.

The agency also said the chemical processes involved stripped the bamboo of any natural antimicrobial properties and biodegradability and released substantial amounts of pollutants into the atmosphere, which was at odds with green claims made about the products.

The initial case was settled in October, but the FTC subsequently sent a letter to dozens of retailers such as Wal-Mart Stores Inc., Target Corp. and Saks Inc. warning them to review their advertising and labeling practices for eco-friendly textiles.

“Lately we’ve seen a deeper focus on the environmental aspects of this,” said Stephen Lamar, executive vice president with the American Apparel & Footwear Association. “It’s a natural outgrowth. As the consumer is more focused on environmental issues that’s where the FTC goes.”

Canada’s Competition Bureau has also stepped up the monitoring and regulation of fabrics labeled as bamboo.

Some industry experts said the FTC has been increasingly activist under the Obama administration.

“We’re likely to see a much more ramped-up FTC going forward,” said Mallory Duncan, senior vice president and general counsel for the National Retail Federation. “What we’re seeing now is the reemergence of a more activist FTC on the consumer protection side.”

Jonathan Fee, a Washington lawyer who focuses on regulatory issues, said: “I think the FTC felt that this marketing fluff about bamboo just became too egregious.”

The FTC is expected to release an updated policy statement this year that will include specific guidelines for textiles and building materials. The commission publishes “Guides for the Use of Environmental Marketing Claims,” which are commonly referred to as the Green Guides.

The Green Guides are not binding, but provide guidelines for advertisers and marketers to follow in order to help them steer clear of problems, offering a “safe harbor” of sorts, the FTC’s Davis said.

“Part of the concern that the commission had with the bamboo advertising was that it had the green claims,” Davis said.

The FTC has also received other requests to broaden its scrutiny of environmental marketing claims.

In March, the Organic Consumers Association and the Consumers Union, which publishes Consumer Reports, filed a petition with the FTC that urged the agency to take action on “widespread and blatantly deceptive labeling practices” involving organic personal care products. The petition followed a separate complaint filed with the Department of Agriculture’s National Organic Program that contained similar allegations.

Actions taken by other federal agencies have created potential regulatory hurdles related to green issues.

“The growing interest in the environment and sustainability is triggering a lot of regulatory work,” Lamar said.

He pointed to a recent action taken by the Environmental Protection Agency that suggests closer monitoring of greenhouse gases.

Beyond the new regulations that could come from the FTC, the business community is concerned about attempts by U.S. lawmakers to broaden the agency’s rule-making authority. The House passed a financial regulatory reform bill in December that would add enforcement authority for the FTC to assess civil penalties for unfair or deceptive acts or practices.

Retail trade groups argue the bill would give the FTC “unlimited” rule-making authority over myriad retail practices, including advertising, marketing, privacy issues and Internet activity. They are concerned the agency will issue burdensome regulations and will not give companies the option of modifying their practices if they are not in compliance, in lieu of punitive fines.

A spokesman for the House Financial Services Committee said the bill seeks to give the FTC more unencumbered authority to go after the “bad actors” and would not change the oversight function of Congress.

The bill has been slow to move in the Senate, where Sen. Christopher Dodd (D., Conn.) recently released a draft measure that does not include the new rule-making authority for the FTC that is in the House-passed bill.

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