30/03/2009 - 14:23

Director banned after misleading claims

30/03/2009 - 14:23

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The Federal Court has imposed a five year injunction on a former SeNevens International director for knowingly engaging in misleading conduct.

The Federal Court has imposed a five year injunction on a Perth woman and former director of nappy company SeNevens International for knowingly engaging in misleading conduct.

 

The announcement is below:

 

The Federal Court of Australia has declared that a director who approved her company's advertising had been knowingly concerned in the company's misleading conduct.

Ms Charishma Seneviratne, while a director of SeNevens International Ltd, approved the company's claim that the whole of its Safeties Nature Nappy product was biodegradable, when she knew that was not the case.

Justice Marshall has imposed a five year injunction on Ms Seneviratne restraining her from being party to any nappy biodegradability claims without first having received independent scientific testing of the product being promoted.

ACCC Chairman, Mr Graeme Samuel said: "This case serves to emphasise that directors cannot hide behind their companies. If a director or employee is knowingly concerned in their company's misleading conduct, then those individuals also risk personal fines and injunctions.

The Federal Court had previously declared that the company had engaged in false or misleading conduct by making representations that the Safeties Nature Nappy was '100% biodegradeable'.

Claims that the whole of the nappy, including nappy disposal bags, were biodegradable were made on the product packaging, in promotional material and on SeNevens' website.

Justice Marshall had previously declared that the biodegradability claims were false and misleading because SeNevens' Safeties Nature Nappy range contained plastic components that are not capable of being broken down by the biological activity of living organisms.

Senevens marketed its '100% biodegradable' nappy and nappy disposal bag in Western Australia from November 2006 before expanding to all Australian States and the ACT in March 2007. SeNevens withdrew the product from sale in April 2008 after the ACCC's investigation into the claims.

Justice Marshall found that in making the claims SeNevens contravened sections 52 and 53 of the Trade Practices Act 1974 by engaging in misleading conduct about the biodegradability of its Safeties Nature Nappy. Justice Marshall imposed injunctions on SeNevens restraining it from engaging in similar conduct and ordered that SeNevens publish a corrective advertisement and establish a trade practices compliance program.

Justice Marshall has ordered the respondents to pay the ACCC's costs of the proceedings.

"Consumers are actively choosing products that are environmentally friendly. If a business makes biodegradability claims then it must ensure the claims are supported by rigorous scientific evidence."

Consumer concerns about the veracity of green marketing claims have led the ACCC to develop Green Marketing and the Trade Practices Act, a publication providing guidance for consumers and business on environmental claims in advertising. This publication can be downloaded from the ACCC's website.

SeNevens International Ltd has changed its name and now trades as Eco Quest Limited.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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