The Weekly Pulse: 20th – 24th February

What’s HOT in our Regulatory World

What are our clients looking at?

This week’s trending sources in C2P

• Hong Kong (China): Product Eco-Responsibility Ordinance No. 32, Chapter 603, 2009 and Others – Proposed Amendment – (on refining the existing producer responsibility schemes for electrical and electronic equipment, and creating new regulations for disposable plastic products) Bill, February 2023
• Taiwan: Online Shopping Packaging Restrictions, Announcement No. 1121010684, 2023
• Rhode Island (USA): Prohibition of PFAS in Products, House Bill 5673, 2023

What is our Content Team talking about?

Proposed EU Green Claims Directive to Be Published Soon – Leaked Draft Available Online – Emilia Assenza

The draft Directive on green claims is yet to be officially presented by the EU Commission, however, a leaked text is currently circulating online and is available here.

The primary intent of the proposal is to provide uniform rules across Europe specifically dedicated to environmental claims about business-to-consumer commercial practices. The new rules will contribute to fighting greenwashing, by creating a unified framework along with the proposal for a Directive on empowering consumers in the green transition.

Scope

The Directive would apply to all environmental claims on products made available on the market as well as environmental claims made by traders in business-to-consumer commercial practices. The Directive applies to voluntary environmental claims and does not intend to amend any other EU legislation that already establishes requirements in terms of information provided to consumers (e.g. EU Ecolabel).

Definitions

The definition of environmental claim set out in Article 2(o) of Directive 2005/29/EC as amended by [COM(2022) 143final] and the definition of the business-to-consumer commercial practice as defined in Article 2(d) of Directive 2005/29/EC shall apply.

The definitions are as follows:

• ‘environmental claim’ means any message or representation, which is not mandatory under Union law or national law, including text, pictorial, graphic, or symbolic representation, in any form, including labels, brand names, company names, or product names, in the context of commercial communication, which states or implies that a product or trader has a positive or no impact on the environment or is less damaging to the environment than other products or traders, respectively, or has improved their impact over time.
• ‘business-to-consumer commercial practices’ means any act, omission, course of conduct, representation, or commercial communication including advertising and marketing, by a trader, directly connected with the promotion, sale, or supply of a product to consumers.

Further definitions are provided in Article 2 of the draft.

Substantiation of environmental claims

According to the draft, Member States must ensure that environmental claims made as regards products or traders are substantiated based on the methodology detailed in Article 3.

The methodology consists of a product lifecycle assessment method whereby environmental performance is calculated taking into account environmental impacts throughout the supply chain.

Environmental claims are deemed to be compliant if they are based on environmental footprint methods, specifically the applicable Product Environmental Footprint Category Rules (PEFCRs) or the Organisation Environmental Footprint Sector Rules (OEFSRs). The Commission is empowered to adopt delegated acts for the establishment of these Rules.

Communication of environmental claims

Commercial communication of explicit environmental claims must meet the requirements detailed in Article 4, which include:

• Environmental aspects, impacts or performance must be assessed in accordance with Article 3;
• Positive environmental impacts, aspects, or performance shall not be made if they’ve been achieved through a significant negative increase of any other environmental impact or aspect; unless the negative increase is transparently communicated;
• If the environmental claim is related to a final product, and the use phase is among the most relevant life cycle stages, it shall include information on how the user of the product may relevantly contribute to decreasing the environmental impacts of that product in line with the environmental claim;
• Information on the assessment on which the environmental claim is based shall be made available together with this claim (through a weblink, QR code, or equivalent).

A presumption of conformity with some of the requirements is set in case of compliance with PECFRs/OEFSRs.

Environmental Labels

Environmental labels shall be based on certification schemes, complying with Articles 3, 4, and where relevant 6 and 7 as well as with the conditions set out in Article 5.

Existing national or regional EN ISO 14024 type I environmental labeling schemes established by public authorities and voluntary schemes developed under Union law are deemed to comply with the conditions established in Article 5(1). It is prohibited to set up new national and regional type I environmental labeling schemes as of entry into force of the Directive.

Private labeling schemes based on an aggregated score of overall environmental performance are also prohibited. Only labels adopted under EU law or labels substantiated by a PEFCR or OEFSR are allowed. Moreover, a procedure to approve new private labeling schemes by the competent authorities is described.

Specific requirements are set out for comparative environmental claims and environmental claims related to future environmental performance (see Articles 6 and 7).

Enforcement

Finally, the draft outlines the enforcement procedures, including the process to be implemented by Member States for the verification of the substantiation of environmental claims and environmental labeling schemes. Member States are also called upon to lay down the penalties applicable to infringements of national provisions adopted under the Directive.

What are our Knowledge Partners talking about?

Mexico’s Implementation of USMCA Forced Labor Import Ban – Baker McKenzie

After much anticipation since the United States-Mexico-Canada Agreement (“USMCA”) entered into force, on February 17, 2023, the Ministry of Economy published in the Federal Official Gazette an Administrative regulation that sets forth the goods which importation is subject to regulation by the Ministry of Labor and Social Welfare (the “Forced Labor Regulation”), which prohibits the importation of goods produced with forced labor.

The Forced Labor Regulation, which will become effective on May 18, 2023, implements the obligation included in the USMCA to prohibit the importation of goods produced in whole or in part by forced or compulsory labor, including forced or compulsory child labor. The full text of the publication can be found here, and the relevant announcement made by the United States Trade Representative can be found here. This is a significant development that marks the Mexican government’s first step toward implementing the forced labor import ban under the USMCA.

The Forced Labor Regulation provides that the Ministry of Labor and Social Welfare (“MLSW”) may initiate, ex officio or at the request of a private party, a procedure where it will determine if forced labor was used in the production of goods.

To the extent MLSW, following its procedure, determines that certain goods were made with forced labor, such findings (called “resolutions”) will be published on MSLW’s website, under the Forced Labor Regulation, and goods covered by such resolutions will be prohibited from entering into Mexico. We expect further clarifications and guidance to be issued by the MLSW and the Ministry of Economy in the following weeks, which should assist Mexican importers to meet the relevant requirements.

Takeaways

Once the Forced Labor Regulation becomes effective on May 18, 2023, Mexican importers will need to maintain in their files information and documents that duly demonstrate that the goods they import are not covered by the lists on the MLSW website. This means companies should ensure proper implementation of robust and effective due diligence practices, including adopting adequate systems, controls, and training in line with best practices; enhanced traceability and transparency in supply chains; and plans to meet regulator expectations.

Mexico’s implementation of the Forced Labor Regulation may mirror certain aspects of similar, recent developments in the United States and/or Canada (see our previous blogs summarizing such developments here, here, and here). Companies are encouraged to take a holistic approach in their forced labor compliance programs within the USMCA region and coordinate relevant expertise within their organizations.

What are our clients asking about?

“Is the Green Label scheme mandatory or voluntary in Thailand?”

Answer by Chelsea Ní Chuinneagáin

The Green Label is a voluntary environmental labeling scheme.

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This information is based on the most viewed regulations on C2P this month.

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