Consumer product information standard—care labelling of clothing and textile products.
Name of proponent and responsible minister
The Hon. Warren Truss MP Minister for Customs and Consumer Affairs.
Reason for regulation
To ensure appropriate and adequate information for consumers to help them make fully informed purchases regarding cleaning and caring costs and procedures associated with the purchase of clothing and textile products. The regulation will help ensure that:
the life of textile products can be prolonged
products will not be damaged, or damage other products during care treatments
dry cleaners can be clear on appropriate and suitable treatments
the textiles and clothing industry benefits from a high level of certainty regarding liabilities arising under the Trade Practices Act.
Background to the regulation
The care labelling standard is administered by the Department of Industry, Science and Tourism. It was first declared a mandatory consumer product information standard under the Trade Practices Act in 1980. Its most recent version, based on Australian Standard AS 1957-1987 Care labelling of clothing, household textiles, furnishings, upholstered furniture, bedding, piece goods and yarns, was declared in the Commonwealth of Australia Gazette of 20 September 1989.
Review of the care labelling regulation
A review of the current mandatory care labelling standard was completed in June 1997 by a committee comprising the Department of Industry, Science and Tourism and the Australian Competition and Consumer Commission (the ACCC). It was undertaken in accordance with the national Competition Principles Agreement and the Commonwealth Legislation Review Schedule. The review committee considered a range of options for delivering care labelling information and recommended that a mandatory care labelling standard should be retained but that it be made less prescriptive to reduce regulatory burdens on business. Following approval of the recommendations by the then Minister for Customs and Consumer Affairs the Hon. Chris Ellison, the report Review of Care Labelling Regulations under the Trade Practices Act was released in October 1997.
Since the release of the review committee's report Standards Australia has revised the Australian/New Zealand standard on which the mandatory product information standard is based. Australia/New Zealand Standard AS/NZS 1957:1998 Care labelling of textiles has now been published. In addition a range of concerns have been raised by industry and consumer agencies particularly relating to the `prescriptiveness' of the mandatory standard and any proposals to move to symbols alone. Following this a discussion paper was prepared that outlined the approach proposed to be taken by the Department of Industry, Science and Tourism in updating the mandatory standard for care labelling under the Trade Practices Act. Its outline for a revised draft regulation received comment from a number of industry and consumer agencies.
The range of concerns raised by industry and consumer agencies in the course of the review and subsequent discussion paper included:
need for adequate care labelling information
need for mandating provision of care information
prescriptive nature of the existing standard
adequacy of care symbols alone
balance between less prescription and consumer certainty
clarity on which textile products could be appropriately exempted.
Enforcement
The regulation under the Trade Practices Act is enforced by the ACCC. Enforcement is generally limited to checks for presence and adequacy of labelling. Other standards carry a safety or health imperative but as an information standard, care labelling is not given a high priority for enforcement activity. Surveillance undertaken to date has revealed a high rate of compliance.
As a policy body responsible for developing standards which are enforced by the ACCC, this department is mindful to develop practical standards which provide intended benefits to industry and consumers and which are clear and can be enforced by the ACCC. Close liaison with the ACCC was undertaken in the review of this standard.
The ACCC advised that enforcement of this standard will continue in response to complaints of non-compliance. The ACCC has a set of stated priorities to which all discretionary actions are subjected. These are:
apparent blatant disregard for the law
the matter particularly affecting disadvantaged consumers
significant public detriment
successful enforcement, by litigation or other means having significant deterrent or educational effect
an important new issue being involved, e.g. economic or technological change.
Complaints regarding alleged breaches of the care labelling standard are considered on their merits, primarily to the level of consumer detriment involved.
Enforcement options available to the ACCC include administrative resolution, seeking removal of non-complying goods from sale through administrative means or court action, and prosecution. These actions can be taken with all levels of the supply chain, but are generally limited to incorporated businesses.
Given its stated priorities, there is limited likelihood of increased proactive enforcement of care labelling. The high existing levels of compliance indicate that impact of additional enforcement action on compliance costs is likely to be minimal.
The ACCC noted there have been few consumer complaints and supports retention of a mandatory care labelling standard.
Overseas requirements
Since 1 July 1997 textile manufacturers in the United States have been permitted to use specified care symbols in place of written instructions on permanent labels inside garments to indicate a method for properly cleaning them. The Federal Trade Commission (FTC) requires manufacturers to include written information explaining what the symbols mean in swingtags or elsewhere within the garments for the first 18 months that new symbols are in use. The symbols used are those developed by the American Society of Testing and Materials (ASTM).
In Europe there are no mandatory requirements for care labelling of textile products. There is, however, a voluntary code of conduct which encourages industry to use the International Organisation for Standardisation (ISO) symbols for care labelling purposes. It is understood that fibre content labelling is mandatory in many European countries.
The Japanese Industrial Standard for Care Labelling requires use of symbols for washing, chlorine bleaching, ironing, drycleaning, wringing and drying in that order. The symbols vary from those used in the US and Europe.
In Canada, care labelling, presented as either symbols or written words, may be provided on a voluntary basis. The symbols are based on the National Standard of Canada, Care Labelling of Textiles and if used must be in compliance with the Canadian Care Labelling Program under the Textile Labelling Act. The semi-voluntary system is administered by the government. Fibre content labelling is mandatory under the Textile Labelling Act.
New Zealand has adopted Australian Standard 1957-1987 as a mandatory standard. This aligns with the current Australian requirements. It is understood that New Zealand is likely to revise its mandatory standard to adopt the newly amended AS/NZS 1957-1998. It was noted in the course of the consultation process that New Zealand remains opposed to the use of labels that provide care symbols only, and this approach was supported by a number of Australian state governments. Under the Trans-Tasman Mutual Recognition Arrangement the care labelling requirements for both countries should be aligned.
Internationally, it is observed that when care labelling is not required by legislation, fibre content labelling of textile products is required. As explained later in this document, this is not considered to be an appropriate alternative for Australian consumers.
The market failure we are seeking to redress is one whereby consumers may not have adequate information regarding the range of fibres, blends and finishes of textile products to enable them to appropriately care for those products to:
prolong the life of products
retain the appearance of products
not damage articles 'in the wash'
make an informed choice at the point of sale as to whether an article is suitable.
This is a potential market failure because adequate information is currently being provided on textile products under the existing mandatory information standard and it is not known whether suppliers/manufacturers would voluntarily supply it in the absence of the standard. Anecdotal evidence, including information from the Australian Council of Fashion and Textile Industries, suggests that while larger suppliers and those at the high quality end of the market might provide adequate care labels in the interest of quality assurance, many other suppliers would not.
Before the introduction of the mandatory standard in 1980, care labelling information was not widely provided voluntarily. This situation led to the development of the Australian Standard and subsequently the mandatory standard.
Anecdotal evidence also suggests that an absence of care labelling information would have the potential to result in problems for consumers, drycleaners and retailers, with cost of these problems being proportional to value of the garment or textile item concerned.
Overly prescriptive existing regulation
Excessive levels of prescription are contrary to Council of Australian Government (COAG) Principles and guidelines for national standard setting and regulatory action by ministerial councils and standards setting bodies, aimed at reducing unnecessary regulation. COAG specified that regulation should be the minimum required to satisfy regulatory objectives. In this case the regulatory objective is to provide adequate information for consumers.
The current mandatory standard and the latest Australian Standard AS 1957:1998 are prescriptive in the requirement for specific wording contained in tables to the Australian Standard to be used. It is considered that alternative wording could achieve the stated objective.
The new mandatory standard removes this level of prescriptiveness. It does not require specific wording to be used, rather it allows the wording in the tables or words that have a similar meaning. This is a simpler approach and should reduce the need for relabelling imported products, thereby improving international trade and competition.
Any items that are not labelled, that contain labels that are not in English or contain labels that provide care symbols only are currently in need of re-labelling to comply. This would continue to be the case.
It was suggested in the course of the review that a less prescriptive standard could allow labels complying with European and US standards. These standards allow the use of symbols without text. Responses to the review revealed research findings that showed a lack of awareness among overseas consumers concerning meaning of care label symbols. This means that symbols alone does not fulfil consumers' need for information, and there are potential difficulties for consumers in a standard that permits use of symbols without supporting text. To move to a symbols-based system, which would align with international standards, two things need to happen:
The International Organisation for Standardisation (ISO) standard for care labelling would need to be revised so that care labelling symbols contained in it were meaningful and understandable to Australian consumers.
An education campaign to explain care symbols to Australian consumers would need to be developed and implemented.
The department will be working to achieve these aims over the next 3–5 years.
The objective is to ensure that consumers, drycleaners and launderers have information about care procedures and warnings so that:
consumers will be aware of the method and potential cost of caring for products when buying them
consumers, drycleaners and launderers can confidently select correct care treatments
the useful life of articles will be prolonged
products are not damaged by improper care
litigation costs for consumers seeking redress if adequate care labelling information is not provided can be avoided.
The objective of the regulation is also to provide a performance-based standard, which does not impede the flow of goods between Australia and other nations.
A range of options was presented in the review report Review of care labelling regulations under the Trade Practices Act. These have been refined and following feedback on the review further options have been considered. These are summarised and discussed below.
Status quo: retaining the current mandatory standard
Consumers, the cleaning industry and testing laboratories all indicated a view that the information provided on care labels is vital for both consumers and drycleaners, who would suffer considerable damages and costs if clothing and other textile items were not cared for appropriately, due to lack of or inappropriate care information. The existing mandatory standard, however, as noted above can be seen to be overly prescriptive in the level of detail mandated on care labels. The existing mandatory standard is based on Australian Standard AS 1957-1987 and is outdated.
Costs and benefits to consumers
The main cost to consumers is the possibility that labels which conform to the 1987 Australian Standard will not contain the most up to date or appropriate information.
The main benefit to consumers is that the level of information provided on care labels would be maintained, enabling informed choice in the purchase of clothing and textile products and proper care and maintenance of products at home.
Costs and benefits to industry
The main costs to industry are:
the overly prescriptive nature of the existing mandatory standard may add to compliance cost associated with production
the existing mandatory standard is based on a 1987 Australian Standard and is therefore outdated.
The major benefit to industry is that as they are already complying with the standard, they would not need to change their labelling.
Costs and benefits to government
The major cost to government of this approach would be foregone oportunity to simplify the requirements of the standard. As previously discussed, the current mandatory standard and the latest Australian Standard AS 1957:1998 are prescriptive in the requirement for specific wording.
The major benefit to government of this approach is that costs of enforcement would remain small.
No regulation: labelling left to market forces or a voluntary system
There was no expressed desire in submissions to the review for de-regulation. It is unknown whether consumers would exercise their choice on the basis of labelling and reliance on the market to provide the necessary information.
However, care labelling is not mandatory in Europe, the UK or Canada. In these countries voluntary systems based on codes of conduct operate. As well as being voluntary, the standards on which these systems are based require only symbols (but would not preclude use of phrases). It is noted that fibre content labelling is mandatory in these countries.
During both phases of the review of current care labelling requirements there was very little support for a voluntary approach. The following views were expressed:
Textile Distributors Association—did not support a voluntary approach
Institute of Textiles—said 'no chance of being workable'
Standards Australia—no support, industry too fragmented
Drycleaning Institute of Australia—no support for a voluntary approach, said that many suppliers did not use the voluntary standard before it became mandatory to do so
Consumers' Federation of Australia—did not believe a voluntary system was enough on its own
Council of Textile and Fashion Industries of Australia—gave unanimous support to retention of the current arrangement, believed the industry was too fragmented for a successful voluntary approach.
The effectiveness of self-regulation depends on a range of factors, including the size and structure of an industry. The textile, clothing and furnishings industries are fragmented in nature. The industries also produce a wide range of product types, and comprise a wide range of business sizes. Due to this lack of integration the sector is limited in its ability to self-regulate. Self-regulation would require that all sectors within the industry adopting a code or codes of conduct.
Currently such a system would be unable to meet the objective of ensuring that consumers, drycleaners and launderers have adequate information about care procedures and warnings to enable them to select correct care treatments, prolong the life of articles and not cause damage to articles.
It is considered however, that a voluntary system based on use of symbols might be an appropriate goal to work towards in the interest of global harmonisation, over the next five years.
There has been significant work done in the furnishing industry sector by the Furnishing Industry Association of Australia to implement a code of conduct. This may be a useful model on which to base a future assessment of the ability of such industries to successfully self-regulate care labelling.
Costs and benefits to consumers
The major costs to consumers of this approach would be:
If no information were provided, losses to consumers would range from total ruin of a garment or other product, damage e.g. bleeding of the dye in such a way that adjacent products in the wash are also damaged, to shortening the lifespan of goods. It could be significant to individual consumers.
It could become more difficult for consumers to seek redress from suppliers when damage occurred to textile products during care procedures. It would be difficult to prove whether consumers had performed 'reasonable care procedures'. Smaller retailers, in particular, are often less willing to refund or exchange goods if blame is not clear.
The only benefit to consumers is a slight possibility that such products may cost less with compliance costs removed.
Costs and benefits to industry
The main costs to industry of this approach would be:
The burden placed on it to regulate itself/develop codes of conduct, which given the fragmented nature of the industry may be difficult.
Some manufacturers would continue to label products with care instructions in the absence of regulation, as part of their quality assurance, therefore continuing to incur similar costs for labelling.
Without labelling there is likely to be a cost to retailers and manufacturers in increased disputes arising from damage caused to items through use of inappropriate care procedures. The greatest hardship would be suffered by smaller retailers and manufacturers.
The main advantages to industry would be:
possibility of reduced costs of manufacture because lower standards of labelling would be permitted
as there is nothing mandated under this approach it could allow for more innovative behaviour of industry participants.
Costs and benefits to government
The main cost to government lies in not fulfilling its objective promote adequate information for consumers on the care labelling of textile products.
The main benefit to government lies in the transference of responsibility for labelling to industry. This lessens regulatory and enforcement costs.
No care labelling but mandated fibre content labelling
Countries including Canada and parts of Europe have mandated fibre content labelling as an alternative to mandatory care labelling requirements. This has been seen as an alternative to care labelling because for many fabrics knowledge of fibre content indicates appropriate care treatment.
The review considered replacing care labelling requirements with fibre content labelling requirements. However, submissions to the review noted that knowledge of fibre content cannot necessarily be equated with knowledge of care requirements for that fibre, given the range and complexity of modern textile products.
More importantly, this option does nothing to fulfil the requirements of the COAG principles. It simply replaces one form of regulation with a similar form of regulation. The review concluded that care labels were more effective in providing the required consumer information.
The review also considered combining care labelling with fibre content labelling on the one label. However, for both this and the replacement of care labelling with fibre content labelling there is a view that it is inappropriate for the Commonwealth to mandate provision of fibre content information, although provision of fibre content information is mandated by four states. The costs and benefits are therefore not assessed.
Update the mandatory regulations to make requirements less prescriptive
The prescriptiveness of the current mandatory standard and the latest version of the Australian Standard are of concern. The department, in line with COAG principles, wishes only to adopt minimum requirements to achieve regulatory objectives.
The option proposed to achieve the objective of providing adequate care labelling information to consumers and drycleaners represents a lessening of current mandatory requirements.
The new mandatory care labelling regulation is less prescriptive than the existing standard. It adopts the latest version of the Australian Standard AS/NZS 1957:1998 Textiles care labelling, requiring overall compliance with the standard but allowing wording on labels other than the wording prescribed by the Australian Standard as long as the replacement wording has similar meaning. Labels complying with AS 1957:1998 comply with the mandatory standard and in addition scope is provided for other labels to comply as well.
This change creates the possibility of importing clothing and other textile products with acceptable labels into Australia from overseas without relabelling, thereby potentially reducing costs and increasing the range of goods available in Australia. It is recognised that this effect is likely to be small. This proposal also continues to confer the benefits of the current mandatory standard.
It has been suggested during the course of the review that to facilitate harmonisation of requirements with our trading partners in Europe, Asia and America it would be desirable to allow a 'symbols only' approach to care labelling.
At this stage such an approach cannot be supported. In Europe a voluntary code of conduct is in place which allows use of ISO symbols. Research provided to the review indicated these symbols were not well understood by European consumers. If symbols are not well understood, the objective of a care labelling regime, whether voluntary or mandatory, is not met.
It is also noted that ISO symbols have been developed to suit the technology available in Europe such as water temperature indication being a feature of washing machines. This information would not be appropriate or meaningful for Australian consumers, although it is hoped that future revisions to the ISO standard may make it more suitable for adoption in Australia.
In the United States a mandatory care labelling requirement has been in place since 1971. The requirement was recently amended to allow use of symbols developed by the American Society of Testing and Materials, without text. For an 18-month period after introduction of this approach in July 1997 there was a requirement for an explanation of symbols to be provided with textile products on a swing tag. The government also mounted an extensive and costly education campaign to aid consumers' understanding of the symbol system. It would be beneficial to us to evaluate the success of this initiative before implementing similar requirements in Australia.
Harmonisation with international requirements when possible is a priority. However, for care labelling it is not considered the best option at present.
This is because of the inappropriateness of some aspects of current overseas symbol systems for Australian consumers and the considerable cost of implementing a campaign to educate consumers about the meaning of symbols.
Costs and benefits to consumers
There would be no additional costs for consumers.
Major benefits to consumers would be:
Clothing and other textile products are being made from an increasing range of natural and synthetic fibres. Increasing numbers of blends of fibres are also being used. With this variety comes a need for appropriate care procedures for different products, which consumers could not be expected to assess without appropriate care instructions. The new standard addresses this need.
The new mandatory care labelling regulation is less prescriptive than the existing standard, allowing wording on labels other than the wording prescribed by the Australian Standard as long as the replacement wording has similar meaning. This change creates the possibility of enabling clothing and other textile products with acceptable labels to be imported into Australia from overseas without relabelling, thereby potentially reducing costs and increasing the range of goods available in Australia.
The new mandatory labelling standard provides greater clarity at the point of sale, thereby assisting claims settlement and reducing the need for entering into a claims process.
Costs and benefits to industry
The new standard does not place any additional costs on industry above those currently incurred. These costs are associated with supplying a label, ensuring compliance and a slight reduction in competition since some labels on imported products would not comply with the standard.
The main benefits to industry are:
the new standard will simplify labelling requirements and reduce relabelling requirements and therefore reduce the associated cost burden on industry
the labelling requirements lead to clearer delineation of liability in the event of dispute resulting from product failure for both manufacturing and cleaning industries.
Costs and benefits to government
The main cost to government of the new standard will be continued enforcement costs.
The main benefits will be fulfilment of the objective of ensuring adequate information to consumers and in simplifying the mandatory requirements which reduces the burden on industry.
The update to regulations has been adopted as the new Consumer Product Information Standard within the meaning of the Trade Practices Act 1974.
Amendments
AS/NZS 1957:1998 has been adopted as the mandatory consumer product information standard under the Trade Practices Act with variations to make the standard less prescriptive. A copy of the new standard is attached. The latest Australian Standard varies from AS 1957:1987 by including labelling requirements for individual pieces of a suite of furniture and improved labelling for leather and upholstery. In line with COAG principles, certain prescriptive requirements relating to form of the words used on care labels are replaced in the mandatory standard with provisions that offer greater flexibility while maintaining a high standard of care label for consumer clothing and textile products.
It is seen as unnecessarily prescriptive to require specific wording in a product information standard when similar wording may be used which could provide for equally appropriate and adequate information on the label. Therefore when care instructions are prescribed in the Australian Standard according to the actual words to be used on the label, the revised mandatory standard provides that wording that conveys a similar meaning to that which is prescribed in the Australian Standard complies with the mandatory product information standard. The amendments also allow for more flexibility in the size of lettering on labels as long as the care instructions are clearly legible and in English. Symbols may be used provided they are accompanied by words.
Care labelling complying with the requirements of AS/NZS 1957:1998 will comply with the proposed mandatory standard.
Exemptions
In the existing mandatory standard, division 1: particulars of the goods, lists exempt goods. The items listed in the exemptions are those for which it would be impractical or unnecessary to require care labelling to be provided. The list includes such things as footwear (other than hosiery), dish cloths, embroidery thread, surgical bandages and dressings, etc.
The current exemptions have been retained with minor amendment.
The issue of coverage of second-hand goods has also been raised. It is considered appropriate that second-hand goods also be included in exemptions.
The existing mandatory standard also contains a variation from AS 1957:1987 which allows for care instructions to be provided on certain goods in a form other than a permanent label where it would be impractical to place such a label on the goods but where care instructions are necessary. Such goods include hosiery, reversible jackets, gloves, nappies and face washers.
This variation has been maintained, with minor amendments to include such goods as bow ties and hot water bottle covers, in the new mandatory standard.
Care labelling in the main is non-controversial and overall care labelling regulations are considered not to have a major impact on competition.
The proposed new mandatory standard will enhance national competition by making labelling requirements less prescriptive, enabling suppliers to use a greater range of care labels and innovative approaches. The new standard will affect those suppliers that are subject to the requirements of the Trade Practices Act, ie: incorporated bodies and those operating interstate. Other suppliers, such as unincorporated companies, will continue to be subject to state regulations for care labelling, which apply in NSW, Queensland and South Australia. Due to the effect of the Mutual Recognition Agreement, the state regulations do not apply when goods are supplied from other states which do not have care labelling regulations.
Likewise, the less prescriptive nature of the proposed standard may free up international trade by allowing scope for accepting overseas labels that are currently not permitted for use in Australia. It is acknowledged this effect is likely to be small.
The current care labelling regulation is different from comparable overseas regulation, which often requires imported items to be labelled specifically for the Australian market or relabelled before they can be put on the market. This means additional costs per item will be incurred by importers, which reduces effective competition in the market. It may also represent a barrier to trade for countries exporting to Australia.
For Australian exporters, the differences in regulation require providing different labelling for domestic and export markets, which represents a cost to exporters.
The proposed new mandatory standard, in representing a less prescriptive requirement than the current standard, will reduce some of the current costs and slightly increase competition.
Many manufacturers and retailers see good care labels as a means of enhancing quality perception of products. Thus, care labels can be used to promote competition. A more flexible regulation would enhance this competition aspect.
There has been widespread consultation with relevant stakeholders during development of this regulatory proposal including major manufacturers, distributors, retailers, consumer groups and state and territory governments. This included advertising in the national press seeking input.
A review of the mandatory care labelling standard under the Trade Practices Act was completed in June 1997 by a committee comprising the Department of Industry, Science and Tourism and the Australian Competition and Consumer Commission. It was undertaken in accordance with the national Competition Principles Agreement and the Commonwealth Legislation Review Schedule.
The report of the review was released in June 1997, and a subsequent discussion paper was circulated among stakeholders in January 1998 which sought to address certain industry concerns expressed about the report of the review.
Furthermore, relevant stakeholder organisations and industry have also been closely involved in development of the voluntary Australian Standard from which the mandatory requirements will be drawn.
The new regulation has now been implemented. In the first 12 months of implementation the new regulation will provide for a transitional period which will enable existing stock in the marketplace which complies with the current mandatory standard to be sold.
The mandatory requirements will be reviewed within five years from the date of implementation.
The regulation maintains a requirement for care labelling of clothing and textile products and is based on an Australian Standard developed by Standards Australia withindustry, consumer and government participation. The mandatory standard does not place any additional requirements on industry, reduce national competition, or create any additional barriers to international trade. Indeed, it represents an improvement in all these areas by removing prescriptive requirements. The proposed standard is performance-based where practical.
