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Newsletter | August 2015, Issue 2
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ENVIRONMENT
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Pending Legislation: Proposed Amendment to Regulations on Unfair Environmental Labeling and Advertising Guides Companies and Consumers
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The Proposed Amendment to the Environmental Technology and Environmental Industry Support Act (the "Act") is currently pending legislation before the National Assembly.
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On March 20, 2015, as part of the legislative scheme, the Ministry of Environment (“MOE”) held a public hearing on the relevant "Guideline to Determine Unfair Environment-related Labeling and Advertising” (MOE's Public Notification; "Guideline"), and heard opinions from interested parties such as companies and consumers.
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Under the current Act, a manufacturer, a manufacturer-seller, or a seller ("Manufacturer, etc.") is prohibited from engaging in any of the following types of labeling and advertising activity with respect to the environmental nature of the manufactured goods which may deceive the consumer or create false perceptions about the goods:
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false or exaggerated labeling and advertising;
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deceptive labeling and advertising;
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unfairly comparative labeling and advertising; and
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libelous labeling and advertising.
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Manufacturer, etc. that is found to violate the foregoing provisions will be punished by either an imprisonment of 2 years or less, or by a criminal fine of KRW 20 million or less. Moreover, the violating company can also be punished under the vicarious liability theory.
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To date, there has not been a clear guideline that indicates what types of labeling and advertising would be regarded as being unfair. This Guideline, which is scheduled to be legislated shortly, provides not only relevant examples, but also specific standards to determine unfairness in the following types of labeling and advertising:
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comprehensive environment-related matters;
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third-party authentication or self-authentication;
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non-containing;
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substance reduction;
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carbon emission reduction and carbon offset;
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recyclable elements;
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new and renewable energy and substance; and
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reduction of environmental pollution.
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It is expected that the Guideline will greatly help companies make labels and advertisements with increased foreseeability as to what would constitute unfair labeling and advertising.
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Additionally, we note that the Proposed Amendment also allows the MOE to impose administrative fines against unfair environment-related labeling and advertising. Thus, upon the enforcement of the Proposed Amendment, MOE may actively conduct investigations against unfair environmental labeling and advertising.
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