The Federal Trade Commission recently unveiled long-awaited proposed revisions to its Guides for the Use of Environmental Marketing Claims, known as the “Green Guides,” which were last updated in 1998 (available at guidesfrn.pdf). The Green Guides help marketers comply with basic advertising law principles when making “green” advertising claims by ensuring claims are true and substantiated. As part of its revision effort, the FTC relied on public workshops, comments and a study of consumers’ perceptions of environmental claims. Moreover, the FTC has requested public comments on the proposed revisions, through December 10, 2010, after which time the FTC will decide what changes to make final.

We now turn to use of the term “organic” in advertising.

Somewhat surprisingly, the revised Green Guides do not address use of the term “organic” which can be utilized in both agricultural (e.g. food) and non-agricultural (e.g. personal care) products. The FTC notes that another Federal agency, the U.S. Department of Agriculture through its National Organic Program (NOP), already regulates use of the term “organic” in agricultural products, and chooses not to propose duplicative or possibly inconsistent guidance. Under NOP standards, “organic” agricultural products must be produced and handled without using prohibited methods or synthetic substances, except as permitted under specified exceptions. Moreover, companies that produce or handle such products must be certified by an NOP-accredited agent. Products that qualify as “100% organic” or “organic” may use the USDA’s organic seal on their packaging and advertisements.

The USDA does not, however, regulate organic claims for non-agricultural products such as cosmetics and other personal care products. This has left a vacuum, leaving manufacturers of such products without any mandatory regulation. Nevertheless, as “green marketing” becomes ever more present in contexts beyond the grocery store, private organizations, specialty stores, and even courts are calling for formal regulation of “organic” claims.

History of The Organic Food Products Act

The Organic Food Products Act of 1990 (OFPA) authorized the USDA to establish the NOP, and through it promulgate and enforce standards for labeling “agricultural products” as “organic.” By enacting the OFPA, Congress created an exclusive federal mechanism for reviewing synthetic materials and for challenging decisions made by the USDA pursuant to that mechanism. Additionally, the statute created the National Organic Standards Board (NOSB) to advise the Secretary of Agriculture regarding ingredients that should either be prohibited or approved for the National List of ingredients used in manufacture of “organic” products. Since its passage, regulation under the OFPA has traditionally affected only food products.

USDA Application of the OFPA to Non-Agricultural (Personal Care) Products

Within the last decade, the USDA has changed course several times with respect to its role in the labeling of personal care products as “organic,” most recently adopting the position that producers of personal care products are permitted to seek USDA “organic” certification, but are not required to do so (April 2008 Guidance Statement on “Cosmetics, Body Care Products, and Personal Care Products”). Notably, the Statement makes clear that: (1) the FDA does not define or regulate use of the term “organic” as applied to personal care products; (2) personal care products are eligible to receive “USDA Organic” certification on a voluntary basis; (3) the USDA “has no authority over the production and labeling of cosmetics, body care products, and personal care products” that do not contain agricultural ingredients and those that do not make claims of “USDA organic” certification; and (4) personal care products may be certified as “organic” under private labeling standards. Thus, any personal care or similar product that contains or is made up of agricultural ingredients may be eligible for certification as “organic” under the NOP standards, but, in contrast to agricultural products, personal care products are not required to be certified under the NOP, and manufacturers are in fact free to make “organic” claims without any certification whatsoever.

Recent Developments

The NOSB met in November 2009, and voted 12 to 1 to direct the USDA to enforce “organic” labeling standards for personal care products just as they already do for food products. On December 10, 2009, the NOSB made a Formal Recommendation to the NOP that “organic personal care products be recognized explicitly by the National Organic Program to ensure consumers and businesses alike that the products have an unquestioned home in the USDA National Organic Program.” The NOSB urged the NOP to issue a Rulemaking Action and a Guidance Statement on this issue. As part of the Formal Recommendation, the NOSB recommended amendments to the relevant regulation (7 C.F.R. Part 205) to add a definition of a “Personal Care Product” as: “An article intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body or any part thereof for cleansing, beautifying, promoting attractiveness, or altering the appearance.”

After pressure from the courts (All One God Faith, Inc. v. The Hain Celestial Group, Inc., No. C 09-03517 JR (HRL) (N.D. Cal. Dec. 14, 2009 and May 24, 2010)) and several private organizations, the USDA responded in April by issuing a memorandum to the Chairman of the National Organic Standards Board on the issue of “organic” labeling, stating that “[o]rganic labeling on personal care products has been a divisive issue within the organic food industry for many years.” The memorandum discusses the current status of the law with respect to personal care products, and commits the NOP to: (1) collaborate with the FDA and the FTC “to understand the issued associated with the use of the term ‘organic’ in personal care products”; (2) begin to gather information regarding organic labeling of personal care products currently in the marketplace; and (3) consider the NOSB’s recommendations and take them under advisement.

Yet the fervor surrounding this issue has not dissipated, with such organizations as the Organic Trade Association, the National Cooperative Grocers Association, Consumer Union, and the Organic Consumers Association continuing to lobby for mandatory federal regulation of organic labeling claims.

Even retailers are beginning to take matters into their own hands rather than wait for official USDA regulation. In a much-publicized announcement earlier this year, Whole Foods Market announced that all personal care and similar products available for sale in its U.S. stores must become certified as “organic” under the USDA’s NOP standards no later than June 1, 2011.

Future Implications

If the NOSB’s Formal Recommendation is accepted, all producers of personal care products and cosmetics would be required to drop “organic” labels and advertising claims or to reformulate their products to meet the “USDA Organic” standards as defined by the NOP. Manufacturers of personal care products would no longer be permitted to use more lenient private labeling standards to indicate that products are “organic,” and instead would be required to adhere to the stricter standards promulgated by the USDA, seeking official certification through that administrative body only.

Anyone choosing to use the term “organic” in advertising their products must be extremely careful because regulation in this area is constantly evolving. The FTC chose specifically to avoid any guidance around use of the term “organic” in advertising in issuing its proposed revisions to the Green Guides, so it is important for advertisers to stay aware not just of FTC guidance on advertising, but of other regulatory agencies as well.