Key Point

  • Unless the draft Standard is adopted into legislation, very little will change.

Perhaps surprisingly the use of the word "organic" is not explicitly regulated in Australia. Whether an "organic" claim is permissible will depend upon whether or not that claim is misleading and deceptive, in accordance with sections 52 and 53 of the Trade Practices Act 1974.

While there is no strict legal definition of the word "organic" there are a number of standards that a court or regulator would likely take into account when determining whether an organic claim was misleading and deceptive. The first is AQIS' National Standard for Organic and Bio-Dynamic Produce , with which exported products are currently required to comply. The second is standards used by private organic certification bodies. These standards are used by the certification organisations in administering their certification schemes. Examples of such certification schemes include Australian Certified Organic (the certification arm of the Biological Farmers of Australia), the National Association for Sustainable Agriculture Australia, and Organic Growers of Australia.

Whilst there is a large degree of overlap between these standards there are differences, leading to a potentially confusing situation for industry.

Currently, in the absence of any binding standard the simplest way to substantiate a claim that a product is organic would be to obtain certification, and indeed, for exported product the AQIS standard imposes a requirement that the product be certified by an approved certifying organisation.

The draft Standard

On 21 July 2008 Standards Australia released the draft Australian Standard for Organic and Biodynamic Products for public comment. Submissions closed on 22 September 2008.

According to Standards Australia the draft Standard:

  • Provides a national, consistent framework for the organic industry from the paddock to point of sale;
  • Sets out minimum requirements for growing products which can be labelled as "organic", "biodynamic" or "in-conversion";
  • Provides clear definitions about what is organic and what is not;
  • Protects consumers against unsubstantiated claims and misleading labelling;
  • Protects growers against misinterpretation and misleading use of organic agricultural practices and the term "organic";
  • Provides a guide for farmers considering conversion to organic farming.

Likely impact

Despite Standards Australia's lofty statements we suggest that as a practical matter unless the draft Standard is adopted into legislation that very little will change. The draft Standard, when finalised, will be voluntary and so does not alter the regulatory framework surrounding organic claims - rather it will be yet another standard that courts and regulators such as the ACCC will take into consideration when considering whether a claim is misleading.

Certainly the development of a national standard appears to be supported by the ACCC, with the ACCC Chairman, Mr Graeme Samuel saying.

"Many consumers actively seek out and are prepared to pay a premium for organically produced products. Many farmers also make a significant investment to grow and differentiate organic produce. The development of a national standard will benefit both consumers and producers by enhancing the opportunity for informed choice."

However, we will have to wait and see whether the ACCC will endorse the draft Standard once it is finalised.

Additionally, were a decision made to formally regulate the use of the term organic it seems likely that the draft Standard would form the basis of any legislation/regulation. However, in the short term the draft Standard is unlikely to have much impact on industry.

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