Due to recent court decisions, considerable confusion has been created in the minds of the industry and consumers alike, undermining both the value of origin claims in the marketplace. The government is acting to address this uncertainty, and set rules that the industry can follow and consumers can understand.
Consequently legislation was established by the Commonwealth Parliament to make the legal standing of corporations that make representations regarding the country of origin of goods they supply clearer. The Australian Competition and Consumer Commission (ACCC) regulates the Country of origin claims under the Australian Consumer Law (ACL) that sets regulations for claims such as ‘product of’ and ‘made in’. The ACL replaces previous Commonwealth, state and territory consumer protection legislation in fair-trading acts.
The Australian Consumer Law contains provisions of relevance to country of origin claims made by businesses. (Refer to Appendix A)
Sections 151(1)(a), 151(1)(k) and 155, are offence provisions and make conduct outlined in ss. 29(1)(a), 29(1)(k) and 33 respectively, offences.
Section 29(1)(a) and 151(1)(a), are relevant because a representation as to the country of origin of goods is a representation of the history of those particular goods.
Section 33 and 151 are relevant because a representation about the country of origin may be a representation of the nature, manufacturing process or the characteristics of particular goods.
These provisions cover all forms of representation and imply that businesses must be cautious when making representations about the origin of goods. It is a breach of the sections mentioned above in the ACL for a corporation to make misleading, false or deceptive representation about the place of origin of goods. Usually origin claims are about the country of origin, for example ‘Made in Australia’.
There are four general classes of country of origin representation recognised in part 5-3of the ACL.
General country of origin claims is a provision that covers terms used to indicate origin, for example, ‘Made in Australia’. The general country of origin test is set out in the s.255 (1) item 1, which states that if a representation as to the country of origin of goods meets the following requirements:
(a) The goods have been substantially transformed in that country; and
(b) 50 percent or more of the total cost of producing or manufacturing the goods as worked out under section 256 is attributable to the production or manufacturing processes that occurred in that country; and
(c) The representation is not a representation to which product of/produce of representations or prescribed logo representations apply.
A person does not contravene ss.18, 29(1)(a), 29(1)(k), 151(1)(a) or (1)(k) by reason only of making the representation.
What this means is that goods must pass two tests to qualify for the general country of origin defence. They must be substantially transformed in the country that is the subject of representation and 50 percent or more of the costs of production or manufacture of the goods must be incurred in relation to the processes that occurred in that country. If goods pass both of these tests for a particular country, the manufacturer may make a claim that the goods are made in that country with the full confidence that this claim will not attract liability under the relevant sections of the ACL.
A Federal court case in 1989, Thorp v C.A. Imports Pty Limited , illustrates three important points:
1) Certain simple procedures carried out in a country(in this case Australia) do not qualify goods for the claim ‘Made in Australia’
2) Certain costs, even if incurred before the manufacture of the…