The following text reproduces: ISO. 1998. Environmental labels and declarations- General principles. ISO 14020, Geneva

Environmental labels and declarations are one of the tools of environmental management, which is the subject of the ISO 14000 series.

Environmental labels and declarations provide information about a product or service in terms of its overall environmental character, a specific environmental aspect, or any number of aspects. Purchasers and potential purchasers can use this information in choosing the products or services they desire based on environmental, as well as other considerations. The provider of the product or service hopes the environmental label or declaration will be effective in influencing the purchasing decision in favour of its product or service if the environmental label or declaration has this effect, the market share of the product or service can increase and other providers may respond by improving the environmental aspects of their products or services to enable them to use environmental labels or make environmental declarations, resulting in reduced environmental stress from that product or service category.

This International Standard establishes guiding principles for the development and use of environmental labels and declarations. It is intended that other applicable standards in the ISO 14020 series be used in conjuntion with this International Standard.

Where other International Standards provide more specific requirements than ISO 14020, such specific requirements take precedence.

This international Standard is not intended for use as a specification for certification and registration purposes.

NOTE: Other international Standards in the series are intended to be consistent with the principles set forth in this international Standard. Other standards currently in the ISO 14020 series are ISO 1402. ISO 14024 and ISO 14025. (see Bibliography).

For the purposes of this International Standard, the following terms and definitions apply

claim which indicates the environmental aspects of a product or service

NOTE: An environmental label or declaration may take the form of a statement, symbol or graphic on a product or package label, in product literature, in technical bulletins, in advertising or in publicity, amongst other things.

2.2 Life Cycle

consecutive and interlinked stages of a product system, from raw material acquisition or generation of natural resources to the final disposal

[ISO 14040:19971]

The overall goal of environmental labels and declarations is, through communication of verifiable and accurate information, that is not misleading, on environmental aspects of products and services, to encourage the demand for and supply of those products and services that cause less stress on the environment, thereby stimulating the potential for market-driven continuous environmental improvement.

All the principles set out in 4.2 to 4.10 are applicable to all environmental labels and declarations.

Where other International Standards in the ISO 14020 series provide more specific requirements than ISO 14020, such specific requirements shall be followed.

Environmental labels and declarations shall be accurate, verifiable, relevant, and not misleading.

The usefulness and effectiveness of environmental labels and declarations depend upon the extent to which they convey reliable and meaningful information about the environmental aspects of a product or service. Environmental labels and declarations shall provide accurate information about the environmental aspects of a product or service. The factual and technical basis for environmental labels and declarations shall be verifiable. Environmental labels and declarations shall provide information that is relevant; they shall address only nontrivial environmental aspects related to the actual circumstances of natural resource extraction, manufacture, distribution, use or disposal associated with the product or service. A periodic review of the basis for environmental labels and declarations should occur to account for innovation, information should be gathered at a frequency consistent with the pace of innovation. Environmental labels and declarations shall be understandable and not likely to mislead the intended purchaser of the product or service.

Procedures and requirements for environmental labels and declarations shall not be prepared, adopted, or applied with a view to, or with the effect of, creating unnecessary obstacles to international trade.

For guidance on the above principle, the applicable provisions and interpretations of the World Trade Organization should be taken into account.

Environmental labels and declarations shall be based on scientific methodology that is sufficiently thorough and comprehensive to support the claim and that produces results that are accurate and reproducible.

The information supporting environmental labels and declarations shall be gathered and assessed using methods that are recognized and widely accepted in scientific or professional disciplines or are otherwise scientifically defensible. The methods should follow recognized standards that have international acceptability (these may include international, regional or national standards) or be industry or trade methods which have been subjected to peer review, where such standards or methods exist. The methods used shall be appropriate to the claim and shall provide information that is relevant and necessary to support the claim as well as accurate and reproducible.

Information concerning the procedure, methodology, and any criteria used to support environmental labels and declarations shall be available and provided upon request to all interested parties.

The information shall include underlying principles, assumptions and boundary conditions. This information should be sufficient and reasonably comprehensible to allow purchasers, potential purchasers and other interested parties to evaluate and compare environmental labels and declarations in terms of scientific principles, relevance and overall validity, and to assess whether an environmental label or declaration is consistent with the applicable standards within the ISO 14020 series. This information shall also clearly indicate whether the environmental label or declaration is a self-declared environmental claim or is based on independent validation.

The means of obtaining this information shall be made known to purchasers and potential purchasers wherever the product or service is marketed. This can be achieved by the various means discussed in 4.10. There may be limits to the availability of specific information due to confidential business information, intellectual property rights or similar legal restrictions.

The development of environmental labels and declarations shall take into consideration all relevant aspects of the life cycle of the product.

The life cycle of a product or service ranges from activities associated with the production and delivery of raw materials or generation of natural resources to the final disposal. Consideration of the life cycle of a product or service allows a party developing an environmental label or declaration to take into account a range of factors that impact on the environment. It further allows that party to identify the potential for one impact to be increased in the process of decreasing another.

Consideration should be given to the life cycle of a production or service in order to help identify appropriate and relevant characteristics and criteria for environmental labels and declarations or to determine the significance of an environmental claim. The extent to which the life cycle is considered may vary depending on the type of environmental label or declaration, the nature of the claim and the product category.

This does not necessarily mean that a life cycle assessment should be undertaken.

Environmental labels and declarations shall not inhibit innovation which maintains or has the potential to improve environmental performance.

Requirements shall be expressed in terms of performance rather than design or descriptive characteristics. This approach leaves maximum flexibility for technical or other innovation. Prescriptive design criteria or implicit preference for a technology should be avoided because of the possibility of restricting or discouraging improvements in products or services which do not affect conformance to applicable environmental criteria or which could lead to significant environmental improvement.

Any administrative requirements or information demands related to environmental labels and declarations shall be limited to those necessary to establish conformance with applicable criteria and standards of the labels and declarations.

All organizations, regardless of size, should have equal opportunity to use environmental labels and declarations. Involvement should not be hindered by extraneous factors or requirements such as procedural complexity or unreasonable information or administrative demands.

The process of developing environmental labels and declarations should include an open, participatory consultation with interested parties. Reasonable efforts should be made to achieve a consensus throughout the process.

The process for developing standards and criteria shall be open to all interested parties. The parties shall be invited to participate and encouraged to become involved through timely and adequate notification. Parties may choose to participate directly or through other means such as written or electronic correspondence. Comments and input shall be responded to in a meaningful way that addresses the substance of the comment or input. For self-declared environmental claims developed in accordance with ISO 14021, consultation is regarded as having occurred during the development of that International Standard.

Ultimately, the effectiveness of environmental labels and declarations depends on their ability to enable purchasers and potential purchasers to take responsibility for, and make informed choices about, the environmental aspects of their purchasing decisions and to influence purchasers and potential purchasers in their selection of products or services. This, in turn, is related to the degree of acceptance and understanding purchasers and potential purchasers have of the information provided about environmental aspects.

Therefore, parties using environmental labels and declarations have an incentive and a responsibility to provide their purchasers and potential purchasers with access to information so that the purchaser and potential purchaser may understand the meaning of any claim, symbol or term. This can be accomplished through various means, such as advertising, explanatory panels at the retail level, free telephone numbers, and education programmes, among others. The information provided shall be appropriate and sufficient to the nature and scope of the environmental claim being made.

ANNEX 1²

TERMS AND THEIR DEFINITIONS FOR THE PURPOSE OF THIS AGREEMENT

The terms presented in the sixth edition of the ISO/IEC Guide 2: 1991, General Terms and Their Definitions Concerning Standardization and Related Activities, shall, when used in this Agreement, have the same meaning as given in the definitions in the said Guide taking into account that services are excluded from the coverage of this Agreement.

For the purpose of this Agreement, however, the following definitions shall apply:

1. Technical regulation

Document which lays down product characteristics or their related processes and production methods, including the applicable administrative provisions, with which compliance is mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements as they apply to a product, process or production method.

The definition in ISO/IEC Guide 2 is not self-contained, but based on the so-called "building block" system.

2. Standard

Document approved by a recognized body, that provides, for common and repeated use, rules, guidelines or characteristics for products or related processes and production methods, with which compliance is not mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements as they apply to a product, process or production method.

The terms as defined in ISO/IEC Guide 2 cover products processes and services. This Agreement deals only with technical regulations, standards and conformity assessment procedures related to products or processes and production methods. Standards as defined by ISO/IEC Guide 2 may be mandatory or voluntary. For the purpose of this Agreement Standards are defined as voluntary and technical regulations as mandatory documents. Standards prepared by the international standardization community are based on consensus. This Agreement covers also documents that are not based on consensus.

[1] ISO 14021, Environmental labels and declarations � Self/declared environmental claims³.

[2] ISO 14024, Environmental labels and declarations � Environmental labelling Type I � Guiding principles³.

[3] ISO 14025, Environmental labels and declarations � Environmental labelling Type III � Guiding principles procedures³.

[4] ISO 14040, Environmental management � Life cycle assessment � Principles and framework.

[5] ISO/IEC Guide 2, General terms and their definitions concerning standardization and related activities.

[6] ISO/IEC Guide 59, Code of good practice for standardization

The key point of reference for discussion of this Item has been the WTO Agreement on Technical Barriers to Trade (TBT) and its relationship to environmental regulations and voluntary standards. Discussions focused on environmental labelling (eco-labelling) schemes/programmes and measures and their relationship to the provisions of the TBT Agreement⁴. Considerable empirical and analytical work was done by the GATT EMIT Group in this area, covering not only eco-labelling but also environmental packaging and waste handling requirements. That work has been recalled, and some stressed their continued interest in taking up again the analysis on environmental packaging, waste handling, and related requirements.

Discussions on eco-labelling have been enriched by presentations of several existing eco-labelling schemes/programmes at a joint informal session of the CTE and the TBT Committee⁵. Those presentations illustrated the variety of approaches that have been adopted towards eco-labelling by WTO Members and described the perceived environmental benefits and cost effectiveness of the different approaches.

Some consider there are still few eco-labelling schemes/programmes in operation in WTO Member countries and they have expressed doubts about them becoming a significant new force in the market. In this regard, some questioned why the CTE spent a large amount of time discussing voluntary eco-labelling schemes/programmes, given that approximately 20 schemes/programmes were in operation. Some feel that a deeper analysis of eco-labelling schemes/programmes is required to determine their effectiveness as policy instruments for environmental protection, particularly in view of their potential trade-distorting nature.

Some noted that Agenda 21 recognized the importance of eco-labelling as an environmental policy tool to assist consumers in making informed choices, along with the need to develop criteria and methodologies for the assessment of environmental impacts and resource requirements throughout the full life-cycle of products and processes.

Some have noted that eco-labelling schemes/programmes are variously administered in different Members by central governments, local government bodies, and non-governmental bodies. Some of those administered at the local government level or by non-governmental standardizing bodies have significant government involvement at various stages of the process from product selection to product certification and the award of a label.

Existing eco-labelling schemes/programmes are overwhelmingly voluntary in nature, which some consider should relieve concerns that may exist about their potential trade restricting effects. Some others express doubts in that regard, however, saying that if the schemes/programmes are successful they influence consumer behaviour and that in this respect they can affect significantly market access and conditions of competition.

One focus of discussion has been the implications that the use of Life-Cycle Approaches (LCA) in some eco-labelling schemes/programmes can have in requiring inter alia the use of non-product-related PPMs in order for a product to be eligible to receive an eco-label. Some have said in this context that LCA can result in standards that are based on a mixture of criteria relating to product and performance characteristics, product-related PPMs and non-product-related PPMs. They have suggested that it would not be practical to separate the coverage under WTO provisions of eco-labelled products according to the nature of the criteria used, and that all criteria involved in granting an eco-label should be covered by WTO disciplines. From an operational perspective an eco-labelling scheme programme needs to be treated as an integrated whole under WTO provisions.

One Member noted that the business community in both developed and developing countries acknowledged non-product-related PPMs as one of the realities of the marketplace. In many cases, business was more concerned about transparency and consultation issues, rather than with whether or not a particular standard was based upon non-product-related PPMs. However, developing country exporters appeared to require additional time to adapt to new requirements. A number of individual case studies demonstrated the pragmatic attitude of some developing country textile exporters in meeting non-product-related PPM requirements⁶.

Another Member noted that a number of developing countries had reported difficulties in complying with standards based on non-product-related PPM⁷. These problems were particularly acute for small firms, because of difficulties in obtaining and adapting required technology, among other factors. While transparency was a basic requirement, it was not considered adequate, as complying with the standard would restrict their market access.

Some others have expressed concern that multiple criteria-based schemes/programmes will inevitably reflect the environmental conditions, preferences and priorities prevailing in the domestic market, and that this can create market access difficulties. Overseas suppliers operating under different sets of environmental conditions could find it difficult and costly, especially in developing countries, to adjust their products to meet the criteria required in their export markets, and may even be placed in a situation of having to adopt practices unsuited to their local environmental conditions. They have expressed concern also about the implications of the use of LCA based inter alia on non-product-related PPMs, particularly where these are chosen selectively by an eco-labelling authority, for the maintenance of WTO disciplines based on the principle of "like product".

The view of some is that there is a need to extend the examination to different types of eco-labelling standards and discuss the trade implications of each. In this regard, it is felt important when designing LCA-based eco-labelling standards to recognize adequately different countries' particular environmental conditions and to accommodate different approaches that produce an equivalent, environmentally-beneficial result. Also, eco-labelling schemes/ programmes should be designed so as to ensure that they provide sufficient and accurate information to consumers regarding the relative environmental impacts of competing products, and in that respect the principles of truthfulness, scientific basis and substantiability are important.

The CTE examined the relationship of the provisions of the TBT Agreement to eco-labelling in the light of a document prepared by the WTO Secretariat⁸. The CTE discussed (i) the application of the notification and other transparency provisions of the TBT Agreement to voluntary eco-labelling standards, and (ii) the applicability of the provisions of the TBT Agreement to voluntary eco-labelling schemes/programmes based, inter alia, on criteria on non-product-related PPMs.

Divergent views were expressed in this regard. Some expressed the view that the analysis of the two issues may not be conducted separately, and consequently should be dealt with together.

With regard to the first issue, given various trade-related concerns about eco-labelling schemes/programmes, it is a widely held view that full transparency plays a pivotal role in avoiding potential trade difficulties and increasing the legitimacy of such schemes/programmes and participation by interested parties in their development. It was recalled that the TBT Committee has decided that mandatory labelling requirements are subject to the notification provisions of Article 2.9 of the TBT Agreement regardless of the kind of information that is provided on the label.⁹

Some consider that all voluntary eco-labelling standards are subject to the transparency provisions of the Code of Good Practice for the Preparation, Adoption and the Application of Standards (Annex 3 of the TBT Agreement). Some others consider that voluntary schemes/programmes based on LCA do not seem to be fully covered by the transparency provisions of the TBT Agreement to the extent that criteria concerning non-product-related PPMs do not fall within the definition of "Standard" in Annex 1. Furthermore, in accordance with this view, a partial coverage is not in practical terms sensible, because in the operation of these schemes/programmes all criteria established for specific categories of products have to be jointly taken into account when awarding the label.

With regard to the second issue, many delegations expressed the view that the negotiating history of the TBT Agreement indicates clearly that there was no intention of legitimizing the use of measures based on non-product-related PPMs under the TBT Agreement, and that voluntary standards based on such PPMs are inconsistent with the provisions of the Agreement as well as with other provisions of the GATT. There is objection¹⁰ to any attempt through CTE work on eco-labelling to extend the scope of the TBT Agreement to permit the use of standards based on non-product-related PPMs.

Another view is that the definition of the term "Standard" in the TBT Agreement is ambiguous with respect to its coverage of standards based on non-product-related PPMs. Some Members suggested that the definition does not seem to cover standards based, inter alia, on non-product-related PPMs. It cannot be stated, therefore, a priori, that such standards are inconsistent with the terms of the Agreement. It has been suggested that, if any kind of inconsistency between the use of LCA tools in the context of voluntary eco-labelling and the provisions of the multilateral trading system were identified, the CTE should, in accordance with its terms of reference and the first preambular paragraph of the Agreement establishing the WTO, devise positive solutions to preserve the integrity of LCA. This would not imply that the use of non-product-related PPM requirements would be generally allowed.

Still others have stated that the TBT Agreement does not cover measures based on non-product-related PPMs, and voluntary eco-labelling schemes/programmes based on LCA are not covered by transparency provisions of the Agreement, since criteria concerning non-productrelated PPMs do not fall within the definition of "Standard" in Annex 1. The CTE is not the proper forum to discuss preserving the integrity of LCA. Further, environmental impacts of different stages of a product depend on the absorptive capacities of different countries.

Another view is that all forms of eco-labelling, including eco-labels that involve non-product-related PPMs, are covered by the TBT Agreement and that the inclusion of non-product-related PPM-based elements in an eco-labelling regime is not per se a violation of WTO rules. According to this view, the TBT Agreement provides sufficient flexibility to permit non-product-related PPM-based eco-labelling to be used, subject to appropriate trade disciplines, and the validity of any eco-labelling regime under the WTO must be judged according to the relevant rules of the multilateral trading system.

A number of specific proposals have been made. One¹¹ is to confirm that the provisions of the TBT Agreement and its Code of Good Practice for the Preparation, Adoption and Application of Standards apply to all eco-labelling schemes/programmes, whether voluntary or mandatory, and whether administered by governmental or non-governmental bodies. In addition, the CTE, jointly with the TBT Committee should in its future work-programme analyse the impact of the development of international standards based on LCA in a way that does not prejudice the views of Members regarding non-product-related PPMs. In this regard it has been suggested¹² that the scope of the TBT Agreement should be interpreted to cover the use of standards based upon non-product-related PPMs in eco-labelling schemes/programmes provided that these standards adhere to multilaterally-agreed eco-labelling guidelines based on scientific criteria, are transparent, consensual and non-discriminatory.

In response to this proposal, some have stated that they do not see any need to confirm what is already included in existing provisions of the TBT Agreement, and they have opposed changing the interpretation or application of the TBT Agreement to permit standards to be based on non-product-related PPMs. In this regard, they have objected to including as a point of reference in the TBT Agreement international standards based on LCA that are currently being developed by the International Organization for Standardization (ISO). In their view, accepting LCA under the TBT Agreement would permit one country to impose its environmental priorities on another. They have also expressed concern about the ISO process and the difficulties for some WTO Members, particularly developing countries, to participate effectively in it because of the considerable resource commitments it involves. Consequently, they do not consider that the ISO standards currently being developed in this field take their trade interests adequately into account.

Some have suggested more generally that where environmental standards, not only eco-labelling but also in such areas as packaging and waste handling, are based on national environmental attributes which are not necessarily shared by other countries, international standardization will not prove to be an acceptable way forward under WTO provisions as a means of avoiding unnecessary trade restriction or distortion. Rather, they consider there is a need to examine and develop the TBT provisions relating to the "equivalence" of standards and "mutual recognition" of conformity assessment procedures as a way of alleviating trade concerns. They have referred to the work of UNEP and UNCTAD in this regard.

Another proposal¹³ is that full transparency should be encouraged to enable timely public input at each stage of an eco-labelling programme's development. This would reduce the risk that environmental criteria in eco-labelling schemes/programmes narrowly reflect national considerations, take different environmental approaches into account, and help ensure that foreign producers or countries with significant trade interests in a labelled product have both timely and effective input throughout the entire eco-labelling process. Transparency provisions should emphasize the timely access to information regarding product group definition; the identification and elaboration of environmental criteria; procedures used in the awarding of labels, and other factors. Transparency, it has been noted, is of importance not only to the trading system but to the environmental policy objectives as well.

Another proposal¹⁴ in support of the importance of full transparency in the development and operation of voluntary eco-labelling schemes/programmes based on LCA suggests that two possible options should be considered: (i) seeking full coverage by the TBT Agreement; and (ii) negotiating an ad hoc instrument such as a code of conduct taking as a point of reference the mechanisms and procedures established in the TBT Agreement. However, the proposal notes that it may be inappropriate to address the transparency issue without first clarifying the status of LCA-based voluntary eco-labelling schemes/programmes.

In response to this proposal, some have expressed objection to developing a separate code of conduct.

One proposal¹⁵ emphasizes the potentially adverse market access impact which eco-labelling schemes/programmes can have on developing countries, and seeks clarification of the extent to which countries, particularly developing countries, are able to participate effectively in existing transparency provisions. Article 12 of the TBT Agreement has been recalled, in which special and differential treatment of developing country Members should be accorded. In this regard, the proposal includes consideration of the transfer of appropriate technologies as one aspect of an effective transparency regime with regard to eco-labelling schemes/programmes.

Some consider that the discussions on this Item to date have focused on eco-labelling to such an extent that insufficient attention has been given to other environmental product requirements, notably packaging and waste handling requirements, including recycling requirements. In that regard, one view is that eco-packaging requirements generally are based on conditions which reflect the national priorities in the country which imposes them. Applying these measures to imports might not only be environmentally inappropriate but also have a negative impact on market access. According to this view, in depth discussion is necessary on the best way of ensuring that eco-packaging requirements effectively comply with the relevant provisions on non-discrimination and national treatment, since these requirements might lead to significant de facto trade barriers. Equality of opportunity to compete is central to this issue, and the effective application of the concept of necessity is also important.