Australian Competition and Consumer Commission v Kimberly-Clark Australia Pty Ltd
[2019] FCA 992
•28 June 2019
FEDERAL COURT OF AUSTRALIA
Australian Competition and Consumer Commission v Kimberly-Clark Australia Pty Ltd [2019] FCA 992
File numbers: NSD 2124 of 2016 Judge: GLEESON J Date of judgment: 28 June 2019 Catchwords: CONSUMER LAW – misleading and deceptive conduct – where the applicant alleges contraventions of ss 18, 29(1) and 33 of the Australian Consumer Law, being Schedule 2 to the Competition and Consumer Act 2010 (Cth) (ACL) arising out of the respondent’s promotion of flushable wipes – where the applicant alleges that flushable wipes caused harm to household and municipal sewerage systems – whether representations were with respect to a future matter pursuant to s 4 of the ACL – whether flushability representation was false, misleading or deceptive – flushability representation was not false, misleading or deceptive Legislation: Australian Consumer Law, being Schedule 2 to the Competition and Consumer Act 2010 (Cth) ss 4, 18, 29(1), 33
Evidence Act 1995 (Cth) s 140
Cases cited: Aldi Foods Pty Ltd v Moroccanoil Israel Ltd [2018] FCAFC 93; (2018) 358 ALR 683
Amaca Pty Ltd (under NSW administered winding up) v Booth [2011] HCA 53; (2011) 246 CLR 36
Australian Competition and Consumer Commissionv Coles Supermarkets Australia Pty Ltd [2014] FCA 634; (2014) 317 ALR 73
Australian Competition and Consumer Commissionv Dukemaster Pty Ltd [2009] FCA 682
Australian Competition and Consumer Commission v Giraffe World Australia Pty Ltd [1999] FCA 1161; (1999) 95 FCR 302
Australian Competition and Consumer Commission v Prysmian Cavi E Sistemi SRL (No 12) [2016] FCA 822
Australian Competition and Consumer Commission v Purple Harmony Plates Pty Ltd [2001] FCA 1062
Australian Competition and Consumer Commission v Telstra Corporation Ltd [2007] FCA 1904; (2007) 244 ALR 470
Australian Competition and Consumer Commission v TF Woollam & Son Pty Ltd [2011] FCA 973; (2011) 196 FCR 212
Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 250 CLR 640
Australian Competition and Consumer Commissionv Turi Foods Pty Ltd (No 4) [2013] FCA 665
Australian Securities and Investments Commission v Cassimatis (No 8) [2016] FCA 1023; (2016) 336 ALR 209
Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304
Commissioner for Fair Trading, Department of Commerce v Perrett [2007] NSWSC 1130
GlaxoSmithKline Australia Pty Ltd v Reckitt Benckiser (Australia) Pty Limited (No 2) [2018] FCA 1
McGrath v Australian Naturalcare Products Pty Ltd [2008] FCAFC 2; (2008) 165 FCR 230
Reckitt Benckiser (Australia) Pty Ltd v GlaxoSmithKline Australia Pty Ltd [2018] FCAFC 138
Roads and Traffic Authority v Royal [2008] HCA 19; (2008) 245 ALR 653
Samsung Electronics Australia Pty Limited v LG Electronics Australia Pty Limited [2015] FCA 227; (2015) 113 IPR 11
Specsavers v Luxottica [2013] FCA 648
Date of hearing: 17-21, 24-28 September 2018, 2 October 2018 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Category: Catchwords Number of paragraphs: 330 Counsel for the Applicant: Mr S White SC with Ms D Forrester Solicitor for the Applicant: Australian Government Solicitor Counsel for the Respondent: Mr JC Sheahan QC with Mr J Redwood and Mr D Harris Solicitor for the Respondent: King & Wood Mallesons ORDERS
NSD 2124 of 2016 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
Applicant
AND: KIMBERLY-CLARK AUSTRALIA PTY LTD (ACN 000 032 333)
Respondent
JUDGE:
GLEESON J
DATE OF ORDER:
28 June 2019
THE COURT ORDERS THAT:
1.The parties approach the Associate to Gleeson J to fix a date for a case management hearing in connection with the applicant’s claims for relief concerning the “Made in Australia” representations.
2.Otherwise the application be dismissed with costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
GLEESON J:
The applicant (ACCC) claims that, between May 2013 and May 2016 (relevant period), the respondent (KCA) contravened the Australian Consumer Law, being Schedule 2 to the Competition and Consumer Act 2010 (Cth) (ACL), by its advertising and marketing of Kleenex Cottonelle Flushable Cleansing Cloths (KCFC wipes).
“Wipes” are moist towelettes, generally sold in packets or plastic tubs at supermarkets and other retail outlets. “Wipes” come in varying sizes and fabric strengths, and are marketed for a range of uses.
The KCFC wipes were marketed as “flushable”, in contrast to other wipe products which were marketed with no reference to flushability or with a recommendation: “Do not flush”.
The ACCC contends that, by its advertising and marketing of the KCFC wipes, KCA:
(1)engaged in conduct in trade or commerce which was misleading or deceptive, or likely to mislead or deceive, in contravention of s 18(1) of the ACL;
(2)made false or misleading representations in connection with the supply, possible supply and/or promotion of its KCFC wipes that KCFC wipes had a particular quality in contravention of s 29(1)(a) of the ACL and/or had particular performance characteristics, uses and/or benefits, in contravention of s 29(1)(g) of the ACL; and
(3)engaged in conduct in trade or commerce that was liable to mislead the public as to the nature, characteristics, and suitability for purpose of KCFC wipes, in contravention of s 33 of the ACL.
Summary of conclusions
The ACCC’s case fails, except in relation to a representation that the wipes were “Made in Australia”, which the parties agree was made and was false or misleading.
KCA represented that its KCFC wipes were “flushable”, which an ordinary reasonable consumer would have understood to mean that they were suitable to be flushed down the toilet and into sewerage systems in Australia. The KCFC wipes were intended to be flushed down the toilet, consistent with their intended use to remove human faecal matter.
The representation was based on the fact that KCFC wipes passed flushability tests set by the third edition of guidelines published by the International Nonwovens and Disposables Association (INDA) and the European Disposables and Nonwovens Association (EDANA) (INDA/EDANA GD3 Guidelines or GD3). The guidelines are entitled “Guidelines for Assessing the Flushability of Disposable Nonwoven Products: A Process for Assessing the Compatibility of Disposable Nonwoven Products with Plumbing and Wastewater Infrastructure”.
The ACCC’s case was that the “flushability” representation entailed that the KCFC wipes would not cause or contribute to harm to household and municipal sewerage systems, including harm in the form of increased maintenance. In other words, the wipes were compatible with the sewerage systems. The household systems comprise the household drainline and or treatment or septic systems located on the consumer’s property. The municipal system comprises the network of sewerage pipes, pumping stations and wastewater treatment plants.
There was some evidence that KCFC wipes have caused harm to household sewerage systems in the form of blockages. This evidence came from KCA’s business records of 28 consumer complaints about household system blockages during the relevant period (including two from consumers in New Zealand). There was no evidence from a consumer or plumber to verify the facts in relation to any of those complaints, or to enable the Court to exclude other causes for the blockages including the inevitable imperfections and defects that exist in the sewerage infrastructure. Further, despite the millions of packets of KCFC wipes sold in the relevant period, there was no evidence from any other consumer or plumber of a household system blockage attributed to KCFC wipes. As KCA observed, they received complaints at a rate of about one tenth of a complaint per million wipes sold.
The phenomenon of sewerage blockages pre-dates the invention of the wipe. The evidence showed that sewerage blockages have many causes, not limited to the disposal of “non-flushable” items into toilets. Accordingly, it is not self-evident that a wipe designed to be flushed down the toilet is not suitable for flushing because it has caused or contributed to a sewerage blockage on one or more occasions. Nor is it self-evident that such a wipe is not suitable for flushing because it does not share relevant characteristics of toilet paper.
I am not persuaded that the consumer complaint evidence is sufficient to support a conclusion that the KCFC wipes are unsuitable for flushing. If it is sufficient, I do not draw that conclusion because the instances of blockages identified by the complaints are so few in the context of the total sales of the wipes that they are properly characterised as insignificant.
There was ample evidence that “wipe” products generally are a significant management problem for municipal sewerage systems, impairing the function of infrastructure and increasing maintenance costs.
However, the evidence did not demonstrate on the balance of probabilities that KCFC wipes had caused harm to, or inflicted cost on, any single municipal system in any particular instance. Further, the evidence did not demonstrate on the balance of probabilities that KCFC wipes contributed to the identified problems in municipal sewerage systems.
There was a risk of harm to both household and municipal sewerage systems from KCFC wipes that was greater than the risk of harm posed by toilet paper. That risk arose from the fact that KCFC wipes had inferior properties of breakdown and dispersion than toilet paper when flushed. However, the evidence does not reveal the risk materialised except to the insignificant extent revealed by the consumer complaints.
The ACCC also contended that the “flushability” representation was a representation “with respect to a future matter” within the meaning of s 4 of the ACL, so that KCA was required to adduce evidence that it had reasonable grounds for making the representation when it was made in order to discharge the evidential burden set by s 4(2). I do not accept that contention. In any event, I am persuaded that KCA did discharge the evidential burden and the ACCC failed to prove that KCA did not have reasonable grounds for making the “flushability” representation.
Accordingly, I am not satisfied that the “flushability” representation was false, misleading or deceptive or otherwise contravened the ACL.
The ACCC did not pursue its case that the representation also entailed that the wipes did not cause harm to the environment by means of synthetic fibres persisting in biosolids and treated water that is returned to the environment.
Facts
Standard of proof
The ACCC was required to prove its case against KCA on the balance of probabilities. By s 140 of the Evidence Act 1995 (Cth) (Evidence Act), in deciding whether the Court is satisfied that the case has been proved to that standard, the Court is to take into account:
(1)the nature of the cause of action or defence;
(2)the nature of the subject-matter of the proceeding; and
(3)the gravity of the matters alleged.
Contravention of s 29 or s 33 of the ACL may expose a person to the imposition of a civil penalty. It is relevant to take that matter into account in determining whether the allegations of contravention of those provisions have been proved: Australian Competition and Consumer Commission v TF Woollam & Son Pty Ltd [2011] FCA 973; (2011) 196 FCR 212 at [8], Australian Competition and Consumer Commission v Prysmian Cavi E Sistemi SRL (No 12) [2016] FCA 822 at [42] and Australian Securities and Investments Commission v Cassimatis (No 8) [2016] FCA 1023; (2016) 336 ALR 209 at [39].
Witnesses
Generally, the witnesses for both parties presented as credible and reliable.
The ACCC adduced evidence from Andrew Drinkwater, a civil engineer, and Principal Engineer and Contract Manager at Water Research plc. Mr Drinkwater evidently had substantial experience of relevance to the performance of materials in the sewerage system and his affidavit evidence expressed opinions based on that experience. However, despite the requirement of the Court’s Expert Evidence Practice Note GPN-EXPT, Mr Drinkwater did not agree to be bound by the Harmonised Expert Witness Code of Conduct. There was no evidence as to the particular circumstances of this omission and there was no suggestion that Mr Drinkwater had refused to agree to be bound by the Code.
KCA did not object to the admissibility of Mr Drinkwater’s evidence on this basis but submitted that he was not an impartial witness on the basis of his company’s substantial work for, and consequent reliance upon continued engagement from, wastewater utilities, manufacturers of sewerage equipment and assets used in utilities and regulators of utilities. Mr Drinkwater’s work has included providing evidence for and assisting wastewater utilities in court proceedings.
Mr Drinkwater also stated that his work has involved advising about six manufacturers to assist with product testing to determine the likelihood of potential new products passing flushability criteria, including by testing products against a test protocol published by UK Water Industry Research Limited (UKWIR Test Protocol) and giving advice to product developers on what needs to change to make their products more acceptable to the water industry. The UKWIR Test Protocol is a set of nine tests used to assess product performance in a variety of situations that represent certain aspects of a wastewater system, co-authored by Mr Drinkwater.
KCA made several other criticisms of Mr Drinkwater’s impartiality and credibility, including that he displayed a propensity in the witness box to advocate for his preferred position; that he is in a “conflicted position” in giving evidence about the INDA/EDANA GD3 Guidelines by reason of his co-authorship of the competing UKWIR Test Protocol; and that he gave evidence about matters outside his expertise (particularly the question of the composition requirements for flushable materials).
My impression was that Mr Drinkwater was an honest witness. However, the matters set out above are reasons to approach his evidence with a degree of caution.
Wastewater system
Generally, I understood the parties to use the expressions “wastewater system” and “sewerage system” interchangeably.
Elements of the system
The ACCC adduced evidence that the basic design of Australian and international sewers is the same. In particular, Australian sewerage systems are relevantly similar to United States and English sewerage systems. Thus, for example, Mr Drinkwater treated his English experience as relevant to the Australian experience. To the extent that it was appropriate for KCA to rely on the INDA/EDANA GD3 Guidelines at all, there is no good reason to doubt that it was appropriate to rely on them in marketing products as flushable in Australia.
The following explanation of the system is based on KCA’s written submissions, which were not disputed in this regard.
When a toilet is flushed, items in the toilet that are not too large, too heavy or too voluminous to pass through the toilet are flushed into a household or commercial drainline. The flushing action releases a volume of water from the head tank, which forces the water and material in the toilet bowl to begin to circulate and flow down and through the toilet’s submerged trap.
Within the drainline, wastewater from shower and bath drains, kitchen and laundry sinks, wash basins, and dishwashers and washing machine drains, joins the flow of material flushed from the toilet and travels through the drainline, which may include turns, junctions with other drain pipes and vertical drops.
In urban environments, the drainline joins the municipal sewer pipes at a connection point near the edge of a private property.
Wastewater flows are primarily comprised of water, but also include a wide variety of organic and inorganic waste materials and substances. Apart from wastewater and the “Three Ps” (pee, poo and (toilet) paper), waste materials and substances found in the wastewater system include food scraps, fats, oils, grease (from kitchen sinks and dishwashers), hair, sand, grit, dirt and soaps (from showers, baths and wash basins), lint (from washing machines), paper towels, facial tissues, plastic, wipes (of various types), feminine hygiene products and contraceptives and, particularly during wet weather, groundwater and stormwater flows that enter the system.
Wastewater systems in Australia are predominantly gravity-fed, that is, the pipes are laid at a gradient sufficient for the pipes to be “self-cleansing”, which means there is sufficient energy within the flow of water in the pipe to carry solids from a customer’s property into the main sewer and onto the treatment plant. This generally provides enough turbulence to prevent solids from settling out of the wastewater flow. The flow of wastewater through the pipes is disturbed by drops, twists and turns. As the pipes flow downhill, the diameter of the pipes generally increases as the pipe is joined by other pipes and carries wastewater flows from other properties and other sewer pipes.
Often, sewer pipes pass through one or more pumping stations on the way to a treatment plant where the level of the pipes reaches an inefficient depth and needs to be pumped up to a higher level so as to resume the gravity-fed flow. The larger municipal sewer pipes will then typically converge at a final “headworks pumping station” at the entrance to the treatment plant.
Some pumping stations include screens (which catch and remove material from the flow) or grinders (which cut material into smaller pieces and pass it downstream) located near where wastewater first enters the wet well in the pumping station and before the wastewater reaches the pump itself. Wet wells within a pump may include features designed to deal with solids in the wastewater, including the turbulence of water flowing into the wet well that can break up a solid mass that has formed in the wet well, corner fillets (to prevent dead spots), sloping floors, mixers (to keep solids in suspension), and grit traps. Wet wells are periodically cleaned out, either manually or through an automated process, to remove settled solids at the bottom of the wet well and floating materials at the top. Wastewater passing through a pump station is pumped through by an “impeller”, a rapidly rotating (720-1,800 rpm) propeller like component that is specifically designed and rated by manufacturers to successfully pump solids-bearing liquids of at least a specified minimum size.
Multiple considerations affect the design for a pumping station. For example, Colin Hester, Manager, Commercial Water and Trade Waste of Queensland Urban Utilities (QUU), a statutory body that supplies drinking water, recycled water and wastewater services to South East Queensland, stated:
16.Many of QUU’s pumping stations have had their screens removed, due to the risk of overflow when a screen becomes covered in debris including wipes, and also due to the maintenance burden imposed by the requirement to regularly clean the wipes off the screens by manual processes. The risk of pumps fouling or rocks striking and damaging the impellers has been identified by QUU in many of these instances as being a lesser operational risk than repeated overflows of sewerage. For example, about 4 years ago, when I held the role of Manager Source Control and Environmental Compliance … I was involved in reporting environmental overflows at pump stations sometimes caused by blockages on screens. In some instances, the preventative action taken was to remove the screens.
17.[S]creens are “intended to prevent solid materials in the wastewater from potentially becoming clogged within pumps, valves, or piping located downstream”. From QUU’s perspective, the only purpose of having screens installed at the pumping station is to protect QUU’s infrastructure … This is consistent with the intent being to protect the equipment and to maintain the flow, rather than to perform some type of treatment function of separating solids from the wastewater for collection (as in the case with the function of screens fitting at treatment plant).
Most wastewater treatment plants have screens (inclined vertical bars or round openings) located near where wastewater first enters the treatment plant. This is intended to protect the plant’s downstream equipment, including pumps, valves and piping. The screens catch larger solid material (including faecal matter and toilet paper) and remove it from the flow, with the collected material taken to landfill. Typically, the screens at the treatment plant clean themselves automatically. There is then a grit removal process at the treatment plant involving inorganic materials, such as grit and sand, settling (via gravity, aeration or a vortex motion within a tank) and being pumped out of the tank and disposed to landfill, whilst the organic material flows on to other treatment processes. Primary settling tanks then allow solids to settle into a sludge at the bottom of the tank (where the sludge moves on to biological treatment and disinfection), whilst a mechanical moving skimmer removes floating materials (such as grease, scum and small plastics) off the top of the wastewater in the tank.
In the case of QUU, Mr Hester said:
22.Screening systems are always included at QUU’s wastewater treatment plants. These are finer screens than those installed at the relevant QUU pumping stations, being 3-6mm screens. At the wastewater treatment plant, the screens are the first stage of the treatment process, as well as being there to perform the function of protecting the equipment within the plant.
23.In respect of the pumping stations the imperative is to protect the assets and keep the network moving, whereas, at treatment plants, the objective is to protect the assets and to separate the wastewater from the solids contained within it. It is for these reasons that the screens are finer than those that might be installed at a pumping station … so that more debris is filtered out of the wastewater.
24.These screens at the treatment plant are also automatically raked, as opposed to the manual process applied at those QUU pumping stations that have screens installed. However, sometimes human intervention is required, for example, when wipes, rags or other debris, including feminine or other personal hygiene products, accumulate and cannot be dislodged by means of the automated process.
Bernie Sheridan, Manager, Treatment at Sydney Water Corporation, a statutory body that supplies drinking water and wastewater services to greater metropolitan Sydney, expressed the view, which I accept, that if a wipe takes longer than 30 minutes to break down in the system, it is possible that it might arrive intact at the plant and it is also possible that such a wipe can bypass the screens at the entry point to the treatment plant.
System design
There was evidence, in the form of assertion (for example, by Gary Hurley, Manager, Networks at Sydney Water and Mr Drinkwater), that the sewerage system is designed only for the removal of urine, faecal matter and toilet paper (and trade waste subject to limits). To the extent that the sewerage system is or forms part of the wastewater system, this cannot be correct because, as explained at [30] above, it is designed to receive wastewater from kitchens, laundries and bathrooms. This is significant because it results in the introduction of materials such as fat, oils, grease, detergents and hair which contribute to the risk of blockages.
Evidently, the Australian sewerage system as a whole has evolved over time. In all likelihood, parts of the system were designed and constructed well before the introduction of KCFC wipes onto the Australian market and so could not have been designed for the disposal of those wipes. It is also evident that the sewerage system is equipped to handle the inevitable incursion of substances and products that are not intended to pass through the system. Mr Hurley explained that the system is nevertheless “designed to cope with misadventure, damage, the entry [of] foreign material that is not its designed intent”, and that the system is therefore designed to “have an element of resilience”. To that extent, the system cannot be said to be designed only for the removal of the Three Ps.
Similarly, Glenn Wilson, General Manager of Infrastructure Services at Yarra Valley Water (YVW), a utility which services approximately 1.8 million customers, gave evidence that the wastewater system is designed to accommodate “the odd occurrence” of items other than human waste and toilet paper being flushed down the toilet, but that the system is not designed to have those types of items “regularly pass through the system”. Mr Wilson stated that YVW “understand[s] people from time to time do the wrong thing”.
System conditions
Across Australian sewerage systems generally, there is a broad range of conditions and distances travelled from the point of the toilet to the treatment plant. For the purposes of assessing flushability, it would not be appropriate to assume a perfect system. Like most infrastructure, the sewerage system is subject to wear and tear and can be expected to include irregularities and imperfections that are potential sites for build ups and blockages.
One of KCA’s witnesses, Professor Ned Paschke, agreed that the ordinary sewerage system will contain defects and “a properly functioning sewerage and wastewater system will have pipes at different stages … from newly laid pristine pipes to older sections that might be close to failure and various stages in between.” Professor Paschke is Professor of Practice and Honorary Adjunct Professor in the University of Wisconsin-Madison Department of Civil and Environmental Engineering. He is an expert in the fields of wastewater, water and environmental engineering and management.
System conditions may also be affected by usage. Mr Drinkwater identified the following scenario:
[I]f solids (including wipes) remain in the drainline for over one day, they can: (a) start to become septic and in doing so emit unacceptable odours; and (b) start to dry out and stick to the pipe wall, making it more difficult for them to be picked up in the flow in the pipe again (that is, re-entrained), and to be moved on in successive flushes.
Peter Lortscher, a senior research scientist at Kimberly-Clark Corporation (KCC) and head of its Fate of Materials Centre (FOMC), agreed that it is possible that a product can remain in a drainline with very little water for a long period of time and may even dry out, and that this may affect its “rate of dispersability”.
Mr Wilson gave the following evidence concerning defects in the Melbourne and YVW sewerage networks:
9.…. The reality is that in a city such as Melbourne, the sewer network was built over an extended period of time using a range of material such as concrete, clay, and plastics. Each of these materials are susceptible to different types of failures. For example concrete and clay pipes often develop cracks and joint failures due to external loading and ground movement, which allow tree roots to infiltrate. Plastic pipes (PVC and PE), which are more durable and resistant to tree root intrusion were only introduced on a large scale as part of the YVW network in the early 1990s and represent approximately 23% of the total pipe network length.
10.Furthermore, environmental conditions also contribute to defects developing. For example, almost all of YVW’s service area contains clay soils, which are highly reactive to changes in soil moisture content between summer and winter meaning they expand and contract. This ground movement can often result in structural failure.
Mr Drinkwater explained the following potential for blockages:
What we’re talking about is items that get caught up on maybe a minor joint imperfection, a minor tree root. That’s where the problem occurs. If – if items get caught on something in the drainline, then that has the potential to cause a blockage.
Toilet paper, wipes and other products found in wastewater
Toilet paper is made of a blend of short wood pulp fibres which range from 1-2mm in length. Toilet paper typically has very low wet strength, with no binding agent or wet strength agent, and begins to break up after becoming wet. KCA admitted that toilet paper loses its strength in water faster than KCFC wipes.
Other products found in wastewater are referred to at [32] above. A Sydney Water survey found that consumers admitted to flushing a variety of wipes including “hand and body cleansing” wipes, “facial cleansing” wipes, “household cleaning wipes”, “baby” wipes and “floor cleaning (electro-static)” wipes as well as disposable nappies and cotton/ear buds. KCA consumer research evidence indicated that consumers frequently flush products into the sewerage system, apart from wipes marketed as “flushable”, including facial tissues, paper towels and feminine hygiene products.
By way of illustration of the kinds of KCA products that were marked “Do not flush”, Huggies Baby Wipes, Kleenex Sensitives Wipes, Kleenex Anti-bacterial Wipes and Depend Cleansing Wipes were all labelled “Do not flush”.
Different types of wipes have varying degrees of wet strength. Mr Drinkwater described baby wipes as “very strong plastic wipes”, while cosmetic wipes are “far less strong than baby wipes”. Household cleaning wipes were said to be “very strong wipes” but “don’t feature a great deal in what we find in sewer blockages or pump plugs”.
Baby wipes and potty trainer wipes are made up of a combination of regenerated cellulose (~70%) and plastic fibres (~30%), often with very long fibres up to 25mm in length. These longer fibres form very strong bonds and have permanent wet strength so that they do not break down in moving water. They also have a tendency to entangle or rope together due to their long fibres. Similarly, household cleaning wipes, electrostatic cleaning cloths and industrial cleaning wipes are typically comprised of blends of plastics that retain considerable permanent wet strength.
Mr Lortscher stated that the “basesheet” (the substrate of all nonwoven hygienic wipes) used in “non-flushable” wipes such as baby wipes is far stronger than the basesheets used in a flushable wipe that passed INDA/EDANA GD3 Guidelines.
Paper towels and facial tissues are made of a blend of short wood pulp fibres that range from 1-2mm in length. However, a permanent wet strength resin is added to form covalent bonds rather than hydrogen bonds, which provides permanent wet strength and means that they do not break apart easily when wet. In contrast, the KCFC wipes did not contain any such chemical binder. Mr Drinkwater stated that facial tissue has greater wet strength than toilet paper but is not as strong as paper towels.
Comparing KCFC wipes and toilet paper
The ACCC relied on a demonstration by Sydney Water of the different behaviour of toilet paper and KCFC wipes (Sydney water agitation demonstration). The demonstration involved comparing the behaviour of the two products once submerged and agitated in water. The ACCC made the following observations of the demonstration:
(1)While between 89.9% to 92.0% of the toilet paper could pass through a sieve at the end of the period of agitation in water, only between 4.5% to 12.2% of the various KCFC Wipes could pass through the sieve.
(2)One can see the different manner and timeframe in which the toilet paper breaks down when viewing the video recording of the water agitator testing.
None of the ACCC’s expert witnesses endorsed the demonstration as an appropriate test for assessing flushability. In particular, Mr Stonehouse, a technical specialist at Sydney Water who conducted the test, was unable to comment on the utility of the test for the purpose of understanding the operation of sewerage conditions. Mr Stonehouse confirmed that the test has been used for the educational purpose of “demonstrate[ing] the difference between how a wet wipe product and toilet tissue would break up”.
It is difficult to make much of the ACCC’s observations. The ACCC put the evidence forward only as a demonstration of how the different products act under similar forms of agitation.
Collection studies
From time to time, water authorities have collected waste from parts of the sewerage system to study their contents.
In its closing submissions dated 1 October 2018, although referring to the studies as “imprecise and contestable in nature”, the ACCC contended that the collection studies “confirm and are consistent with [a finding that] flushable wipes … are represented proportionately in the material that is resulting in harm to wastewater networks across Australia (and indeed globally).” The ACCC retreated from that contention by its closing submissions dated 2 October 2018 and in oral closing submissions. Ultimately, the ACCC’s position was that it did not rely on the collection studies which, it submitted, were “not reliable, probative or relevant to the issues in issue in the proceeding”.
Dr Greg Ryan, Manager, Utility Excellence at Water Services Association of Australia (WSAA), the peak body representing the urban water industry in Australia, expressed several reservations about the utility of collection studies notwithstanding that, as explained below, his organisation had embarked upon a path of conducting such studies in April 2015. Dr Ryan initially considered the task of effective sampling as “relatively difficult” but he has since formed the view that “it is difficult to obtain a representative sample of material from the sewer network and … even if this can be achieved, identifying material removed is not straightforward”.
Mr Drinkwater expressed the view that the information collected for the UK Water study, referred to below, was “very valuable”, albeit not the only information to be taken into account in determining the causes of sewerage blockages. I accept that evidence. In particular, I accept that collection studies may be unable to detect a problem in fact caused by flushable wipes. However, I did not understand the ACCC to suggest that collection studies may falsely implicate products that can be identified from a collection study as products that cause or contribute to blockages.
Sydney Water
In late 2015 and early 2016, Sydney Water conducted a study with the object of “determination of the wipe material found to be blocking sewer pipes and coarse screens”. The test method document stated that there was “currently limited data on the nature of these materials within Australia. Obtaining more information will allow the industry to better understand the extent of the problem, characterise the materials that are responsible for the interferences and provide quantitative information to ultimately solve the problem”.
The laboratory manager who conducted the study, Charlie Pierce, did not give evidence. He had retired from Sydney Water by the time of the hearing and was probably available, if either party had chosen to call him. In a 6 August 2015 email, Mr Pierce noted that he had “completed a few batches of wipe identification and found very low numbers of flushable wipes. The flushable wipes are difficult to differentiate from paper towels (the dominant component at both Malabar and Penrith).” Mr Pierce resolved to consider further information on wipe identification before resuming the survey.
By mid-October 2015, Mr Pierce expressed greater confidence in his ability to distinguish between paper towels, flushable wipes and other personal hygiene products and decided that he was ready to resume testing.
In February 2016, Mr Pierce expressed the conclusion that “‘[f]lushable’ wipes are not a serious issue for SWC [Sydney Water Corporation], the paper towels and in some cases large industrial wipes are a bigger problem”.
The immediate response of Dr Sherry Cabardo-Oclarit, Business Customer Representative, Sydney Water, was that Mr Pierce’s report showed that “paper towels is the bigger issue compared with flushable wipes”.
At the hearing, Dr Cabardo agreed that the average of flushable non-woven wipes identified across Mr Pierce’s studies was about 2% of the material analysed. For a similar result in the UK Water study (considered below), Dr Cabardo agreed that flushable wipes were of “negligible significance” in that study. However, Dr Cabardo did not make a similar concession in relation to the Sydney Water study which she considered to be preliminary only, and “not representative of the whole area of Sydney Water’s operations”.
Despite moving away from the study in her evidence, Dr Cabardo had relied on it at a March 2016 business customer forum, including to say that “[p]aper towels and large industrial wipes being flushed are also causing blockages in the system”.
Thus, at the least, Dr Cabardo was prepared to accept that the Sydney Water collection study is evidence that paper towels and large industrial wipes are causes or contributors to blockages in the Sydney sewerage system.
The ACCC referred to an observation in the test method for the study that “[i]n most cases, it is impossible to distinguish between personal hygiene wipes and flushable wipes”. However, as KCA observed, Mr Pierce did apparently draw such a distinction after obtaining additional information on “wipe identification”. Without evidence from Mr Pierce, Dr Cabardo’s observation in re-examination that the combined results for the “personal hygiene” and “flushable” wipe category are “notable” does not have significant weight.
QUU
In July 2016, Mr Hester conducted a test at the Sandgate Sewage Treatment Plant to estimate the amount of non-destructible wet wipes entering the plant. The test was based on a representative sample of four litres of “screening” with a wet weight of 6.2kg, removed from the inlet screen at the plant.
By separating and reviewing the material and counting the entirety of the wet wipe pieces comprising the “screenings” sample, Mr Hester estimated that approximately 1 litre (wet volume) of the sample with a wet weight of 630g comprised wet wipes. Mr Hester concluded that QUU’s estimate that 120 tonnes of wipes are removed from QUU’s sewerage network each year was conservative.
In an email dated 14 July 2016, Bob Phillips, Supervisor Microbiology, referred to the composition of wipes obtained in this test. His email noted that 23 wet wipes had been isolated, and stated:
All wipes isolated were very difficult to tear and seemed much stronger than the pack of flushable wet wipes purchased for visual comparison. SAS staff supplied non-flushable wipes today for comparison, and the wipes isolated from the Sandgate sample seem much closer to those in appearance and structure …
In cross-examination, Mr Hester agreed that this July 2016 data provided no evidence of flushable wipes being a problem in QUU’s system. He agreed that the only information that he had about the wipes found in the test, as to their kind, suggested that they were probably not labelled as “flushable”. Mr Hester also agreed that he had never had any evidence that wipes, which were not baby wipes but had passed the GD3 protocols and were sold as flushable, were among the wipes that he observed causing problems in QUU’s wastewater system. Mr Hester emphasised that his test was seeking to understand the mass load of wet wipes entering the treatment plant, in circumstances where he had earlier expressed the view that there is not very much difference between a so-called flushable wipe and a non-flushable wipe.
UK Water
There was also evidence of a collection study commissioned by Water UK in 2017 and co-authored by Mr Drinkwater. Water UK is a membership organisation that represents all major statutory water and wastewater service providers in England, Scotland, Wales and Northern Ireland, working with government, regulators and stakeholder organisations to develop policy and improve understanding of the business of water on behalf of UK water companies.
The study was the largest and most thorough of its kind to date in the UK, involving about 50 blockages.
The report’s conclusions included the following:
1)The majority of the sewer blockage material recovered comprised of non-flushable wipes that were not designed to be flushed and should not have been disposed of via the WC. Baby wipes accounted for over 75% by weight of identifiable products. Surface wipes, cosmetic removal wipes and feminine hygiene products accounts [sic] for approximately 20% by weight of identifiable products.
2)The products recovered that were designed to be flushed accounted for a small proportion of the products recovered – Approximately 0.88% by total weight and 1.9% by weight of products that could be identified. However, it is accepted that during the blockage recovery process some toilet tissue and other weaker material is lost in the blockage removal process.
3)The analysis of the samples collected at wastewater treatment works inlets shows a similarity with the items recovered from the sewer blockage samples. This suggests that the items causing/present in sewerage blockages are the same types of items by intended use and that they remain intact as far as the wastewater treatment works.
4)The majority of material in pumping station clogs was an unidentifiable mass of wipes. However, a single pumping station clog where individual products could be recognised, showed that it contained a higher proportion of non-flushable wipes than sewer blockages – 95% as opposed to 75% in sewer blockages. There was limited flushable wipe material (0.09%) identified in the pump clogs in this single sample. Experience suggests that this is because sewage pumps are able to mechanically break the flushable wipes and pass them downstream.
5)The analysis of features associated with blockage locations, for which sufficient data was provided, showed a wide variability in the reason or the blockage having formed:
•11 were the result of wipes being flushed via toilets into drainage systems with features which are integral to drain and sewer systems. These features include interceptor traps, backdrops, 90º bends etc.
•4 were the result of wipes being flushed via toilets into drainage systems which contained unavoidable debris, such as gravel/sediment deposits).
•1 was the result of a sewer defect that was in need of repair.
•6 were due to inappropriate disposal practice; the flushing of a dishcloth, a curtain and at 4 sites, excessive volumes of wipes.
•3 were at locations where, despite adequate information being returned from site, there was no obvious cause.
•3 of the 7 pump clogs recovered were caused by material (clothes etc.) being disposed of to the sewer system.
•For the remaining 20 sewer blockages insufficient data was available to assess the features at the blockage locations.
In considering the percentages of the products recovered, it is relevant to note that the study samples were processed by being “gently rinsed with tap water to remove organic material and the bulk of toilet paper captured with the blockage”. The report noted that “dispersible wipe material may also have been washed out during this process as it is similar to toilet paper, although care was taken to retain any of this material if it was identified”.
The UK Water study contains nine recommendations, including the following single recommendation concerning products labelled as flushable:
5) Polypropylene or polyethylene fibres should not be included in any product labelled as flushable. This is because the majority of the items found in the sewer blockage and pump clog samples are composed of these materials.
KCA conceded that the KCFC wipes’ bicomponent fibres were composed of polypropylene or polyethylene.
In cross-examination, Mr Drinkwater confirmed that the study did not identify flushable wipes as causing blockages but qualified this observation by saying that this does not mean that flushable wipes do not cause blockages.
Mr Drinkwater gave evidence that the finding that about 2% of the material examined was categorised as “flushable” was “hardly negligible” when considering the total volume of wipes that are flushed each year. However, he said that “[i]f you’re looking at where the large proportion of customer education needs to be, then clearly that’s suggesting that baby wipes and such are the main issue”.
Mr Drinkwater explained the difficulty with capturing intact blockages in the network because of the tendency for them to break up under the pressure of the flow once dislodged. The ACCC also noted that Mr Drinkwater clarified that this study did not include an assessment of blockages occurring “in the private pipes right next to the house”.
The Water UK report indicates that baby wipes, surface wipes, cosmetic wipes and female hygiene products are significant contributors or causes to sewer blockages in the UK. The report also suggests that it is often difficult to determine the cause of a sewer blockage.
Uncompleted studies
KCA submitted that it was significant that none of the ACCC, the water utilities and WSAA, have produced a more comprehensive collection study than those identified above, or any other study or research directed to the impact of “flushable” products on sewer networks.
WSAA has 75 member organisations including 57 publicly owned water utilities; three private water supply companies; two international water utilities; eight consultant members; and five stakeholder bodies with interests allied to the urban water industry. In April 2015, WSAA conducted a “Wipes Forum” in collaboration with the Australian Food and Grocery Council (AFGC) and Accord Australasia Limited (Accord), the national industry association representing manufacturers and suppliers of hygiene, cosmetic and specialty products, their raw material suppliers and service providers. Following the forum, WSAA published a media release entitled “Water and wipes industries come together to tackle issue”. Relevantly, the media release stated:
As a result of the forum, the three associations will lead further work in confirming the source of material in sewers, considering ways to better educate the community and participating in the development of an international standard relating to flushable products.
…
We are pleased the industry wants to work with us on this issue. We are working towards a solution that will avoid additional long term costs to water utility customers and adverse impacts on the environment”, said Adam Lovell, WSAA’s Executive Director.
“The wipes and hygiene industry welcomes this opportunity to commence collaborative discussions with the water industry. Our first priority will be to gain a better understanding of all dimensions of this issue to maximise the effectiveness of any solutions brought forward” said Craig Brock, Accord’s Policy Director.
“This work will develop a strong evidence base to determine what products are causing concern and what role companies can play in contributing to addressing this challenge”, said a representative from the AFGC.
In March 2017, KCA was told that there were four Australian water utilities currently conducting collection studies. In July 2017, the AFGC was informed that WSAA was looking to share results with AFGC and its members once a peer review had been completed.
Dr Ryan gave evidence of three collection studies, undertaken by QUU, Watercare (a New Zealand utility) and South Australia Water. His evidence was that results have been obtained in each case, but only published for the Watercare study. The results were not published because WSAA’s members were not “comfortable” that the results were correct or valid, and they were not sure that the method was right and that the results would not be misconstrued. Dr Ryan suggested that this proceeding had caused some reticence on the part of WSAA’s members, which I took to be reticence to reveal the results of collection studies.
KCA submitted that the proper inference to be drawn is that those best placed to assess the matter (because they have conducted the studies and obtained the results) are convinced that the unpublished results of the collection studies, when tested in court, either would provide no evidence that GD3 compliant products were incompatible with their systems, or would produce evidence that they were compatible. I draw the inference that the unpublished material does not assist the ACCC’s case.
Risks posed by wipes and anecdotal evidence of harm caused by wipes
If a product does not break down quickly in a sewer or septic system, it can cause blockages and clogging. Mr Lortscher agreed that the “dispersability” of a product is critical in determining whether it might cause a problem in the sewer and household drainline.
As a matter of logic, the more quickly an item disperses after flushing, the lower the chance that it will catch or “snag” on an imperfection in the system as it travels towards the treatment plant.
Except where I have identified otherwise, the evidence and findings set out below refer to wipes generally, and not to wipes of any particular size or composition or to KCFC wipes (or GD3 compliant wipes) in particular. Further, the evidence generally does not address the likelihood of the risks identified.
There was a dispute between the experts about whether it is necessary for a product to break up to be compatible with a properly functioning household toilet and drainline system. One of KCA’s experts, Dr McAvoy, expressed the view that this was unnecessary. In his view, all that is required is that the product can be transported through the drainline pipe before entering the municipal wastewater collection system or an onsite wastewater treatment system. In support of his view, Dr McAvoy referred to tests which showed that toilet paper stays intact as it passes through the household drainage system due to very low velocities in the household drainline.
Mr Drinkwater disagreed, identifying the following as relevant to an assessment of flushability:
17.1[T]he likelihood of wipes snagging on minor defects, which are not so significant as to undermine the functionality of the system, but which represent a reality of actual sewerage conditions. This is problematic because if a wipe becomes snagged on any such defect, it must be able to break up and dislodge from the snag to avoid presenting further impediments to the functionality of the system. If this does not start to break up relatively quickly other material can collect toilet tissue and faeces around it, which do not pass over the wipe and keep on travelling down the pipe, but which instead become lodged where it is. This is in contrast to a pipe without a snagged wipe where the toilet tissue and faeces just slide along the bottom of the pipe. The explanation is that a snagged wipe adds additional resistance or friction on the invert (bottom) of the pipe, which stops the sliding action (this is referred to as the “sliding dam action”);
17.2[T]he problem of intact wipes, or largely intact wipes, covering or “blinding” screens in the wastewater network; and
17.3The reality that foul or combined sewer pipe leading from a property normally carry very little flow (“combined” sewer pipes are those that carry both household and roof drain flows, whereas “foul” pipes only contain household flows). Heavier and intact wipes are likely to settle in the pipe once they are more than 10 or 15 metres from the flush input. The wipe may or may not move further with successive flushes.
Both Dr McAvoy and Mr Drinkwater evidently accepted that there is relatively little turbulence in the household drainline environment. Consistent with this, Mr Drinkwater’s unchallenged evidence was that most blockages within the sewerage system occur in small household pipes. Mr Drinkwater said that “the major issues with wipes are blockages in sewers, and those often occur well before you get to pumps”, referring to the “smaller sewers immediately after leaving the house”. His evidence was that “90 percent of blockages occur in pipes around the house and leading from the house within the first, say, hundred metres”.
If the wipe does not break down and passes through the household drainline intact, it presents a risk that it will cause or form part of a blockage as the wipe is transported through the system.
Mr Drinkwater’s evidence was that the vast majority of pump clogs are caused by wipes. Further, based on his experience and research, Mr Drinkwater expressed the view that over 50% of all major sewerage blockages in the UK that need to be cleared and removed have wipes as a major component of that blockage. While some of these blockages may be due to issues concerning the state of repair of the pipes, the vast majority are in sewers that are otherwise serviceable.
Mr Wilson of YVW suggested that the main issue is “not that the wet wipe will be flushed into the municipal system, but that it moves slowly as it does not break down and it is therefore more likely to combine with other materials such as fats, oils and other non-biodegradable materials (such as other wet wipes), which can cause blockages”.
Mr Wilson’s evidence was that, while it is possible for a wipe to be transported intact (or not broken down) through a wastewater network, in that event it will present problems in terms of:
(1)maintenance, that is, removing the wipes, as part of the debris (which includes faecal matter and toilet paper) that accumulates on the screens resulting in increased maintenance costs borne by the wastewater authority;
(2)risk of damage to plant equipment (for example, the risk of wipes getting tangled or forming a ball with other matter, which can result in increased maintenance, repair and replacement costs to be borne by the wastewater authority); and
(3)treatment processes (that is, the question of how to deal with wipes, or wipe fragments that bypass the screens and enter the treatment plant).
Mr Drinkwater referred to “cases where so-called flushable wipes will clog together in a sewer and come down as a snowball. And when that happens, that could kill a pump. But the – in the majority of cases, it is going to be baby wipes or similar”. Mr Drinkwater clarified that these “so-called flushable wipes” may or may not be wipes that had satisfied the GD3 protocol. Thus, I do not treat this as evidence of the potential behaviour of the KCFC wipes.
WSAA
In an affidavit, Dr Ryan said that, since 2003, the wastewater industry, including in Australia, had observed that “intact flushable wipes” are an issue in the sewerage network in at least three ways:
(1)they rope and block on pumps;
(2)they snag on irregularities on the pipe surface within the sewerage network (not just on the householder’s premises); and
(3)they can be discharged to the environment during high flow events.
Dr Ryan explained that:
[S]nagged material can lead to the accumulation of material behind the snag including faeces, toilet paper and fat from cooking and other sources. When this material accumulates in a sewerage pipe it behaves in a similar manner to a snowball, effectively combining these larger intact wipes with fats and other material to form congealed masses of material in the sewer, commonly known as fatbergs.
However, in cross-examination, it emerged that the WSAA did not have evidence that “intact flushable wipes” were an issue prior to the April 2015 forum. Dr Ryan gave evidence about the matters known to WSAA at that time:
[W]e were encountering wipes. So it was anecdotal. There wasn’t scientific evidence. When people pull[ed] pumps out of pump stations, they found large amounts of wipe material around it, and also when there was blockages associated with tree roots and other things within the sewer network.
New South Wales
Sydney Water experiences approximately 20 blockages within sewage pumping stations per month. There is no reason to doubt that wipes and other non-wipe materials contribute to these blockages.
Mr Hurley’s evidence was that wipes have significantly contributed to damage to customers’ pipes and Sydney Water’s systems in the following ways:
(1)Blockages in customers’ private pipes where there is a lower flow of water (water only flows when toilets are flushed), as these materials accumulate. Material becomes caught on any imperfections in the pipes including root material or joins.
(2)Blockages in Sydney Water’s smaller pipes. Material catches in imperfections in the system where the hydraulics (water flow) is not perfect. In particular, grit and rubble can accumulate in the pipes which the wipes can catch onto.
(3)Blockages in pumping stations. Where material does not break up swiftly it can catch on the pumps and lock them or the material may settle to the bottom of wet wells, thus reducing their capacity and using more energy. This requires the material to be manually removed and controls and sensors to be fixed.
(4)Material gets caught in screens at wastewater treatment plants. This material then needs to be removed manually. In storm events, this material can be picked up and deposited on the screens in a large mass, which also can block the screens and in certain cases can bypass the screens and become part of the treatment process.
(5)Material that enters the treatment process accumulates in sedimentation tanks and causes blockages.
Rodney Kerr, Service Planning Lead at Sydney Water, gave evidence of debris discharged with wastewater from emergency relief structures that operate as release values for the sewer network. The emergency relief structures are activated when intense periods of wet weather occur. Mr Kerr’s evidence shows that the debris included wipes and other rag-type material.
Mr Sheridan gave evidence that he has observed an increasing impact of wipes at the waste water treatment plants since 2014, in particular at the initial screening stage. He described the impact of solids, including rag-type debris and wipes on management of the treatment plants in high flow conditions (during or following rain events).
Mr Ross Brown gave evidence that, both in his former career as a contractor plumber and in his current role as a hydraulics engineer at Abel & Brown, he has observed cloth-like material clumping in drainlines:
During the period 1990 to ‘94, I saw – sewer blockages tend to – materials tend to clump together as a general rule. They do. They get trapped on things. I’ve seen solid matter and cloth-like materials get trapped. Subsequent to that, I’ve seen clumps of material containing toilet paper, solid faecal matter, other materials all clumped together as well.
Mr Brown also gave evidence that wipes are one of a number of contributing factors to the blockages he has inspected:
In my experience, as – the cause of sewer blockage is usually a combination of factors. It’s not one – it’s not paper, it’s not faecal matter, it’s not wipes, it’s a – it’s not a defect in the sewer. It’s a combination of factors that come together to create the – the circumstances.
Mr Brown also gave evidence that “most, if not all, drainlines will have some form of minor imperfection”. Mr Brown accepted that a minor imperfection is capable of snagging a cloth or wipe-like material, which in turn may lead to the build-up of product behind it and a blockage.
QUU
Mr Hester gave evidence about how wipes interfere with the proper operations of the sewerage system and create increased “maintenance frequencies”. He gave several reasons why wipes can cause blockages in a residential customer’s private drainage, and can reduce the efficiency of sewage treatment plants.
At Riverview pump station in Ipswich, maintenance has been required on 13 occasions since 2010 due to faults or blockages caused by “rags (including contribution from wet wipes)”.
During cross-examination, Mr Hester gave various examples of the information that has been available to him in his role at QUU in forming the view that “wipes”, including wipes described as “flushable”, cause problems for the QUU waste water system, including the experience of QUU on a day-to-day basis (that is, the “full-scale experiment” run every day), which involves findings that “wet wipes entangle themselves in lift stations and are a participant in blockages, and they don’t have to travel all the way to the treatment plant to pose that risk or, in fact, materialise that risk”. Mr Hester also referred to the experience of the service delivery crews at QUU, who are regularly called to unpick rag material from the network.
Mr Hester said that that wet wipes “of all different types” can be observed at pump stations that are “very close to the point of discharge” and that it “seems a practical certainty that wet wipes of both types [flushable and non-flushable] are included in the wet wipes that appear at pump stations”. However, he ultimately accepted that he had no Brisbane-based evidence that wipes described as “flushable” make their way to the treatment plant and to the pump stations.
YVW
Mr Wilson gave evidence that blockages “caused by materials not designed to be carried by” the YVW network were most likely to occur in the following five locations:
(1)within a customer’s private sewer pipes;
(2)in YVW’s reticulated sewerage network, comprised of smaller pipes between 100mm and 225mm in diameter;
(3)the inlets to YVW’s sewer siphons;
(4)pumps at sewage pumping stations and sewage flow control facilities that are detention/storage tanks designed to prevent overflows from the pipe network; and
(5)at sewage treatment plants.
KCC facility, Wisconsin
There was evidence that, in March 2013, the KCC facility in Wisconsin, United States of America, experienced a blockage that required clearing shortly after placing Cottonelle moist wipes in the restrooms of a building, called “KC North”. One email stated: “[W]hen they opened the manhole, we could see all the moist wipes and they were not deteriorated or broken down at all.” Another reported that “the backup surfaced way inside the building, not good”.
Senior counsel for the ACCC, Mr White SC, conceded that the evidence did not identify the wipes involved in this episode as the KCFC wipes in this proceeding.
KCFC wipes
During the relevant period, KCA promoted and supplied KCFC wipes in the following four varieties:
(1)Sensitive;
(2)Sensitive (Out & About);
(3)Cotton Fresh; and
(4)Kids.
According to their packaging, the Sensitive (Out & About) wipes were 200mm x 135mm in size. The Sensitive and Cotton Free wipes were somewhat smaller (166mm x 131mm) and the Kids wipes were smaller again (166mm x 125mm).
Packaging
The ACCC’s case relied on the following language and marking on the packaging of all varieties of KCFC wipes throughout the relevant period:
(1)the descriptor “flushable”;
(2)the words: “For best results, flush one or two cloths at a time”;
(3)the words: “Cloths break down in sewerage system or septic tank”; and
(4)the following logo:
Next to the logo, the Sensitive Wipes and the Cotton Fresh Wipes had the following words:
Often, dry toilet paper alone doesn’t provide a good enough clean. That’s where KLEENEX Cottonelle Flushable Cleansing Cloths come in: Lightly moistened toilet tissue wipes, to be used with your regular toilet paper to feel extra clean and fresh, everyday.
Next to the logo, the Sensitive Wipes (Out & About) had the following almost identical words:
Often, dry toilet paper alone doesn’t provide a good enough clean. That’s where KLEENEX Cottonelle Flushable Cleansing Cloths come in: Lightly moistened toilet tissue wipes, to be used with your regular toilet paper to feel extra clean and fresh.
Next to the logo on the Kids Wipes were the following words:
Making the transition to self wiping is easier with KLEENEX Cottonelle Flushable Cleansing Cloths for Kids. The lightly moistened toilet wipes are gentle, soft and conveniently sized to help little hands clean their bottoms better. Used with regular toilet paper, your kids will be extra clean and fresh, everyday.
Website
In addition, the ACCC contended that 14 statements, published on webpages that are attached to the website at various times during the relevant period, also contravened the ACL. The webpages are:
(1)A page entitled “Kids Cleansing Cloths FAQs” (Kids wipes page). It contains 19 questions and answers. The passages relied upon by the ACCC were contained in the following passage on the page:
What are Kleenex Cottonelle Flushable Cleansing Cloths for kids?
Kleenex Cottonelle Flushable Cleansing Cloths for kids are pre-moistened wipes that deliver a cleaner clean than using dry toilet paper alone. They are made from a specially designed clothlike material that will break up in both the sewerage and septic systems so they are flushable. They are available in a 42 sheet resealable refill.
Is it safe to flush Kleenex Cottonelle Flushable Cleaning Cloths for kids?
Yes. Kleenex Cottonelle Flushable Cleaning Cloths for kids are made from a specially designed material which will break up in the sewerage or septic system like toilet paper. However, do not flush an excessive amount of wipes at one time (no more than two wipes per flush). Kleenex Cottonelle Flushable Cleaning Cloths for kids meet the EDANA Guideline for flushability.
How many wipes can I flush at once.
Sewage systems and stream flow conditions are different from door to door. Some extreme cases show that just one sheet can plug a toilet, so our advice is don’t flush these wipes if the water stream in the toilet is weak, and also don’t flush many sheets at once (we recommend that no more than two wipes are used per flush).
(2)A page with the bolded words “Flushable Cleansing cloths page” (Flushable Cleansing cloths page) published from 19 October 2015 to 15 December 2015. The page contains the following words:
Flushable Cleansing cloths
Kleenex Cottonelle Flushable Cleansing Cloths are designed to deliver a cleaner, shower fresh feeling. Able to be flushed in the toilet, they are easy to use and suitable for the whole family’s hygiene. The wipes are also dermatologically tested, pH balanced and alcohol free, and remember that no more than two wipes flushed at a time.
(3)A page with the bolded words “Flushable Cleansing cloths Refill” (Flushable Cleansing cloths Refill page), published from at least 29 October 2015 to on or about 1 May 2016. The page contains the following words:
Flushable Cleansing cloths Refill
Handy to easily slip into handbags or glove boxes, without taking up too much room, 3 packs of 10 cloths are there for when you’re on the go. Offering a sensitive choice, these personal hygienic wipes are hypoallergenic and have no added fragrance. A maximum of two wipes at a time.
(4)A page headed “The convenient Flushable Cleansing Cloths range” (Convenient cloths page) that, relevantly contains the same words as the Flushable Cleansing cloths page set out above.
(5)A page headed “Meet the Kleenex Toilet Paper family” (Meet the family page). The ACCC relied on the heading to the page, the word “flushable” and also to the following words, which I could not locate on the page:
Kleenex Cottonelle Flushable Cleansing Cloths are flushable due to technology that allows them to lose strength and break up when moving through the system after flushing. However it is important to note that sewerage systems and stream flow conditions are different from door to door. That is why we recommend no more than 2 wipes to be flushed at any one time.
The page includes the following words:
Flushable Cleaning cloths
Great for when you’re away from home and the kids bottoms need cleaning, these handy cloths provide that “just showered” feel and are just the answer. Available in either hypo-allergenic or fragrance free, choose from a tub pack, refill packs, cloths or a 3 x 10 on-the-go pack. Flush a maximum of two wipes at a time.
(6)A page headed “You wouldn’t clean your car without water” (You wouldn’t clean your car without water page), which contains the following words:
You wouldn’t clean your car without water
Come to think of it, there isn’t much you wouldn’t clean without water. We use water when we take a shower, when we mop the floor, when our clothes get dirty – it’s the key ingredient in cleaning pretty much everything.
That got us thinking: why do we only use dry toilet paper in the loo? Are we getting the thorough clean we expect and deserve? Can we improve it by adding water? We didn’t think twice. That’s why we developed Kleenex Cottonelle Flushable Cleansing Cloths.
Available in 3 x 10 and 42-Sheet Packs, our Cleansing Cloths offer a new level of clean when used in conjunction with dry toilet paper. They’re soft, gentle and refreshing. They’re also 100% biodegradable so you can flush them without worrying about the environment and they fit neatly into your handbag so you can stay fresh and clean on the go.
Why should you think twice about the way you clean?
•A better, more hygienic clean when used with toilet paper
•Completely flushable
•Environmentally friendly
•Convenient range of sizes
•Feel more confident throughout the day
(7)A page entitled “Wipe your hands of wiping bottoms” (Wipe your hands page) which includes the following words:
Making the transition to self-wiping is easier with Kleenex Cottonelle Flushable Cleansing Cloths for Kids. The pre-moistened wipes help little hands clean their bottoms better. Gentle and soft, they’re comforting for bottoms accustomed to baby wipes, yet they’re safe to flush. The kids’ wipes come in an easy to use pop-up tub easy for little fingers to access and they only dispense one at a time, so you save on toilet paper. They’re great for potty-cleaning too – simply wipe and flush.
Composition
During the relevant period, the KCFC wipes were made from a “Hydraspun” basesheet produced by a process of “hydroentangling”. This involved a mix of fibres being arranged together in a loose web which was blasted with fine jets of water, causing the fibres to entangle and bond together without the use of a chemical binder or bonding agent. The fibres comprised approximately 75% softwood and hardwood fibres, 23% lyocell (being a form of rayon made from regenerated cellulose) and 2% bicomponent (plastic) polyester fibres.
Following the manufacturing of the basesheet, it was then converted to make the finished KCFC wipe product by applying a liquid, folding or interleaving the basesheet, cutting the product to size, and packaging the finished product. Thus, the wipes were packaged for use in a moist state.
Unlike toilet paper, which becomes soggy when wet, the KCFC wipes were kept in store in a moistened state, remaining intact, with a two year shelf life in that state.
There was an issue between the parties about the length of the fibres in the KCFC wipes. Neither parties adduced evidence of any test by which the length or lengths was measured. KCA said that the fibres in hydroentangled wipes are “short”, based on the classification of “flushable wipes” in the UK Water study.
In cross-examination by KCA, Mr Drinkwater agreed that the length of hydrocarbon derived plastic fibres in baby wipes was up to 25 mm. In re-examination by KCA, Dr McAvoy was asked to explain his opinion that roping would not be produced by flushable wipes. Dr McAvoy said:
This really occurred – realisation early on assessing flushable wipes and, in particular, looking at pump compatibility and seeing some of the wipes that were roping. And so what I did with product development is I asked them – because I knew then that the fibre links of these wipes that were roping were like 25 millimetre. So I said can you provide me with individual fibres of cut five, 10, 15, 20, 25 millimetre in length. And I tested these in the pump. And if they were less than 15, if they were five and 10, I saw no roping. 15 started to rope. Get to 20, by 25 you get these fibres their length is such that they just starting wrapping around each other. So, based on this experiment, it was, you know, if you’re truly going to be compatible with pumps and a flushable product, you need to keep the fibre length 10 millimetres or less. So flushable wipes are short fibres. They’re not going to rope. These are other wipes that would be roping, baby wipes, for example.
The ACCC submitted that the Court should infer from Mr Drinkwater’s evidence that the length of the bicomponent fibres in the KCFC wipes was up to 25mm.
As to the length of the regenerated cellulose fibres in the KCFC wipes, KCA’s evidence was that, in the context of producing wipes, the main benefit of regenerated cellulose is that the fibres can be made longer than ordinary cellulose, which enables a stronger basesheet to be created when the longer fibres are bonded together.
ACCC contended that, given the significant proportion of the KCFC wipes that were comprised of artificially lengthened regenerated cellulose fibres and “long” bicomponent fibres, the hydroentangled fibre mixture of the KCFC wipes were predisposed to “roping” of the kind observed in sewerage blockages, either together or in combination with other items in the sewer.
Based on Dr McAvoy’s evidence, the disposition of KCFC wipes to “rope” is a matter that could probably have been the subject of empirical evidence. In the absence of such evidence, I do not accept that the evidence provides a sufficient basis for a finding about the propensity of the KCFC wipes to rope, particularly without a clear identification of the relevant kind or extent of “roping”.
Compliance with INDA/EDANA Guidelines and other testing
Mr Lortscher conducted or supervised testing on the KCFC wipes against the INDA/EDANA Guidelines at various times before and throughout the relevant period. These tests were primarily conducted at KCC’s FOMC in Wisconsin.
On each occasion that the KCFC wipes were tested, they satisfied the requirements of the INDA/EDANA Guidelines for flushability:
(1)KCC tested the basesheet used in the embossed Out & About KCFC Wipes (the 105530 55gsm quilt embossed Hydraspun basesheet) on the following occasions:
(a)August – October 2010 (tested at FOMC – passed GD2 tests); and
(b)June – August 2014 (tested at FOMC – passed GD3 tests).
(2)KCC tested the basesheet used in the non-embossed Out & About KCFC Wipes (the 105700 60gsm Hydraspun WL105700 basesheet) between December 2014 and January 2015 (tested at FOMC - passed GD3 tests).
KCA submitted that the KCFC wipes satisfied the GD3 criteria by a significant margin. For example, whilst the “slosh box” pass criteria in GD3 requires at least 25% of a product’s mass to pass through a 12.5mm sieve, on a test conducted by SGS Integrated Paper Services, Inc in 2017, most of the KCFC Wipes had over 80% of their mass pass through.
The ACCC did not dispute this submission, but noted that it did not refer to the “low flow slosh box” test, considered below. This latter test was not included in the GD3 criteria.
Mr Lortscher also gave affidavit evidence of “field testing”, including in the form of a “wet well” study in which he compared the performance of three flushable wipe products, including a competitor product, by supplying wipes to the 17 restrooms serving 1,000 staff at the KCC Wisconsin facility. He also referred to an onsite lift station pump where, since 2009, KCC has evaluated the compatibility of its products with the pump. In cross-examination, Mr Lortscher gave evidence on onsite field testing, drop studies in sewers, collection studies at treatment plants and onsite septic systems.
The ACCC submitted that, in the absence of supporting documentation, this evidence should be given very little or no weight. In my view, the evidence supports a conclusion that Mr Lortscher did not confine his relevant testing of KCC products to the INDA/EDANA Guidelines but also conducted testing by which he evaluated the sewerage systems themselves.
Evidence of problems caused by KCFC wipes
The ACCC tendered documents obtained from KCA concerning 28 separate complaints from consumers about sewerage blockages following use of KCFC wipes during the relevant period (consumer complaints). The complaints related variously to household drainlines, septic systems and other sewage systems. The complaints included documents that record the following opinions:
(1)An opinion of a plumber that a sewer choke in Mount Rankin, NSW in August 2014, was caused by “dip in pipework and flushable wipes”.
(2)An opinion of a person, who may have been a plumber, that a septic tank in Mildura, Victoria had a blockage that “consisted of a large mass of what appeared to be wipes” in November 2014, accompanied by a complaint that blamed the blockage on KCFC wipes.
(3)An internal email concerning a blockage in New Zealand in October 2015, which states “plumber confirms blockage caused by wipes”, apparently referring to KCFC wipes.
(4)An invoice from a plumber dated 26 October 2015, which records: “Locate and remove paper napkin blockage in sewerage drain at rear of property” in Moorabbin, Victoria accompanied by an internal KCC email that states: “It may be correct to say that flushable wipes were a part of the blockage that has caused the home owner to call in a plumber, based on the photographs provided”.
(5)An invoice dated 17 August 2015 from a plumber that records: “Clear blockage in toilet [indecipherable] line with eel caused by baby wipes.” The invoice is accompanied by an email from a consumer which states: “Please note, the plumber has written ‘baby wipes’ in the report, but meant ‘flushable wipes’.”
The ACCC did not attempt to prove the underlying facts in relation to these complaints by direct evidence from the relevant consumers or the plumbers who addressed the blockages. However, the complaints are evidence from which a conclusion may be drawn that KCFC wipes caused or contributed to harm to the authors of the complaints.
KCA’s records also included a complaint about a blockage allegedly caused by KCFC wipes in Auckland, New Zealand in September 2014. In response to the complaint, Neil Richards, who was part of the Adult and Feminine Hygiene Division at KCA, made the following observations:
In our experience, from a relatively small number of blocked plumbing complaints here in Australia, if the person lives in a country area with a long pipe run or if the pipeline doesn’t have a good angle of fall to a septic tank then these are both factors that make the use of a high number of flushable wipes possible contributing factors in a blockage.
Two other factors include the presence of nearby large trees with roots that can cause small snags in the internal surface of the pipework or a large number of turns in the pipework.
The EDANA test that relates to the dispersability of our wipes (that we meet), uses an oscillating tray to ensure ongoing movement of the wipes to speed up the break-up of the basesheet.
Basically our flushable wipes do work best in a smooth high flow pipe system.
Did KCFC wipes contribute to blockages in the sewerage system and increased maintenance costs?
The ACCC argued that KCA should not be able to take advantage of the fact that it is “incredibly difficult” to isolate the impact of their particular brand of wipes on the wastewater network. Even so, a positive finding on this question requires an adequate evidentiary basis.
Having regard to the substantial sales of KCFC wipes in the relevant period and the likelihood that those KCFC wipes were flushed in accordance with the “flushable” claim, it is reasonable to infer on the balance of probabilities that the KCFC wipes contributed to blockages in the sewerage system in an unknown number of instances, and to maintenance costs. However, even faecal matter and toilet paper contribute to sewerage blockages. Thus, as noted above, in the UK Water Study, organic material and the bulk of toilet paper captured with the blockage samples was washed out of the sample.
The ACCC contended that there is a “wealth of evidence” to support an inference that KCFC wipes contributed to or caused harm to household plumbing and the sewer network. It relied on the following matters:
(1)The consumer complaints.
(2)The blockage at the KCC Wisconsin facility.
(3)Various matters that demonstrate what KCA accepted, namely, that the KCFC wipes took longer to lose their wet strength than toilet paper, and therefore presented a greater risk of snagging and clumping with other materials, when flushed. These matters included:
(a)The fact that a product may pass GD3 and not break down during conveyance through the sewerage system.
(b)The KCFC wipes contain plastic and regenerated cellulose that ensures wet strength is maintained thereby delaying dispersion.
(c)Testing of the Hydraspun basesheet disclosed that it did not lose any strength after 60 minutes in a drainline thereby increasing the potential for contributing to blockages in drainlines and sewer pipes.
(d)Longer fibres are associated with the roping effect and the KCFC wipes did not merely contain short fibres.
(e)The GD3 “slosh box” test permitted 75% of the KCFC wipe to remain intact.
(f)An internal KCA email dated 29 October 2015 which states relevantly:
1)Area of contention with stakeholders is around flushability” V’s dispersability. Flushability means it’s availability to disappear down the toilet. Dispersability is the ability of the product to breakdown in the sewer. The water authorities issue is with ‘dispersability’ as our products don’t fully break down and disperse in the water (we know that our products imported into Australia are only about 65% dispersible – whilst we obviously do not discuss that externally! – which is hence why we’re fast tracking a significant product upgrade.
(g)KCFC wipes did not pass the “low flow slosh box” test. This contention is not accurate since the “low flow slosh box” test did not have criteria for determining whether a product passes or fails. However, the test can be used to compare the relative performance of different products. A KCC internal email dated February 2015 expressed the view that the GD3 “slosh box” test was likely to evolve to a lower flow slosh test that many would say was more representative of normal usage in waste water pipes.
(4)KCA’s October 2015 amendment to the packaging for the “Out and About” wipes from “[c]loths breakdown in sewerage system or septic tank” to the words “[c]loths suitable for use in properly maintained sewerage systems and commercial septic tanks”. The ACCC described the new language as an implied warning that the product was not suitable for domestic septic tanks.
(5)KCA’s change to a better dispersing product in May 2016, which was an attempt to reduce consumer complaints and to respond to concerns raised by the media that the KCFC wipes were not suitable to be flushed.
(6)The INDA/EDANA GD3 Guidelines were not an appropriate basis to determine whether a product was suitable to be flushed. It follows that large volumes of KCFC wipes were being placed into the drainlines and sewer systems that were not suitable, thereby contributing to blockages.
The ACCC argued that the representations each comprise predictions or forecasts as to how the KCFC wipes will behave when flushed and, similarly, how they will behave upon entering the wastewater network. Further, the representations relate to the benefits and characteristics of the KCFC wipes that will be exhibited once the products are used. All of the representations, according to the ACCC, can thus be characterised as relating to a performance characteristic of the product that only manifests at a future point in time after purchase and after use. These performance characteristics also manifest themselves in the context of an external and variable environment.
I am not satisfied that the “flushability” representation (or either of the alleged characteristics and disintegration representations) is a representation with respect to any future matter, for reasons identified by KCA which are as follows:
(1)The “flushability” representation is expressed as a representation about the characteristics of the KCFC wipes as manufactured, that is, that the wipes are suitable for flushing. The representation is not couched in conditional terms, nor as a prediction. It does not depend upon whether or not some uncertain event occurred.
(2)The fact that a consumer needs to actually use the product is hardly grounds to give the representations a futuristic quality. If that was the effect of s 4 of the ACL, then any representation made about the characteristics of goods sold in Australia, in respect of their intended use after sale, would be taken to be with respect to a future matter and the maker of the representation would be taken to have contravened the ACL absent evidence of reasonable grounds. It would substantially mischaracterise claims that something is “soluble”, “edible”, “dishwasher safe”, “water-proof” or “scratch resistant”, to describe them as predictions, forecasts or, in any substantial sense, representations as to future matters. Rather, in substance and effect, each is a statement of present fact as to the performance characteristics of the product as it has been manufactured. In the forms ending “-ble” the expression means “able to be” (dissolved or eaten or flushed as the case may be). As a matter of grammar and as a matter of substance that is an assertion in the present tense. And each such assertion is true or false whether or not the item is ever used as described. It is edible whether or not it is ever eaten. It is flushable whether or not it is ever flushed. The assertion is about the present quality of the thing.
(3)The ACCC’s submission does not reflect the intention behind s 4, or its predecessor in s 51A of the Trade Practices Act 1974 (Cth) (TPA). Allsop J traced the enactment history of this section in detail in McGrath v Australian Naturalcare Products Pty Ltd [2008] FCAFC 2; (2008) 165 FCR 230 (McGrath) at [165]-[195]. The particular mischief to which the section was directed was in overcoming the difficulty in obtaining “conclusive proof of dishonesty or recklessness from the surrounding circumstances without an admission of guilt from the defendant” in relation to statements, representations or predictions about future matters: Explanatory Memorandum, Trade Practices Amendment Bill 1986 (Cth) at [72], quoted in McGrath at [167]. Relevantly, the Explanatory Memorandum and the Senate Standing Committee for the Scrutiny of Bills both referred in this respect to the concepts of “promises”, “predictions” or “forecasts” when considering the proposed application of the section: see extracts quoted in McGrath at [167] and [169]-[170].
Conclusion
Accordingly, s 4 of the ACL has no relevant application.
Was the “flushability” representation false or misleading?
Legal principles
Determining whether the representations are false, misleading or deceptive, or likely to mislead or deceive, requires the application of well-settled principles: Specsavers v Luxottica [2013] FCA 648 (Specsavers) at [49].
In this case, the relevant principles are:
(1)a representation will be false, misleading or deceptive, or likely to mislead or deceive, if it induces or is capable of inducing error: Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 250 CLR 640 (TPG Internet) at [39] (French CJ, Crennan, Bell and Keane JJ);
(2)having determined that a pleaded representation is established, it is necessary to ask whether, as a question of fact, the representation is false, misleading or deceptive, or likely to mislead or deceive: Australian Competition and Consumer Commission v Telstra Corporation Ltd [2007] FCA 1904; (2007) 244 ALR 470 at [14]-[15];
(3)whether or not conduct is false, misleading or deceptive is an objective question of fact to be determined by the Court having regard to the evidence of the alleged conduct and to the relevant surrounding facts and circumstances: Specsavers at [49], citing, inter alia, Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304 at [25] (French CJ) and [102] (Gummow, Hayne, Heydon and Kiefel JJ (as her Honour then was));
(4)when the representation is directed to the public, the ordinary or reasonable person may be intelligent or not, may be well educated or not; the representations must be judged on ordinary or reasonable members of that class of the public to which it is directed: Australian Competition and Consumer Commissionv Coles Supermarkets Australia Pty Ltd [2014] FCA 634; (2014) 317 ALR 73 at [43];
(5)the legal principles relevant to finding that a representation is false or misleading in contravention of s 29 are the same as those that apply to s 18 of the ACL: cf. Australian Competition and Consumer Commissionv Dukemaster Pty Ltd [2009] FCA 682 at [14]-[15]; and
(6)the phrase “liable to mislead” in s 33 (and its predecessor s 55 of the TPA) has been held to apply to a narrower range of conduct than that comprehended by the phrase “likely to mislead or deceive” appearing in s 18: Australian Competition and Consumer Commissionv Turi Foods Pty Ltd (No 4) [2013] FCA 665 (Turi Foods) at [79].
A contravention of s 33 will be made out if “there was an actual probability that the public would be misled’ by the impugned conduct: Turi Foods at [79].
The ACCC also noted that “where claims are made of a scientific nature, proof that there is no scientific foundation or no adequate scientific foundation for those claims may be sufficient to establish that the claims are misleading”: GlaxoSmithKline Australia Pty Ltd v Reckitt Benckiser (Australia) Pty Limited (No 2) [2018] FCA 1 at [49]. See also Reckitt Benckiser (Australia) Pty Ltd v GlaxoSmithKline Australia Pty Ltd [2018] FCAFC 138 at [41].
ACCC’s case
In its closing submissions, the ACCC identified the following six reasons in support of a conclusion that the “flushability” representation was false and misleading:
(1)The KCFC wipes did not have similar characteristics to toilet paper when flushed.
(2)The KCFC wipes did not sufficiently break up or disintegrate in a timeframe and manner similar to toilet paper.
(3)Unlike toilet paper, the KCFC wipes were, in part, comprised of regenerated cellulose (lyocell), and plastics (polyethylene and polypropylene) and were packaged for use in a wet or moist state.
(4)Toilet paper breaks up or disintegrates in moving water within a period of a few minutes and loses its strength in water much faster than the KCFC wipes. The corollary of this is that the KCFC wipes did not break up or disintegrate in moving water as quickly or as easily as toilet paper; that is, within a few minutes.
(5)The KCFC wipes are not suitable to be flushed into sewerage systems in Australia and cause or contribute to blockages and damage to household, drainlines and septic systems, and wastewater networks and infrastructure.
(6)Passing the INDA/EDANA GD3 Guidelines is not a proxy for, or indicator of, suitability for disposal by flushing, including because they have been developed by the manufacturers and they do not constitute an independent testing regime, nor do they replicate real life sewerage system conditions. KCA represented that the KCFC wipes were “flushable”, not that they were “flushable as they complied with the INDA/EDANA Guidelines”.
Dissimilar characteristics to toilet paper when flushed
It is clear that, generally speaking, toilet paper breaks down more quickly and easily than KCFC wipes and the rate of break down is a significant characteristic when considering flushability.
The ACCC sought an additional finding that the KCFC wipes did not easily break down and disperse in a timeframe that prevents the risk of harm to household and municipal wastewater systems. KCA dispute that a finding to this effect should be made.
In support of the additional finding sought, the ACCC relied on the following matters:
(1)The different characteristics of toilet paper and the KCFC wipes, as shown by the Sydney Water agitation demonstration. As noted above, this demonstration shows how toilet paper and KCFC wipes act differently under similar forms of agitation. It does not, either alone or with other evidence, provide a basis for any conclusion about the risk posed by flushing KCFC wipes.
(2)KCA’s effective acceptance that its wipes may reach the wastewater treatment plant intact and, as such, that they do not easily disperse, as evidenced by the following:
(a)The December 2014 email referred to at [163(7)] above which records: “my guess is that the expectation is that our wipes are removed during sewerage treatment processing with the solid material being separated out and sent to landfill”.
(b)The June 2015 email referred to at [163(10)] above which states “if you sit our wipes in a dish of water, with no agitation, they most probably won’t start to break up inside 30 minutes, but that’s why we refer to the standard test methods from EDANA to claim ‘flushability’”.
(c)The July 2015 email referred to at [163(11)] above saying “I’ve been hesitant to include any message about how long it should take to disperse in fear of setting ourselves up for being ‘tested’ by the media”.
(d)A letter from KCA to the ACCC dated 11 January 2016, in which KCA states:
Substantiation testing supports KCFC Cloths being described as breaking down “like toilet paper”, but over a longer period of time and in a slightly different manner to toilet paper.
(e)An internal KCA email from Mr Foster to Ross Hearns and Geeta Uka dated 9 May 2013 that states that “You will always be able to find complaints on the internet etc about wipes as it is true that they do not break down as readily as dry product (hence the on pack instruction to only use 2 per flush)”.
(f)The internal KCC email dated 14 May 2014 referred to at [163(2)] above.
(g)In a KCC document dated 31 March 2016 headed “Key Messages”, the following: “Our wipes are designed to break down over time when passing through plumbing systems. They do take longer than dry toilet tissue to break down.”
(3)The results of the Sydney water agitation demonstration.
I accept that the KCFC wipes did not break down as easily as toilet paper. Further, all things being equal, the KCFC wipes were likely to disperse more slowly than toilet paper within the sewerage system.
Concerning household systems, I do not accept that these characteristics presented a real risk of harm over and above the risk posed by toilet paper in the light of the evidence that toilet paper also does not break down or disperse in the household drainline and having regard to the minimal evidence that any such harm eventuated.
Concerning the municipal wastewater systems, in the absence of evidence that any such harm eventuated, I do not accept that the characteristics of KCFC wipes identified by the ACCC presented a risk of harm materially greater than the risk posed by toilet paper.
Lack of break up or disintegration comparable to toilet paper
The ACCC contended that “far from breaking up or disintegrating in water within a period of a few minutes, the KCFC Wipes did not break up or disintegrate in half an hour”.
The ACCC referred to the internal KCC email, noted at [163(13)] above, which stated:
All other Hydraspun wipes … do not significantly lose strength after flushing as the strength comes from the hydroentangling of the fibres which is not easily reversible. So to have a highly dispersible Hydraspun wipe essentially means having a low strength to start with, creating problems in use.
The ACCC also referred to the “Competitive Flushability Performance” document, described at [163(12)] above, which compares three products including “Suominen Hydraspun”. This document suggests that the Hydraspun product failed on the “Dispersability slosh box”, “% Drainline strength Loss after 60 minutes” and “Municipal pump % increase” tests. In particular it records a score of 0% for the “% Drainline strength Loss after 60 minutes” test.
This is evidence that the KCFC wipes did not significantly lose strength after flushing and, in contrast to toilet paper, were not highly dispersible.
I accept that the KCFC wipes did not break up or disintegrate in a timeframe and manner similar to toilet paper. However, it is a separate question whether the capacity of the wipes to break up or disintegrate was “sufficient”.
Composition and wet packaging
I have set out the facts above concerning the composition of the wipes. In summary, I accept that the KCFC wipes were composed, in part, of regenerated cellulose and plastics and were sold in a sealed package for use in a wet or moist state.
Speed of disintegration
The ACCC contended that toilet paper breaks up or disintegrates in moving water within a period of a few minutes and loses its strength in water much faster than the KCFC Wipes. Conversely, the KCFC wipes did not break up or disintegrate in moving water as quickly or as easily as toilet paper; that is, within a few minutes.
Mr Hester’s evidence was that toilet paper begins to disintegrate quickly and to break up within a few minutes.
In response, KCA referred to the following evidence:
(1)Professor Paschke’s evidence that he has seen lots of toilet paper on the screen at the wastewater facility countless times;
(2)Dr McAvoy’s evidence that “even bath tissue [toilet paper] would not sufficiently disperse in a drainline” and “bath tissue … doesn’t disperse in a drainline”;
(3)Mr Lortscher’s evidence that even dry bath tissue will not pass the IWSFG disintegration or disposability test;
(4)Mr Lortscher’s evidence that screening is a natural process on waste treatment systems and screens out materials including faecal matter and dry toilet paper;
(5)Mr Brown’s evidence that it is not uncommon to find solid pieces of faecal matter and toilet paper within the vertical section at the junction to the infrastructure sewer;
(6)Mr Brown’s evidence of observing blockages in household drainlines which included toilet paper; and
(7)comments in a document entitled “Draft responses to peer reviewers Comments”, relating to GD1, that “even toilet tissue does not break up during drainline transport because the turbulent forces are not great enough to cause break up”.
On balance, I am not satisfied that toilet paper breaks up or disintegrates in moving water within a period of a few minutes. Having regard to the evidence pointed to by KCA, I accept that the suitability of toilet paper for flushing into the Australian sewerage system does not depend upon an ability to break up or disintegrate in moving water within a period of a few minutes.
I accept that the KCFC wipes did not break up or disintegrate in moving water as quickly or as easily as toilet paper.
Harm caused
My findings concerning the impact of the KCFC wipes upon Australian sewerage systems are set out above. In summary, I have found that the evidence does not support an inference that KCFC wipes contributed to or caused harm to household plumbing and the sewer network, except in relation to the cases recorded in customer complaints to KCA.
The ACCC pointed to five pieces of evidence to demonstrate the unsuitability of the KCFC wipes for flushing.
The first was KCA’s own decision to accelerate the development and introduction of “an improved flushable cloth”, which was said to further exceed the standards set by GD3. The new product, Queen, which was launched in Australia in May 2016, used a different base sheet.
The second and third were two KCA internal email exchanges. One was a February 2015 internal email exchanges which noted:
The current the [sic] base sheet is 98% cellulose, 2% synthetic fibre. Using the KC USA base sheet developmental learnings, we are looking to remove the synthetic fibre which has shown in initial testing to improve dispersibility ... this is a relatively small step in a longer journey...
And
Also as we are removing the synthetic element we would predict that the improved basesheet should be better in terms of biodegradability.
The other was the October 2015 email entitled “Moist wipe flushability issue”, which included the passage set out at [143(3)(f)] above.
Based on this evidence, by October 2015 KCA had a precise view about the extent of dispersion of the KCFC wipes, and did not expect them to fully disperse in the sewerage system. Earlier, by February 2015, KCA was taking steps to improve the dispersion of the wipes. Evidently, KCA recognised dispersion as an aspect of the quality of the KCFC wipes and, in 2015 and 2016, considered it desirable to improve the quality of the wipes in that respect.
While I accept that this evidence is consistent with a conclusion that the KCFC wipes were not fully dispersible, and therefore posed a risk of harm to the sewerage system, without evidence that this harm eventuated (except to the limited extent that I have found), it does not demonstrate that the KCFC wipes were unsuitable for flushing.
The ACCC contended that whether a product is suitable for disposal via the household and municipal wastewater treatment systems and processes must be understood in light of the following matters:
(1)The sewerage system is only designed for removal of urine, faecal matter and toilet paper (and trade waste subject to limits).
(2)The sewerage system includes imperfections such as tree root incursions, belly dips and misaligned pipes, both on customers’ properties and in the network. While only a proportion of pipes will have these defects, material that is flushed should be compatible with these features.
(3)The fact that, while it is physically possible to flush materials other than urine, faeces and toilet paper into the sewerage system, such materials should break down and disperse easily, and in a timeframe that prevents damage to the network.
Broadly, the KCA did not dispute the ACCC’s case in this regard.
Next, the ACCC referred to the evidence from the wastewater authority witnesses as to damage caused by “flushable” wipes. However, as set out above, that evidence was not directed to “flushable” wipes but, rather, to wipes generally. In circumstances where there is ample evidence of wipe products that are significantly different in composition, size and wet strength to the KCFC wipes, the evidence of the wastewater authorities does not provide a basis to conclude that the sewerage systems have suffered damage caused by “flushable” wipes.
Contrary to the ACCC’s submission, I do not accept that the evidence of the wastewater authority employees demonstrates the highly unsuitable nature of “flushable” wipes, including the KCFC wipes, to be disposed of via the toilet.
Rather, the evidence goes to a different issue, which is the unsuitable nature of wipes more generally to be flushed down the toilet.
KCA acknowledged that there are many types of wipes that are not suitable to be flushed into the sewerage system. Examples included baby wipes, household cleaning wipes and industrial cleaning wipes. Its case was that KCFC wipes are an exceptional category, aptly described as “flushable” because of their particular properties.
In the face of the existence of other wipe products, it is not possible to infer that the wipe products, which undoubtedly caused or contributed to blockages and damage to household drainlines and septic systems, and wastewater networks and infrastructure, were KCFC wipes.
INDA/EDANA GD3 Guidelines
Finally, the ACCC contended that “[p]assing the INDA/EDANA [GD3] Guidelines is not a proxy for, or indicator of, suitability for disposal by flushing, including because they have been developed by the manufacturers and they do not constitute an independent testing regime, nor do they replicate real life sewerage system conditions.
The ACCC pointed to the following evidence as to the insufficiency of the INDA/EDANA GD3 Guidelines:
(1)The August 2013 statement that:
The test method acceptance criteria needed to be agreed and accepted by a consensus of all INDA and EDANA wipes manufacturers, which resulted in the poorest performing wipe being used as the acceptance criteria.
Mr Sheahan SC submitted, based on the evidence of Mr Lortscher, that this statement was wrong. Mr Lortscher’s evidence was that KCC had argued unsuccessfully for stricter test criteria in relation to the slosh box test but, ultimately, Mr Lortscher was satisfied that GD3 contained a satisfactory test for flushability because it would exclude products that should not be disposed of in the sewerage system, namely, baby wipes, feminine care products, household cleaning wipes, and products that were not designed to break down at all. Mr Lortscher’s evidence does not clearly falsify the statement if the “poorest performing wipe” refers to a wipe marketed as “flushable”.
(2)A KCC internal report dated 20 January 2015 concerning “Project Trumpton”, which was a project concerned with improving the rate of dispersion of “moist toilet tissues”. The report noted:
Water authorities (UK & BE specifically) disagree with our standard of flushability – they believe that we are making their problems worse by encouraging consumers to flush wipe products and want us to increase our standards by which we self-regulate.
(3)The August 2013 statement that:
The testing in the [INDA/EDANA] guidelines is designed to differentiate a wipe which has the ability to break-down to some extent from a wipe such as Baby Wipes or Facial Wipes which will definitely not breakdown and could cause a pipe or pump blockage.
The ACCC noted that this statement was corroborated in February 2015 by an internal KCC statement in February 2015 concerning the INDA/EDANA GD3 Guidelines, which said: “These are the tests that differentiate us from baby wipes, household wipes which are not flushable.”
(4)Mr Richards’ observation, referred to earlier, that “[b]asically our flushable wipes do work best in a smooth high flow pipe system”.
(5)A KCC 2015 PowerPoint presentation, which stated:
While there has been significant progress on dispersibility, there is growing pressure by wastewater authorities and ISO to have even stricter standards using test methods with lower agitation to better simulate sewer systems. KC is actively engaged.
As set out above, I have concluded that the INDA/EDANA GD3 Guidelines represent a conscientious and scientific effort to establish an appropriate framework for assessing flushability.
While there is continuing disagreement about an appropriate standard or standards for flushability, in the absence of substantial evidence of harm caused by flushing the KCFC wipes, in my view, the INDA/EDANA GD3 Guidelines were a reasonable benchmark for making a claim of flushability. Their reasonableness is demonstrated by the fact that they were developed by scientists to test for performance on several dimensions relevant to performance in the sewerage system, they have been adopted or followed in several respects by the UKWIR Test Protocol and the 2017 IWSFG standard and they have not been demonstrated to produce harmful outcomes.
Conclusion
The “flushability” representation was not false, misleading or deceptive or likely to mislead or deceive.
If I am wrong in concluding that the “flushability” representation was not a representation with respect to a future matter, then it follows from my reasons above that KCA adduced evidence that it did have reasonable grounds for making the representation, and the ACCC failed to demonstrate that the representation was misleading.
Conclusion
The proceeding will be listed for a case management hearing with a view to determining appropriate relief and penalty in relation to the “Made in Australia” representation, which the parties agree was made and was false or misleading.
I will also hear the parties on to the question of costs.
I certify that the preceding three hundred and thirty (330) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gleeson. Associate:
Dated: 28 June 2019
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