Any claims or representations made by a business must be accurate and truthful. If a business has been dishonest, exaggerated the truth, or created a misleading impression, then there is a very broad provision in the Trade Practices Act to prohibit such conduct by a corporation.
For example, the ACCC webpage on misleading and deceptive conduct gives an example of a business predicting the health benefits of a therapeutic device or health product but having no proof that such benefits can be attained. Note that there is no need to show that the product has no benefit in fact, rather it is misleading to make a claim when there is no proof. In general:
If the overall impression left by an advertisement, promotion, quotation, statement or other representation made by a business creates a misleading impression in your mind then the conduct is likely to breach the law.
Drought Exceptional Circumstance report (DECR)
How do the claims in the Drought Exceptional Circumstance report (DECR) stack up?
The summary of the DECR reports the results on temperatures:
The analysis shows that the areal extent and frequency of exceptionally hot years have been increasing rapidly over recent decades and this trend is expected to continue. Further, over the past 40 years (1968-2007), exceptionally hot years are typically occurring over 10-12% of the area in each region, i.e. about twice the expected long term average of 5%. By 2010-2040, the mean area is likely to increase to 60-80%, with a low scenario of 40-60%, and a high scenario of 80-95%. On average, exceptionally high temperatures are likely to occur every 1-2 years.
On low rainfall:
Observed trends in exceptionally low rainfall years are highly dependent on the period of analysis due to large variability between decades. If rainfall were the sole trigger for EC declarations, then the mean projections for 2010-2040 indicate that more declarations would be likely, and over larger areas, in the SW, SWWA and Vic&Tas regions, with little detectable change in the other regions. Under the high scenario, EC declarations would likely be triggered about twice as often and over twice the area in all regions. In SWWA the frequency and areas covered would likely be even greater.
And on low soil mositure:
Projected increases in the areal extent and frequency of exceptionally low soil moisture years are slightly clearer than those for rainfall. If soil moisture were the sole criterion for EC declarations, then the mean projections indicate that more declarations would be likely by 2030, particularly in the SW, SW WA and Vic&Tas regions. Under the high scenario, EC declarations would be triggered almost twice as often in most regions and almost four times as often in SWWA.
These results were sufficiently alarming to produce the following interpretations:
ABC: A new report is predicting a dramatic loss of soil moisture, increased evaporation and reduced ground water levels across much of Australia’s farming regions, as temperatures begin to rise exponentially.
DAFF: Australia could experience drought twice as often and the events will be twice as severe within 20 to 30 years, according to a new Bureau of Meteorology and CSIRO report.
It was described by the Agriculture Minister Tony Burke as like â€œa disaster novelâ€.
The DECR created an overall impression, particularly within the rural community of considerable increase in intensity and severity of droughts. Three quasi-legal questions that occur to me (disclaimer: I am not a lawyer) are: Were people misled? Were claims made without proof? Did people suffer financially as a result?
As readers of this blog know, I have failed to find proof of the claims that lower rainfall is likely, despite my own analysis and a number of requests, both to the lead author and to the organizations that produced the reports, the CSIRO Flagship for Climate Adaptation and the Bureau of Meteorology (BoM). Similar to the example of a medical product promoted without proof, this alone may be sufficient to constitute misleading conduct.
The CSIROpod interview
Contrast the difference between the summary in the report above and an excerpt from an interview on the CSIROpod website a week later, after the furore surrounding the release of the report.
‘An assessment of the impact of climate change on the nature and frequency of exceptional climatic events’ was prepared by CSIRO and the Bureau of Meteorology for the Australian Government’s National Review of Drought Policy.
The analysis shows that the real extent and frequency of exceptionally hot years have been increasing rapidly over recent decades, and that trend is expected to continue.
The researchers also found that only some parts of the country will be affected by more frequent dry, hot periods, and that climate change through human induced greenhouse gas emissions is not always the culprit.
(1:20m) â€¦ there has not been a clear indication of changes in exceptional low rainfall years.
(1:40m) â€¦ but in terms of a long term trend its not very clear in terms of exceptional low rainfall years.
A few points about the CSIROpod argue the DECR was misleading:
1. Notice how qualified the statements are a week later, relative to the text of the report. This sugests the authors have had second thoughts about the quality of the original claims.
2. There is no reference to lower rainfall in the CSIROpod text, despite strong claims that lower rainfall is likely in the DECR.
3. The text on the web site states the researchers also found … “that climate change through human induced greenhouse gas emissions is not always the culprit”.
On point 3, I could find no evidence that researchers looked at the role of AGW relative to other factors in the report. Is this another misleading statement that has been presented without proof in order to create an effect?
Last week, Professor Stewart Franks, a hydroclimatologist at the University of Newcastle School of Engineering wrote in a major newspaper, that the Murray Darling Basin drought was caused by an entirely natural phenomenon, the 2002 El Nino event, and there is no evidence that CO2 has had any significant role. While he does not mention the DECR directly, the following statement appears to refer to the DECR, and would also support the contention that the report was misleading:
However, the most literally fantastic claim on climate change must go to Kevin Rudd, who has guaranteed that rainfall will decline over coming decades; one can only assume heâ€™s based his view on deficient climate models and bad advice.
The DECR was also prominent in an article by Ian Castles, former Australian Statistician describes the reactions to the report, and reflects on the absence of proof:
It is truly unfortunate that the CSIRO and the Bureau of Meteorology did not undertake a prior evaluation of the models used in the first study of its kind in Australia in order to ensure that those models were able to reproduce the past situations that were relevant to the study.
These experts seem to believe the DECR is was misleading, and fails to satisfy basic standards of proof for its claims.
What can be done?
There are a number of actions to take against businesses making misleading statements. The Australian Competition and Consumer Commission (ACCC) can take action in court against corporations and related individuals involved in misleading conduct, and may apply to the court for an injunction and other orders, particularly if it has been carried out through a medium that reaches a wide audience, such as over the internet, on national television, or through a nation-wide print advertising campaign. The DECR would surely qualify as a widespread distribution.
Individuals can also take private action if they have suffered a loss as a result of a business’ misleading or deceptive conduct or misrepresentation. For example, if a rural business suffered loss, such as the sale of a property falling through, as a result of misleading representations about increasing frequency of droughts or EC declarations in the DECR, courts can order damages, injunctions and other orders. Alternatively, depending on the amount of money involved, a claim may be lodged in the local small claims tribunal.
Update: A few hours after posting this I received an email from Andrew Ash, Director of the Climate Adaptation Flagship indicating that Kevin Hennessy will be responding to my report on basic validation tests of drought models.