Document 99zvdEVL1Xn3kpDoN2bL4GzL

'^rvr-i'C THE SOCIETY OF THE PLASTICS INDUSTRY. INC. 230 PARK AVENUE NEW YORK. NEW YORK 10017 2 1 2/S87 267 5 MINUTBS ACTUAL M5ETING PLASTIC BOTTLE INSTITUTE Marco Beach Hotel Marco Island. Florida November 29 & 30, 1973 9:00 a.m. Present: Mel Cooper, Chairman. Owens-Illinois, Inc., P. 0. Box 1035, Toledo, Ohio Ray Abramowltx, Hooker Chemical Corp., River Road, Burlington, N. J. 080l6 Alan Bailey, Diamond Shamrock Chemical Co., P. 0. Box 191, PainesviUe, Ohio 44077 Rome P. Busa, Progressive Plastics Ihc., 3321 W. lUoth Street, Cleveland, Ohio 44111 S. B. Bartean, American Can Co., American Lane, Greenwich, Ct. 06830 Robert D. Bishop, ECO Container Co., 4240 Blue Ridge Blvd., Kansas City, Missouri 66206 Donavon F, Beaver, Vlatron Corp., Prospect Avenue, Cleveland, (Kilo Donald R. Brinkley, Vlstron Corp., 165O Midland Hldg., Cleveland, Ohio 44115 Robert K. Croll, Allied Chemical Corp., P. 0. Box 53006, Baton Rouge, La. Hugh Comay, Marquis Products Co., Ihc., P. 0. Bax 52452, Lafayette, La. Clement J. Comay, Marquis Products Co., Ihc., 931 E. Convent St., Lafayette, La. 70501 Harry Eberhelm, Continental Can Co* Inc., 633 Third Ave*, New York, If. Y. Lewis P. Green, Borden Chemical Inc., 5U Imneaster St., Leominster, Mass. J. J. Glachetto, U S. I. Chemicals Co., 99 Park Ave., New York, N. Y. 10016 Frank M. Harris, Aim Packaging, Inc., P. 0. Box 278, Port Clinton, Ohio 43452 F, W. HaHowell, Consupak, Inc., One Cory Road, Morristown, N. J. 07960 Kevin J* Howard, Flexible Plastics Corp*, 132 So* M^le Ave*, So* San Francisco California 94060 Jerome H Beckman, SPI General Counsel, Keller and Heckman, 1150 - 17th St., H.W., Washington, D. C. 20036 Jack Jhglom, Pantasote Co* of Bew York, 26 Jefferson St*, Passaic, N. J. 07055 Carl H* Johnson, Diamond Shamrock Chemical Co*, 1100 Superior Avenue, Cleve land, Ohio 44077 G* Kappas, U.S.I. Chemicals Co., 99 Park Avenue, Saw York, V. Y* 10016 R. P. KLttredge, Fabrl-Kal Corp*, 3303 X* Cork St., Kalamazoo, Michigan 49001 Frederic S. Kaafhan, Jt., Sinclalr-Koppers Co*, Product Development, Menace, Pennsylvania 15061 Don Lewis, Mansanto Co*, 800 If* Lindbergh Blvd*, St* Louis, Missouri John M* McDonald, JT., Continental Can Co., 633 Third Avenue, Bew York, If. Y. Tom Mosser, Burson-lfarsteller Assocs., 866 Third Ave*, New York, N.Y. 10022 Thomas W* MiUea, Consupak, Inc*, One Cory Road, Morristown, N. J* Roy E McBride, Spokane Pres-to-Log Co*, Terminal Annex 2766, Spokane, Wash. 99200 Kenneth G. Michel, Continental Can Co., 633 Third Avenue, New York, N. Y. SPI-23969 -2- Thomas J. tfchoaey, Allied Chemical Corp., P. 0. Box 53006, Baton Rouge, La. John C. Murphy, American Can Co*, American Lane, Greenwich, Conn. 06630 Lewi* L. Ottereon, Dura Containers, lac., 3428 W. 48th Place, Chicago, til. Don Pollock, Consupak, lac.. One Cory ftsad, Jferristown, IT. J. 07960 David E. Paxaon, Kerr Glass Ifanufacturing Co., Manheim Pike, Lancaster, P&. William E. Rlsch, Anchor Hocking Corp., 189 Container Place, Cincinnati, Ohio 1*5246 Sam Rupert, Uhilcry Division, Hoover Ball * Bearing Co.. 135 E. Bennett 9t., Saline, l&chlgan 46176 J. M. Ryder, Owens-Illinois, Inc., P. 0. Box 1035, Toledo, Ohio Joseph D. Stephens, American Can Co., American Lane, Greenwich, Connecticut Guy S. Sutherland, Phillips Petroleum Co., Sixty-Six Bottle Div., Rt. 303, Orangeburg, N. Y. 10962 Joseph J. Salve, B. F. Goodrich Chemical Co., 6100 Oak Tree Hlvd., Cleve land, Ohio Frederic A. Sacks, Diamond Shamrock Chemical Co., P. 0. Box 191, Painesville, Ohio 44077 Richard F. Sands, DCO Container Co., 4240 Blue Ridge SLvd., Kansas City, Mo. Matthew E. Smith, Owens-Illinois, Inc., F. 0. Box 1035, Toledo, Ohio 43602 Robert M. Ulmer, Kerr Glass Mfg. Co., P. 0. Box 4000, Lancaster, Pa. Robert L. Walter, Monsanto Co., 800 ff* Lindbergh Blvd., St. Louis, Mo. K. E. Walker, Pantaaote Co. of New York, 26 Jefferson St., Passaic, N. J. Thomas J. McGrath, Director of Packaging Services. SPI, 250 Park Avenue, New York, New York 10017 Guest Speaker Jim Gillie, Assistant to the Manager, Public Affairs Department, Phillips Petroleum Co. Quentin Looney, Office of Energy Programs, Department of Commerce OPENING BPgKKB Chairman Mil Cooper welcomed the attendees to our Semi-Annual Meeting. He said that he was sorry to report that Wally Howells, Official Representative from fhnsrtrnl Co., and a member of the Sxeeutive Committee, had suffered a heart attack, however, he Is progressing nicely and is expected hack to work in the near fixture. Following .the usual self-introduction of the attendees, he inquired If there were any corrections to the minutes of our September 14, 1973 meeting. There were no corrections and the minutes were accepted. FINANCIAL REPORT Mr. McGrath reported that the Institute as of October 31st had total income of $55,855.87 with expenditures of $21,710.85, leaving a balance in the fund as of October 31st of $34,175.02* In comparing our expenses to budget all looks well and he closed his report by stating that we are in sound financial condition. SP1-239T0 3 (Please Hotet A. copy of the Institute's income and expenditure statement from June 1, 1973 thru October 31, 1973 and the expense to budget stateamixt covering the same parted- is attached to the minutes. ~ ----- LEGAL COQHSg, BgQHJ Jerome Heckman, Esq., SPI General Counsel, and Counsel for the Plastic Bottle Institute, reported that Senator Jackson's energy hill has been passed. We are most appreciative that the hill makes reference to the needs of petro chemical industry. Bie members are to he congratulated on their efforts in having this important reference included in the bill. He reported that the people in Vermont are rebelling against their container deposit bill and are making their purchases in ether states. The situation with the Minnesota Pollution Control Board is still in a "state of flux" as they have not yet developed an applicable set of guidelines regarding the introduction of "new" packaging. There will be a meeting with the Bnrvironaeirtal Protection Administration on December 13 at their request to discuss the Battelle Study on PVC incineration and corrosion. Mr. Beckman reported that we are still In negotiations with the Federal Trade Comission regarding their proposed co^laint. Be is of the opinion that we can negotiate a consent order. He reported that we will probably conduct nsi--billty research and the urethane industry will be laoirfng for total plastic industry support. He apologised to the members of the Market Development Comlttee for not having the product liability guidelines ready, however, he stated that he has been extremely busy with other matters which carry greater importance. Also, the situation regarding product liability is rapidly changing which has co^ plicated the preparation of the draft. However, he will ante every attempt to have a set of product liability guidelines ready for the tertet Develop ment Committee's next meeting. He reported that our cements regarding the migration of vinyl spanner into FVC limanr bottles ban been filed with the Food and Drug Administration. He are hcpafUL that they will accept our comments. At this point In te. Heckman's report mention, wee made about the tenufacturlng Chemist Association tftady of the affects of a saturated atmosphere of vinyl chloride- aonemar on rata. It would be aost helpful for us to obtain the results of this study, and It was rsmawsmlsil that we contact Clarence Heher of Bthyl Corporation, who is Chairman of the MCA plastics group. In dosing his report, Mr. Beckman reported on the activities of the Ad Hoc Hltrile Resin Committee. This Comnlttee is preparing an terlronmentsl I*>act Analysis Rsport for the Food sal Drug Administration on plastic carbonated beverages. Ha advised that the I^act Analysis Statement will be filed on SPI-23971 -b- Deceaber 6# A copy of the written aaterial without appendixes will be sent to all aeabers of the Plastic Bottle Institute. However, if they want the coaplete report, -which is aamoth in size, he requested that they either contact the Food and Drug Administration and request that they reproduce it, or contact Toa McGrath at the SPI. Ton McGrath will review the cost necessary to duplicate the complete document sad establish a price. 3IATI3TIC3 COMMUTES Statistics Committee Chairman Harry Eberfaeim reported. (Please Botes A copy of Mr. E&erheia's report is attached to the minutes as Exhibit A.T (Please Note: A copy of the Census Report of plastic bottles sad total weight of bottles shipped for August, 1972 compared to August, 1973 is attached to the ainutes as Exhibit 9.) WASTE HMIAGBfflrr COMMOTES RETORT Committee Chairman Fred Kaufman, Sinclair-Koppera Co., reported. (Please Notes A copy of Mr. Kaufman's report is attached to the ainutes as Exhibit C.T 3PI TRAN3ITI0K COWCTTa Ken Michel, Chairman of the SPI Transition Comlttee advised that at the Public Affairs Council's last nesting they voted to disband. In Its place will be a new Public Affairs Comlttee of the SPI Board of Directors* The following individuals co^rise the Public Affairs Comlttee of the SPI Board, Fred C* Sutro, Chairman, TJSS Cheadcals Robert Daily, Vice Chairaaa, Celanese Elastics Co* Vernon Larson, Treasurer, Ohion Carbide Corp* win-- Kennel, Chalraan, Technical Comlttee, Amoco Cheadcals Corp* Donald Bryan, gh****^", Public Relations Comlttee, Mahay Chemical Co* Cooper, Owena-Hldnois Clarence Heher, Ethyl Corp* Jean Malone, 3* F. Goodrich Chemical Co* C E. O'Connell, Gulf Cheatcal Co* Harold Salth, Illinois Tool Works Ken reported that a ballot has been sent out to the SPI members requesting that they approve the necessary changes in the SPI Hrlaws to incorporate the new Public Affairs Committee* He motioned the importance of the SPI maintaining all Its aeabers* It is difficult to detexalae how many aeabers any resign because of the new dues increase, however, all efforts should be taken to mini wise the loss in asabership* SPI-23972 6 closing his remarks he stated that each year the Promotion Committee has had a difficult time in obtaining approval of its program. While he personally has some concern over the PLASTIC BOTTLE EXPERT, he believes that the remainder of the program la excellent and urged its endorsement. The members of the Institute did approve Che promotion program and the suggestion that the Promotion Committee consider ways of expanding its program where they feel it's needed. (Please Note; A copy of the Plastic Bottle Institute's 1974-75 Public Relations Program Is attached to the minutes.) 1974-75 BUDGET Tom McGrath presented the proposed budget for June L, 1974 through May 31, 1975. He advised that he was requesting a budget some $10,000.00 lower than the previous year's budget because several budget items involving publications were not spent during the previous fiscal year because the brochures have not yet been completed. He advised that these items will be carried as part of the budget for accounting purposes only, and, therefore, he requested approval of a budget of $83,775.00 for fiscal 1974-75. A motion was made, seconded and unanimously carried that the budget be approved. (Pleaea Note: A copy of the budget la attached to the minutes.) GUEST SPEAKER Mai Cooper introduced our gueat speaker, Mr. Richard R. Salzman, Directing Editor of the Research Institute of America, who gave a stimulating talk entitled "The Economy The Reel Challenge." DATE AND PLACE OF NEXT MEETISC It wee approved that we tentatively schadula our next meeting on September 19 in New York City. (Please Note? Subsequent to the meeting a conflict arose, and the next meeting will be held on September 10, 1974 in New York City.) DATE AND PLACE OF SEMI-ANNUAL MEETING f The Institute's Semi-Annuel meeting will be held on November 20, 21, and 22, at Mountain Shadows in Arizona. ADJOURNMENT There being no further business to transact, the Plastic Bottle Institute's Tenth Annual meeting was adjourned at 11:50 a.a. Respectfully submitted, Thomas J. McGrath General Manager TJMcG/pb SPI-23973 The New Role of the Trade IsAssociation-- It Now a Quasi-Governmental Entity? Jerome H, Heckman Keller and Heckman IMDA General Counsel "Cheng-teh, li-yuh, hou shong." No, this is not part of the Watergate transcript, It is intelligible and devoid of expletives. It is the theme of the Chinese exhibit at Expo '74 and means: "One must with perfect virtue, serve THE REASONABLE REQUIREMENTS OF THE PEOPLE AND ENRICH THEIR LIVES," It SEEMS a SENSIBLE MISSION FOR GOVERNMENT, INDUSTRY, AND EVERY MAN IN A RELATIVELY FREE SOCIETY. PROVIDED THE WORD REASONABLE IS UNDERSCORED, IT EVEN SEEMS ACHIEVABLE. The very use of this theme would appear to indicate THAT MANKIND ALL OVER THE REST OF THE WORLD STILL BELIEVES IN ITSELF* AND IN THE RULE OF REASON, YET A LOOK AT THE EVOLUTION OR REVOLUTION WHICH HAS TAKEN PLACE IN THE UNITED States in the past ten or twelve years makes one wonder ' WHETHER OUR "FREE SOCIETY" HAS LOST SIGHT OF WHAT FREEDOM Presented at the Sixth Annual Meeting of the International Nonwovens and Disposables Association, Montreal, Ontario, May 15-17, 1974. SPI-23974 -2 - IS IN ALL ITS ASPECTS, PERHAPS OUR PERSPECTIVE HAS BECOME SO DISTORTED THAT WE ARE HAVING A TYPE OF NATIONAL SCHIZO PHRENIC NERVOUS BREAKDOWN, AS A NUMEER OF WRITERS HAVE SUGGESTED, What is reasonably clear is that many of those who LOUDLY INSIST ON MORE PERSONAL FREEDOM OR LICENSE (DEPENDING ON YOUR POINT OF VIEW), ARE ALSO BUSILY PROSELYTING THE NOTION THAT GOVERNMENT MUST REGULATE SO PERVASIVELY AS TO ASSURE LONG LIFE, PERFECT HEALTH, NO SO-CALLED "RIP-OFFS," AND PLAYPEN OR PADDED CELL TYPE SAFETY TO THE CITIZENRY. The CRY IS FOR "zero defects" WHERE PRODUCTS, MANU FACTURERS, AND THEIR ASSOCIATIONS ARE CONCERNED. It IS A NOW DEMAND, NOT AN "AS SOON AS POSSIBLE OR REASONABLE" ONE. In SOME IMPORTANT RECENT INSTANCES RETROACTIVE PROTECTION IS BEING CALLED FORj FORMAL CHARGES FOR LACK OF TWENTY-TWENTY HINDSIGHT COULD BE THE WAVE OF THE IMMEDIATE FUTURE. All THIS AT A TIME WHEN OUR BASIC GOVERNMENTAL INSTITUTIONS SEEM LESS., RATHER THAN MORE CAPABLE OF COMMANDING PUBLIC respect. Their answer is to pass the buck to industry and, EVER INCREASINGLY, TO TRADE GROUPS LIKE YOUR OWN. THIS,. OF COURSE, IS WHAT PRESENTS THE DILEMMA SUGGESTED BY THE TITLE OF THIS TALK BECAUSE SUCH BUCK-PASSING CAN LEAD TO DIRECT CONFLICTS BETWEEN CONSUMER PROTECTION RESPONSIBILITIES AND ANTITRUST LAW PROSCRIPTIONS ON GROUP ACTION. SPI-23975 -3- Trade associations in this country have heretofore BEEN BUSINESS LEAGUES OR GROUPS OF COMPETITORS WHOSE MAIN LEGAL PREOCCUPATION WAS AVOIDING THE RUNNING AFOUL OF THE ANTITRUST LAWS. ASSOCIATIONS LIKE THIS ONE HAVE ALWAYS BEEN AN IMPORTANT PART OF THE FREE ENTERPRISE SYSTEM PRO VIDING SUCH NEEDED SERVICES AS INSTITUTIONAL ADVERTISING AND MARKET PROMOTION OF PRODUCTS IN GENERAL, IMPROVING CON SUMER RELATIONSHIPS, PRODUCT STANDARDIZATION, PUBLIC EDUCA TION, AND GOVERNMENT LIAISON. TRADITIONALLY, THE MAIN LEGAL CONCERNS OF SUCH ORGANIZATIONS AROSE FROM THE FACT THAT TRADE ASSOCIATIONS ARE COMPOSED OF COMPETITORS AND MOST ANTITRUST VIOLATIONS INVOLVE CONSPIRATORIAL ACTIVITY BY COMPETITORS. ASIDE FROM . ANTITRUST VIOLATIONS SUCH AS PRICE FIXING AND MARKET ALLOCATIONS, MOST TRADE ASSOCIA TION ACTIVITIES ARE NOT PROSCRIBED BUT, INSTEAD, ARE GOVERNED BY THE "RULE OF REASON." THUS, ASSOCIATIONS MAY ENGAGE IN A WIDE VARIETY OF PROGRAMS AS LONG AS THEIR EFFORTS, UNDER THE "RULE OF REASON," DO NOT UNREASONABLY RESTRAIN TRADE, UN FAIRLY IMPEDE COMPETITION, AND ARE NOT.DISCRIMINATORY OR EXCLUSIONARY REGARD ING NON-MEMBERS. Implicitly recognizing the effectiveness of the TRADE ORGANIZATIONS, FEDERAL LEGISLATION AND FEDERAL REGULATORY AGENCIES HAVE BEEN INCREASING THEIR RECOGNITION OF TRADE ASSOCIATIONS AS VALUABLE SOURCES OF INFORMATION. SPI-23976 -4- Thus, the Food and Drug Administration in notices to industry REQUIRING THE FILING OF ENVIRONMENTAL IMPACT ANALYSIS REPORTS ACTIVELY SOLICITED THE VIEWS OF TRADE ASSOCIATIONS, In 1973,Section 6 of the Emergency Petroleum Allocation Act of PROVISION IS MADE FOR THE FEDERAL ENERGY OFFICE TO MEET WITH "REPRESENTATIVES" OF INDUSTRY SO AS TO OBTAIN THE DATA NEEDED TO DEVELOP PROPOSED REGULATIONS; THE UNDERLYING LEGISLATIVE INTENT HERE WAS TO ELICIT THE VIEWS AND COMMENTS OF TRADE ASSOCIATIONS. IN A RECENT SPEECH, THE DIRECTOR OF THE BUREAU of Competition of the Federal Trade Commission advocated that TRADE ASSOCIATIONS ENCOURAGE THEIR RESPECTIVE MEMEERS TO IMPLEMENT INDIVIDUAL COMPANY RAW MATERIALS ALLOCATION PRO GRAMS SO AS TO COMBAT THE PROBLEM OF MATERIALS SHORTAGES. IN A PROVISION OF THE CONSUMER PRODUCT SAFETY ACT CONCERNING THE ESTABLISHMENT OF CONSUMER PRODUCT SAFETY Standards, an opportunity exists for the development of STANDARDS BY OFFERORS OUTSIDE OF THE COMMISSION WITH THE UNDERLYING LEGISLATIVE INTENT BEING THAT OFFERORS WILL MORE OFTEN THAN NOT BE TRADE ASSOCIATIONS. ALSO UNDER THE Occupational Safety and Health Act, consensus safety STANDARDS WERE ADOPTED SHORTLY AFTER THE EFFECTIVE DATE OF THE ACT WITH THESE STANDARDS BEING DEVELOPED EY STANDARDSMAKING ORGANIZATIONS SIMILAR IN NATURE AT LEAST TO TRADE ASSOCIATIONS. SPI-23977 -5- This kind of increased recognition of the role of THE TRADE ASSOCIATION IS LEADING TO THE IMPOSITION OF GREATER / RESPONSIBILITIES ON SUCH GROUPS, HOWEVER. ThE "RULE OF REASON" IS NO LONGER AN ADEQUATE GUIDE FOR THE TRADE ASSOCIA TION BECAUSE RECENT CASES, THE SCOPE OF WHICH ARE STILL TO BE FULLY DEFINED, ARE CASTING UPON GROUPS LIKE THIS ONE THE NEED FOR CONCERN ABOUT WHETHER THEIR ACTIVITIES CAN LEAD THEM INTO EXPOSURE FOR ANY HARM CAUSED MORE DIRECTLY BY THE USE OF INDIVIDUAL MEMBER COMPANIES' PRODUCTS. NOW TRADE ASSOCIATIONS, R , CAN AND ARE BEING CHARGED IN PRODUCTS LIABILITY AND DECEPTIVE ADVERTISING CASES THOUGH THEY NEITHER MAKE OR SELL GOODS, AND PROBABLY CANNOT OBTAIN PRODUCTS LIABILITY INSURANCE. Witness the now famous "blasting caps" case. Hall v. E. I. duPont de Nemours s Co...^ Inc... brought in 1972. In THIS CASE, SUIT WAS BROUGHT AGAINST SIX MANUFACTURERS MU THFTR TRADE ASSOCIATION FOR INJURIES SUFFERED BY CHILDREN RESULTING FROM VARIOUS BLASTING CAP ACCIDENTS. As A SIGNI FICANT PART OF THE CASE, THE PLAINTIFFS CHARGED THAT THE , DEFENDANT MANUFACTURERS HAD ACTUAL KNOWLEDGE THAT CHILDREN WERE FREQUENTLY INJURED BY BLASTING CAPS AND THROUGH THE TRADE ASSOCIATION KEPT STATISTICS REGARDING THESE ACCIDENTS. The defendants' use of placards and printed notices to warn USERS OF THESE CAPS AND THE GENERAL PUBLIC AS TO THE SPI-23978 -6 - HAZARDOUS NATURE OF THE PRODUCTS WAS HELD BY THE COURT TQ BE INADEQUATE. INSTEAD A PROGRAM OF LABELING THE BLASTING CAPS WITH DANGER WARNINGS WAS VIEWED AS NECESSARY TO PROVIDE AT LEAST A MINIMAL REQUIREMENT REGARDING SAFETY; HOWEVER, THE DEFENDANTS NOT ONLY REJECTED THAT POSSIBILITY BUT LOB BIED AGAINST LEGISLATION THAT WOULD HAVE REQUIRED SUCH LABELING. IN HOLDING FOR THE PLAINTIFFS, THE COURT IMPOSED A SEVERE DUTY OF CARE ON THE DEFENDANTS, INCLUDING THE DEFENDANT f TRADE ASSOCIATION. THE COURT HELD, IN EFFECT, THAT THE TRADE ASSOCIATION ACTED CONTRARY TO THE PUBLIC INTEREST AND WAS, THEREFORE, LIABLE IN A PRODUCT LIABILITY SUIT FOR NEGLIGENCE. Underlying this decision was the concept of a need for joint OR GROUP RISK. CONTROL, I.E. THE NEED TO DETER HAZARDOUS BEHAVIOR BY GROUPS OR MULTIPLE DEFENDANTS AS WELL AS IN DIVIDUALS; AND THE NEED FOR ENTERPRISE LIABILITY. What this decision indicates is there is a duty of ASSIGNING THE FORESEEABLE COSTS OF A POTENTIALLY DANGEROUS ACTIVITY TO THOSE IN THE MOST STRATEGIC POSITION TO REDUCE THE RISKS. BY FIN DING THAT THE TRADE ASSOCIATION KNEW OF THE DANGEROUS ACTIVITY AND, AS THE COURT SAW IT, ACTED IN ADEQUATELY TO REDUCE THE HAZARDS ASSOCIATED WITH THE ACTIVITIES OF THAT INDUSTRY, IT WAS CONCLUDED THAT THE TRADE ASSOCIATION DID NOT FULFILL ITS DUTY TO ACT IN THE PUBLIC INTEREST. SPI-23979 -7- The second significant development in this area is THE PROPOSED COMPLAINT ISSUED BY THE FEDERAL TRADE COMMIS SION INVOLVING CELLULAR PLASTICS PRODUCTS USED IN CONSTRUC TION AND HOME FURNISHINGS. IN THIS CASE, A STANDARDS-MAKING ORGANIZATION, TWENTY-SIX MANUFACTURERS, AND THE MANUFACTURERS' TRADE ASSOCIATION WERE NAMED AS PROPOSED RESPONDENTS. THE VIOLATIONS CHARGED HERE WERE IN THE NATURE OF THE DECEPTIVE ADVERTISING OF PRODUCTS, AS THESE SELLING PRACTICES RELATED TO THE DEVELOPMENT AND USE OF TEST METHODS AND DESCRIPTIVE TERMINOLOGY UTILIZED IN CONNECTION WITH THE FLAMMABILITY TESTING OF CERTAIN TYPES OF PLASTICS. THE COMMISSION CHARGED THAT THE RESPONDENTS KNEW THAT THE TEST STANDARDS PERMITTING THESE PRODUCTS TO BE DESCRIBED AS "NON-BURNING" AND "SELF-EXTINGUISHING" WERE INVALID FOR DETERMINING HOW THE PRODUCTS BEHAVED IN ACTUAL FIRES. AS PART OF THE CASE, IT ALSO CHARGED THAT THE TRADE ASSOCIATION ACTUALLY KNEW OR SHOULD HAVE KNOWN THAT THE TESTS AND STANDARDS WERE INACCURATE AND INVALID AND THAT PRODUCTS SOLD USING THE CLASSIFICATIONS OF THESE TESTS AND STANDARDS WERE BEING DECEPTIVELY ADVERTISED. A VERY POS SIBLE AND MOST UNFORTUNATE INFERENCE WHICH MIGHT BE DRAWN FROM THE FTC CHARGES WAS THAT THE TRADE ASSOCIATION SHOULD HAVE REFRAINED FROM PARTICIPATING IN DISCUSSIONS ABOUT THE SPI-23980 -8 - PROMULGATION OF THE TESTS AND STANDARDS DESPITE THE FACT THAT THEY WERE PROMULGATED BY AN ESTABLISHED INDEPENDENT STANDARDS"MAKING ORGANIZATION, OR ACCEPT AN AFFIRMATTVF DUTY OF DISCLOSING TO THE. PUBLIC THE HAZARDOUS NATURE OF THE INDUSTRY^ PRODUCTS IN REAL FIRE SITUATIONS. EVEN BEFORE THE PROBLEMS. WERE, THOROUGHLY STUDIED AND_ SCOPED. TlHlS CASE, WHICH COULD EE SETTLED BY A CONSENT ORDER SO THAT IT MAY NEVER BE LITIGATED, COULD NONETHELESS HAVE SUBSTANTIAL PRECEDENT-SETTING IMPACT BEARING ON THE DUTIES AND CHARACTER OF TRADE ASSOCIATIONS. As A RESULT OF THE INCREASED SIGNIFICANCE OF AND RELIANCE PLACED ON TRADE ASSOCIATIONS AS SOURCES OF INFORMA TION FOR FEDERAL AGENCIES, AND BASED ON TRENDS THAT MAY BE ARISING OUT OF THE "BLASTING CAPS" CASE AND THE FTC Complaint I have discussed, it appears that the new obliga tions BEING PLACED ON TRADE ASSOCIATIONS TO ACT IN THE PUBLIC INTEREST MAY ACTUALLY BE ELEVATING THEM TO THE STATUS OF QUASI-PUBLIC ORGANIZATIONS. THUS, IT MAY NO LONGER BE SUFFICIENT FOR A TRADE ASSOCIATION TO FOLLOW THE ANTITRUST LAW "RULE OF REASON" CONCEPTS AND AVO.ID RESTRAINING TRADE f WHILE REPRESENTING THE INTERESTS OF ITS MEMEERS AS AN ADVOCATE. It is perhaps a little early to predict with ACCURACY BUT A GREAT DEAL OF SOUL SEARCHING WILL PROBAELY SPI-23981 -9- BE TAKING PLACE IN SOME ORGANIZATIONS LIKE THIS ONE AS TO WHETHER THEY SHOULD EITHER AESTAIN FROM ENGAGING IN TRADI TIONALLY ACCEPTED ACTIVITIES RELATING TO THE MARKETING OF PRODUCTS OF MEMBER COMPANIES (E.G, DEVELOPMENT OF A STANDARD "WIDGET" SIZE AS OR THROUGH A STANDARDS-MAKING ORGANIZATION), OR HAVING ONCE DECIDED TO ENGAGE IN SUCH ACTIVITY, RECOGNIZE THEY TAKE ON THE BURDEN OF ACTING "iN THE PUBLIC INTEREST" BY DISCLOSING ALL HAZARDOUS ASPECTS AND FOSTERING SAFE USE APPLICATIONS OF SUCH A PRODUCT, In OTHER WORDS, IT MAY BE THAT ONCE A TRADE ASSOCIATION ACTIVELY PARTICIPATES IN SOME TYPE OF PROMOTIONAL ACTIVITY REGARDING A GIVEN PRODUCT, THAT ORGANIZATION UNDER THE NEW "BUREAUCRATICS" MAY HAVE TO TRY TO ANTICIPATE AND DISCLOSE ALL POSSIBLE PUBLIC SAFETY AND HEALTH PROBLEMS ASSOCIATED OR POTENTIALLY ASSOCIATED WITH THE PROMOTION OF THAT PRODUCT. It CERTAINLY APPEARS THAT THE TRADE ASSOCIATION of THE FUTURE IS NOT ONLY GOING TO BE CHARGED WITH ACTING IN THE INTERESTS OF ITS MEMBERS, BUT MAY ACTUALLY BE ELEVATED TO THE POINT WHERE IT ASSUMES QUASI-PUBLIC INSTITUTION STATUS, NOW, APPARENTLY, WHERE THE DEVELOPMENT, PROMOTION, AND SALE OF PRODUCTS ARE CONCERNED, AND AT LEAST WHERE THE PUBLIC SAFETY AND HEALTH MAY BE INVOLVED, TRADE ORGANIZA TIONS MAY HAVE TO OBSERVE A TYPE OF JUDICIAL, OR AT LEAST QUASI-REGULATORY AGENCY POSTURE, TNIS IS GOING TO PRESENT SP1-23982 - 10 - ANY NUMBER OF PROBLEMS, THE SCOPE OF WHICH WE'VE ONLY BEGUN TO IMAGINE, IT WOULD SEEM THAT TRADE ASSOCIATIONS WILL BE REQUIRED, IN SOME WAY OR ANOTHER, TO PUBLICIZE ANY PROBLEMS ENCOUNTERED AND, IN GENERAL, OPERATE IN A FISHBOWL. WHEN A PROBLEM COMES UP IN THE ASSOCIATION, IF ANY TYPE OF HAZARD IS APPARENT OR SEEMS POSSIBLE, IT LOOKS AS IF THE ASSOCIATION IS GOING TO HAVE AN AFFIRMATIVE DUTY TO MAKE DISCLOSURE AND PUBLICIZE ANY ANTICIPATED TOXICITY, FLAM MABILITY OR OTHER HAZARDS POTENTIALLY RELATED TO THE USE OF ITS MEMBERS' PRODUCTS. In SHORT, I THINK THAT ORGANIZATIONS LIKE THIS ONE ARE BEING VIEWED AS QUASI-PUBLIC BODIES AND IN DUE TIME WE MAY VERY WELL HAVE THE SITUATION IN THIS COUNTRY THAT HAS PERSISTED ELSEWHERE AROUND THE WORLD, WHERE TRADE ASSOCIA TIONS ARE VIRTUALLY AN INFORMAL ARM OF THE GOVERNMENT, AND ACT IN MANY RESPECTS AS A WAY TO COVER INABILITY OF GOVERN MENT TO DEAL WITH COMPLICATED PROBLEMS. Obviously, there are many, many questions that have TO BE RESOLVED IF THIS IS TO BE THE CASE. It'S AN OPENING ARENA; IT'S FRIGHTENING `IN MANY RESPECTS AND WILL BRING INTO PLAY A NUMBER OF DILEMMAS FOR THOSE LIKE US WHO ADVISE YOU IN THE FUTURE. IT IS NOT EASY, FOR EXAMPLE, TO IMAGINE PUBLICIZING SOME OF THE DRAWBACKS OF PRODUCTS AND AVOID ANTITRUST, LIBEL AND SLANDER, OR OTHER SUITS BY INDIVIDUAL SPI-23983 - II - MEMBERS OR NON-MEMBERS WHO ARE THEREBY INJURED. THIS IS ONE OF THE DILEMMAS THAT WE HAVE TO TRY TO RESOLVE. IF NOTHING ELSE, I THINK, YOU WILL HAVE TO AGREE THAT YOU ARE NOT THE ONLY ONES WHO HAVE SOME CHALLENGING TASKS AHEAD. We DO, TOO. We ARE GOING TO TRY TO DEAL WITH THEM AND TO HELP YOU SORT THEM OUT SO THAT INPA CAN CONTINUE TO FUNCTION EFFECTIVELY IN THIS BRAVE NEW WORLD. PlY MAIN PURPOSE TODAY WAS TO POST YOU ON THE PROBLEM; IN THE FUTURE, WHEN SOME OF THE DUST HAS SETTLED, WE WILL CONTINUE TO TRY TO ADVISE YOU ON VIABLE SOLUTIONS AS SPECIFIC INSTANCES ARISE. Thank you very much. SPl-23984 PLASTIC BOTTLE INSTITUTE TRAFFIC REPORT May, 1974 At the Executive Committee Meeting in New York on February 21, 1974 two proceedings were emphasized as being important to the plastic bottle industry. First, the Central and Southern effort to eliminate plastic bottles from the liquor commodity rates was discussed. This carrier action was successfully protested by the Society of Plastics Industry and the Distilled Spirits Council of the United States. At the present time Central and Southern has a Petition for Reconsideration and Vacation of Suspension before Division 2 of the Interstate Commerce commission, hoping to reverse the Suspension Board's decision. The second matter of importance discussed was the New England Classification proposal. A great deal of time has been spent in an effort to protect plastic bottle manufacturers from adverse changes in the subject classification; Martin Bercovici (5.P.I. counsel), Derrill Dunkman (Monsanto), and Les Pierce (Owens-Illinois) attended one meeting and two hearings pertain ing to this matter. The first hearing at Burlington, Massachusetts was not successful. An appeal and appearance made by these individuals before the General Rate Committee on May 8th appears, at this time, to have convinced the Committee of the merits of our position. Hopefully, no further action will be required. The motor carrier industry persists in attempts to increase the truckload, costs to plastics manufacturers through a variety of methods* Members of the Plastic Bottle Institute traffic committee have been alert to several items published in various tariffs. Admiral-Merchants published a minimum weight restriction that would require a 24,000 pound minimum for our products, imco protested this publication which was suspended and subsequently withdrawn (I&SM 27595). Our present classification minimum weight is 10,000 pounds for most plastic bottles. Central and Southern published a "Minimum Charges" item which would have resulted in a 16,000 pound minimum weight for our products. This provision was protested by S.P.I. and Imco, resulting in a deferred effective date to allow the bureau time to justify its position (Suspension Board Case No. 60771) SPI-23985 PLASTIC BOTTLE INSTITUTE TRAFFIC REPORT Page 2 Southern published in three tariffs a "Capacity Load Minimum Charge Rule" which would result in higher charges at the higher rate basis numbers. This publication was protested by the S.P.I. and Imco and has been suspended by the commission. Central States tariff bureau published a proposal in their docket to eliminate the exception rating earned for plastic bottles. It is noteworthy that through communication from the traffic committee and S.P.I. Counsel, the bureau was persuaded to leave the exception item in the tariff and allow individual carriers to elect whether or not to participate in the rates through independent action procedures. This action is positive and very significant. Eastern Central published an item to become effective on June 1, 1974 (unless suspended) whereby seven large carriers would require a 12,000 pound minimum weight on plastic bottles. This item is unique in that plastic bottles are specifically designated. Eastern Central also has requested and will pub lish rate increases on the controversial "capacity load" provision which exceed the increases applicable to truckload rates. This is another effort to effect higher increases on low density products. The above examples are not exhaustive. There have been many other actions taken by the traffic committee and its1 members pertaining to a variety of subjects at the bureau levels, and subjects indirectly related to plastic bottles. The Traffic Committee is scheduled to meet June 5th, 6th, and 7th at Scotsland Resort, Oconomowac, Wisconsin. Many proceed ings and projects affecting the entire plastics industry will be discussed and resolved at these meetings. f Respectfully submitted WC/pb Chairman Traffic Committee Plastic Bottle institute SPI-23986 TECHNICAL COMMITTEE REPORT First -- thanks to everyone for the becking we have received from member companies. Ue have had excellent attendance and cooperation In both the aub-comitteea and Technical Committee. As Tom mentioned earlier, ve have overrun our budget as this la due to the increase of member attendance. At our Technical maetlng laat month we had 25 percent. A big factor in our ability to respond to the projects and to complete them has been mainly through the excellent work done on the sub-committee level. This in turn has kept the Technical Committee better informed from their reports, and also enables us to spend more time on other areas. In fact at our laat meeting, we had a guest speaker -- Mias Hay Bender, a designer -- who was wall received. Ue are arranging to hold our next meeting in Toronto, and we will have a speaker to dlacuea what ia taking place in the Canadian conversion to the metric system, in that they have approximately a year of the system under their belt. Ue also have received a report on the status of the Australian metric conversion for the next meeting. We were able at our Laat meeting to also have Tom give us a review on statue of the Vinyl Chloride situation. Ve alao had handouts on the update of the Universal Product Code and were able to spend time discussing areas which may effect ue concerning the product Identification* In all, I went to thank you for the backing we have received and excellent work being done by our sub-committee chairmen. A. DIMENSIONAL enanAncit si^-COMCTTEg Chairman Kan Sampson (Owens-Illinois) l. Child Resistant Closure Supplement to the SP-400 Finishes. This proposal has been difficult to tie down mainly due to the many new caps. Ue alao SPI-23987 reviewed this with GCMI and were not able to get a clear statement to cover all of the possibilities. On the last ballot received, we had one negative vote and this we think is now resolved. The present form 1$ as follows: "Proposed additional "Note" on SP-400 Finishes of PBD-2 Many two-piece child-resistant closures rely on a downward motion of the outer shell for their proper function. The SP-400 finishes do not necessarily provide physical space for this motion. A speciaL min. and max. H-dimension or, as an alternate, a max. bead diameter must then be specified. In addition, to avoid closure contact between adjoining packages during shipment, the bottle diameter should be greater than the largest diameter of the outer shell of the closure assembly. Since these limiting specifications vary between types of two-piece child-resistant closures, any user should obtain them from the specific closure manufacturer." This is now ready for re-ba1lotting. 2. peep Skirted Metal cap Finishes. This project is one which we proposed to GCMI in a joint meeting as needing a new plastic bottle finish combining GCMI 445 and 480. GCMI Task Force Committee implied they might follow our example if we can develop such a finish. In turn, they will stan dardize the caps to fit. We now have this developed into what we feel is a new standard which will be SP-445. We are now setting up a meeting with GCMI to evaluate our pro posed standard which should be in next few weeks. f 3. Metric Conversion. As you may recall we are adding equivalent metric- dimensions to all of our standard finishes on PBD #2. We have approved in the Technical Committee a basic format for the layout of the new speci fications. The work of redrawing la now In progress. TEST METHODS. POLY-OLEFINS chairman Pat Gibbons (Continental Can) L. This committee has been very active and in fact yesterday and today are SPI-23988 having a day and a half meecing in order to complete the many projects thev have under way. As you may recall, we are rewriting and updating all of our present technical bulletins. They are ail being done in the same format which was adapted from ASTM. 2. PBD #1 "Visual Color Evaluation" and PBD #3 "Vertical Compression Test" have been completed by the sub-committee and presented to the Technical Committee. These have been reviewed by professional editing and are now going to ballot. 3. A new Technical bulletin "Decoration Adhesions Test for Plastic Bottles" is also completed and edited and going out for ballot. 4. PBD M ,fDrop impact Test Method" is essentially finished waiting a final draft from the PVC test method sub-committee so that this bulletin will encompass all types of bottle resins, 5. The Stress Crack Test Method has been doing very well in regards to the round robin tests conducted by the participating companies. This is now in its final draft and should shortly be submitted to Technical Committee for ballotting. S C. CARTON Ayn CTngm>E3 SUB-COMMITTEE ________________ Bill Seubert (Conaupak. Inc.) This committee as you may recall, is winding down and when present work is completed will phase out unless something specific develops to work on in future. This sub-committee has three new bulletlaa: SPI DEAD LOAD TEST SPI COMPRESSION TEST FOR BOXES SPI STACKING PATTERN FACTOR These three bulletins have been submitted for editing and are to be sent out for ballotting. SPI-23989 D. PVC TEST METHODS SUB-COMMITTEE Bob Hayes (trnpco) This sub-committee is, as mentioned earlier, working on Drop Impact to combine with our present bulletin to include PVC bottles. The main project has been the development of a teat method for color evalua tion of PVC containers. This is now being drafted into final form and should be ready in near future for ballotting. Work has now started on new project which is a test method for measuring clarity of PVC containers. This is in its early stageB and will report progress at future meetings. Bud Ha Howell Chairman - Technical Committee SPX SPI-23990 Burson-Marstkller i' PLASTIC BOTTLE INSTITUTE 1974-75 PUBLIC RELATIONS PROGRAM SITUATION Many factors are currently threatening continued growth of plastic bottles. Included are the PVC situation, OSHA regulations, environmental considerations. To combat these negatives, positive programs that communicate the positive advantages of the package (safety, weight reduction, energy conservation, aesthetics, functionality, reuse) must be communicated on a continuing basis. In fact, more emphasis than ever must be given positive promotion activity to offset fears on the part of customers and consumers. Also, a program must be developed that is flexible enough to chanj emphasis quickly to handle any contingency that might arise. !,vr example, should the PVC situation start to show adverse affects on other plastic bottle sales, the program must be able to switch cj. ,.io quickly to handle the problem. For that reason, the techniques to Lc used become more important than ever. The message to be communicated via those techniques will be the basic "plastic bottle pluses" at the outset but could change as need demands. AUDIENCES: In the past, activity has been directed at a wide vruio^y of audiences. It has been difficult to successfully communicate to any of these audiences because of limited programs and budgets. Tor 3 974-75 v.o must target key audiences and direct all efforts at those audiences. Key targets should be 1) customers 2) consumers 3) editors who reach either customers or consumers. SPI-23991 i I' 1. Customers - This has been and still is the most critical group of decision-makers to reach. It is this group that ultimately decides on what type of packaging is used and what material will be selected. It is recommended that programs reaching this key audience be continued. 2. Consumers - This is an audience on which we have focused little attention in the past. Now, because negative stories ave reaching the consumer, the image and desirability of all pi nr; tic bottles may be in jeopardy. Consequently, a positive rt. n miunications program should be conducted to hold onto what u. already have. t ;.irs - Edi lors, communicate to both customers and con.v,;:;IV increasing our coninets and programs with editors, we r- Vi force our message with other audiences. And through oo.i torial relations, we improve the image and prestige of the Institute. PIWIA V UKCOMHEKPATIONS: A. To reads Customer as primary audience: 3. PLASTIC BOTTLE OF THE YEAR AWARDS - Based on results and industry interest in 1973 and 1974 efforts, further expand the program and add to the prestige of the awards for the next fiscal year. Increase the number and SPI-23992 ir 3 categories of awards so that more key customers can participate and receive recognition for their efforts. $12,000 2. FEATURE ARTICLES - Institute should prepare six new feature value stories on the individual bottle markets citing numbers, benefits, trends etc. This has been a major project of last year's campaign and initial results have been favorable. Stories would again be placed with the major verticle and horizontal trade publications. Features would also be reprinted and could be merchandised to customers. $12,000 u. To reach Consumer as primary audience: 1. THE PLASTIC BOTTLE EXPERT - Institute should hire ard train a spokesperson to travel to 6 major markets to appear on local radio/TV shows to talk about the benefits o^plastic bottles to the consumer, housewife etc. Spokesperson would add credibility on benefits of plastic to a large home audience. Highlights of appearances using positive statements could be prepared into news releases to attain additional coverage. Spokesperson could be Irma Jean Holloway (former Deputy Directory of Product Safety, Dept, of Health, Education and Welfare). SPI-23993 4 \ Spokesperson becomes a key communications vehicle that is used throughout the consumer portion of this program. $12,000 2. TELEVISION APPEARANCE - Get Bottle Institute spokes person to appear on major TV show. WHAT'S MY LINE and TO TELL THE TRUTH have expressed an interest in having the creator of plastic bottle on show. Appearance would give positive exposure to the plastic bottle to millions across the country. Would mention the Institute as the industry's organization. $1,000 :j. newspaper MATS - Prepare 8 different consumer stories on the benefits of plastic bottles to the consumer. The six stories would cover major bottle benefits such as safety, lightweight, reuse, ecology, energy savings. Stories would be distributed every two months to more than 1,000 daily and weekly newspapers. Program reaches consumer with benefits of plastic bottles. $6,000 4. WIRE SERVICE STORIES - Throughout the year, prepare a series of shorts on increasing bottle production, and benefits of plastic bottles, citing the Institute as source. Effort would reinforce mat program and further identify Institute to the public. $2,000 SPI-23994 -5- i' 5. PUBLIC SERVICE -- It is more important than ever to establish the plastic bottle as a sale package. Public service 111m, radio spots on home salety will help olfset negatives ol the PVC situations. Spokesperson can be featured in dramatic presentation ol safety message. Public Service makes more sense than ever because spokesperson is also appearing in major markets talking the benefits of the package. $7,000 C. To reach Editors as primary audience: 1. ROUNDTABLE PRESS EVENT - Institute should organize and hold a press event discussing the effects cl the energy and materials crisis on packaging, PVC situation. Event would position Institute as leading authority on plastic packaging with user trade press and would also furnish customer with information vital to his decision making on material selection. $1,0 2. BBWOBIAL LUNCH PROGRAM - While this program was limited this past year because of various negative situations facing the Institute, this remains a key way of creating an interaction between leading Institute figures and the trade press. Program further gives Institute credibility and establishes faces to go with the names in the Institute $500 SPI-23995 6- 3. WOMEN EDITORS CAMPAIGN - Launch Intensive campaign to tell positive aspects of plastic bottle packaging via womens interest publications. Activity will include editorial contact, development of tailored feature articles for publications such as WOMEN'S DAT, FAMILY CIRCLE, GOOD HOUSEKEEPING, etc. $5,000 4. MEETINGS AND PRESENTATIONS - Agency participation in annual, semi-annual meetings, committee meetings. $2,000 TOTAL BUDGET: $60,500 AGENCY FEE $30,000 EXPENSES $30,500 - ###- SPI-23996