As tariffs and trade wars dominate the global news cycle, the BHR community is reflecting on how widespread economic uncertainty will impact international commitments to labour rights and meaningful due diligence.

Both Maurice Van Beers and Clean Clothes Campaign have shared vital insights into how trade wars and supply chain disruption erode labour rights across the globe. In addition, the Ethical Trading Initiativehas published recommendations for businesses on how to avoid reneging on their human rights commitments in the face of supply chain shortages and economic pressure.

Meanwhile in the EU, both the Parliament and Council approved the Commission's proposal to delay the implementation of the CSDD and CSRD under the Omnibus’s ‘stop the clock’ proposal. This decision will postpone the application of both regulations by at least a year.

Finally, there are more signs that the EU's deregulatory agenda is impacting domestic legislation – with Germany set to replace its Supply Chain Due Diligence Act (LkSG) with the (as yet undefined) CSDDD. Under this agreement, reporting requirements on German companies will be abolished immediately and due diligence obligations will not be sanctioned until the CSDDD/Omnibus comes into force, with the exception of unspecified "severe violations".

Keep reading to deep dive into legislative developments from the past two weeks...

Upcoming Event: GRC's OECD Side Session

On May 7th, BHRC's sister organisation, Global Rights Compliance, is hosting a side session at the OECD Forum on Responsible Mineral Supply Chains, addressing state-imposed forced labour risks across critical mineral supply chains.

Featuring a panel of expert speakers, including former MEP Samira Rafaela and Professor Laura Murphy, the session will provide a forum for businesses and industry actors to deepen their understanding of key mineral supply chains’ links to systemic forced labour practices – and to explore mechanisms for mitigating exposure to such harms.

Register here to join us in Paris on May 7th from 3-4:30pm.

Corporate Sustainability Due Diligence Directive (CSDDD)

Update:

The EU Parliament and Council vote in favour of the “stop the clock” fast track proposal – postponing the application of both the CSRD and CSDDD by at least a year.

Co-legislators in both the Council and Parliament have supported the Commission's proposal to delay:

  • by two years the 'entry into application of the CSRD requirements for large companies that have not yet started reporting', as well as listed SMEs, and
  • by one year the 'transposition deadline and the first phase of the application (covering the largest companies) of the CSDDD.

Following the adoption of the proposal by the EU council on the 31st of March, the legislative act will be published in the EU’s Official Journal and enter into force on the following day.

Member states will then have to transpose this directive into their national legislation by 31 December 2025.

The EU Parliament has published a draft timeline for upcoming negotiations on the 'Contents' of the Omnibus Package.

The deadline for amendments to the Omnibus will be the 27th June – with the JURI committee and plenary votes to follow in October.

An “exchange of views” is also planned to take place later this month. From there, the Omnibus rapporteur, Swedish EPP MEP Jörgen Warborn will send a draft report by 4 June.

40+ CSOs and smallholders’ representative organisations presented a joint position, calling on the Members of the European Parliament and the Council of the EU to ensure that any revision to the CSDDD respects the principles of responsible business conduct.

Notes/Further Reading:

In response to ongoing negotiations on the 'simplification' of sustainability rules, Shift Project has published an explainer on 'risk-based due diligence'.

Through setting out the basics of risk based due diligence, the piece puts forward that the process 'is not about burdensome entity-by-entity assessments and questionnaires in the mythical search for perfect information', but about, 'making good faith judgements based on reasonably available information.'

Business & Human Rights Resource Centre's Heidi Hautala and Phil Bloomer’s think-piece in Sustainable Views, entitled ‘Profound Cynicism or Magical Thinking’, considers steps the EU must take to embed human rights principles into the Omnibus package.

Their recommendations include maintaining corporate transparency on businesses, upholding the risk-based due diligence framework, and not 'forcing a fragmented legal landscape of civil liability on companies.'

Hautala and Bloomer also argue that under the current proposals, "benefits of the simplification, or de facto deregulation, will go to the laggard companies that drive human and environmental abuses with impunity."

EU-funded researchers urge the EU to rethink its 'competitiveness' agenda.

Implementation timeline:

  • 31 December 2025: Member states must transpose 'stop the clock' directive into their national legislation.
  • From 2028 [delayed]: Companies with 5,000+ employees and a net turnover of 1 ,500 million EUR must comply.
  • From 2028 [unchanged]: Companies with 3,000+ employees and a net turnover of 900 million EUR must comply.
  • From 2029 [unchanged]: Companies with 1,000+ employees and a net turnover of 450 million EUR must comply.

EU Deforestation Regulation (EUDR)

Updates: None

Further Reading/ Listening: None

Implementation timeline:

Obligations stemming from the regulation will be binding from:

  • 30 December 2025: for large operators and traders
  • 30 June 2026: for micro- and small enterprises

EU Forced Labour Regulation (EUFLR)

Update: None

Further Reading:

Know the Chain's 2025 benchmarking of ICT companies under key social responsibility metrics.

BHRRC’s post summarises essential takeaways including the fact that enabling workers rights and purchasing practices were the lowest scoring themes.

Critically, under their analysis, all companies scored zero on responses to allegations of forced labour.

CSOs have published a joint statement calling on the International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD) to ‘provide remedy to workers harmed by a cotton-producing company in Uzbekistan that has received millions of dollars in financing.’

Implementation timeline:

  • 2026: EU Commission to publish guidelines, including a forced labour risk database.
  • 14 December 2027: law becomes applicable.

Uyghur Forced Labor Prevention Act (UFLPA)

Updates: None

Further Reading/ Listening: None

Disclaimer: This newsletter is for general informational purposes only. It does not, and is not intended to, constitute legal advice.