Legal and Policy Debrief: 19 February — 4 March

Updates:

Last week, the EU gave its final approval for the changes to mandatory human rights and environmental due diligence legislation under the Omnibus I package. After its publication in the Official Journal on 26 February, the changes will come into effect 20 days later. It amends the CSDDD and CSRD that originally entered into force in July 2024 and 2023, respectively.

Compared with the originally passed CSDDD, the law is now applicable to companies with more than 5,000 employees and a net annual turnover of €1.5 billion. The civil liability regime across the EU has been removed as well as the obligation to design and implement a climate transition plan. ClientEarth and Frank Bold have published an overview of the changes to the CSDDD.

The scope of the CSRD is now applicable to companies with 1,000 employees and €450 million (instead of €50 million, resulting in a 90% reduction of the number of companies covered by the legislation) and information requests made by in-scope companies are tied to voluntary sustainability reporting standard for SMEs (VSME). At the same time, EFRAG had submitted the final draft of the simplified ESRS to the European Commission which would reduce the number of mandatory datapoints to report on by 61%.

Notes/Further Reading: 

The OECD has published its Due Diligence Guidance for Responsible AI aimed at supporting companies that are developing and using AI. The guidance translates and merges AI systems into its six-step approach to due diligence, supported by practical examples for implementation. 

In Brazil, the trial against individuals of the mining company Vale and the certification body TÜV-Süd started, seven years after the dam burst in Brumadinho, Minas Gerais, killing 272 people and causing widespread environmental destruction. The hearing, which is scheduled to last until May 2027, will determine whether the case will be taken to a jury trial at the end of which criminal charges could be faced by former directors, managers and engineers of Vale and employees of TÜV-Süd. In Germany, where TÜV-Süd is based, there are still not yet any charges brought forward by the Munich public prosecutor’s office. 

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Deforestation Legislation

Updates:

While the EU’s Information system of the Deforestation Regulation is offline for maintenance and the incorporation of the amended provisions of the Regulation, we look beyond the EU for developments concerning deforestation.  

In Australia, US mining giant Alcoa has been ordered to pay AUD 55 million (US$ 36 million) in fines for unlawfully clearing parts of the North Jarrah Forest (WA) as part of its bauxite mining operations. The fine, which takes the form of a legal agreement between the government and a proponent to address breaches of the law, address the unlawful clearing of tracts of endangered forests between 2019 and 2025.  

However, as the Australian legal NGO Environmental Defenders Office highlights, a part of the agreement reached between the company and the Environment Ministry is a national-interest exemption to Alcoa allowing for continuing limited land clearing while undergoing an assessment of the operations’ cumulative environmental impacts by the government. The organisation highlights that the use of the exemption is rare and its original purpose was not intended to give out exemptions for corporate actors in breach of environmental laws. 

The Parliament of Ecuador has approved the Law for the Strengthening of Strategic Mining and Energy Sectors which aims to attract foreign investment in the sector. The law simplifies procedures to obtain environmental authorization, lengthens the duration of concessions, authorises the use of the Armed Forces in areas of mining activities and establishes a maximum timeframe in which environmental assessments must be conducted.  

Civil society organisations have heavily criticised the bill and warned that it would spur deforestation and environmental destruction in the Amazon and infringe Indigenous territories by reducing environmental, social and cultural safeguards with one Indigenous leader dubbing the law “ecocidal”. The Confederation of Indigenous Nationalities of Ecuador (CONAIE) criticised that the law will effectively replace environmental licences with simple authorisations that would allow concessions of up to 30 years.  

Further Reading/Listening:

A new report by WWF highlights cocoa production as a driver of deforestation in around the world. The authors stress that within the biggest producer countries, more that 60% of agricultural deforestation has been driven by cocoa since 2000. The same patterns are now repeating in in Liberia and the Congo Basin, with cycles of forest invasion, rapid profits, soil exhaustion, declining yields and onward migration to new forests. 

In Indonesia, there is growing scrutiny of the government’s actions on curbing deforestation as a response to the landslides and flash floods triggered by Cyclone Senya in late 2025 which killed over 1000 people and left 1.2 million homeless. The government had promised sweeping action against deforestation and filed lawsuits and revoked 28 operational permits across different sectors.  

However, recent analyses of those actions reveal that many of the permits had already been revoked years earlier or concerned concessions far away from disaster areas. Civil society organisations also criticise that there is little consideration of what will happen after permits are revoked and warn that the government’s actions would merely change ownership of the affected areas from private to public. 

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Forced Labour Legislation 

Updates:

In the U.S., a human trafficking lawsuit initially brought against Rubicon Resources in 2016 and dismissed in 2018 has been remanded for another look. Brought by rural Cambodian villagers who alleged to have been forced to work at seafood factories in Thailand, the appellate court cited the Abolish Trafficking Reauthorization Act (ATRA) which it argued also applies retroactively in its decision.  

A lawsuit brought against Dyson Technology Ltd in 2022 by 24 migrant workers who alleged that they were subjected to forced labour in a Malaysian supplier company has been settled in London. While the settlement is not an admission of liability, the case sets a significant precedence insofar that the Supreme Court agreed that the trial could take place in an English court. Thus, English companies can be held accountable for violations committed by suppliers in another country. 

Further Reading:

The International Labour Organization has published a baseline report of the recruitment and working conditions of migrant workers in Southeast Asia’s fishing and seafood processing sectors as part of its Ship to Shore Rights programme. According to the data collected, 61% of migrant workers were indebted by recruitment fees and related costs and 50% reported their individual documents were held by supervisors. Migrant workers reported long working hours between 6 and 7 days per week and the reports estimates that 13% of migrant workers were employed in situations of forced labour. 

A report published by the Office of the UN High Commissioner for Human Rights exposes the widespread abuse of migrant workers in Southeast Asia’s scam centres. Migrants are coerced to commit crimes and are subjected to severe punishments, sexual violence, wage theft and other atrocities. In addition, the reports highlight alleged collusion between the operators and local officials which keeps the centres running.