Legal and Policy Debrief: 29 January – 18 February

Updates:

EU policymakers continue on the course of extensive deregulation of European markets at a regional and national level as evidenced by leaders’ statements at the European Industry Summit in Antwerp and the Informal leaders’ retreat. 

While President of the European Commission Ursula von der Leyen renewed her commitment to the delivery of the Omnibus proposals, German chancellor Friedrich Merz and Italian prime minister Giorgia Meloni renewed their calls for an elimination of regulatory burden with the former emphasizing that “small changes” to existing laws were not sufficient.   

Amidst the accelerating drive to deregulate, over 60 CSOs across the block have called on policymakers to protect evidence-based, transparent and participatory lawmaking as the EU Better Regulation Framework undergoes review. During the implementation of the Omnibus, many of the Frameworks’ principles had been disregarded as found by the European Ombudsman.  

Further Reading/ Listening:

Germanwatch and Misereor published new evidence on the effectiveness of the German Supply Chain Act. Using practical examples, the report argues that the law has had a wide-ranging impact owing to its wide-spread implementation and targeted enforcement, such as in the cases of the transportation sector in Germany, banana plantations in Ecuador and Costa Rica and Bauxite mining operations in Guinea. Nonetheless, progress remains fragile given the developments at EU level to water down mandatory due diligence legislation. 

The International Trade Union Confederation published a Just Transition Manifesto for the Textile and Garment Supply Chain. It calls for placing workers’ rights and livelihoods at the centre of the low-carbon transition and emphasises the need for strong social dialogue, binding corporate and government accountability and comprehensive protections among other aspects.  

The Business and Human Rights Centre has published its 2026 Know the Chain Food and Beverage Industry Benchmarking Report. Its assessment of 45 companies in the sector exposed large deficits in the implementation of due diligence across value chains, specifically concerning efforts that would address systemic drivers of worker vulnerability and exploitation in practice. 

Amidst the confusing legislative developments at EU level, the Danish Institute has updated its overview of EU-based legislative initiatives on business and human rights, including projected timelines for implementation.  

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Deforestation Legislation

Updates:

According to reporting by Euractiv, the EU Commission does not plan to reopen the text of the EU Deforestation Regulation. At the end of 2025, the Commission said it would present a simplification package by the end of April 2026 which many feared could water down some of the Regulation’s provisions. 

Instead, the Commission will use “targeted tweaks” to simplify the implementation of the Regulation and adjust the list of products to which the legislation applies. While it is not yet clear whether leather will be excluded from the list of products (as pushed for by some lawmakers and criticised by CSOs), the Commission may add soap made with palm oil and instant coffee – to derived products currently not in scope of the law – to the Annex of products covered. 

In addition, the Commission confirmed that the benchmarking system underpinning the EUDR and classifying countries by deforestation risk from low to high will not be reviewed this year. More technical updates, including a revised implementing act on the IT system to reflect a simplified regime for small farmers and foresters are planned for this year. 

Further Reading/ Listening:

Major soy traders operating in Brazil have abandoned the so-called Soy Moratorium, an agreement to prevent the acquiring of soybeans grown on deforested areas in the Amazon after July 2008. The decision comes after a new law entered into force in Mato Grosso, the country’s largest soy-producing state, which restricts access to state tax benefits to companies that adopt more ambitious voluntary environmental standards than those required by law. 

While the Moratorium hasn’t completely stopped deforestation driven by the soy industry, deforestation linked to its production fell by 69% between 2009 and 2022. The Agreement isn’t entirely dead as the National Association of Grain Exporters (Anec), of which large producers are part, still stands by the Moratorium.  

The Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (Ipbes) published a major new report highlighting that businesses risk extinction unless they protect and restore the natural world. The Business and Biodiversity Assessment, drawing on the contributions of 79 scientists and experts and endorsed by 150 governments, further outlines 100 actions to counter current adverse trends. 

Some of the key messages of the report include the idea that businesses both depend on and impact biodiversity. At the same time, all businesses have a responsibility to address their impacts and dependence on biodiversity. And while current external conditions (for instance policy landscapes) are not favourable, collaborative efforts of governments, financial institutions, businesses and other actors can achieve a more enabling environment.  

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Forced Labour Legislation 

Updates:

New Zealand has introduced a legislative Bill to combat modern slavery to Parliament with bipartisan support. It comes after years of advocacy by CSOs, the financial sector and business leaders. 

The proposed legislation follows a reporting approach where businesses with annual revenues above NZ$ 100 million are required to report on measures undertaken to address modern slavery in its supply chains. This would include reporting on the number of complaints made, whether any modern slavery incidents have occurred and what actions have been taken to address them. 

While the Bill would impose civil penalties and includes potential liability for directors and senior managers, the law falls short of introducing mandatory due diligence. The Walk Free Foundation argues that transparency-based reporting models fall short of combatting modern slavery. 

Meanwhile, Australia’s anti-slavery commissioner Chris Evans has called for a strengthening of existing Australian anti-slavery laws, given they are proving to be “too weak”. This comes after a series of allegations of forced labour conditions in supply chains of Australian companies, including Ansell and Kmart. 

EU Forced Labour Regulation: 

The EU Commission has launched a call for evidence about guidelines on the implementation of the Forced Labour Regulation, open until 6 March. The guidelines will be published by 14 June 2026 and aim to ensure a predictable and smooth implementation of the rules with minimal administrative burden on companies and member states.  

Further Reading:

The International Labour Organization has assessed the effects of forced labour import bans as part of the legislative toolbox used to fight forced labour. While the assessment concludes that it is too early to determine impacts, risks and challenges, case examples can highlight positive impacts. 

In the case of the Malaysian rubber glove sector, for instance, Withhold Release Orders (WROs) were issued in six cases against Malaysian producers by US customs authorities. Given the reliance of the Malaysian industry on the US market, the direct engagement of the US Customs Border Protection with the producer companies and concerted actions by other stakeholders to address forced labour, the WROs led to extensive remediation measures taken by producers. 

Drawing on another case from the garment sector in India, the authors also outline the effectiveness of stakeholder engagement in addressing worker rights violations and WROs. The Dindigul Agreements between a garment supplier in Tamil Nadu, several buyers, trade unions and CSOs to address human rights issues and implement a remediation framework helped lift a WRO issued by the CBP in 2022 and led to the removal of the forced labour ban.