Legal and Policy Debrief: 3 April – 16 April

Updates:

The Swiss Federal Council has released a draft sustainability due diligence and reporting law, the Bundesgesetz über die nachhaltige Unternehmensführung (NUFG).  

This attempts to close a legislative gap that currently exists between Swiss Law and the upcoming CSDDD and CSRD. The draft sets out obligations for companies with over 5,000 employees and more than 1.5 billion CHF in annual revenue to conduct due diligence in accordance with the UNGPs in its activities, closely mirroring the due diligence steps required under the CSDDD.  

In addition, companies with more than 1,000 employees and an annual revenue of over 450 million CHF, are required to report of their environmental, social and governance topics measures. The draft law requires in-scope companies to compile their sustainability reports on environmental topics, social and human rights topics and governance aspects. In addition, the reports must be in compliance with a relevant EU standard, for instance, the ESRS. 

In addition, and consistent with existing legislation, the draft law sets out specific obligations for minerals and metals produced in conflict-affected areas and using child labour. Accordingly, companies are required to implement a system which enables full transparency of these supply chains as well as establish a corresponding responsible sourcing policy.  

French cement maker Lafarge has been convicted of financing terrorist groups, including ISIS during Syria’s civil war to keep its plant working.

The company has been found guilty of paying nearly €5.6 million to different terror groups around the company’s Jabaliya factory, including to ISIS and the al-Nusra-Front. Lafarce Cement Syria (LCS) had established a systematic payment system to the groups for protection to keep the plant working during the Syrian civil war. The company has been fined over €1 million and prison sentences (ranging from 18 months to 7 years) have been issued to four former executives and four former intermediaries and security managers. 

Human rights groups Sherpa and the European Center for Constitutional and Human Rights (ECCHR) who filed the case say this is a landmark decision for corporate responsibility as companies are shown that they cannot evade conviction by deferring responsibility to their subsidiaries abroad. It also marks the first time a French company has been convicted of financing terrorism. 

While most multinational companies had left Syria in 2012, Lafarge evacuated only its international employees and left Syrian staff in place until ISIS seized control of the factory in September 2014. More than 190 Syrian Lafarge employees took part in the proceedings as co-plaintiffs to seek compensation which the court denied on the basis that individuals could not be recognised as victims of terrorist financing. A second case alleging crimes against humanity is still ongoing. 

Swedish non-profit Justice and Accountability Initiative filed a lawsuit against Telenor for sharing customer data with the military junta in Myanmar.

The organisation alleges that Telenor Myanmar passed phone data of its customers to the junta following the coup in 2021. The lawsuit argues that Telenor ASA, the parent company, either failed to prevent disclosure or knowingly and unlawfully authorised its subsidiary to disclose their customer data without taking sufficient measures to prevent its misuse. It further claims that the data led to the execution of Phyo Zeya Thaw, a democracy activist and lawmaker in 2022.  

Telenor Myanmar, a wholly-owned subsidiary of Telenor, had served over 18 million customers in the country and gathered and stored information including names and physical addresses, bank accounts, e-wallets, ID numbers, location and call logs. Before selling its business in 2022, the company is alleged to have passed data of at least 1,253 phone numbers. 

Telenor argues that it was legally required to share the data with the junta adding that refusing the military’s request could have resulted in “imprisonment, torture or the death penalty” for local employees. 

Notes/Further Reading:

As engagement through consultations and surveys has revealed, companies struggle to implement the plethora of obligations stemming from different mHREDD-related legislation. To support companies in an efficient implementation of all relevant obligations, the German Helpdesk on Business and Human Rights has published a paper on the solutions and recommendations for effective due diligence implementation. It provides an overview of 11 different norms and guidance on for businesses of all sizes and due diligence steps. 

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Deforestation Legislation

Updates:

Deforestation in Indonesia has surged by 66% in 2025 according to new data by the NGO Auriga Nusantara.

The data shows a dramatic reversal in the trend of past years which saw a near-stalling of rates of annual deforestation. The 433,751ha of cleared forest represent the largest area of deforestation since 2016. As a result, Indonesia could become the top deforester among tropical countries in 2025.   

Different drivers contribute to this alarming spike, including weakened legislation, the government’s programme for food security which aims to boost domestic output of key agricultural products, mining operations industrial deforestation, and other agricultural sectors, such as palm oil. Deforestation remained highest in Kalimantan followed by Sumatra, while the largest deforestation expansion occurred in Papua.  

Further Reading/Listening:

Brazil’s long-standing soy moratorium is weakening after major industry association Abiove withdrew at the beginning of this year. Experts warn this could put over 13 million hectares at risk and increase deforestation significantly, with environmental groups, Indigenous organisations, and international buyers raising concerns about climate impacts and Brazil’s global reputation. While associations representing farmers have argued the pact limits competitiveness, uncertainty now looms over how deforestation-free commitments will be maintained without it. 

The EU Commission has previously resisted calls to introduce a “no-risk” category to the EUDR, a demand that has repeatedly been raised. The World Resources Institute outlines how such a categorisation would harm the implementation of the Regulation. Specifically, it would create loopholes for intentional and unintentional laundering of products made with deforestation, open avenues for WTO disputes and would be unnecessary given the already existent low-risk category. 

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Forced Labour Legislation 

Updates:

An investigation by China Labour Watch (CLW) has revealed brutal working conditions, amounting to forced labour at BYD’s Hungarian factory. 

The NGO had received a complaint by a migrant worker brought to Hungary from China to help in the construction of a factory. Upon the complaint, CLW launched an investigation which included interviews with 50 workers, many of whom were construction and installation workers recruited through subcontractors or other intermediaries. The report’s findings have been shared with different news outlets in advance of its publishing later this month.  

Workers’ rights violations included seven-day workweeks with shifts of up to 12 or 14 hours without sufficient breaks and overtime pay. Steep recruitment fees were used as a form of debt bondage and wages arrived up to three months late; final payments were withheld until workers returned to China. In addition, workers entered on business visas instead of authorised work permits, leaving them unable to access health care services.  

Further Reading/Listening:

The human rights group Walk Free has issued a warning that the increased occurrence of conflict across regions is driving risks of forced labour. The group highlights that the 59 active state-based conflicts across Europe, Africa and West Asia and the decline of peace in 100 countries since 2014 drastically increase risks of forced labour. Common pathways into modern slavery include people being targeted by traffickers while escaping conflict, people not receiving protection at displacement sites, people forcibly recruited to fight, forcibly married or forced to perform labour or sexual services.