Legal and Policy Debrief: November 5th – 18th

Updates:

Last week, the European Parliament adopted its final position on Omnibus I, aligning with far-right groups.

On 13 November, the European People’s Party (EPP) chose to push through a heavily diluted Omnibus I in alignment with far right groups that appeases global lobbying from corporate interests.

The EPP's new alliance with the far right backtracks on its leader's previous vow to never cooperate with extremist parties, claiming it had drawn a “red line” in defence of the rule of law and European values.

Trilogues are due to begin imminently, with a (tentative) goal to wrap up by 8 December. All parties aim finalise the revisions of the CSRD/CSDDD legislation by the end of 2025.

What is the European Parliament's final position on the CSDDD?

• Reduces the threshold for companies in scope under the CSDDD to 5000+ employees & 1.5 billion turnover.
• Removes the CSDDD obligation for companies to adopt a climate transition plans. This means that the European Parliament is not aligned with the European Council on this element of the law, opening the door for further watering down during the trilogue.
• Responsible disengagement made voluntary: a majority vote changed the wording of a provision on disengagement from 'shall' to 'can'.

NGOs, businesses and policy makers respond to the European Parliament's deregulatory position.

European Coalition for Corporate Justice: 'When anti-EU parties and corporate lobbies write the rules, accountability dies and Europe’s credibility crumbles.' Nele Meyer, Director

Human Rights Watch:'EU institutions should spare no effort during the trilogue to protect the risk-based approach to due diligence across the supply chain, and to further strengthen the law by reintroducing civil liability at the European level. Failing again would dangerously normalize a global erosion of human rights standards at the hands of corporate lobbies.'

Danish Institute for Human Rights: 'The stated aim of the Omnibus I proposals is simplification. But rather than simplifying, the current proposals risk dismantling key elements of the CSDDD and the CSRD, turning them into procedural formalities and penalizing companies already leading on sustainability.'

Pascal Canfin, MEP, Renew Europe: 'The EPP has chosen to form an alliance with the far right on the first simplification text of this term. This is a dangerous choice for Europe. It is impossible to run the European Parliament with alliance with Jordan Bardella on Monday, and with the centrists and social democrats on Tuesday.'

In the lead-up to the final Omnibus vote, sixteen U.S. State Attorneys General threatened legal action against Meta if it didn't “reject the EU’s anti-American-values CSRD and CSDDD directives.”

In a public letter to Meta's CEO, Mark Zuckerberg, Meta called on the company to "comply with US law" and urged it not to "allow bureaucrats in Brussels to direct your company’s policies and operations here in America.”

This news follows a previous letter penned by five major industry associations in the U.S. asking the White House to intervene in the trilogue stage of the Omnibus to reassert American concerns. In the letter the groups claim they, "stand ready to assist, frame, and communicate a U.S. response strategy before the EU advances the CSDDD into force."

Implementation timeline:

• November - December 2025: Trilogue on Omnibus (Parliament, Council and Commission) to negotiate final legal text.
• 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.

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EU Deforestation Regulation (EUDR)

Updates:

Delays and simplification back on the table as MEPs fail to reach compromise.

On Wednesday, EU countries failed to reach a common position on changes to the bloc’s deforestation regulation put forward by the Danish presidency.

The Danish presidency proposed to replace the six month grace period with a year long delay, but fell short of calling for new simplification measures.

The failure to reach a compromise hinged on disagreement about this new review clause which would allow member states to reopen and resimplify the text.

The Danish presidency is expected to put forward a new compromise by the end of the week commencing 17th of November, or early the following. An agreement with the European Parliament must be reached by the week of 15 December.

A Forbes op-ed claims that this new deforestation deadlock once again puts the EU's credibility on the line.

Companies in food, cocoa, coffee, palm oil, rubber and timber sectors call for no delay to the EUDR.

In a public statement, the coalition of 30+ companies, non-governmental and multi-stakeholder organisations argued that, 'any proposal for a ‘stop-the-clock’ mechanism or a simplification review clause, leading to a suspension of the EUDR without clarity on its final provisions, would be extending current legal and market uncertainty for the long run.'

Client Earth: Legal Validity Risks of Delaying or Weakening the EUDR

In their legal opinion, Client Earth claim that 'without clear policy justification or consideration of the potential environmental and economic impacts (amending or delaying the EUDR) could violate legal obligations under the EU treaties, general principles of EU law, and international law on State climate obligations, rendering the amendments invalid and vulnerable to legal challenge.' The document clearly expresses the legal consequences of repeated uncertainty, delay and so-called "simplification".

Further Reading/Listening:

Tropical Forest Forever Fund (TFFF) proposed at Cop30 to tackle deforestation.

A new scheme backed by Brazil's environment minister aims to 'disrupt the financial logic for deforestation; by raising $125 billion to invest in bonds, with returns used to reward tropical countries for conservation.

Implementation timeline:

• 30 June 2025: Country benchmarking act adopted
• 30 December 2025: Obligations stemming from the regulation will be binding for large operators and traders
• 30 June 2026: Obligations stemming from the regulation will be binding for micro- and small enterprises

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EU Forced Labour Regulation (EUFLR)

Update:

None

Further reading:

China Labor Watch: How the Responsible Business Alliance Fails Workers

New research by China Labor Watch (CLW) identifies recurrent labor risks in Foxconn factories and RBA-member companies.

According to CLW, these findings call RBA's methodology and credibility as a leading standard setter into question.

Implementation timeline:

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

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Uyghur Forced Labor Prevention Act (UFLPA)

Updates:

• None

Further reading

Italian tomato industry’s sustained efforts to reject tomato paste produced with forced labor in the Uyghur Region lead to stockpiles in the XUAR.

In recent years, the Chinese government massively upscaled its tomato cultivation and processing in the Uyghur Region. However, slumping sales to Italy and other western European markets, due to forced labour concerns, have left it sitting on a vast stockpile of unsold paste.