New Legal Risks on the Near Horizon Add to an Already Heavy Load
Corey L. Norton
International Trade Partner | Guides Global Companies on Securing Market Access, Improving Returns and Supply Chain ESG Laws
Sharing information on rapidly expanding supply chain ESG law and developments.? Original content selections and comments are mine alone.
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Legal Developments
Effective immediately, CBP will allow imports of disposable gloves manufactured by Supermax Corporation Bhd. and its wholly owned subsidiaries to enter the U.S. … CBP began enforcing a WRO [in October 2021] against Supermax Corporation Bhd. and its wholly owned subsidiaries based on evidence reasonably indicating the presence of 10 of the 11 International Labour Organization indicators of forced labor. In response to the WRO, the company demonstrated to CBP that it has taken steps to remediate the forced labor indicators identified in its supply chain.? CBP, 9/19/23.
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*Each WRO issuance, lifting or modification is significant given the importance of this area and the business impact involved, but limiting notice of each action to essentially the same press release makes it much more difficult for counsel and other stakeholders to guide companies on what their supply chain forced labor oversight and remediation should entail.? After some of these announcements the companies involved have also seen a need or benefit to publicize what they have done to address forced labor, but even that perception seems to have dwindled, thereby cutting off another, albeit limited, information source to guide companies.? Having done a brief search for publicity around this action that has been pending for a couple years, and presumably required substantial work to finally reach resolution, there doesn’t appear to be much other than citing the basic press release.
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For the first time in any trade agreement, the United States is pushing for a commitment in the proposed Indo-Pacific Economic Framework aimed at ensuring government measures to protect the environment don’t hurt agricultural exports any more than necessary to achieve their objectives, a top U.S. official said … “We want to make sure that countries around the globe don't erect barriers to trade in the name of the planet or the name of sustainability,” chief U.S. agricultural negotiator Doug McKalip said Thursday at a produce industry event.? U.S. officials want countries to have the flexibility to decide for themselves how to achieve environmental goals, rather than being required to follow a mandate set by someone else … “Unfortunately, we have countries right now who are saying, ‘We’re for sustainability, and here's the one size. Everybody's got to do this practice. Everyone's got to do it this way,’” McKalip told the International Fresh Produce Association. ?Politico, 9/15/23.?
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*There is probably more context to what was quoted from the event covered here, but I couldn’t help doing a double take when I read this and wondered whether there are differing (conflicting?) approaches within the U.S. government on expectations for sustainability in supply chains.? While these new trade negotiations might aim to avoid a one-size-fits-all approach to sustainability if that means decreased opportunities for U.S. exports, isn’t trade policy generally moving towards certain specific expectations?? For example, isn’t U.S. law, as well as laws in other jurisdictions, moving towards requiring scope 3 measurement and reducing same while also prohibiting deforestation and forced labor?? Again, there’s probably more to this story, but perhaps there’s a need to watch how consensus around climate needs works with market access priorities.
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Resources
TNFD looks to raise natural capital on par with climate in organizations’ disclosure of sustainability-related impacts, dependencies, risks, and opportunities … Key Points:
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? Natural capital is quickly rising in importance for various public and private sector actors.
? The Taskforce on Nature-related Financial Disclosures’ recommendations are likely to serve as a catalyst for further expectations in this area.
?? Organizations may wish to start developing a strategy on natural capital to reflect these expectations.? Latham, 9/20/23.
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*So many alerts came out this week about the TNFD news, but I wanted to cite one from a law firm as an indication that, while TNFD is not yet law, it requires attention from the bar and compliance counsel given a likelihood it’s heading in the direction of influencing various laws.? Whether by virtue of the success of similar subject matter getting in the EU’s CSDR (coming ISSB standards?), global climate disclosure requirements generally and financial stakeholder interest in environmental impact, the window is open for the wider range of environmental topics covered in TNFD to become standard topics in emerging global disclosure regimes.
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Views
Carbon offsetting, as a foreign-investor-led commodification of people and their environments, has no place in addressing climate change. Countries and communities with significant natural resources beneficial to addressing global warming should be able to access financial support to preserve their natural wealth – on their terms. This support must come from the Global North countries and companies that caused climate change and should be seen as a part of a programme of reparations.? SOMO, 9/19/23.
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*The critiques of offsets keep expanding in number and focus, posing huge challenges for a concept that the GHG Protocol scope 3 standard itself identifies as a critical strategy for companies fighting climate change.? This article, and others like it, should help keep on the mind of those involved in offsets that substantial opposition based on social considerations should be expected in addition to other challenges arising frequently. ?They include objections to the scientific support for claimed offsets, double counting or worse and the legal frameworks available to help companies have assurance of what they are buying.? To help offsets live up to the key role contemplated in the GHG Protocol, my guess is a lot more will be published soon on frameworks for evaluating credible investments.
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