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EU Watchdog Warns of Major Compliance Flaws in Omnibus Framework

  • smritidas
  • Nov 28
  • 6 min read

By Ray Nulty, President, Stratagem Partners,


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The EU Ombudswoman has found the Commission guilty of maladministration in its handling of environmental and human rights protections. This ruling, which came out recently, represents a major blow to regulatory compliance in the European Union. The landmark decision stands as a major milestone for transparency, democracy, and environmental rights in the EU.


The Commission's obligation to follow proper procedures while amending legislation defines regulatory compliance in this context. The investigation exposed serious flaws in the process. The Commission failed to conduct required assessments that would show the effects of weakening sustainability laws. They tried to justify skipping these vital evaluations by claiming 'urgency'.


Eight NGOs formed a coalition and filed a formal complaint with the European Ombudsman. They condemned the Commission's undemocratic and rushed development of the Omnibus proposal. The NGOs pointed out how the proposal aims to substantially water down EU sustainability laws that were just adopted. These include the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive. The Commission's failure to provide evidence of the climate-consistency assessment required by the European Climate Law emerged during the investigation.


Ombudsman finds EU Commission violated good governance

The European Ombudsman has delivered a harsh verdict on the European Commission's regulatory compliance approach. The findings revealed "a number of procedural shortcomings" that "amount to maladministration" in preparing crucial legislative proposals [1]. Teresa Anjinho, the EU Ombudswoman, reached this landmark decision after she investigated the Commission's handling of the Omnibus Simplification Package.


Watchdog criticises lack of transparency and consultation

On the 21 May 2025, eight organisations filed complaints that prompted the Ombudswoman to ask whether the Commission's failure to follow Better Regulation Guidelines qualified as maladministration under EU law On 21 May 2025[2]. The investigation showed that the Commission had drastically limited stakeholder consultation. Most civil society actors were left out while industry representatives dominated the meetings [3].


The Commission broke fundamental principles of good administration, which included transparent, inclusive, and evidence-based lawmaking [3]. This violation carries extra weight because stakeholder involvement serves as the life-blood of the EU's decision-making process. Article 11 of the Treaty on European Union and the 2016 Interinstitutional Agreement on Better Law-Making both support this principle [2].


"The Commission needs to ensure that accountability and transparency continue to be part of its legislative processes and that its actions are clearly explained to citizens," stated EU Ombudsman Teresa Anjinho [4].


Commission bypassed climate and impact assessments

The investigation found that the Commission stretched the meaning of 'urgency' to skip required evaluations [5]. The Commission avoided a complete impact assessment when developing the Omnibus Package. Instead, it used a Staff Working Document that claimed to match the same methodology [2].


Civil society groups pointed out that this urgency claim doesn't hold up. The  Corporate Sustainability Reporting Directive (CSRD) only begins applying in 2025 to a small group of companies. The Corporate Sustainability Due Diligence Directive hasn't even taken effect yet Corporate Sustainability Reporting Directive only begins applying in 2025[2].


The Commission also failed to show it followed the European Climate Law. This law requires new policies to align with EU climate targets before adoption [2]. Climate consistency checks must appear in impact assessments that accompany proposals - they're vital steps for initiatives that affect climate policy [2].


These findings led the Ombudsman to make specific recommendations. She called for clear definitions of 'urgency' in Better Regulation contexts. She also pushed for procedures that ensure urgent legislative preparations still follow transparent, evidence-based, and inclusive lawmaking principles [5].


NGOs file formal complaint over Omnibus process


A formal complaint against the European Commission was filed with the European Ombudsman in April 2025. This action challenged the Commission's handling of the controversial Omnibus proposal, a package that would modify the 2-year old EU sustainability frameworks.


Coalition of eight NGOs initiates legal challenge

The coalition challenged what they called an "undemocratic, untransparent and rushed" development process for the Omnibus proposal [7]. Their complaint addressed how the Commission's approach violated standard regulatory compliance and weakened core democratic principles in EU lawmaking.


Complaint explains exclusion of civil society

The investigation revealed that the Commission consistently excluded broader stakeholder participation. The NGOs pointed out three major failures in regulatory compliance:

  • The Commission failed to gather evidence properly and assess how changing corporate laws would affect environmental and social aspects [7]

  • They chose closed-door meetings dominated by oil and gas industry interests instead of broad consultations [6]

  • They didn't assess if the proposal lined up with EU climate-neutrality targets—directly violating obligations under the European Climate Law [7]


Yes, it is documented that the proposal was developed "without any public consultation[6]” and "a primary focus on narrow industry interests".


NGOs argue deregulation favours corporate interests

The coalition believes the Omnibus proposal's "simplification" approach hurts rather than boosts EU competitiveness [6]. Strong sustainability laws like the CSDDD and CSRD are competitive advantages in global markets where consumers and investors just need responsible corporate behaviour [8].


The NGOs stated that weakening environmental and human rights requirements takes "a step in the wrong direction" [8]. Their complaint showed how "a small group of industry interests to take control and push for the deregulation of key sustainability laws" [7], putting corporate convenience ahead of public interest protections.


The coalition has asked both the European Parliament and Council to completely reject the Omnibus proposal [6].


Omnibus I weakens key sustainability laws

The Omnibus I package signals a significant scaling back of the EU's sustainability framework. This change dismantles regulatory compliance mechanisms that took years of legislative work to build.


CSDDD and CSRD stripped of core accountability measures

The Corporate Sustainability Reporting Directive's scope has shrunk from about 49,000 undertakings to roughly 7,000 companies, an 80% contraction[9]. The threshold that defines a 'large undertaking' now stands at 1,750 employees with a minimum €450 million turnover [10]. The CSDDD will now only apply to companies that have more than 5,000 employees and €1.5 billion in annual turnover [3]. These numbers are five times higher than the Commission's original proposal.


Removal of civil liability and climate transition plans

The removal of EU-wide civil liability regime raises serious concerns [11]. Victims must now guide themselves through fragmented national mechanisms that offer varying levels of protection. Parliament's decision to scrap mandatory climate transition plans [12] has weakened corporate climate accountability's life-blood. The due diligence requirements now only cover direct "tier 1" business partners [13], though evidence shows severe violations often happen deeper in supply chains [14].


Industry lobbying influences legislative rollback

Business interests shaped these changes significantly. Business associations dominated the Commission's consultations [14] and outnumbered other stakeholders. About 70% of what industry groups like Medef, BDI and Confindustria asked for ended up in the legislative proposal [15]. Support from far-right groups in Parliament [16] made it easier to weaken these sustainability obligations.


Ombudsman issues recommendations to restore trust

The European Ombudsman suggested concrete steps after these investigations. These steps aim to fix what they call "a broad interpretation of urgency" that weakened proper regulatory compliance processes.


Call for adherence to Better Regulation Guidelines

The Ombudsman made two main recommendations based on their findings. The Commission must ensure "a predictable, consistent and non-arbitrary application of the Better Regulation rules" [5]. They need to define 'urgency' clearly in regulatory contexts and document any internal decisions that exempt proposals from standard requirements [5].


Need for inclusive, evidence-based lawmaking

The Commission should set up procedures that stick to transparent, evidence-based and inclusive lawmaking principles, even during urgent situations [5]. These recommendations arrive as the Commission works on updating its Better Regulation Guidelines [17].


Commission urged to halt further deregulation packages

Environmental and rights organisations want the Commission to stop all planned deregulatory initiatives right away. ClientEarth pointed out that the Omnibus proposal " lacks a solid evidence base[4], skips public consultation, and ignores its own Better Regulation Guidelines".  This makes it "legally vulnerable and risks being overturned in court" [4]. More than 100 organisations share these worries about planned omnibus packages for chemicals, digital rights, and other sectors. They ask to stop any attempts to reopen core protections [18].


Conclusion

The EU Ombudswoman's ruling against the Commission marks a turning point for regulatory governance in the European Union. This watchdog body revealed major procedural failures in the democratic lawmaking process. The Commission's random interpretation of 'urgency' bypassed essential impact assessments and climate consistency checks while developing the Omnibus package.


The Ombudswoman's ruling how the corporate sector dominated the consultation process and how civil society had no real voice in the matter. The new legislative proposal has cut deep into the Corporate Sustainability Reporting Directive and Corporate Sustainability Due Diligence Directive. These changes have altered Europe's sustainability landscape. They removed civil liability mechanisms and did away with mandatory climate transition plans that were key to corporate accountability.


The ruling casts doubt on whether EU institutions can balance business competitiveness with environmental and human rights protections. The Ombudswoman wants predictable and consistent Better Regulation rules. She also calls for open and inclusive lawmaking processes during urgent situations.



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