Crisis Management 2025

Definitive global law guides offering comparative analysis from top-ranked lawyers

CHAMBERS GLOBAL PRACTICE GUIDES

Definitive global law guides offering comparative analysis from top-ranked lawyers

Contributing Editor Thiago Jabor Pinheiro Mattos Filho

Global Practice Guides

Crisis Management

Contributing Editor Thiago Jabor Pinheiro Mattos Filho

2025

Chambers Global Practice Guides For more than 20 years, Chambers Global Guides have ranked lawyers and law firms across the world. Chambers now offer clients a new series of Global Practice Guides, which contain practical guidance on doing legal business in key jurisdictions. We use our knowledge of the world’s best lawyers to select leading law firms in each jurisdiction to write the ‘Law & Practice’ sections. In addition, the ‘Trends & Developments’ sections analyse trends and developments in local legal markets. Disclaimer: The information in this guide is provided for general reference only, not as specific legal advice. Views expressed by the authors are not necessarily the views of the law firms in which they practise. For specific legal advice, a lawyer should be consulted. Content Management Director Claire Oxborrow Content Manager Jonathan Mendelowitz Senior Content Reviewer Sally McGonigal, Ethne Withers, Deborah Sinclair and Stephen Dinkeldein Content Reviewers Vivienne Button, Lawrence Garrett, Sean Marshall, Marianne Page, Heather Palomino and Adrian Ciechacki Content Coordination Manager Nancy Laidler Senior Content Coordinators Carla Cagnina and Delicia Tasinda Content Coordinator Hannah Leinmüller Head of Production Jasper John Production Coordinator Genevieve Sibayan

Published by Chambers and Partners 165 Fleet Street London EC4A 2AE Tel +44 20 7606 8844 Fax +44 20 7831 5662 Web www.chambers.com

Contents

INTRODUCTION Contributed by Thiago Jabor Pinheiro, Rômulo Silveira da Rocha Sampaio and Lucas Guimarães Ribeiro, Mattos Filho p.4

NORWAY Law and Practice p.108 Contributed by Wikborg Rein Advokatfirma AS

UK Law and Practice p.126 Contributed by Freshfields

AUSTRALIA Trends and Developments p.10 Contributed by Herbert Smith Freehills BRAZIL Law and Practice p.19 Contributed by Bermudes Advogados Trends and Developments p.37 Contributed by Bermudes Advogados DENMARK Law and Practice p.42 Contributed by Gorrissen Federspiel FRANCE Law and Practice p.53 Contributed by Gide Loyrette Nouel GERMANY Law and Practice p.76 Contributed by Noerr Trends and Developments p.101 Contributed by Noerr

USA Law and Practice p.148 Contributed by FGS Global Trends and Developments p.164 Contributed by FGS Global USA – ILLINOIS Trends and Developments p.172 Contributed by FTI Consulting, Inc. USA – NEW YORK Trends and Developments p.178 Contributed by FTI Consulting, Inc. USA – WASHINGTON D.C. Trends and Developments p.185 Contributed by FTI Consulting

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INTRODUCTION

Contributed by: Thiago Jabor Pinheiro, Rômulo Silveira da Rocha Sampaio and Lucas Guimarães Ribeiro, Mattos Filho

Mattos Filho is a high-performance law firm and strategic partner to clients, delivering innovative solutions for legal problems across more than 40 practice areas. The firm is recognised for the excellence and efficiency of its service. At the Chambers Brazil Awards, Mattos Filho holds the record for Brazilian Law Firm of the Year, having been awarded this recognition eight times. Mat- tos Filho’s pioneering spirit is also reflected in actions that highlight the social role of the legal

profession, such as the firm’s pro bono work and its diversity, equity, and inclusion initiatives. The crisis management group is composed of seasoned professionals from various practice areas and provides comprehensive legal advice to clients navigating complex emergencies. The group’s collaborative and multidisciplinary ap- proach ensures effective assistance to clients during disruptions and reputational threats to business continuity.

Contributing Editor

Co-Authors

Thiago Jabor Pinheiro is based in Brasília and is one of the

Rômulo Silveira da Rocha Sampaio is a partner in both the environmental law and climate change practice and the ESG practice at Mattos Filho. Experienced in consensual

co-ordinators of Mattos Filho’s corporate investigations group. Thiago advises clients on a wide range of corporate ethics and administrative law matters, with a focus on internal investigations, government enforcement actions, and corporate crisis management. He frequently advises clients in response to allegations of corporate wrongdoing of various types and represents them in settlement negotiations. Thiago holds an LLM from Harvard Law School and previously worked as a foreign associate at Sullivan & Cromwell LLP’s New York office. He is an officer of the International Bar Association (IBA)’s anti-corruption committee.

conflict resolution as well as socio- environmental and climate-related matters, he also specialises in structuring opportunities in carbon markets, waste management, and water resources. Rômulo is a professor of regulatory law at the Getulio Vargas Foundation School of Law in Rio de Janeiro, an adjunct professor at Pace University in New York, and a visiting professor at Georgia State University’s College of Law in Atlanta. He is a member of the Brazilian Bar Association’s Environmental Law Commission and the Brazilian Lawyers’ Institute.

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INTRODUCTION Contributed by: Thiago Jabor Pinheiro, Rômulo Silveira da Rocha Sampaio and Lucas Guimarães Ribeiro, Mattos Filho

Lucas Guimarães Ribeiro is a senior associate in Mattos Filho’s compliance and corporate ethics group, with extensive experience of advising clients during complex crises.

Lucas holds an LLB (2017) from Universidade Federal do Estado do Rio de Janeiro and an MSc in Public Policy from the Institute of Economics at Universidade Federal do Rio de Janeiro. He also completed an executive education programme at Harvard University, focusing on crisis management and emergency preparedness, and studied the public accountability of governmental entities and agents in crises and disasters.

Mattos Filho Edifício Parque Cidade Corporate Block B 12th Floor Brasília DF 70308-200 Brazil Tel: +55 613 218 6168 Email: tjabor@mattosfilho.com.br Web: www.mattosfilho.com.br/en/

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INTRODUCTION Contributed by: Thiago Jabor Pinheiro, Rômulo Silveira da Rocha Sampaio and Lucas Guimarães Ribeiro, Mattos Filho

Crises management from a historical perspective Corporate crises can be defined as unexpect- ed events arising from a company’s business activities that pose substantial, or even exis- tential, risks to both the company’s continuity and reputation and the communities it serves. As such, corporate crises are inevitably linked to economic cycles and the development and emergence of new business sectors, activities, and markets. As businesses evolve, so do the crises they may face. During the dawn of the Industrial Age, from the late 1800s to the early 1900s, corporate crises often stemmed from dire labour conditions, the spread of smoke and fog due to rudimentary industrial methods, and infrastructure failures. Innovations in banking and securities in the early 1900s brought crises related to financial miscon- duct and bank runs. The 1950s, for example, saw the first large-scale corporate crises in the pharmaceutical, chemical, and transportation sectors. The early days of globalisation in the 1970s and 1980s introduced crises related to unethical business practices in less developed nations and significant oil spills. In the 1990s and 2000s, crises related to accounting and corporate fraud became more common. More recently, in the 2010s and 2020s, crises have emerged from cybersecurity failures, serious workplace misconduct, and growing concerns about the impact of business activities on the climate. Evolving types of crises and crisis management This is not to say, of course, that crises that hap- pened in the past cannot happen again. Unfor- tunately, recent examples demonstrate that vir- tually all the above-mentioned types of crises

Crisis Points: A Global and Historical Overview of Crisis Management as It Continues to Unfold

Corporate crisis management has evolved sig- nificantly in recent decades, driven by changes in the environmental, social, political, economic, and technological challenges that businesses face on a global scale. Historically, crisis man- agement primarily focused on responding to threats and mitigating their impact, whereas a more modern approach considers a broader spectrum of concerns (including risk assessment and prevention, preparedness and response, recovery and remediation). This evolution has also reshaped the expecta- tions of companies regarding the roles of the outside experts they seek out when a crisis hits. Companies now resort to a growing and diverse range of crisis specialists, including lawyers in different practice areas, technical experts, communications advisers, cybersecurity and IT consultants, private investigators, remediation designers, and several others. All these pro- fessionals must work seamlessly together with the company’s crisis management team to help the company face the complex and constantly evolving issues that often arise during a crisis. The decision by Chamber and Partners to launch a practice guide dedicated to crisis manage- ment is, therefore, both important and timely. This guide brings together contributions from a stellar group of leading professionals from vari- ous backgrounds, fields of expertise, and juris- dictions to offer readers – particularly corporate leaders – a comprehensive resource to help their organisations understand and manage the com- plexities of modern-day crises.

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INTRODUCTION Contributed by: Thiago Jabor Pinheiro, Rômulo Silveira da Rocha Sampaio and Lucas Guimarães Ribeiro, Mattos Filho

continue to have disastrous consequences for the communities and the environment in which affected companies operate. However, today’s interconnected world introduces a remarkable novelty: crises can now emerge from a far more diverse range of sources, evolve much faster in scale and reach, and have a much broader impact. At the same time, the expectations of stake- holders – including regulators and communities – have evolved regarding the degree of care and responsibility that corporate leaders are expect- ed to take and the ethical standards that they are expected to follow. Regulators have developed new legal and practical tools to respond to crises and hold companies and individuals account- able. Communities now have more resources to raise awareness and seek redress. Conse- quently, companies are held to a much higher standard than ever before, requiring a broader perspective for their crisis prevention and man- agement practices as well as their mitigation and remediation efforts. Cross-border crises and geopolitical tension Another complicating factor is the cross-border potential of certain crises. A crisis event that happens in Brazil, for example, can very easily generate impacts, investigations and litigation in other jurisdictions, as regulators and communi- ties have deeper connections and the ability to reach beyond territorial borders. All of this occurs in a time of increasing geopolitical tension, pre- senting an additional challenge for organisations that operate in several jurisdictions. In some parts of the world, political instability, disputes concerning immigration and foreign trade, and decreased trust in multilateral organi- sations and negotiations can also disrupt supply chains, affect market stability, and pose security

risks – creating additional complexity for those whose job it is to ensure that a global business remains stable. The German chapter by Wilke, Theusinger and Schilla in this guide exemplifies how both the local and global political landscape can affect crises and their management. Technological challenges Technological progress and the reliance on data have increased companies’ exposure to IT threats that could have unpredictable effects and lead to serious corporate crises. Data protection is a significant modern concern for companies and the rise of cyberthreats makes privacy an increasingly important issue. Data breaches and cyber-attacks can have dra- matic effects and consequences may range from legal penalties to the loss of trust from custom- ers and counterparties. Recent high-profile data breaches highlight the importance of cybersecu- rity policies and protections in crisis prevention. In their insightful contribution to this guide, Sing- er and Griffanti discuss the complexity of cyber- security crises and the importance of managing the expectations of various stakeholders. In the USA – Illinois chapter, the authors discuss the role of the media in shaping public perception of privacy and safety. In the USA – Washington, DC chapter, Marlin, Becker, McQuillen and Pulio- Deighton emphasise the critical importance of comprehensive risk assessment and preparation for cybersecurity crisis response. They argue that commitment from management is indispen- sable in successfully addressing the impact of

cyber-incidents. Climate change

For some time, climate change has been an emerging source of crisis as companies and communities adapt to its risks and consequenc-

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INTRODUCTION Contributed by: Thiago Jabor Pinheiro, Rômulo Silveira da Rocha Sampaio and Lucas Guimarães Ribeiro, Mattos Filho

es. Organisations are under increasing pressure to adopt sustainable practices, reduce their carbon footprint, address climate-related risks associated with their activities, and comply with new regulatory requirements on industry stand- ards. In the Australian chapter, Briggs, Wong, Smyth and Dougherty touch on this topic, dis- cussing examples of the increasing complexity of Australian regulatory and enforcement sce- narios concerning environmental issues during the past few years. The failure of an organisation to adequately address those risks can lead to regulatory enforcement, pressure from investors, and repu- tational damage – all in an ever-changing envi- ronment. Therefore, effective management of this type of crisis requires science-based deci- sion-making, transparent reporting, and proac- tive stakeholder engagement. It also requires adequate climate risk assessments, which are essential to build climate resilience and better response mechanisms. Diversity, equity, and inclusion (DEI) In recent years, diversity, equity, and inclusion have become critical sources of potential crises. While different jurisdictions may adopt different approaches and requirements as to the extent of the adoption of such practices by companies, there is increasing accountability and demand for inclusive cultures, equitable policies, and transparent communication. Workplace harass- ment and discrimination are serious threats to the well-being of employees and communities; organisations need to respond accordingly. Speed of the modern news cycle Crisis management professionals in the 1950s could go to bed after the evening news and only worry about the following day’s morning papers. Nowadays, such professionals can barely be

away from their phones for a few minutes as a cri- sis develops. The pace of the modern-day news cycle and the ability for information to instantly spread have significantly increased the pressure on organisations and their advisers. With the rise of social media and digital platforms, information can become global within minutes, requiring a more agile, proactive approach. This has also amplified public scrutiny and demands for accountability. Crises can have a more profound and immediate impact on an organisation’s reputation, as negative news can quickly go viral and disrupt a company’s opera- tions in several jurisdictions at once. In this scenario, organisations need to be prepared to engage in real-time communication, monitor media coverage, and address stakeholder con- cerns promptly. By examining US trends in crisis management, the chapter by McAndrews, Wachter, Kimberly, and Pickler discusses the impact of media frag- mentation and the consequences of eroding public trust in the media and the professional press for organisations. The authors recommend practices to ensure an effective crisis response on that front, which include ensuring that the organisation’s message is consistent and clear. The ability to provide timely, accurate and appro- priate updates to stakeholders – demonstrat- ing a commitment to resolving the crisis – may determine whether an organisation is able to survive. Miscommunication during a crisis can

easily become another crisis. Adaptability and resilience

As we delve into the complexities of crisis man- agement in this guide, we want to highlight the importance of planning, adaptability, and resil- ience. By working in advance to understand what may lead to or amplify crises and by implement-

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INTRODUCTION Contributed by: Thiago Jabor Pinheiro, Rômulo Silveira da Rocha Sampaio and Lucas Guimarães Ribeiro, Mattos Filho

Conclusion With this introduction, we hope to set the stage for the following chapters of this Global Practice Guide. By understanding the historical context, the evolving types of crises, and the modern challenges posed by technological threats, cli- mate change, DEI issues, and the rapid pace of the news cycle, corporate leaders can bet- ter prepare for the complex landscape of crisis management. As mentioned earlier, the goal of the edito- rial team is to equip corporate leaders with the knowledge and tools they need to anticipate, prepare for, and respond to crises in different jurisdictions. In doing so, their ability to safe- guard their organisations and the communities they impact will increase.

ing robust prevention and management frame- works, organisations can enhance their ability to respond effectively and mitigate potential risks to themselves and the communities they impact. As analysed by Sá in the Brazil chapter, adopting a preventive strategy and building strong rela- tionships with governmental authorities is cru- cial for companies to reduce legal exposure and confusion during a crisis. Maintaining a consist- ent communication strategy is key to preserving credibility, especially during the initial stages of a crisis. This involves developing a culture of ongo- ing improvement, which includes being able to learn from past crises to avoid new ones. A good example comes from crisis response tab- letop exercises, which are discussed in the USA – New York chapter by Roberts and Griffanti in this guide.

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AUSTRALIA

Australia

Trends and Developments Contributed by: Peter Briggs, Christine Wong, Mark Smyth and Tom Dougherty Herbert Smith Freehills

Sydney

Tasmania

Herbert Smith Freehills is a leading global law firm, with more than 5,450 people (including 528 partners) in 23 offices across Africa, Asia, Australia, Europe, the Middle East and the USA, advising many of the biggest and most ambi- tious organisations across all major regions of the globe. The firm has decades of experience helping major corporations and governments take control of all aspects of crises, including cybersecurity breaches, defamation and repu- tation management, ESG compliance, employ-

ee relations and human rights, as well as safe- ty, environmental, insurance and competition issues. In the event of a crisis, Herbert Smith Freehills draws on a deep pool of crisis man- agement experts with market-leading sector and regional expertise to assemble a bespoke team to be by the client’s side in those crucial first hours – all the way through to implement- ing recovery strategies and drawing on lessons learned to embed proactive and preventative measures to mitigate future risk.

Authors

Peter Briggs is a partner at Herbert Smith Freehills, where he leads the firm’s Australian environment, planning and communities practice, and is an experienced litigator in

Christine Wong is a partner in Herbert Smith Freehills’ dispute resolution practice and has particular expertise supporting clients in responding to crises and investigations arising in

Australian courts. Peter has more than 30 years of experience advising corporate and government clients on matters that demand a creative, strategic and commercial approach – for example, climate adaptation, ESG risks, regulatory issues, and crisis management. He also advises clients on planning law, contamination, pollution, heritage, biodiversity issues, environmental incident response, regulatory investigations, and defending environmental prosecutions. Ranked in Band 1 by Chambers and Partners, Peter is consistently recognised in leading legal

cyber/data breach, white-collar crime and whistle-blower contexts. She has broad experience in helping clients across a range of sectors resolve significant commercial disputes, investigations, and enforcement proceedings.

directories as one of Australia’s top environment and planning lawyers.

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AUSTRALIA Trends and Developments Contributed by: Peter Briggs, Christine Wong, Mark Smyth and Tom Dougherty, Herbert Smith Freehills

Mark Smyth is a partner in Herbert Smith Freehills’ dispute resolution practice and specialises in ESG, public law and strategic litigation. Mark advises clients on ESG issues,

Tom Dougherty is a senior associate in Herbert Smith Freehills’ environment, planning and communities practice, as well as a trusted adviser to corporate and government

including human rights, sustainability, First Nations engagement and governance issues, as well as regulatory enforcement processes and consequent litigation. He is involved in defending a number of significant, high-profile ESG claims against multinational clients and in responding to novel claims, as well as advising clients on risk mitigation, ESG, and regulatory compliance.

clients on major projects and critical infrastructure, urban redevelopments, significant M&A and real estate deals, and significant specialist litigation. He advises clients on environmental assessment and approvals, biodiversity, climate change, ESG, pollution and significant land contamination, land acquisition and disposals, contractual risks and disputes, native title and cultural heritage, and statutory reform. Tom is highly regarded for his expertise in incident response, crisis prevention and management, regulatory compliance and risk management, stakeholder engagement, and complex disputes.

Herbert Smith Freehills ANZ Tower 161 Castlereagh Street Sydney NSW 2000 Australia Tel: +61 292 255 000 Fax: +61 293 224 000 Web: www.herbertsmithfreehills.com

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AUSTRALIA Trends and Developments Contributed by: Peter Briggs, Christine Wong, Mark Smyth and Tom Dougherty, Herbert Smith Freehills

Key Risk Areas for Businesses in Australia to Focus On When Developing Crisis Management Frameworks Complex global and local challenges contin- ue to require businesses to maintain a robust approach to crisis management in Australia, with a focus on adaptability, compliance and resil- ience. Businesses are presented with unique issues while operating in an increasingly digital Austral- ian society and navigating a regional and global landscape with more stringent environmental obligations due to climate change impacts. This operating environment also has a regulatory overlay with governments, who are respond- ing by increasing their focus on corporate and director breaches, as well as by establishing new regulatory frameworks to improve the govern- ance and management of crisis risks. Within these digital and natural environments, recent trends and developments have led busi- nesses in Australia to focus on: • cybersecurity and data protection; • environmental regulatory enforcement under state and territory laws; and • ESG and greenwashing. These are expected to remain strong areas of focus for businesses in Australia in 2025. Cybersecurity and data protection Cybersecurity has ranked as the top concern for Australian businesses in recent years. This is not surprising given: • increasing regulatory expectations and obli- gations on companies to ensure that their governance and management of cyber-risks is robust;

• the volume of personal and other confidential information held by organisations (increasing with artificial intelligence adoption); • the increased sophistication of threats; • reliance on third parties; and • an active class-action environment. These factors mean that cybersecurity and data protection will remain key risks – and areas of focus – for Australian businesses. The risk of regulatory enforcement action following a major cybersecurity incident is material. To date, com- panies have faced enforcement action under pri- vacy laws, as well as sector-specific laws and regulations (ie, prudential standards for banks and insurers, financial services licensees and telecommunications providers). The Australian Securities and Investments Com- mission (ASIC) stated that it is actively investi- gating breaches of directors’ duties for failing to take reasonable steps to prepare for a cyber- attack. Recent reforms increase the scope and risk of actions against companies. Privacy reforms The Privacy and Other Legislation Amendment Act 2024 (Cth) (the “Amendment Act” ) was intro- duced into law in 2024, as part of modernising Australia’s privacy laws. Certain amendments are now in force, with others to take effect later this year. The reforms follow 2022 amendments to the Privacy Act 1988 (Cth) (the “Privacy Act” ), which increased the penalties for breaches of the Privacy Act for serious interferences with privacy to AUD50 million or more. The Amendment Act expands the privacy regu- lator’s powers and raises the bar for data secu- rity and privacy practices. The obligation to take “reasonable steps” to protect personal informa- tion is clarified as including organisational steps,

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AUSTRALIA Trends and Developments Contributed by: Peter Briggs, Christine Wong, Mark Smyth and Tom Dougherty, Herbert Smith Freehills

as well as technical measures. This provides a more explicit basis for potential enforcement action where there is inappropriate governance, emphasising the importance of appropriate oversight and involvement of the board in pri- vacy and cybersecurity risk management. A new tiered civil penalty regime for Privacy Act breaches gives the privacy regulator a more flexible toolkit, as well as the ability to obtain enforcement outcomes and fines without com- mencing court proceedings. Cybersecurity reforms A suite of reforms strengthening cybersecurity laws in Australia were also passed in 2024 to enhance the security of critical assets and to gain a better understanding of the impact on business of cyber-attacks, with a view to ena- bling the government to better mitigate risks across the economy and to formulate future responses. In the context of cyber-extortion attacks, the Cyber Security Act 2024 (Cth) means that busi- nesses should consider reflecting the following in incident response plans: • mandatory obligations to report information about cyber extortion payments (details of the payment process and threat actor communi- cations), where reporting thresholds are met. While information protected by privilege does not need to be disclosed and reported infor- mation is subject to limited use by govern- ment, the protections leave open the possibil- ity that information can be used in a criminal prosecution of a company; and • the government’s enhanced powers to inter- vene in critical infrastructure cyber-incidents.

The government has also introduced enhanced obligations for critical infrastructure. Amend- ments to the Security of Critical Infrastructure Act 2018 (Cth) include: • the expansion of obligations to data storage assets; • enhanced powers to require entities to vary critical infrastructure risk management plans; • enhanced information-sharing criteria; and • security and notification obligations for critical telecommunications assets. Environmental regulatory enforcement As communities, organisations and governments maintain a focus on climate change impacts and related environmental issues, businesses in Aus- tralia are faced with an increased regulation of environmental impacts under state and territory laws. This includes an increased risk of enforce- ment action with regard to business-as-usual operations or in connection with an environmen- tal crisis or legal non-compliance. Australia has a complex environment protec- tion legal system, which is primarily governed by federal and state and territory laws. At a federal level, the Environment Protection and Biodiversity Conservation Act 1999 (Cth) is the overarching regulatory vehicle for the protection of biodiversity in Australia. At a state and terri- tory level, each jurisdiction has its own legisla- tion that governs: • the primary environment protection frame- work for that jurisdiction, which regulates most business activities being carried out in Australia; and • the investigation and enforcement powers of an Environment Protection Authority (EPA) or equivalent for that jurisdiction.

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AUSTRALIA Trends and Developments Contributed by: Peter Briggs, Christine Wong, Mark Smyth and Tom Dougherty, Herbert Smith Freehills

This framework comprises numerous pieces of legislation, regulations, guidelines and other instruments, creating a legal patchwork that businesses must safely navigate, particularly at the start of a crisis. Within this context, the Australian environmental regulatory enforcement landscape continues to see sustained action by state and territory agencies for environment- related issues, including: • a co-operative, multi-agency approach to the early investigation of issues relating to envi- ronmental incidents and non-compliances in key jurisdictions such as New South Wales (NSW) and Victoria; • an expansion of investigation and enforce- ment powers for EPAs, including harsher penalties for breaches of environmental laws; and • the pursuit of Australian and overseas-based corporate directors for breaches of environ- ment protection laws. Multi-agency approach to investigations Generally, statutory obligations require certain environmental issues to be reported to the EPA (or equivalent) in each state or territory jurisdic- tion, in addition to other government agencies (eg, health, fire and other emergency services). At a time of crisis, this type of legal reporting obligation ensures that there may be more than one government agency involved in the investi- gation of that issue – examples of which include the following. • A multi-agency investigation in NSW (which included the NSW EPA) was undertaken fol- lowing the significant discovery of asbestos in mulch in numerous public locations across Sydney, including schools, hospitals, and transportation facilities. The extensive inves- tigations resulted in several clean-up and

prevention notices being issued, as well as a suite of prosecutions against three corpora- tions and a director that are yet to be deter- mined. • The Victorian EPA led an unannounced multi- agency investigation into businesses in the meat and livestock industry in Echuca and, in 2024, the EPA was successful in the prosecu- tion of the director of a related corporation. These case studies show a willingness by EPAs to involve other agencies in responding to envi- ronmental issues, even if it is ultimately the EPA that will undertake the prosecution. This is increasingly playing out at an early investigation stage, as the relevant EPA and other agencies appear to take a co-ordinated approach to stat- utory requests for information, site inspections, interviews, and other preliminary steps. During an environmental crisis, a multi-agency regulatory approach can result in additional issues arising from the original environmental issue owing to the spotlight on different parts of a business by various regulators. Businesses must be mindful of this risk when responding to a crisis and be ready to address issues that may not appear to be at the core of the environmental issue, such as consumer, contractual and safety matters. The multi-agency approach also has a higher risk of increased regulatory burden after a crisis event. By way of example, a variation of existing environmental licence conditions is an approach that regulators typically adopt to impose new obligations requiring wide-ranging action by the licence holder (eg, mandatory audits). This potential post-crisis requirement also carries a material risk that other issues in the business will be identified and reported to the relevant regulator.

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AUSTRALIA Trends and Developments Contributed by: Peter Briggs, Christine Wong, Mark Smyth and Tom Dougherty, Herbert Smith Freehills

Expanded regulatory investigation and enforcement powers Various Australian jurisdictions have introduced reforms to strengthen investigation and enforce- ment powers of EPAs (or equivalent) and now impose higher penalties for environmental offences. Examples of such reforms include the following. • Major changes to the environment protection regime in NSW commenced in April 2024, doubling maximum penalties for environ- mental crime (with some maximum penal- ties now AUD10 million for corporations and AUD2 million for individuals) and substantially expanding the investigatory powers of the NSW EPA. New investigatory powers for the NSW EPA include the power to issue public “name and shame” warning statements about poor environmental practices and performers, as well as oral or written “preliminary inves- tigation notices” that require recipients to assist investigations by the NSW EPA at their own cost. Notably, the results of a prelimi- nary investigation could be used by the NSW EPA in prosecuting the person to whom it is issued. • New environmental laws in Queensland com- menced in June 2024, introducing a broader range of enforcement options for regulators, along with stronger penalties. The new laws include: (a) the power to issue “environmental enforcement orders” to compel improve- ments to on-site activities causing unac- ceptable environmental harm; and (b) “general environmental duty” (GED) that requires a person to take reasonably practicable action to prevent or minimise material or serious environmental harm (similar to the GED in Victoria).

Notably, NSW’s environment protection reforms were a direct response to a significant asbestos in mulch crisis in 2024, which saw various public locations in Sydney closed during the investiga- tion and remediation stages. More frequent investigations and prosecutions of local and overseas company directors Prosecution of corporate management under Australian environment protection legislation is not new. Each state and territory has some form of framework that allows for directors, officers and persons involved in the management of a corporation to be held liable for actions of the corporation. What is significant is that the frequency with which corporate management is prosecuted under these legislations has generally increased over time. This is particularly apparent in NSW and Victoria, which have comparably more active EPAs than other Australian jurisdictions. As indicated in the NSW EPA’s annual reports and in the Victorian EPA’s register of court pro- ceedings, the number of director prosecutions for environmental offences committed by a cor- poration has increased: • for NSW, from no prosecutions (financial year (FY) 2021–22) to six prosecutions (FY 2023– 24); and • for Victoria, from three prosecutions (FY 2021–22) to 12 prosecutions (FY 2023–24). Recently, the Victorian EPA has also attempted to investigate and serve overseas-based direc- tors in connection with a potential environmen- tal prosecution. While the charges against the corporation and its directors were ultimately not pursued, this demonstrates the regulator’s will- ingness to take extraterritorial action relating to

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AUSTRALIA Trends and Developments Contributed by: Peter Briggs, Christine Wong, Mark Smyth and Tom Dougherty, Herbert Smith Freehills

material environmental issues in circumstances where directors are based overseas. This presents an emerging regulatory risk after an environmental crisis for businesses that have both local and overseas directors, officers, or other persons in senior management. If this prosecution trend continues, regulators may increasingly rely on the extraterritorial applica- tion of existing legislative provisions when carry- ing out initial investigations and seeking to rem- edy an environmental issue. By way of example, the Protection of the Environment Operations Act 1997 (NSW) currently allows for a person to be issued with a regulatory notice (eg, prelimi- nary investigation notices or clean-up notices) even if the person is outside of NSW, so long as the relevant matter or thing affects the environ- ment of NSW. ESG and greenwashing Australia has had the second-highest number of documented climate litigation proceedings globally, second only to the USA. Australia has a developed litigation landscape and has signifi- cant reserves of traditional energy sources such as coal, oil and gas. These factors have made it a fast-moving and higher-risk jurisdiction in climate-related litigation. Australian companies are operating within a landscape of increased regulatory surveillance, as the major Australian regulators have contin- ued to target greenwashing as an enforcement priority and recent decisions in favour of regu- lators have crystallised the threat of action for greenwashing and the significant pecuniary pen- alties that can come with it. In 2023, the Federal Senate established an inquiry into greenwashing by Australian compa- nies. The inquiry investigated the environmental

and sustainability claims made by Australian companies, the impact of greenwashing, and legislative options to protect consumers from greenwashing. The committee is due to report by 5 August 2025. As Australia comes to the end of its first major cycle of climate-related litigation, what follows is a snapshot of the key trends that have emerged to date, including relevant examples. Misleading and deceptive conduct: climate change disclosures and companies’ products Regulators have adapted existing and estab- lished causes of action for misleading and deceptive conduct to prevent greenwashing. Both ASIC and the Australian Competition and Consumer Commission (ACCC) have identi- fied greenwashing as an enforcement priority. To date, ASIC has been the more active, having issued 17 greenwashing-related infringement notices and three civil penalties proceedings. Representations that have attracted regulators’ attention have tended to: • be lacking in balance; • use broad or vague terminology or use absolute statements that are unqualified and devoid of context; and • use overly positive environmental imagery. Misleading and deceptive conduct claims have tended to focus either on companies’ climate- related disclosures and emissions reduction targets or on product claims companies have made. The latter type of proceeding has tended to cluster around hot-button terminology such as “carbon neutral” or “sustainable” . By way of example, in April 2024, the ACCC commenced its first-ever greenwashing proceeding against Clorox Australia Pty Ltd ( “Clorox” ) for mislead-

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AUSTRALIA Trends and Developments Contributed by: Peter Briggs, Christine Wong, Mark Smyth and Tom Dougherty, Herbert Smith Freehills

ing or deceptive conduct in relation to claims that its Glad-branded garbage bags were “made using 50% ocean plastic” . The ACCC alleged that these products were made from plastic collected from communities in Indonesia up to 50 kilometres from the shoreline and that Clorox had deprived consumers of the opportunity to make informed purchasing decisions. In Feb- ruary 2025, Clorox agreed to pay a penalty of AUD8.25 million, which remains subject to court approval. Activists have also sought to use increased regu- latory attention on greenwashing to achieve their goals. A recent example was the Environmental Defenders Office asking the ACCC on behalf of Climate Integrity to investigate whether Qantas’ “fly carbon neutral” product was misleading or deceptive and in breach of the Australian Con- sumer Law. Misleading and deceptive conduct: claims against financial institutions Large investment and superannuation funds have been the subject of all three ASIC climate litigation proceedings. ASIC has been particu- larly alert to representations about “ESG-posi- tive” investment screening. Proceedings brought against Vanguard Investments Australia ( “Van- guard” ), Mercer Superannuation ( “Mercer” ) and Active Super have focused on claims of this nature. The Vanguard and Mercer proceedings resulted in significant penalties. In September 2024, Vanguard was ordered by the Federal Court of Australia to pay a penalty of AUD12.9 million – the highest yet ordered in Australia for greenwashing. ASIC alleged that Vanguard had engaged in misleading or decep- tive conduct and made false or misleading rep- resentations about the ESG-related exclusionary screening it applied to investments in an “ethi-

cally conscious” fund. Vanguard admitted much of the alleged conduct. This decision came a month after the court ordered a AUD11.3 million penalty against Mer- cer (which had been agreed between the par- ties). The court held that Mercer had misled members of its Sustainable Plus fund by claim- ing that the fund excluded companies that were involved in carbon-intensive fossil fuels, despite heavily investing in 15 stocks in this sector. The penalty was set on the basis that Mercer’s con- traventions were serious and arose from its fail - ures to implement sufficient systems to ensure the accuracy of its claims. In the Active Super case, ASIC alleged mislead- ing or deceptive conduct against Active Super for directly and indirectly investing in securities the company had represented were eliminated or restricted by its fund. Once again, the court found in favour of ASIC, noting the language used in Active Super’s representations was unequivocal. At the time of writing, the appro- priate penalty has not yet been determined by the court. Continued importance of crisis frameworks In a complex regulatory environment, up-to-date and robust crisis management and prevention frameworks are a crucial tool for businesses to ensure they are meeting their obligations and safeguarding their operations. Businesses should consider developing detailed frameworks to respond to common incident types, includ- ing the targeting of specific assets in cyber- incidents. In September 2024, the Australian govern- ment published a revised Australian Govern- ment Crisis Management Framework (AGCMF), which outlines how the Australian government

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AUSTRALIA Trends and Developments Contributed by: Peter Briggs, Christine Wong, Mark Smyth and Tom Dougherty, Herbert Smith Freehills

responds to various types of crises including natural disasters, cyber-incidents, pandemics, and terrorism. The revised AGCMF sets out a crisis continuum of prevention, preparedness, response and recovery, and establishes over- sight arrangements to continuously improve the framework. For the private sector, this provides a useful blueprint for establishing an appropriate framework to prevent and manage cyber, green- washing, environmental and other crises. Specifically, board and executive decision-mak- ing frameworks should account for the complex set of considerations involved in preparing for and managing a crisis, including: • policies and practices that encourage good corporate governance, a culture of diligence and openness, and clear reporting lines dur- ing a crisis; • the extent of due diligence to be under- taken by directors, officers and managers with regard to corporate actions, including a policy and training structure that maintains an appropriate awareness of environment protection laws; • compliance with the ACCC’s “Making Envi- ronmental Claims: A Guide for Business” , ASIC’s Information Sheet 271 ( “How to avoid greenwashing when offering or promoting sustainability-related products” ) and the Ad Standards’ Australian Association of National Advertiser Environmental Claims Code in environmental and sustainability claims;

• whether to pay a ransom during a cyber- incident (including considerations such as directors’ duties, reputational matters, and the legality of payment); and • for businesses with in-house counsel or legal teams, a policy and training structure that emphasises the importance of responding appropriately to regulatory investigations fol- lowing a crisis (including the need to main- tain integrity of investigations and preserve evidence). In addition, businesses should consider prepar- ing privilege protocols in advance, to manage privilege in the context of responding to a cyber-, environmental or other type of incident. This can be complex, particularly in relation to environ- mental or forensic IT reports – with recent deci- sions scrutinising whether such reports are for the dominant purpose of legal advice. Finally, it is critical to test the efficacy of crisis management frameworks and plans, and to ensure that they are reviewed and updated to respond to future events and legislative reform.

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BRAZIL Law and Practice Contributed by: Thaís Vasconcellos de Sá Bermudes Advogados

Colombia

Ecuador

Brazil

Peru

Brasilia

Bolivia

Rio de Janeiro São Paulo

Paraguay

Chile

Argentina

Contents 1. Market Overview p.22 1.1 Market Comparison p.22 1.2 Key Sectors Impacted by Crises p.22 1.3 Post-Crisis M&A p.22 2. National Legal Framework p.22 2.1 Legal Framework p.22 2.2 Expected Legal Updates p.23 2.3 Government Role p.23 2.4 Independent Oversight p.23 2.5 Transparency Requirements p.24 2.6 Sectorial Requirements p.24 2.7 Public-Private Co-Operation p.24 2.8 National Crisis Management Plan p.24 2.9 Inter-Agency Co-Operation p.24 3. Corporate Crisis Management p.24 3.1 Crisis Management Plans p.24 3.2 Internal Governance p.25 3.3 Crisis Committees: Composition and Attributes p.25 3.4 Crisis Management Team p.26 3.5 External Advisory p.27 3.6 Assessing Crisis Management Success p.27 4. Managing and Preventing Crises p.27 4.1 Identifying a Crisis p.27 4.2 Planning p.28 4.3 Risk Assessment and Mitigation p.28 4.4 Crisis Simulation p.29 4.5 Training p.29 4.6 Policies and Procedures p.29

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BRAZIL CONTENTS

5. Legal Strategy p.30 5.1 Legal Challenges p.30 5.2 Dealing With Enforcement Authorities p.31 5.3 Co-Operating With Enforcement Authorities p.31 5.4 Litigation Risk Assessment p.31 5.5 Involvement of Lawyers p.31 5.6 Documentation and Evidence Preservation p.32 5.7 Settlements p.32 5.8 Insurance p.34 5.9 Reputation Management p.34 5.10 Mandatory Report p.34 6. Communication p.34 6.1 Co-Ordination of Communications p.34

6.2 Internal Communication p.34 6.3 External Communication p.34

6.4 Investor Relations p.35 6.5 Customer Relations p.35 6.6 Communication to Employees p.35 6.7 Communication With Affected Parties p.35 7. Learning From Past Crises p.36 7.1 Post-Crisis Review: Learning Lessons p.36 7.2 Policy Update p.36 7.3 Effectiveness Measurement and Benchmarking p.36

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BRAZIL Law and Practice Contributed by: Thaís Vasconcellos de Sá, Bermudes Advogados

Bermudes Advogados has over 50 years of history and is widely acknowledged as a Brazil- ian leader in arbitration and litigation. The firm handles some of the most complex and high- value disputes of transnational significance, and frequently appears at the top of rankings. It has a distinguished and highly ranked practice in crisis management, providing strategic le- gal solutions across administrative, corporate, regulatory, environmental and civil matters. It is recognised for its proactive, results-driven approach and for its highly technical crisis re- sponse co-ordination, addressing all conse-

quences of a crisis while improving relation- ships with stakeholders and avoiding litigation risks. The team’s skills and hands-on approach ensure that clients maintain a consistent posi- tion on all fronts, and its commitment to ethics and clear communication ensures an adequate and trustworthy response. The firm’s expertise extends to negotiating civil settlements and working with public authorities, and it repre- sents clients in collective actions with multiple stakeholders in Brazil, the United States, the United Kingdom and the Netherlands. of Studies of Legal Societies, Rio de Janeiro. She is also a member of the Turnaround Management Association and its Legislative Reform and Mediation Committees. She was ranked Band 1 by Chambers and Partners for Crisis Management in 2024, and is author of “The Application of the Theory of Deepening Insolvency to Judicial Recovery Proceedings in Brazil” , published by Revista Semestral de Direito Empresarial.

Author

Thaís Vasconcellos de Sá has been a partner at Bermudes Advogados since 2010, and is dedicated to dispute resolution and crisis management. She has an LLM in Business Law,

Corporate Law and Capital Markets from Fundação Getúlio Vargas (2013). She graduated in Law at PUC-Rio, and specialised in Corporate Law. She is director at the Centre

Bermudes Advogados Praça XV de Novembro, 8th Floor Rio de Janeiro/RJ CEP 22010-010 Brazil Tel: +55 213 221 9000 Email: thaissa@sbadv.com.br Web: www.bermudes.com.br

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BRAZIL Law and Practice Contributed by: Thaís Vasconcellos de Sá, Bermudes Advogados

1. Market Overview 1.1 Market Comparison

overflooding and storms have disrupted activi- ties in several regions and markets. Furthermore, the aviation sector and other ser- vices that depend on flights and tourism have not completely bounced back from the COV- ID-19 pandemic, although there the respective crisis was more restricted to financial impacts (rather than being more widespread). As Brazil has a considerably developed legal statute and practice on financial restructuring – including a law that was significantly updated in 2020 – suc- cessful judicial restructuring of companies on those markets has occurred as well. 1.3 Post-Crisis M&A The maturity of Brazil’s restructuring laws and practice is significant for crisis management, as a crisis usually has significant financial implica- tions that can impair a company’s ability to meet its past obligations. As Brazil is a high-litigation country (its courts consistently top rankings in terms of number of ongoing proceedings), an important part of overcoming a crisis will be to renegotiate these past obligations and avoid related enforcement measures. For that reason, most business acquisitions and/or restructur- ings occur via judicial restructuring proceed- ings, where the company will not only be able to renegotiate collectively with its creditors but will also have access to corporate restructuring measures that protect the acquirer of the asset from past liability, maximising the value of the assets sold and the possibility of the company overcoming the crisis.

Crisis management practice in Brazil has devel- oped significantly over the past few years. This development was driven by specific industrial and environmental accidents that occurred in Brazil, by climate events that have become more extreme and recurrent and, of course, by the COVID-19 pandemic. Companies acting in different markets were suddenly faced with the complex challenges of overcoming a crisis; such challenges are inherently multifaceted, and bring significant liability exposure that could impair the most thorough crisis response efforts. The development of the market has raised aware- ness of the need for adequate preparation and crisis response, and of the value of engaging external consultants for this intricate and unique task. Companies across different industries have begun to dedicate their time and resources to developing their internal policies and proce- dures; this, in turn, has led to the crisis manage- ment market improving and professionalising its practices more each day. 1.2 Key Sectors Impacted by Crises Industrial sectors are inherently subject to potential crises arising from the usually signifi- cant risks of their activities. An industrial acci- dent may not only lead to a disruption of the company’s activities and other damages but may also bring a significant level of exposure to multiple legal demands by authorities and third parties, which can perpetuate and multiply the impacts of the crisis. Extreme climate events know no boundaries when it comes to affected sectors, as their mate- rial impacts disrupt companies’ abilities to per- form their activities across the board. Brazil is rarely ever subject to events like hurricanes, but

2. National Legal Framework 2.1 Legal Framework

Brazil’s civil law system governs the various implications of crisis management through dif-

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