The case for South Korean mandatory human rights due diligence
After 12 years of voluntary efforts to implement the UN Guiding Principles for Business and Human Rights (UNGPs) and three National Action Plans by the Korean Government, Korean companies are still failing to achieve minimum international standards for human rights protection. In a rapidly changing global regulatory environment, urgent action is needed to enhance the performance and reputation of Korean companies and investors internationally.
This report looks at data from two respected global benchmarks: the Social Transformation Baseline Assessment by the World Benchmarking Alliance (WBA) and ICT benchmarks by KnowTheChain, alongside analysis of over 17 allegations of abuse.
- On average, just one in three Korean companies fully met each of the WBA Core Social Indicators.
- The picture for stakeholder engagement was particularly concerning: only 3% of Korean companies fully met the WBA indicator on engagement with affected stakeholders.
- Two thirds (65%) of Korean companies scored zero on the most basic human rights due diligence steps as assessed by KnowTheChain.
- No companies disclosed engaging with local or global trade unions.
- Only one in three Korean companies disclosed undertaking a human rights risk assessment in their supply chain.
- Just one in three disclosed a first-tier supplier list.
Globally, we are in a fast-changing regulatory and investment environment as ecological breakdown combines with rising social and geopolitical tensions in many regions. Building on the European Union’s new regulations, the Korean Government has the opportunity to provide leadership across Asia and ensure Korean companies are fit for a future where mHREDD makes addressing unsustainable inequality and environmental harm unavoidable. Mandatory HREDD legislation is not a panacea. Nevertheless, it substantially enhances the opportunity for Korean companies and investors to contribute to greater shared prosperity and human dignities and freedoms through decent work, living wage, respect for communities and environmental regeneration.
The Fourth NAP must function as a robust blueprint of mHREDD legislation in South Korea. It should:
- Adopt a mandatory approach that is critical to ensure companies are required to make consistent and effective measures to protect human rights and recognise voluntary implementation of HREDD is insufficient;
- Go beyond demonstrating commitments and presence of mechanisms and generate transparency in human rights risks identified;
- Insist on active rights-holder engagement, especially with HRDs and unions and/or legitimate representatives of workers throughout the supply chain, to ensure salient human rights and environmental risks are identified and tackled;
- Be context-specific and insist on heightened due diligence for companies operating in conflict-affected regions;
- Require civil liability and penalties to focus the minds of boards and executives of laggard companies;
- Ensure victims of abuse have access to adequate and effective remedy mechanisms, through judicial and non-judicial means.