South Korean Bill Takes Aim At Businesses And Human Rights

Forbes

18-07-2025

A bill under consideration by the Korean National Assembly could have ramification on businesses and ... More their human rights obligations around the world.
South Korea is considering legislation that would impose legally binding human rights obligations on many companies operating in the country, both domestic and foreign.
This could be a turning point in Asia's regulatory landscape, heralding a new era for human rights obligations for businesses across the region.
The Legislative Bill for the Act on the Protection of Human Rights and the Environment for Sustainable Business Management, also known as the Corporate Human Rights and Environmental Due Diligence Act, was reintroduced to the South Korean National Assembly in June 2024. It would require large Korean companies, as well as foreign companies with significant operations in Korea, to conduct due diligence on their operations and supply chains to identify and address human rights and environmental issues. The bill, which mirrors developments in the European Union, targets companies with over 500 employees or annual revenue above $280 million, and lowers the threshold to 250 employees for high-risk sectors like mining and energy.
Under the proposed framework, companies would be required to publish annual reports documenting their due diligence processes and mitigation efforts. Noncompliance could result in administrative penalties while certain violations could give rise to civil liability.
While the bill remains under parliamentary consideration and could go through significant revision, it reflects a growing political and public consensus within South Korea that voluntary guidelines are no longer sufficient to address companies and human rights issues.
The global business and human rights agenda has been anchored in the United Nations Guiding Principles on Business and Human Rights (UNGPs), which call on companies to respect human rights by undertaking appropriate due diligence and providing remedies when violations occur. Although widely endorsed by governments and businesses, the UNGPs are nonbinding and their implementation has been inconsistent.
South Korea's bill is part of a broader global trend toward codifying the principles embedded in the UNGPs into law. Seoul's proposed legislation mirrors aspects of Germany's Supply Chain Due Diligence Act and the European Union's recently adopted Corporate Sustainability Due Diligence Directive, both of which impose due diligence requirements on large companies to ensure corporate accountability for adverse impacts of their global supply chains.
If passed, the Korean bill would be the most comprehensive and enforceable business and human rights initiative in Asia. It would require companies not only to assess and disclose risks but also to act on them, implementing concrete measures to prevent or mitigate harm, establishing grievance mechanisms and tracking their effectiveness over time.
Although the bill is national in scope, its has implications for Asia and beyond. Korea is a G20 economy with significant outbound investment, deep trade relationships and a central role in global supply chains. If enacted, the legislation would have extraterritorial effects, compelling suppliers and subsidiaries across Asia and beyond to adopt business and human rights practices consistent with the Korean law.
Moreover, several other Asian countries are actively exploring similar regulatory models.
Japan has adopted nonbinding human rights due diligence guidelines.
Thailand is developing a National Action Plan on Business and Human Rights and is reportedly considering further regulatory options.
India's Business Responsibility and Sustainability Report (BRSR) framework, while currently a disclosure regime, reflects increasing attention to environmental and social risks in corporate governance.
For multinational companies and regional conglomerates, this shifting legal environment across Asia demands attention. Business and human rights can no longer be relegated to aspirational policy statements or delegated to corporate social responsibility teams. It must become an integrated part of enterprise risk management and legal compliance across operations, jurisdictions and supply chains.
Although the legislation has not yet become law, the bill is an opportunity for those operating in the region. Companies with exposure to Korea or broader Asian markets should consider taking the following steps to prepare for a more rigorous business and human rights landscape:
South Korea's proposed legislation reflects a growing recognition in Asia that businesses must be held accountable for human rights issues, and that voluntary frameworks alone are insufficient to address the risks posed by complex, transnational supply chains. No longer a theoretical or reputational concern, it is now a material risk with legal and financial consequences. Companies that approach this issue with the requisite level of rigor, foresight and strategic intent will not only mitigate those risks but also strengthen stakeholder trust and operational resilience.
The question for business is not whether to take business and human rights seriously, but how quickly and effectively they can meet rising expectations—before those expectations become enforceable obligations.