Asia looks to up its corporate sustainability game

Land grabbing, forced eviction, toxic health impacts, and environmental destruction — these have been common violations of communities at the hands of large corporations across Asia, often without recourse. That could change, however, as Thailand and South Korea look to lead in the region by creating their first legally binding human rights and environmental due diligence legislation. “I'm very hopeful to see that in Thailand and also in other jurisdictions in the region there are these movements to introduce responsible business laws,” said Ji Yoon Kang, staff attorney at GongGam Human Rights Law Foundation and representative of the KTNC Watch, a collective working to combat multinationals’ human rights and environmental violations. The region currently lacks any kind of Corporate Sustainability Due Diligence Directive, or CSDDD, comparable to that of the European Union, which stipulates that companies must prevent their operations from causing any harm to people or the environment. Instead, there are voluntary principles, such as those inside Thailand’s National Action Plan on Business and Human Rights, that act as a framework for businesses to follow. But a lack of enforceable law or consequences for a breach of these principles leaves communities open to abuse, explained Nidhi Singh, business and human rights program manager at FORUM-ASIA, which promotes human rights in the region. And as economies in the region grow — faster than other parts of the world — more conglomerates and their potentially harmful operations are moving in. “Across Asia, in recent years, we have seen that there has been expansive economic growth, there has been extensive supply chains, there is also presence of multinational corporations because the labor markets and the presence of rich national resources also attracts these investments and businesses in Asia,” explained Singh. “But with that, we are also seeing businesses operating unchecked mainly because there is a weak regulatory framework.” In China, for example, over 80 companies, including Adidas, Amazon, and Samsung, are reported to have engaged ethnic minorities in forced labour. In Indonesia, palm oil companies, such as Korindo Group, have been accused of intentionally burning forests to make way for plantations, polluting the environment and harming wildlife. And in the Philippines, nickel mining has led to deforestation, a lack of clean water, and poor health of Indigenous communities. Tired of local communities paying the price for conglomerates’ profit margins, advocacy groups are calling for governments to better protect communities and the environment. “Now more than ever, we need strong laws to regulate business activities and to hold companies accountable,” said Neïla Mangin Maïza, corporate accountability and climate justice adviser at human rights NGO Manushya Foundation. South Korea and Thailand may be ready to respond to those calls. Both are in the process of creating bills that would force companies to adhere to human rights or face penalties. If approved, the countries could set the standard for corporate accountability in Asia, experts said at an event on the topic in Bangkok. South Korea’s mandatory Human Rights and Environmental Due Diligence bill — which is based on similar European laws, including the German Supply Chain Act — would force large Korean corporations and foreign companies operating in South Korea to ensure they take steps to avoid damage and instill countermeasures. The government would produce guidelines for companies and create a committee to handle disputes. The first iteration of the bill was introduced into parliament in 2023 but failed to pass. With new country leadership and parliamentary term, a second iteration was reintroduced earlier this year. There are still several phases the bill will need to go through before it is voted on; a process which could take years. The impetus for it, said Kang, was the civil war in Myanmar which began in 2021 when the military junta staged a violent coup. “There were Korean companies that were heavily related to the junta and despite efforts from civil society, we did not succeed in having them withdraw from Myanmar and they still operate there, so that was our rationale and motivation for pursuing this,” he explained. Research published earlier this year shows that there are over 50 companies in Southeast Asia working with the Myanmar military or its affiliated businesses — mainly in the areas of oil, gas, and timber — enabling the junta to continue its violent regime, which has so far seen over 7,300 people killed and 3.3 million displaced. A lack of a human rights directive prevents these companies from facing any consequences. Thailand’s process hasn’t gone as far as South Korea’s. It only began working on a draft bill on responsible business conduct earlier this year, which is yet to be finalized and made public. Phattharaphong Saengkrai, an author of the bill and lecturer of law at Thammasat University, shared that it is, however, based on the United Nations’ Guiding Principles on Business and Human Rights and the Organisation for Economic Co-operation and Development’s guidance. If approved, it will mandate due diligence, see the government establish a grievance mechanism, and communities negatively impacted by operations receive compensation. Thailand and South Korea’s efforts follow the release of the EU’s CSDDD Omnibus proposal earlier this year, which distills the 2024 CSDDD into tangible measures. It has, however, only watered down and narrowed the CSDDD, said Singh. At the same time, the negotiations around legally binding instruments on business and human rights at the U.N. have already taken over a decade. Legislation is only one part of the answer though, said Saengkrai. There need to be the resources to implement these instruments, which would require both financing and political will. Even when both are in place, Mangin Maïza said, the bills on their own will not prevent human rights violations in a region where authoritarian governments are on the rise, and human rights and environmental defenders are often attacked and killed. Between 2012 and 2023, 468 environmental and human rights defenders were murdered in the region. “We need to look beyond human rights and environmental due diligence to ensure corporate accountability,” said Mangin Maïza. “Corporate capture, corporate lobbying, corruption; those are the breeding grounds of corporate abuses and failing democracies that silence human rights and environmental defenders.”