Hankyung Association Holds Discussion Forum on Supply Chain Due Diligence Response

The Korea Economic Association (hereinafter ‘KAE’) held a discussion forum on supply chain due diligence on the 18th in collaboration with the National Human Rights Commission and the law firm Kwangjang. The discussion focused on the significance of introducing the Supply Chain Due Diligence Act, its issues, and corporate response strategies.

The exact name of the Supply Chain Due Diligence Act is the ‘Sustainable Corporate Supply Chain Due Diligence Guidelines,’ which mandates due diligence in the areas of human rights and environment for companies above a certain size. The Supply Chain Due Diligence Act was implemented in Germany earlier this year. By the end of the year, the European Union (EU) is expected to release the final version of the ‘Corporate Sustainability Due Diligence Directive.’ Accordingly, Korean companies with a high export ratio also need to prepare for the introduction of the Supply Chain Due Diligence Act.

Song Se-ryeon, Chairperson of the Human Rights Management Forum at the National Human Rights Commission, stated in the presentation titled ‘Introduction and Implications of Domestic Supply Chain Due Diligence Legislation’ that “While concerns have been raised that the EU Supply Chain Due Diligence Act could become a new export barrier, the recently proposed Supply Chain Due Diligence Bill in our National Assembly holds significant meaning.” He added, “In the future legislative discussions, thorough review of international norms related to human rights and environment and sufficient communication with various stakeholders must be ensured.”

Yu Jeong-ju, Corporate Systems Team Leader at KAE, who presented on the ‘Issues of Supply Chain Due Diligence Legislation,’ pointed out, “There is a wide divergence of positions among European organizations, and even in Europe, consensus on supply chain due diligence has not yet been reached. Given the heavy burden felt by our companies, a cautious approach to legislation is necessary.” He continued, “Even if legislation is enacted, support such as infrastructure development, information provision, and education is more urgently needed than regulation on supply chain due diligence.”

In the session presenting corporate response strategies to supply chain due diligence, Seol Dong-geun, attorney at the law firm Kwangjang, said, “It is expected that within a few years, most domestic companies, regardless of whether they export to the EU or not, will be affected by human rights and environmental due diligence. Therefore, it is necessary to proactively establish a detailed supply chain due diligence implementation system that reflects domestic and international laws, eliminates risk factors violating the Subcontracting Act, Win-Win Cooperation Act, and Unfair Competition Prevention Act, and revise contracts accordingly.” He especially added, “The currently proposed Supply Chain Due Diligence Bill emphasizes supervisory responsibility by imposing imprisonment on management officials, similar to the Serious Accident Punishment Act, so it is important to carefully monitor the legislative process going forward.”

This content was produced with the assistance of AI translation services.