On June 13, 2025, South Korean Representative Jung Tae-Ho reintroduced the proposed “Bill for the Protection of Human Rights and the Environment for Sustainable Business Management” (the Bill). The current draft of the Bill builds upon a similar proposal from September 2023, which expired with the previous National Assembly term.
The Bill aims to require in-scope companies to establish a human rights and ESG due diligence system, addressing “negative impacts” related to human rights and the environment within their business operations and supply chains. Its reintroduction follows recent presidential elections with new policy objectives in South Korea.
If passed, the Bill’s due diligence obligations will apply to companies headquartered in South Korea, and overseas companies with establishments in South Korea under Article 614 of the Commercial Act, that have at least 500 full-time employees or had sales of KRW 200 billion (approximately US$144 million) in the previous fiscal year.
Consequently, the Bill may have extra-territorial implications for companies headquartered outside of South Korea but with significant business in the region.
If enacted, in-scope companies would be prohibited from engaging in business activities (both domestically and internationally) that infringe on human rights or cause environmental harm. Further, the Bill would mandate in-scope entities to establish a human rights and environmental due diligence system. This would involve:
In-scope companies would need to conduct annual assessments to identify and mitigate negative impacts on human rights and the environment, implementing and evaluating measures to prevent recurrence and supporting suppliers. Additionally, such in-scope companies would prepare and disclose a due diligence report, detailing processes, impacts, and corrective actions. The Bill also creates the Human Rights and Environment Business Committee, which would oversee compliance and issue corrective orders for violations, with penalties for non-compliance including restrictions on public procurement bids, imprisonment, or fines. The Bill also proposes compensation for damages caused by any violations of the Bill.
The Bill’s reintroduction follows the presidential election in June 2025, with President Lee Jae-myung taking office. President Lee made a number of ESG pledges during his campaign, which could lead to significant policy developments in the near future. Underlying the potential environmental policy changes, President Lee intents to establish a Ministry of Climate and Energy, replacing the Office of Energy Policy within the Ministry of Trade, Industry and Energy, to oversee the implementation of carbon neutrality and to increase policy momentum.
One aspect that could see significant change is the energy mix in the country. Lee campaigned to prioritize renewable energy, such as solar and wind, in the power mix, and to review his predecessor President Yoon’s “nuclear-first” policy. Statistics from the South Korean government in 2024 indicate that the country’s highest proportion of power came from nuclear at 31.7%, followed by coal power and LNG.For more details, see this table on power generation by energy source. Lee is expected to pursue reducing South Korea’s reliance on nuclear power in electricity generation, and to increase the role of renewable sources in the power mix. In 2024, 10.5% of South Korea’s power came from renewable sources, although this figure has been increasing year on year.Id.
Further, the adoption of mandatory ESG disclosures based on the ISSB standards, which has stalled since 2023, could be accelerated. The Korea Sustainability Standards Board published an exposure draft in May 2024, with a consultation that closed on August 31, 2024. For more information on the status of ISSB implementation across Asia, refer to this Latham article.
In recent years, mandatory human rights due diligence legislation has received numerous updates globally. If passed, the Bill would be the first mandatory human rights due diligence law in Asia. Related initiatives from the region include the following:
Additionally, several jurisdictions, including Malaysia and Pakistan, have published “National Action Plans” referencing human rights due diligence issues. Although legislation in these regions is not as advanced as the Bill in South Korea, it is an indication of potential developments in this area.
The Bill is in its early stages and will undergo committee review and deliberation, with potential modifications throughout the legislative process.
Looking at the international landscape, the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) is currently subject to significant modification with the recent Omnibus proposal. It will be noteworthy to review the Bill’s progress in South Korea, the challenges it faces, and whether these will be similar to the CSDDD. Regardless, the Bill’s reintroduction is significant for the human rights due diligence landscape in Asia.
We will monitor the impact of the new presidential leadership on further ESG policies in South Korea and track the progress of the Bill through the legislative process.
This article was prepared with the assistance of Samantha Banfield at Latham & Watkins.