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Eyes on Asia: How the Region Is Advancing on Human Rights Due Diligence

Posted on December 12, 2025

Silvia Mera
Silvia Mera
Manager, Stewardship

Key Insights:

  • Asia is transitioning from a passive role in global human rights compliance to actively shaping its own human rights due diligence frameworks, driven by trade pressures and ambitions to align with international standards. 
  • Regulatory momentum in countries like South Korea, Thailand, Malaysia and Indonesia could trigger a regional domino effect. 
  • To stay ahead, companies should proactively strengthen human rights due diligence systems through mapping supply chains, engaging stakeholders, and aligning with the UN Guiding Principles and OECD Guidelines. Investors should monitor regulatory developments and portfolio readiness. 


While political pushback against environmental, social and governance (ESG) considerations continues in the US,1 and the EU scales back mandatory corporate sustainability requirements,2 Asia is advancing its own human rights due diligence (HRDD) frameworks. This article explores key developments in South Korea, Thailand, Malaysia, and Indonesia, and what they mean for businesses and investors. 

From Reactive to Proactive

For a decade, while based in Asia, I worked to strengthen companies’ ability to manage human rights risks. Building the business case was challenging, with corporate social responsibility or philanthropy often conflated with proper HRDD and accountability, especially in the absence of mandatory rules, or significant financial and legal consequences for abuses. The introduction of regulations like the UK Modern Slavery Act in 2015,3 the US Tariff Act amendment in 2016,4 and France’s Duty of Vigilance in 20175 helped to establish human rights risks as material business risks. However, as suppliers or subsidiaries of US or European firms subject to these laws, companies in Asia were mostly passively affected. That is changing, with some Asian governments now starting to shape their own HRDD frameworks in what could become a regional trend. 

Why the Push Toward HRDD in Asia?

These developments connect HRDD to broader national priorities. Thailand6 and Indonesia’s7 pursuit of membership within the Organisation for Economic Co-operation and Development (OECD) – the first Association of Southeast Asian Nations (ASEAN) members to become OECD accession candidates – is accelerating efforts to align with global standards on responsible business conduct. Candidates for accession must demonstrate adherence to the rule of law, effective climate policy, and respect for human rights, among other requirements.8

Additionally, import bans pose a risk of financial repercussions on key export sectors in Asia that are at high risk of forced labor, such as fisheries, minerals, and palm oil. In the US, forced labor trade laws are enforced under 19 U.S.C. §1307 (part of the Tariff Act 1930) and implemented through issuance of Withhold Release Orders and Findings and enforcement of the Uyghur Forced Labor Prevention Act and the Countering America’s Adversaries Through Sanctions Act. These laws enable the US Customs and Border Protection to stop shipments of goods allegedly made with forced labor from entering the US until the importer proves the contrary.9 Similarly, the EU Forced Labour Regulation, which takes effect in December 2027, introduces a comprehensive ban on products made with forced labor, prohibiting the sale of such products in the EU market.10

In addition, recently concluded reciprocal trade agreements between the US and Cambodia11 and Malaysia12 include provisions to ban imports of goods made with forced labor, as well as requirements to protect internationally recognized labor rights in industries like textiles and agriculture. Similar frameworks for future agreements with Thailand have also been recently disclosed.13  

These developments should not be seen as isolated cases. Given their shared human rights contexts and challenges, the success of legislative efforts in countries like Thailand and South Korea could spur other countries and companies in the region to strengthen their own HRDD frameworks in the near future.14 Thailand and Indonesia have the potential to act as a bridge between the ASEAN and the OECD, promoting the exchange of best practices and aligning regulatory standards, including on responsible business conduct and, thus, human and labor rights.15

How Companies Can Prepare for Rising HRDD Expectations in Asia

As HRDD momentum builds across Asia, companies could strengthen their practices to stay ahead of compliance and market expectations. This involves mapping supply chains, conducting risk-based impact assessments, developing preventative measures, and establishing grievance mechanisms aligned with the UN Guiding Principles on Business and Human Rights and OECD Guidelines for Multinational Enterprises. Engaging stakeholders, including affected communities, labor unions, and civil society, can help businesses better understand and address human rights risks. Learning from frontrunners and multi-stakeholder initiatives can further enhance HRDD capacity and offer tools and resources, especially to companies that are new to these efforts. Robust human rights management systems may help reduce the risk of controversies leading to reputational harm and legal exposure, and mitigate potential exclusions from investment portfolios or buyer tenders.

Key Considerations for Investors 

Investors should stay informed and assess the potential impacts of Asia’s evolving HRDD frameworks on their portfolios. This could involve monitoring regulatory developments across the region, including trade-linked labor provisions and emerging HRDD laws. At the same time, evaluating portfolio companies’ readiness – through reviewing their human rights policies, due diligence processes, and grievance mechanism effectiveness – can help investors understand their exposure to risk. Tools like Morningstar Sustainalytics’ ESG Risk Ratings can support this analysis. Investor dialogue with companies aimed at tracking and promoting the uptake of good HRDD practices is another important area to consider. Sustainalytics’ Stewardship Services work with, and on behalf of, investors, enacting engagement strategies to support companies’ progressive improvements in social issues management. 

Key HRDD Developments in Asia: A Summary

South Korea 

 

In June 2025, the Democratic Party reintroduced the Act on the Protection of Human Rights and the Environment for Sustainable Business Management to South Korea’s National Assembly.16 Drafted by the civil society group Korean Transnational Corporations Watch Network, the bill was first introduced in September 2023 but expired at the end of the parliamentary term. The bill requires large companies, including financial institutions, to exercise HRDD in the entire value chain and includes civil liability.17 A second, less stringent HRDD bill was introduced in November 2025 by another member of the Democratic Party, and a debate is expected.18

Thailand 

Thailand’s Ministry of Justice is drafting a new law that will require businesses to conduct HRDD in their supply chains, to address the pain point of lack of adherence to the government’s existing voluntary guidance on business and human rights.19 The law will apply to all companies operating in Thailand, mandating them to identify, prevent, and address human rights and environmental risks. It is expected to include civil penalties for non-compliance, alongside incentives such as tax benefits and access to public contracts for compliant firms.20

Malaysia 

Malaysia’s Legal Affairs Division’s 2024 National Baseline Assessment identified gaps in governance, labor, and environmental protections, providing a foundation for regulatory reforms and stakeholder engagement to strengthen HRDD practices.21 The country’s first National Action Plan on Business and Human Rights (2025–2030) lays the groundwork for integrating human rights into corporate governance.22 The phased plan may lead to future reforms, including a Corporate Manslaughter Act, anti-SLAPP legislation (also known as strategic lawsuits against public participation, which is often used to repress human rights defenders), and supply chain due diligence laws.23

Indonesia 

Indonesia may be transitioning from voluntary to mandatory frameworks in the near future. According to an announcement from the Ministry of Human Rights in August 2025, a new regulation that would require companies to comply with human rights standards – or face sanctions – is slated for 2028.24 This builds on a previous regulation outlining Indonesia’s national strategy for business and human rights, which serves as the government’s primary legal basis and reference for implementing regulations, and highlights labor rights violations, child labor, and land use as issues of concern.25 

 

References

  1. Bundy, R. “Public Policy Drives Sustainable Investing Markets in 2025.” Sustainalytics ESG Blog. April 22, 2025. https://www.sustainalytics.com/esg-research/resource/investors-esg-blog/public-policy-drives-sustainable-investing-markets-in-2025.
  2. European Union Parliament, 2025. ”Deal on updated sustainability reporting and due diligence rules.“ December 9, 2025. Accessed December 9, 2025. https://www.europarl.europa.eu/news/en/press-room/20251208IPR32080/deal-on-updated-sustainability-reporting-and-due-diligence-rules. See also: K. and Blenkinsop, P. 2025. “EU Lawmakers Back Further Weakening of Sustainability Law.” November 13, 2025. Reuters. https://www.zawya.com/en/world/uk-and-europe/eu-lawmakers-back-further-weakening-of-sustainability-law-lpr46rgd.
  3. United Kingdom Parliament. 2015. Modern Slavery Act 2015. March 26, 2015. https://www.legislation.gov.uk/ukpga/2015/30/contents.
  4. United States Congress. 2016. Amendment to Section 307 of the Tariff Act of 1930 (Closing the Consumptive Demand Loophole). December 1, 2016. https://www.govinfo.gov/content/pkg/FR-2016-12-02/pdf/2016-29200.pdf.
  5. French Republic. 2017. Law No. 2017-399 on the Duty of Vigilance of Parent Companies and Ordering Companies. March 27, 2017. https://www.legifrance.gouv.fr/jorf/id/JORFTEXT000034290626.
  6. OECD, 2024. “OECD kicks off accession process with Thailand”. October 30, 2024. https://www.oecd.org/en/about/news/press-releases/2024/10/oecd-kicks-off-accession-process-with-thailand.html.
  7. OECD, 2025. “Indonesia reaches key milestones in OECD accession process”. June 3, 2025. https://www.oecd.org/en/about/news/press-releases/2025/06/indonesia-reaches-key-milestones-in-oecd-accession-process.html.
  8. Randhawa, Dipinder, 2025. "Signalling Policy Credibility: Indonesia and Thailand’s Pursuit of OECD Membership”. July 1, 2025. Accessed December 5, 2025. https://rsis.edu.sg/rsis-publication/rsis/signalling-policy-credibility-indonesia-and-thailands-pursuit-of-oecd-membership/.
  9. U.S. Customs and Border Protection. 2025. “Forced Labor.”  Accessed November 17, 2025.  https://www.cbp.gov/trade/forced-labor.
  10. European Commission. 2025. “Forced Labour Regulation.” Internal Market, Industry, Entrepreneurship and SMEs. Accessed November 17, 2025. https://single-market-economy.ec.europa.eu/single-market/goods/forced-labour-regulation_en.
  11. U.S. Mission to ASEAN, 2025, “Joint Statement on United States-Cambodia Agreement on Reciprocal Trade”. October 25, 2025. https://asean.usmission.gov/joint-statement-on-united-states-cambodia-agreement-on-reciprocal-trade/.
  12. U.S. Embassy in Malaysia, 2025. “Joint Statement on United States-Malaysia Agreement on Reciprocal Trade”. October 27, 2025.  https://my.usembassy.gov/us-malaysia-reciprocal-trade-agreement-statement/.
  13. U.S. Mission to ASEAN, 2025. "Joint Statement on a Framework for a United States-Thailand Agreement on Reciprocal Trade”. October 26, 2025. https://asean.usmission.gov/joint-statement-on-a-framework-for-a-united-states-thailand-agreement-on-reciprocal-trade/.
  14. Root, R. 2025. “Business and human rights: Southeast Asia steps up legislative efforts on corporate due diligence.” October 9, 2025. International Bar Association. http://www.ibanet.org/southeast-asia-turning-to-legislation-to-force-corporations-to-respect-environment.
  15. JD Supra. “In Southeast Asia, Trade Agreements, U.S. Policy, and ESG Drive New Human Rights Due Diligence Requirements”, October 29, 2025, accessed November 5, 2025 https://www.jdsupra.com/legalnews/in-southeast-asia-trade-agreements-u-s-9457202/.
  16. Walk Free. “South Korea Reintroduces Mandatory Human Rights and Environmental Due Diligence Bill”, June 26, 2025, accessed November 5, 2025 https://www.walkfree.org/news/2025/south-korea-reintroduces-mandatory-human-rights-and-environmental-due-diligence-bill/.
  17. KTNC Watch, “Unofficial English translation of Korean mHREDD bill now available”, September 2015, accessed November 8, 2025 https://ktncwatch.org/news/unofficial-english-translation-korean-mhredd-bill-now-available/.
  18. Ji Yoon Kang, Staff Attorney at the GongGam Human Rights Law Foundation and representative of KTNC Watch. “Webinar – The New Korean mHREDD Bill: The Context, The Contents & What Happens Next”, Global Initiative for Corporate Accountability.November 6, 2025. KTNC Watch. https://ktncwatch.org/news/online-event-webinar-introducing-asia-first-proposed-bill-mandatory-human-rights/.
  19. Frankly Speaking. “#90 Nareeluc Pairchaiyapoom: Why the Global South Wants Mandatory Due Diligence”. November 5, 2025, accessed November 10, 2025. https://www.youtube.com/watch?v=w9MkWBiOtmI.
  20. Walk Free. “Thailand to Introduce Mandatory Supply Chain Due Diligence Law”, March 13, 2025, accessed November 5, 2025 https://www.walkfree.org/news/2025/thailand-to-introduce-mandatory-supply-chain-due-diligence-law/.
  21. Legal Affairs Division, Prime Minister’s Department (BHEUU, JPM). 2024. National Baseline Assessment on Business and Human Rights in Malaysia. First Printing, 2024. https://globalnaps.org/wp-content/uploads/2024/10/2024-BHEUU-JPM-National-Baseline-Assessment-on-BHR-in-Malaysia.pdf.
  22. Mohamad Al As. “New Business Human Rights Plan Paves Way for Corporate Manslaughter, Anti-Corruption,” New Straits Times, August 12, 2025, accessed November 5, 2025 https://www.nst.com.my/news/nation/2025/08/1259159/new-business-human-rights-plan-paves-way-corporate-manslaughter-anti#google_vignette.
  23. Ibid.
  24. Bali Post. “Perusahaan Wajib Penuhi Prinsip HAM”, August 19, 2025, accessed November 5, 2025 https://www.balipost.com/news/2025/08/19/481819/Perusahaan-Wajib-Penuhi-Prinsip-HAM...html.
  25. HSF Kramer. “Indonesia’s National Strategy on Business and Human Rights and Expectations in Relation to Human Rights Due Diligence”, March 8 2024, accessed November 5, 2025 https://www.hsfkramer.com/insights/2024-03/Indonesia-s-National-Strategy-on-Business-and-Human-Rights-and-expectations-in-relation-to-human-rights-due-diligence.

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