Mandatory Human Rights Due Diligence – Legal Developments and Practical Implications for Asia

Dr Lisa Hsin presented a hybrid seminar on the legal developments and practical implications of mandatory human rights due diligence in Asia on 22 March 2023. Professor Ernest Lim moderated this session.

Dr Hsin began by explaining that the concepts of ESG, Business and Human Rights and corporate accountability shared similar underpinnings as they recognised that businesses, particularly MNCs, have considerable influence and power, beyond the territorial and jurisdictional control of nation-states. She explained that the legal basis for the regulation of companies and their supply networks through the conduct of human rights due diligence can be found in the United Nations Guiding Principles on Business and Human Rights 2011 (UNGP 2011). UNGP 2011 contains 3 pillars, with the second pillar focusing on the corporate responsibility to respect human rights. Principle 15, in particular, requires businesses to adopt a human rights due diligence process to identify, prevent, mitigate, and account for how companies address their impacts on human rights.

To illustrate how human rights due diligence might operate in practice, Dr Hsin provided an annotated version of the OECD’s Due Diligence Guidance for Responsible Business Conduct diagram, to illustrate the complexity and practical challenges involved. As a corollary, Dr Hsin stated that due diligence was conceptually challenging as it was not only a business process but also a standard of conduct in tort which traced its origins to Roman law. Under international human rights law, due diligence meant that States must take reasonable precautions to prevent, punish, and investigate harm under international human rights law. The conceptual diversity underlying modern human rights due diligence (mHRDD) has a direct effect on the expectations placed on the process.

Dr Hsin then detailed the scope, obligations, and enforcement of recent legislation, including the UK Modern Slavery Act 2015, which was modelled on a 2010 California law and encouraged due diligence through disclosure. This law was premised on the idea of levelling the playing field for consumer-facing businesses which bore the costs of this process more greatly compared to other types of businesses. She also shared more recent developments by comparing the UK Act to its French, Norwegian, and German counterparts as well as the EU Commission’s proposal on human rights due diligence. She concluded her talk by discussing the practical and legal implications of these developments in this region, highlighting, among others, the issues of information overload and the bifurcation of supply chains.

Following the presentation, a lively discussion followed on issues including the relevance and enforceability of due diligence contractual provisions in Singapore, the nature and timing of the filing requirements, and the reconciliation of human rights due diligence requirements with the corporate law dogma of directors’ duties. Ultimately, given the well-attended nature of this seminar and the broad reach and increasing traction of business and human rights obligations, the Singaporean and wider Asian legal profession’s involvement in the performance and development of mHRDD is set to continue to grow in significance.

Q&A moderated by Prof Ernest Lim