On August 27, Representative Park Jee-hye introduced, as lead sponsor, the "Human Rights and Environmental Due Diligence Act for Corporate Sustainability and Responsible Management" (hereinafter the "Supply Chain Accountability Act," Bill No. 2220854). We welcome the introduction of this bill — the third Supply Chain Accountability Act in the 22nd National Assembly — following those separately introduced earlier by Representatives Jung Tae-ho and Park Hong-bae.
The bill's basic framework requires companies to fulfill a due diligence obligation: identifying, on an annual basis, actual or potential human rights and environmental violations arising from the activities of the company itself, its controlled subsidiaries, and other companies within its supply chain, and establishing and implementing measures to address them. It also establishes a Human Rights and Environment Enterprise Committee to review overall implementation and resolve disputes, and holds companies liable for damages where a violation of these obligations causes harm. This is consistent with the points the National Human Rights Commission of Korea recently emphasized in stating the need to enact a supply chain accountability law.
The bill contains especially notable advances in addressing the climate crisis. It explicitly includes the climate crisis, as defined under the Framework Act on Carbon Neutrality and Green Growth for Coping with Climate Crisis, within the definition of environmental violations. It further provides, as methods for identifying environmental violations, a life-cycle environmental assessment that quantitatively measures the environmental impact generated across the entire process from raw material procurement through production, distribution, consumption, and disposal, as well as a carbon intensity assessment that examines the carbon efficiency of energy use by dividing a company's energy-related carbon dioxide emissions by its total energy consumption. It also requires companies to analyze both the physical risks that climate-driven extreme weather poses to them and the transition risks they may face as the economy shifts to a low-carbon system. Greenhouse gas emissions must be calculated separately by category — direct emissions (Scope 1), indirect emissions from energy use (Scope 2), and other indirect emissions occurring across the supply chain (Scope 3) — enabling a systematic grasp of a company's climate impact. It is highly significant that a Supply Chain Accountability Act with such strengths on the climate crisis has now been introduced.
In the 22nd National Assembly alone, the Supply Chain Accountability Act has now been introduced three times, and the National Human Rights Commission of Korea has likewise expressed its view on the need for such legislation. The National Assembly must begin deliberation on the three supply chain accountability bills without delay. We look forward to prompt legislation through measures such as public hearings held by the relevant standing committee and intensive discussion in the bill review sub-committee.