South Korea – Corporate Law & Governance
C. Current Status
1. Domestic Status [page 3]
- Increased discussion of corporate social responsibility as a result of human rights issues such as low wages, child labor, poor working environment and forced migration of indigenous people in the management process of multinational corporations.
- Following the adoption of the ‘UN Guiding Principles on Business and Human Rights’ in 2011, various follow-up measures are being pursued to realize the guiding principle internationally.
- Description of the expiration dates of the comprehensive policy for sustainable management by amending the 「Industrial Development Act」 on December 2017.
* Article 19 (Comprehensive Policies for Sustainable Management)
(1) The Government shall formulate and implement comprehensive policies every 5 year to encourage corporations to promote activities for sustainable management that takes into account economic profitability, environmental soundness, and social responsibility.
- According to ‘Operation Rules for National Contact Point (NCP) for Implementing OECD Guidelines for Multinational Enterprises’ enacted in 2001, NCP was established within the Ministry of Trade, Industry and Energy. But considering the fact that it is insufficient to prevent human rights violations of corporations, NCP amends operational rules and strengthens the diversity and professionalism of its members.
2. Implementation of the Second NAP [page 4]
- Promotion of social responsibility, including respect for human rights in managerial activities.
– Publication of operating casebook of Creating Shared Value Forum and opening of training course for experts of corporate social responsibility and creating shared values.
– Revision of 「Procurement Business Act」 and addition of an article promoting corporate social responsibility on January 2016.
- Improvement of OECD Guidelines for Multinational Enterprises National Contact Point (NCP).
– Held meetings and seminars for overseas Korean companies to promote the implementation of OECD Guidelines.
– Operated NCP website (www.ncp.or.kr) and opened English website.
– Diversified the composition of the members as requested in the OECD Guidelines and professionalized the operational procedures.
D. Tasks for the Third NAP
Institutionalization of Human Rights Management
1. Secure corporate responsibility on human rights [page 4]
- Express expectations of corporate responsibility on respecting human rights in a way that can be effectively communicated to corporations in order to fulfill their responsibilities in respect of human rights.
– Express expectations of corporate responsibility on respecting human rights through its official website. (declaration)
(1) All corporations within the territory or jurisdiction of Republic of Korea, regardless of its size or location, should implement the corporate responsibility on respecting human rights defined by UN Guiding Principles.
(2) To the extent possible, corporations should pay attention to prevent human rights violations happening at supply chain such as business partners or supplying companies.
(3) Government should provide necessary support and legal, policy, and institutional arrangements for corporations to fulfill their human rights responsibilities.
2. Establish and implement measures for corporate sustainability management [page 5]
- Reflect ‘respecting human rights·prohibition on discrimination’ ‘work-life balance’ on the criteria of factual survey on corporate sustainability management and reward assessment.
- Include corresponding strategy about making global standard and norms of corporate sustainability management.