In our previous article (link), we discussed international human rights due diligence (HRDD) trends, essential element in the “S” of the ESG (environment, social and governance) movement. In this article, we will take a closer look at HRDD trends in Thailand and what the implications might be for business operators in Thailand.
Human rights due diligence trends in Thailand
Under the Thai Constitution, human rights are fundamental and observable at government-level policy which provides protection, safety, and good occupational health for workers. Thailand’s Labour Protection Act prescribes a minimum standard for workers as the main piece of legislation for labour protection. There is also a specific legal framework on maritime labour which has been adopted since 2015, in accordance with the Maritime Labour Convention 2006 of the International Labour Organization (ILO), to ensure that the maritime related workforce is treated fairly.
In addition, the Thai government, in cooperation with the United Nations Development Programme (UNDP), has published the first National Action Plan on Business and Human Rights (2019-2022) (NAP) which primarily focuses on improving and addressing urgent and important human rights issues caused by business activities. The NAP includes the following four core areas:
- Community, land, natural resources and the environment;
- Human rights defenders; and
- Cross-border investment and multinational enterprises.
According to the UNDP, Thailand is the first country in Asia to have a stand-alone plan on business and human rights.
However, there is currently no specific legislation which imposes obligations on Thai companies to conduct HRDD. Nonetheless, the private sector, particularly those heavily involved with exporting and industries such as fishery, have been actively working with the government in monitoring human rights issues in their supply chains on a voluntary basis for some time. Non-government organizations also play a vital role in monitoring and publishing related reports.
Despite an absence of legal requirements for HRDD, some companies, including their suppliers, are required by their customers to conduct their own HRDD to ensure their entire operation and supply chain fully respect and comply with human rights and relevant legal obligations, especially those relating to their own employees and migrant workers.
What does it mean for business operators?
As mentioned in our previous article, HRDD is a promising approach to help address human rights issues and lift up global business standards to the next sustainable level while simultaneously creating a number of new obligations for business operators to comply with.
The method and implementation of HRDD related laws and regulations vary significantly in different jurisdictions. HRDD can be very complex depending on the value/supply chain structure and the nature of a business. Many existing HRDD related legislations are closely linked to domestic customs laws and may lead to the prohibition of the importation of goods which may have been produced by workers whose human rights were violated. Additionally, there is a growing number of investors and consumers asking enterprises how they manage risks related to human rights abuses. We have seen HRDD obligations increasingly being imposed by customers upon their manufacturers and suppliers in Thailand. The implications of these cannot be overlooked as the global supply chains are highly complex and interrelated. It can be argued that HRDD enforcement in Thailand will become inevitable. By the time HRDD becomes mandatory, the cross-border transactions will require more sophisticated compliance due diligence.
With HRDD becoming the norm, proactive implementation and corporate commitment in conducting HRDD will ensure and enhance the sustainability of businesses. To prepare for the new wave of HRDD trends, companies should start contemplating how HRDD can be implemented under the current supply chain structures.