The South Korean government is taking a public-private approach to incorporate domestic business feedback into the European Union's (EU) Supply Chain Due Diligence Directive (CSDDD) implementation guidelines.
On July 13, the Ministry of Trade, Industry and Energy held a joint meeting with relevant agencies and major companies to discuss strategies for responding to the EU CSDDD guidelines.
The CSDDD imposes due diligence obligations on companies to prevent and manage human rights and environmental risks throughout their supply chains. The EU Commission is developing detailed implementation guidelines to reduce confusion among businesses as member states begin to enforce the directive, which took effect in March.
The guidelines are expected to include due diligence procedures, risk assessment criteria, and standard contract clauses. The EU Commission has been conducting a public consultation with stakeholders from businesses, academia, and civil society from June 12 to June 24. The guidelines, reflecting the results of this consultation, are anticipated to be published in July 2027.
The CSDDD will impact not only companies directly operating in the EU but also their global supply chain partners. Key domestic industries, such as automotive, battery, and electronics, face complex supply chains from raw material procurement to parts production and logistics. If the due diligence standards are overly stringent, the burden of documentation and contract management could increase significantly.
In particular, the standard contract clauses and risk assessment criteria may effectively shift compliance requirements onto small and medium-sized enterprises that partner with larger corporations.
In response, the Ministry plans to prepare a government opinion letter based on the feedback gathered during this meeting to submit to the EU.
Kim Jang-hee, the Ministry's Director of New Trade Strategy Support, stated, "The guidelines to be announced next year will serve as a crucial benchmark for the legislative direction of EU member states. We will actively present opinions to the EU that can minimize the due diligence burden on our companies."
* This article has been translated by AI.
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