The government is responding jointly with the private sector to a revision of the European Union (EU) supply chain due diligence directive.

The Ministry of Trade, Industry and Energy said on Tuesday it held a public-private meeting ahead of final approval of the EU Corporate Sustainability Due Diligence Directive (CSDDD) revision. Related agencies including the Korea Trade-Investment Promotion Agency, the Korea International Trade Association, the Korea Industrial Complex Corp and the Korea Institute for Industrial Economics and Trade took part, along with major companies including Samsung Electronics, LG Energy Solution and Hyundai Motor.

The EU supply chain due diligence directive imposes due diligence and disclosure obligations on companies to prevent and manage potential human rights and environmental risks across their supply chains. It took effect in July 2024 and was set to be applied in phases from 2027.

The European Commission proposed a revision in February that would partially ease companies' due diligence obligations and delay implementation by 1 year to boost the competitiveness of EU companies. It is currently awaiting final approval by the Council after approval by the European Parliament.

Participants in the public-private meeting assessed that the EU revision could ease some corporate burdens by narrowing the scope of covered companies, adjusting the scope of due diligence and easing the level of fines for violations. They also agreed that some elements could still add to compliance burdens for South Korean companies, and said it is necessary to closely monitor the drafting of due diligence guidelines and domestic legislative trends in each member state.

The government promoted measures including preparing K-ESG guidelines, providing tailored education and supporting an ESG consulting export voucher programme. The industry said it is supporting partners in building ESG management systems and providing consulting to respond to due diligence, while strengthening cooperation between the government and industry to minimise corporate burdens during implementation.

Lee Jae-geun (이재근), director general for New Trade Strategy Support, said, "The supply chain due diligence directive is an important issue that could directly affect the management strategies and supply chain management methods of our exporting companies." He added, "The government will closely check preparedness ahead of the revision taking effect and will actively consult with the EU so that guidelines can be prepared to minimise burdens on our companies."