This article is republished from the Business Human Rights Journal. Read the original article on 10 June 2024.
Written by Bonny Ling.
Image credit: taipei 101 台北101 by sese_87 / Flickr, license: CC BY-SA 2.0.
Marked by the inauguration of a new president on 20 May 2024, this year is a busy and exciting year for business and human rights in Taiwan. In April 2024, Taiwan’s Ministry of Economic Affairs (MOEA) conducted a public consultation with representatives from civil society, businesses, and government ministries for a set of draft guidelines aimed at Taiwanese enterprises on respecting human rights in the supply chain [《臺灣供應鏈企業尊重人權指引 》草案]. The final version is believed to be released imminently. Once out, Taiwan will join Japan in using a guidance model—over mandatory human rights due diligence laws as is favoured in European countries—to set expectations for the corporate responsibility to respect human rights in a business context.
Concurrently, Taiwan is revising its National Action Plan on Business and Human Rights (NAP) [臺灣企業與人權國家行動計畫], released on Human Rights Day (10 December) in 2020 to underscore the commitment of the then administration to “aid Taiwan’s efforts to become integrated in international trade and supply chains.” MOEA is also responsible for revising the NAP and will release the second version by the end of 2024. In contrast to the drafting of the first NAP, there has been more business and civil society input into the second iteration, as seen in the public consultation for the NAP held in May 2024, a month after the consultation for the draft guidelines.
UNGPs in Taiwan
Many have toiled to promote national adherence to the UN Guiding Principles on Business and Human Rights (UNGPs) in Taiwan. Taiwan is not a member of the UN system owing to Chinese opposition and cannot participate in intergovernmental conferences, forums and standard-setting negotiations. Nevertheless, Taiwan has found creative ways to localise international norms and standards into its domestic legal framework and participate as a responsible global player embedded de facto in the global economic and political system.
The localisation of the UNGPs in Taiwan has been greatly facilitated via human rights dialogues with the European Union. In 2018, during the first annual EU-Taiwan Human Rights Consultations, the EU raised the business and human rights agenda and encouraged Taiwan to work on an NAP. Without this bilateral channel with the EU, Taiwan would not have seen such significant progress with many national developments on business and human rights this year.
Europe also needs Taiwan for business and human rights. Trade between the EU and Taiwan has increased eightfold in the last two decades, but the EU still operates a trade deficit with Taiwan, with Taiwanese investments in Europe representing only two percent of Taiwan’s global foreign development investment stocks. Pushing Taiwan to be better aligned with the UNGPs is also a practical strategy to facilitate investments and mitigate the risks of Taiwanese goods running afoul of mandatory human rights due diligence requirements that have emerged in Europe.
The EU deserves much of the credit for advocating emerging human rights standards (as in business and human rights) or locally controversial positions (best exemplified by its longstanding position on the abolition of the death penalty) in its annual human rights dialogues with Taiwanese officials. The fact that Taiwan, in 2024, stands at the cusp of guidelines on human rights due diligence and a revised NAP demonstrates what can arise from meaningful and sustained bilateral engagements on human rights.
More than Investments, More than Rights
Against the backdrop of EU-Taiwan trade and investment discussions, the fact that the EU has adopted the Corporate Sustainability Due Diligence Directive (CSDDD) is keenly felt in Taiwan. Not only does it symbolise the future direction of the UNGPs in moving to legal compliance, the CSDDD further signals to Taiwan important areas of engagement with like-minded democratic governments outside UN channels. The significance of the CSDDD to EU-Taiwan investment is clearly seen in that it is the Department of Investment Services under Taiwan’s Ministry of Economic Affairs that is overseeing the draft guidelines, as well as the NAP revisions.
It is, however, insufficient to view the UNGPs in Taiwan only through the lens of business, human rights or economic trade. For Europe, the undercurrent is also about the bloc’s political strategy to build reliable partnerships in the Asia Pacific, a region marked by increasing geopolitical tension and democratic regression but remain the manufacturing hub for the global supply chain. Engaging with Taiwan is important for Europe to build its influence with like-minded partners subscribing to the same normative values on democracy and human rights.
Taiwan’s stake in Europe’s CSDDD is also more than investments, more than rights. The extraterritorial impacts of the CSDDD on Taiwan must be seen in this larger context of growing EU-Taiwan ties and Taiwan’s widening and existential efforts to build ties with Western democracies. The CSDDD matters greatly to Taiwan, not only in terms of Taiwan’s economic investment in Europe or the value chains of European enterprises in Taiwan. It matters because democratic Taiwan wants—and needs—Europe in an increasingly complicated and divided geopolitical world.
The new President of Taiwan, Lai Ching-te (also known as William Lai), has said that Taiwan under his administration would seek closer economic engagement with Europe. He will continue the policy of his predecessor, President Tsai Ing-wen, to encourage moving investments away from China as an issue of national security. Economically pivoting to democracies and regional allies like Japan and subscribing to the same ideals of responsible business conduct is as much about economic gains as it is about bolstering Taiwan’s survival.
Hearts and Minds of Businesses for Human Rights
In the UNGPs, getting business commitment to the corporate responsibility to respect human rights (Pillar II) is placed at the same level of importance as the state duty to protect human rights, the keystone of the international human rights regime. Genuine business buy-in can change the course of legislation. That the EU has now adopted the CSDDD underscores the power of multistakeholders to push for a new age of corporate accountability against a seesaw of corporate support for a new way of doing business.
Taiwan is no different. The consultation on the draft guidelines for Taiwanese enterprises held in April 2024 opened with the CSDDD serving as a reminder to participant businesses that their global operating context is changing. There is a heightened emphasis on the corporate responsibility to respect human rights, moving beyond voluntary corporate social responsibility. Aligned with the UNGPs, Taiwan’s draft guidelines address all companies with business operating activities in Taiwan, regardless of their size, industry, operating environment, ownership and structure.
The draft guidelines adopt the terminology and phrasing of the UNGPs and call on Taiwanese businesses as per UNGP 15 to (1) establish a human rights policy; (2) conduct human rights due diligence; and disclose information on how adverse human rights impacts are addressed; and (3) provide remedy when they cause or contribute to negative human rights impacts. The guidelines include both potential and actual adverse human rights impacts and encourage Taiwanese companies to identify, prevent, and mitigate these negative adverse human rights impacts as part of their human rights due diligence.
The draft guidelines provide what Taiwan’s first NAP lacked: setting out clear expectations and guidance for businesses beyond corporate philanthropy and voluntary social responsibility, as was recommended by the UN Working Group on Business and Human Rights in 2016 for how countries should embark on developing their NAPs. Substantively, the draft guidelines align with the UNGPs. They seek to proactively address potential lacunae or misinterpretation. Addressing the potential loophole of the applicability of the guidelines to the extraterritorial activities of Taiwanese businesses, for instance, the draft guidelines explicitly state that it includes Taiwanese companies operating domestically or abroad within its scope.
Sirens of a Different Reality
Frequently characterised as a geopolitical flashpoint, Taiwan is a functioning democracy with robust civil liberties protections. Nevertheless, Freedom House notes in 2023 that China “exerts significant influence on the Taiwanese media environment and maintains a well-funded, large-scale disinformation campaign.” This reality complicates discussions on increasing expectations for responsible business conduct, involving China’s role in the global economy where anti-competition concerns of lower labour standards persist despite growing momentum to normalise the UNGPs in everyday business, everywhere.
For Taiwan, the uptake of the UNGPs is a matter of adaption to a new reality of doing business with like-minded economic and political allies with higher expectations of human rights and environmental due diligence. Yet, as in other countries, domestic business voices exist that do not buy into human rights and environmental due diligence in the supply chain. While wavering business support for the UNGPs is not unique, the special context for Taiwan is that these shifts of business lobbies and alliances also affect perceptions of how Taiwan can survive and thrive.
None of this is an excuse for Taiwan not abiding by international human rights standards. There is no vacuum for fundamental human and labour rights anywhere. But it is a call for recognition that, for all that international observers do to simplify Taiwan into a catchphrase —“the most dangerous place on earth”—Taiwan is inherently complicated. A fault line in its relationship with China runs through its society, politics and economy, dividing visions of its future as well as family dinners.
The Draft Guidelines are a Momentous Occasion
The UNGPs, Europe’s CSDDD and similar national legislations in Germany, France, the Netherlands and Norway on supply chain due diligence have spurred a global movement for a different way to do business. Taiwan’s NAP is the fourth national plan on business and human rights in the Asia-Pacific, after South Korea, Thailand and Japan. Taiwan’s draft guidelines for enterprises on respecting human rights in the supply chain will be the second in the region, after Japan’s, for its enterprises on human rights due diligence.
Taiwan’s guidelines for business on human rights will be a momentous occasion for the Asia Pacific. It will not be a human rights due diligence legislation that many in Taiwan had hoped to mirror the CSDDD. Nevertheless, the guidance will be a landmark achievement for Taiwan that has had to understand and localise the UNGPs outside the UN system. It has had no technical assistance from intergovernmental organisations and agencies. Its accredited journalists cannot enter UN grounds. Its delegates cannot participate in UN conferences to counterbalance the views of businesses with investments in China that may see human rights as an issue of sensitivity and potential liability.
Taiwan’s draft guidelines and revisions of its NAP is a clear articulation of its commitment to be more closely aligned with liberal democracies and their economies. It is part of its broader efforts to make friends in the world at a time of growing geopolitical uncertainty. Understood in the subtext of this political light, business and human rights is an expression of a sentiment that is fundamental to the world’s Taiwan: to exist and thrive, democratically.
Notes: As of 26 June 2024, we are still awaiting the official release.
If interested, please also read the commentary by Prof Larry Catá Backer at Penn State Law on the original article here.
Dr Bonny Ling is Senior Non-Resident Fellow with the University of Nottingham Taiwan Research Hub. She is a Global Taiwan Institute Scholar and Visiting Professor at the School of Law, National Yang Ming Chiao Tung University in Taiwan, where she teaches business and human rights. She is a Co-Founder of the Taiwan Project for Business and Human Rights, a project dedicated to increasing knowledge and building the local capacity needed to address business and human rights issues in Taiwan. She is also the Executive Director of Work Better Innovations, and a Research Fellow at the Institute for Human Rights and Business.
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