This study is to examine how developing countries can effectively implement a human rights due diligence (HRDD) framework that meets international investment law obligations while addressing domestic socio-economic realities. This study investigates the evolution of HRDD from a soft legal framework to explicit legal obligations in investment treaties and national laws, focusing on the ASEAN experience. This paper aims to understand the determinants of success or failure of different HRDD implementation approaches and to provide evidence-based recommendations for developing countries, particularly Vietnam, facing similar challenges in balancing investment protection with human rights considerations.
This study uses a qualitative comparative approach combining doctrinal legal analysis with empirical case studies. This study examines international investment treaties, national legislation and investment dispute settlements from 2011 to 2024. Four ASEAN countries (Singapore, Thailand, Malaysia and Indonesia) were selected based on their different HRDD implementation approaches, stages of development and global value chain integration strategies. This study uses a multi-level governance framework that analyzes international legal obligations, domestic policy frameworks and corporate implementation practices.
HRDD has evolved from a voluntary corporate social responsibility obligation to a mandatory legal requirement in investment treaties and national legislation. ASEAN countries demonstrate diverse implementation strategies: Singapore integrates HRDD into an ESG framework; Thailand develops a comprehensive National Action Plan; Malaysia focuses on a sector-specific approach (palm oil); and Indonesia uses state-owned enterprises as an implementation model. Investment dispute resolution increasingly recognizes the need for HRDD, reflecting a shift toward balancing investor protection with human rights.
This study focuses on the ASEAN region, which may limit generalizability to other developing regions with different institutional contexts. The time horizon (2011–2024) captures recent developments but may not reflect long-term implementation outcomes. The limited availability of comprehensive data on corporate HRDD practices, particularly from SMEs, limits the depth of analysis. This study mainly looks at the formal legal framework rather than the effectiveness of implementation on the ground.
This study provides actionable guidance for developing countries implementing the HRDD framework. Key recommendations include developing a step-by-step legal framework rather than a comprehensive system at once, integrating HRDD into existing regulatory mechanisms, leveraging financial regulators and stock exchanges, developing sector-specific approaches for high-risk sectors, collaborating with industry associations, using state-owned enterprises as implementation models and establishing multi-stakeholder monitoring systems.
Integrating HRDD into international investment law represents a fundamental shift toward protecting vulnerable communities affected by business activities. Effective implementation can prevent human rights abuses, improve labor conditions, protect indigenous community rights and ensure environmental protection. Research demonstrates that market-based approaches can complement regulatory frameworks, potentially creating positive change even in contexts of weak domestic enforcement.
To the best of the author’s knowledge, this study provides the first systematic comparative analysis of HRDD implementation across multiple ASEAN countries within the framework of international investment law. This study develops an innovative theoretical framework that connects domestic HRDD implementation with international investment obligations, filling a significant gap in existing scholarship. This study offers new insights into how developing countries can adapt international standards to local contexts while maintaining compliance with global standards. The evidence-based recommendations are particularly valuable for Vietnam and other developing countries.
