Malaysia´s National Action Plan on Business and Human Rights (NAPBHR)

Malaysia has taken a significant step forward in the realm of corporate responsibility and human rights with the introduction of the Zero Draft of the National Action Plan on Business and Human Rights (NAPBHR) 2025-2030. This document outlines the country's commitment to aligning business practices with international human rights standards, reflecting a growing global emphasis on corporate accountability. This article critically assesses Malaysia's efforts, highlighting both the strengths and areas for improvement in the draft plan.

Introduction and Background

The NAPBHR is rooted in the United Nations Guiding Principles on Business and Human Rights (UNGPs), which were endorsed by the UN Human Rights Council in 2011. These principles are based on the "Protect, Respect, Remedy" framework, emphasizing the state's duty to protect human rights, corporate responsibility to respect these rights, and the need for access to remedies when violations occur. The draft plan is a culmination of several years of effort, involving extensive consultations and a national baseline assessment conducted between 2022 and 2024.

Framework and Thematic Priorities

The NAPBHR framework is structured around the UNGPs and includes a statement of commitment, background and context, and a detailed outline of thematic priorities and five-year actions. The thematic priorities are divided into three main areas: Labour, Environment, and Governance.

Labour

Labour issues are a critical focus, given Malaysia's challenges with modern slavery, forced labour, and child labour. The draft plan emphasizes the need for businesses to adopt robust human rights policies, conduct regular human rights due diligence (HRDD) assessments, and ensure that suppliers and business partners adhere to international human rights standards. The plan also highlights the importance of protecting workers in the gig economy and enhancing social security initiatives.

Environment

Environmental sustainability is another key priority. The draft plan encourages businesses to engage in collaborative initiatives such as the Science Based Targets Initiative (SBTi) and the Carbon Disclosure Project (CDP) to ensure transparency and accountability in their environmental impact. The plan also underscores the need for third-party verification and assurance measures for company disclosures.

Governance

Good governance is essential for the effective implementation of human rights standards. The draft plan calls for the establishment of a standing multistakeholder monitoring group to oversee the implementation of the NAPBHR and ensure transparency and accountability. It also emphasizes the importance of addressing gaps in state and non-state grievance mechanisms to improve access to justice and remedy for victims of human rights abuses.

Additional Issues and Way Forward

The draft plan also addresses additional issues such as children's rights, gender-specific impacts, and the rights of indigenous peoples, refugees, and asylum-seekers. The government aims to ensure that the most critical business and human rights matters are addressed over the next five years through active collaboration with various stakeholders, including trade and business associations, companies, civil society organizations (CSOs), and impacted communities.

Our Comments

While the Zero Draft of the NAPBHR 2025-2030 represents a commendable effort by Malaysia to align its business practices with international human rights standards, several areas require further attention:

Implementation and Enforcement: The success of the NAPBHR will largely depend on the effective implementation and enforcement of its provisions. The draft plan acknowledges the need for regular assessments and audits, but it remains to be seen how these will be operationalized and whether sufficient resources will be allocated for this purpose.
Corporate Accountability: The draft plan emphasizes corporate good faith and compliance with minimum requirements, but it lacks clear statutory frameworks to hold businesses accountable for human rights abuses. Strengthening the legal framework to address corporate human rights violations is crucial.
Stakeholder Engagement: While the draft plan promotes active collaboration with various stakeholders, ensuring meaningful and inclusive participation, particularly of marginalized groups, will be essential. The government must ensure that the voices of rightsholders are heard and that their feedback is incorporated into the final action plan.
Monitoring and Evaluation: The establishment of a multistakeholder monitoring group is a positive step, but the draft plan should provide more details on the specific mechanisms for monitoring and evaluating the implementation of the NAPBHR. Clear indicators and benchmarks will be necessary to measure progress and ensure accountability.

Conclusion

The NAPBHR will be a significant milestone for Malaysia in its journey towards corporate accountability and human rights protection. While the draft plan lays a strong foundation, its success will depend on the effective implementation, enforcement, and continuous engagement with all stakeholders.

Foreign companies doing business in Malaysia should closely monitor the developments of the NAPBHR and align their practices with the outlined human rights standards to contribute to a more sustainable and equitable business environment. Having said that, the NAPBHR aligns closely with existing EU legislation on ESG reporting and sustainability due diligence.

EU companies operating in or with connections to Malaysia will need to ensure that their policies and practices are in compliance with both the NAPBHR and EU regulations. This includes adopting robust human rights and environmental policies, conducting regular due diligence, ensuring transparent reporting, and engaging with stakeholders effectively.