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🇰🇷 South Korea /Energy & Infrastructure

South Korea to raise rewards for reporting illegal construction subcontracting

From Hankyoreh · () Korean

Translated from Korean, summarized and contextualized by DistantNews.

At a glance

News Official statement New plan
  • South Korea will increase rewards for reporting illegal subcontracting in construction to up to 30% of the imposed fine.
  • Stricter administrative penalties, including longer business suspension periods and higher minimum fines, will be applied to illegal subcontracting.
  • The government aims to establish fair construction practices by strengthening penalties and expanding reporting incentives.

South Korea is significantly boosting rewards for whistleblowers reporting illegal subcontracting in the construction industry. Under a revised enforcement decree of the Construction Industry Basic Act, approved by the cabinet on June 16th, informants can receive up to 30% of the imposed fine as a reward.

Previously, rewards were capped at 2 million won. The new system allows for substantial payouts; for instance, a fine of 189 million won could result in a reward of up to 56.7 million won for the reporter. Furthermore, the criteria for reporting have been broadened. Previously, concrete evidence was mandatory, but now, detailed statements and circumstantial evidence from the reporter that lead to the confirmation of illegal activity during investigations will also qualify for rewards.

Illegal subcontracting through side or verbal contracts is often difficult to detect through on-site inspections alone, making active reporting by related workers crucial.

— Kim Seok-kiDirector of Construction Policy at the Ministry of Land, Infrastructure, and Transport, highlighting the need for reporting.

Administrative penalties for illegal subcontracting are also being toughened. The period for business suspension will be extended from the current 4-8 months to 8-12 months. The minimum penalty rate for fines will increase from 4% to 24% of the subcontracted amount. For construction companies engaging in illegal subcontracting, the period restricting their participation in public projects will also be extended from 1-8 months to 8-24 months.

The Ministry of Land, Infrastructure, and Transport emphasized the importance of active reporting, especially for illegal practices like side or verbal contracts, which are difficult to detect through on-site inspections alone. "We will strengthen sanctions and expand reporting compensation to establish a fair construction order without illegality," stated Kim Seok-ki, Director of Construction Policy at the ministry. The government aims to foster an environment where the disadvantages of illegal subcontracting far outweigh any potential benefits.

We will strengthen sanctions and expand reporting compensation to establish a fair construction order without illegality.

— Kim Seok-kiDirector of Construction Policy at the Ministry of Land, Infrastructure, and Transport, outlining the government's strategy.
DistantNews Editorial

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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