Toy Company Faces Closure Due to Forced Inspection 'Cost Burden'... "Quality Verification Should Be Voluntary"

Children visiting the stationery and toy street in Dongdaemun, Seoul.
[Photo by Dongju Yoon, Asia Economy]

[Asia Economy Reporter Kim Jong-hwa] "The government is moving in the right direction by strengthening post-management through the Product Safety Management Institute and consumer organizations. Since companies must take full responsibility when accidents occur with their products, I believe it is appropriate to introduce a 'self-declaration of conformity system' where companies themselves take responsibility for product safety management."

This is the claim of Mr. A, who runs a toy manufacturing company. Domestic toy manufacturers must undergo mandatory government inspections before releasing products to the market. After passing safety inspections and displaying the registration number, they must attach the 'KC' certification mark to release the product. The problem lies in the fact that the domestic safety inspection standards are much stricter and more rigorous compared to major countries.

First, it is a full inspection rather than a sample survey. Even if products are the same model, instead of inspecting only some samples, the entire batch is inspected to find any issues. For derivative model products, only harmful heavy metals need to be checked, but in practice, all products undergo inspection.

What particularly burdens toy manufacturers is the '5-year validity period.' Products older than 5 years must undergo safety inspections again. Since most toy manufacturers are small businesses with fewer than 10 employees, inspection costs are a significant burden for them.

In the past, inspection fees for one model were around 300,000 to 400,000 KRW, but recently, as inspection standards have been strengthened to include substances harmful to the environment and human health, fees have increased more than threefold to about 1,200,000 KRW per model. For small-scale companies, a single inspection can cost tens of millions of KRW, and for relatively larger companies, inspection costs can reach several hundred million KRW.

Moreover, standards are continuously tightened, with new inspection items added every year. Some companies undergo inspections every 5 years or even almost annually depending on new product production cycles. Because of this, some companies give up on producing or importing new products. Inspection costs exceed sales profits, making it unprofitable. In conclusion, companies argue that the current inspection system hinders the development of the domestic toy industry.

In Europe, the United States, and Japan, products are released to the market after voluntary inspections by companies rather than mandatory government inspections. The European Union (EU) implements a 'self-declaration of conformity system,' where manufacturers declare that their products meet EU safety standards.

Companies without testing facilities outsource to accredited testing agencies and attach the 'CE' certification mark on product packaging. The government collects and inspects some products distributed in the market post-release and imposes responsibility if problems are found.

Japan operates a 'private voluntary assurance system.' Companies voluntarily request tests from the Toy Association and, if deemed compliant, attach the 'ST' certification mark. If consumer damage occurs due to product issues, the Japan Toy Association provides compensation.

The United States enforces mandatory inspections only for certain harmful heavy metals and inspects only samples of imported products for conformity. Therefore, inspections for obtaining the 'Toy Safety Standard (ASTM)' test report submitted to U.S. customs during export are conducted by sampling, so the inspection cost burden on companies is not significant.

Companies are requesting that the 5-year validity period be extended to 10 years or that the government subsidize 50% of inspection costs. They also propose that inspections for the same model be conducted by sampling, that only harmful heavy metals be inspected for derivative models, and that plastic component inspections be limited to soft products using phthalate-based plasticizers, excluding hard plastic products without plasticizers.

Mr. A stated, "I believe Korea has the strictest safety standards in the world. Since a single recall can shut down a company, manufacturers thoroughly manage production processes." He added, "Companies take full responsibility and all are enrolled in product liability insurance (PL insurance). It is time to lift the mandatory pre-inspections."

An official from the Small and Medium Business Ombudsman said, "We recognize that toy manufacturers’ demands have reasonable aspects and are working to reflect industry realities," adding, "Active discussions are underway with related agencies such as the National Institute of Technology and Standards and the National Assembly for revising relevant laws."

This content was produced with the assistance of AI translation services.