[2020 National Audit] 'Old Industrial Complexes and Safety Accident Management' Criticized... Kim Jeonghwan "Seriously Recognizes the Issue"

Korea Industrial Complex Corporation National Assembly Audit

[Asia Economy Reporter Kim Daeseop] At the National Assembly's Industry, Trade, Energy, Small and Medium Business Committee's audit of the Korea Industrial Complex Corporation held on the 13th, ruling and opposition party lawmakers raised numerous concerns about the improvement of aging industrial complex environments and the rapid transition to smart green industrial complexes. The corporation also faced criticism for inadequate management of safety accidents in national industrial complexes.

Shin Young-dae, a member of the Democratic Party of Korea, pointed out that the vitality of national industrial complexes has declined, citing aging industrial complex environments, poor living conditions, and the downturn of traditional manufacturing industries as causes. As a solution, Shin said, "Policy efforts are needed to enhance the capabilities of national industrial complexes, such as large-scale industrial complex renovation projects and the promotion of smart industrial complexes."

According to the Korea Industrial Complex Corporation, as of the second quarter of this year, there are a total of 1,223 industrial complexes nationwide, including ▲national industrial complexes (47) ▲general industrial complexes (674) ▲agricultural and industrial complexes (472) ▲urban high-tech industrial complexes (30). Among these, 453 complexes have been identified as aging, having been in operation for over 20 years.

The Korea Industrial Complex Corporation is entrusted with the management of national industrial complexes, which are under government jurisdiction. Other industrial complexes are managed on a consignment basis upon the request of the management authority. The corporation currently manages and supports 64 complexes out of the total 1,223 nationwide.

453 Aging Industrial Complexes in Total
Decline in Production and Employment in National Industrial Complexes

In particular, among the 47 national industrial complexes under the corporation's jurisdiction, 35 complexes, accounting for 74.5%, are aging. As of the second quarter of this year, production value, export value, and employment in national industrial complexes have decreased by 21.2%, 37.5%, and 10.3%, respectively, compared to five years ago.

Last year, the total production value of national industrial complexes was KRW 486.6622 trillion, down from KRW 509.6386 trillion in 2015, representing an average annual decrease of 2.5%. Production value per company also declined from KRW 12.9 billion in 2015 to about KRW 12.3 billion last year, an average annual decrease of 3.7%. Exports fell from USD 189.39 billion in 2015 to USD 153.036 billion last year, an average annual decrease of 6.3%.

In the first half of this year, the total production value of national industrial complexes was KRW 221.7 trillion, down 8.4% (KRW 20.2 trillion) compared to the same period last year.

Yoon Young-seok, a member of the People Power Party, criticized, "There are many aging industrial complexes. It is questionable whether the Korea Industrial Complex Corporation has a strong will and effort to address aging complexes. The situation is serious. Industrial complex remodeling is sluggish." Kim Jeong-hwan, chairman of the corporation, responded, "We are continuously increasing the budget for the aging industrial complex structural advancement project."

Um Tae-young, also from the People Power Party, pointed out, "Various projects such as the Industrial Complex Environment Improvement Fund and remodeling of closed or idle factories are underway to improve aging industrial complexes, but the tangible improvement effects or achievements seem minimal. Many measures are just rehashed with different names." He emphasized, "70% of aging industrial complexes are local industrial complexes. Active measures must be prepared to strengthen the competitiveness of local industrial complexes."

In response, Chairman Kim explained, "We are increasing the budget and providing support for aging local industrial complexes, but there are limitations."

Kim Jeong-ho, a member of the Democratic Party of Korea, also said, "Especially for aging local industrial complexes densely populated with small and medium enterprises, budget support should be actively expanded. Through large-scale renovation into smart green industrial complexes, we must enhance the competitiveness of SMEs and revitalize the regional economy."

Smart green industrial complexes are one of the ten core tasks of the Korean New Deal. The government plans to expand the number of smart green industrial complexes to 15 by 2025 and to promote nationwide full-scale expansion from 2026.

164 Safety Accidents in National Industrial Complexes Over 5 Years
Only One Dedicated Staff per Regional Industrial Complex Headquarters

The adoption rate of smart factories, which have significant productivity and employment inducement effects within national industrial complexes, is also insufficient. The adoption rate in the seven complexes designated as smart green industrial complexes this year is about 5%. As of last year, the adoption rate of smart factories among companies in national industrial complexes was only 7.6%.

Criticism regarding safety accidents in national industrial complexes continued.

In the past five years, there have been 164 safety accidents in national industrial complexes, resulting in 89 deaths and 147 injuries. The most damaging types of accidents were fires, with 71 cases (43.3%), and industrial accidents, with 51 cases (31.1%).

There are 30 dedicated personnel responsible for safety management in national industrial complexes, with an additional 18 staff serving concurrently. Excluding personnel at the Chemical Disaster Joint Prevention Center and headquarters, the average number of dedicated staff per regional industrial complex headquarters is only one.

Lee Jang-seop, a member of the Democratic Party of Korea, stressed, "It is necessary to secure dedicated safety management personnel and strengthen continuous management measures so that tenant companies within industrial complexes strictly comply with safety regulations." Choi Seung-jae, a member of the People’s Party, criticized, "Despite receiving budgets, the Korea Industrial Complex Corporation is not increasing the number of safety inspection management personnel."

Chairman Kim responded, "We are making efforts to increase personnel as much as possible. Nevertheless, the situation remains challenging. We recognize the seriousness and will continue to strive."

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