Strengthening Enforcement of Fair Trade Agreements... From Now On, Prime Contractors Receive Bonus Points When Subcontractors Apply for Evaluation

Fair Trade Commission Revises Evaluation Criteria for Compliance with Subcontracting Fair Trade Agreement

[Sejong=Asia Economy Reporter Joo Sang-don] From now on, when large corporations encourage not only the signing of agreements between 1st-2nd tier or 2nd-3rd tier companies but also the application for agreement evaluation, additional points will be awarded during the Fair Trade Agreement evaluation. Previously, points were given based solely on whether an agreement was signed, but instead of awarding those points, points will now be given when an evaluation application is submitted based on implementation.

On the 11th, the Fair Trade Commission announced that it has revised the evaluation criteria for the implementation of fair trade agreements in the subcontracting sector accordingly.

The Fair Trade Agreement is a system where large and medium-sized enterprises pledge to support small and medium-sized partner companies with funds, technology, etc., or to apply transaction conditions higher than those stipulated by law, and the Fair Trade Commission evaluates the implementation results. The evaluation is scored out of 100 points, and based on the score, grades such as Excellent (95 points or higher), Good (90 points or higher), and Fair (85 points or higher) are given. The Excellent grade can receive incentives such as exemption from on-site investigations for two years, and the Good grade can receive exemption for one year.

The main point of this revision to the evaluation criteria is to award points to large corporations that actively encourage the participation of medium and small enterprises in agreements. Previously, 1 point was given to the primary large corporation when an agreement was signed between 1st and 2nd tier companies, and 2 points if an agreement was signed between 2nd and 3rd tier companies. However, from now on, 2 points will be awarded for agreements between 1st-2nd and 2nd-3rd tier companies, and 1 point will be given if these partner companies apply for agreement evaluation. The intention is to give good scores to large corporations that encourage not only agreement signing but also evaluation application, i.e., implementation, by partner companies.

The score for the 'Technology Support and Protection' category has also been increased to activate technology development by small and medium enterprises and support from large corporations. For manufacturing industries with a high need for localization of materials, parts, and equipment, the score was raised from 3 points to 5 points, and for the food industry, which had a relatively low score in this category compared to other industries, it was increased from 1 point to 2 points.

Additionally, up to 3 bonus points will be newly awarded when manufacturing and construction industry partners support industrial safety prevention activities.

Furthermore, activities contributing to carbon neutrality, such as low-carbon and eco-friendly technology development, are recognized as 'efficiency improvement' achievements. Previously, greenhouse gas reduction was considered efficiency improvement, and now related low-carbon technology development has been added as an efficiency improvement achievement.

A Fair Trade Commission official said, "The revised criteria will apply to agreements signed after January 1, 2022 (evaluations will start from 2023)," adding, "We expect that this revision will help spread a culture of coexistence down to lower transaction levels such as medium-sized enterprises and contribute to the spread of industrial safety prevention culture."

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