Cement Industry Union Urges Withdrawal of Local Resource Facility Tax Legislation

Workers and over 30,000 family members and local residents' livelihoods directly affected, forced without social agreement
"Branding as an immoral company neglecting social responsibility, even vilifying factory workers"

Kiln and cement manufacturing equipment. [Photo by Ssangyong C&E].

[Asia Economy Reporter Kim Jong-hwa] Labor unions of major domestic cement companies have called for the suspension of legislation on the regional resource facility tax on cement production (commonly known as the cement tax), which is currently being discussed in the National Assembly.

On the 15th, labor unions from seven major domestic cement companies?Sampyo Cement, Ssangyong C&E, Hanil Cement, Hanil Hyundai Cement, Asia Cement, Sungshin Cement, and Halla Cement?issued a statement opposing the re-promotion of the cement tax legislation.

The unions of the seven companies stated, "This is a bill related to people's livelihoods that threatens not only the survival rights of workers in the cement industry but also the livelihoods of more than 30,000 local residents, including subcontractor workers and their families," and criticized that "it is being pushed forward without social consensus."

The cement tax had been proposed several times since the 19th National Assembly but was discarded due to concerns over double taxation, fairness issues, and doubts about the tax administration capabilities and transparency of related local governments. However, in the 21st National Assembly, Democratic Party members Lee Gae-ho proposed a revision imposing 1,000 KRW per ton of cement produced, and Lee Hyung-seok proposed 500 KRW per ton, which met with strong opposition from the industry.

They also clearly refuted the 'external diseconomy' impact, which the National Assembly cites as the basis for establishing the cement tax. 'External diseconomy' is the logic that when someone suffers a loss, the person causing the loss must pay an amount equivalent to the damage, implying that cement companies should compensate local residents living near cement plants for the harm they have suffered.

However, the unions emphasized, "If the external diseconomy impact were true, there would have been health abnormalities among workers who have worked in the factories for decades, but no such damage cases can be found anywhere," adding, "If there had been any damage, the unions would never have overlooked it."

Furthermore, the unions stated, "It is factually incorrect to brand the companies, where union members work, as immoral corporations that neglect social responsibility merely for profit and to vilify factory workers," and expressed outrage at "the National Assembly and Gangwon and Chungbuk provinces' agitation for taxation."

They also pointed out the unclear usage of the cement tax paid so far. The unions said, "We have paid more than 50 billion KRW in regional resource facility tax on limestone over the past 20 years, but we do not even know the exact usage or purpose," and stressed, "We oppose the imposition of 25 to 50 billion KRW in taxes at once every year, as well as the benefits of the tax imposed on cement companies going to areas unrelated to cement plants."

The unions further argued, "Efforts by the cement industry to transparently and sustainably operate an annual fund of about 25 billion KRW and regional fund management committees to ensure that substantial benefits return to the regions and residents where cement plants are located should not be overlooked."

The unions also made it clear that if their request for withdrawal is ultimately rejected and the National Assembly pushes the bill through, they will launch a strong campaign to repeal the legislation on the grounds of survival rights.

Recently, the cement industry is facing severe business deterioration due to the more than fourfold surge in the price of imported fuel coal, as well as sharp increases in prices of essential materials such as gypsum, explosives, and urea solution, along with rising electricity costs, carbon emission rights, safety freight costs, and nitrogen oxide emission charges, resulting in additional costs amounting to several hundred billion KRW annually. Workers are also in a situation where they must share the pain caused by the company's difficulties. It is already known that the cement industry turned to a deficit in the fourth quarter of this year.

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