SME Sector: "Electricity Fees Should Also Be Included in the Payment Linkage System"

On the 22nd, the 2nd Delivery Payment Fair Price Committee Meeting Held

Voices from the small and medium-sized enterprise (SME) sector called for including electricity fees in the delivery payment linkage system.

The On-Site Settlement Meeting for the Linkage System among Small and Medium Enterprises, hosted by the Ministry of SMEs and Startups and the Fair Trade Commission, was held on the 25th of last month at the Foundation for Large and Small Enterprises and Agricultural and Fishery Cooperation. Lee Young, Minister of SMEs and Startups, is delivering a greeting. Photo by Heo Younghan younghan@

The Korea Federation of SMEs announced on the 22nd that it held the "2023 2nd Delivery Payment Fair Pricing Committee" at the Federation of SMEs in Yeouido, Seoul.

The committee was formed to discuss current issues related to SMEs receiving fair delivery payments and to prepare measures to revitalize the delivery payment linkage system and adjustment consultation system. About 18 people attended, including co-chairmen Choi Jeonnam, Chairman of the Korea Automatic Control Industry Cooperative, and Kim Namgeun, lawyer at the law firm Wemin, as well as Representative Choi Seungjae of the People Power Party, representatives of industry-specific cooperatives, and external experts, sharing the difficulties faced by SMEs regarding the delivery payment linkage system.

Kim Donghyun, Chairman of the Gyeonggi Foundry Industry Cooperative, said, “For small root companies such as foundry, mold, welding, and heat treatment, electricity fees surged by 27% last year alone, accounting for as much as 43.9% of operating profit, showing that electricity fees take up a large portion of delivery payments.” He emphasized, “Since electricity is a practically essential raw material for root companies, the application criteria of the system should be expanded from material costs to supply cost standards.”

Seol Pilsoo, Chairman of the Banwol Surface Treatment Business Cooperative, said, “Currently, under the system, there is a blind spot where the linkage system cannot be applied to material costs that do not account for 10% of the delivery payment.” He added, “It is necessary to differentiate the application criteria of the system by industry or transaction specificity, moving away from uniform standards.”

In addition, attendees unanimously agreed on the need for institutional measures to prevent abuse of exceptions to the linkage system, such as explicitly stating illegal acts in the law and imposing the burden of proof on the commissioning company in disputes related to the linkage system.

Chairman Choi said, “For the delivery payment linkage system to be well established in the field, it is important to continuously improve the system to fit the realities of the SME sector.” He added, “We will actively seek out voices from the field through the committee.”

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