"Full Cash Payment for Subcontracting Fees"... Commendation for Fair Trade Model Companies

Fair Trade Commission Awards Commendations to 13 Companies

Han Ki-jung, Chairman of the Fair Trade Commission. [Photo by Yonhap News]

On the 25th, the Korea Fair Trade Commission (KFTC) announced that it awarded the 'Chairman of the Fair Trade Commission Commendation' to 13 companies that exemplary implemented the Fair Trade Agreement in the subcontracting sector.

These companies were recognized for their efforts to promote the growth of small and medium-sized partner companies and mutual cooperation through the use of standard subcontracting contracts and financial support for partner companies.

The evaluation of the implementation of the Fair Trade Agreement in the subcontracting sector is divided into companies subject to the Win-Win Growth Index (hereinafter referred to as index companies) and companies not subject to the index (hereinafter referred to as non-index companies).

For index companies, the KFTC's evaluation of the Fair Trade Agreement implementation and the Win-Win Growth Commission's comprehensive evaluation are combined to announce the Win-Win Growth Index annually. For non-index companies, a separate evaluation is conducted upon application for the agreement evaluation to promote the voluntary spread of a win-win cooperation culture.

In this year's evaluation of non-index companies, 18 companies applied for the agreement implementation evaluation, an increase from 16 companies the previous year. The KFTC and related organizations evaluated these companies' one-year (Q4 2022 to Q3 2023) agreement implementation performance through document review, on-site inspection, and partner company satisfaction surveys.

In this evaluation, the KFTC noted that Korea Electric Power KD&N, as a public enterprise, participated in the Fair Trade Agreement implementation evaluation and demonstrated win-win efforts in the public sector, such as supporting partner companies' entry into overseas markets and early payment of dues to partner companies.

Among the 18 non-index companies evaluated, 5 were selected as top performers, 5 as excellent, and 3 as good, showing overall improvement compared to the previous year. In particular, MEMC Korea (from ungraded to top performer), TSE (from good to top performer), and Hanguk Seongjeon (from ungraded to excellent) improved their ratings by two or more levels compared to the previous year.

Among the 18 companies evaluated, 16 were found to pay subcontracting fees entirely in cash, and 4 companies fully reflected partner companies' requests for increased purchase amounts, actively adjusting the purchase amounts for partner companies.

Additionally, companies have been confirmed to have made efforts to create a win-win environment in various ways, such as providing financial support through logistics cost payments (LOT Vacuum) and supporting partner companies' export expansion (MEMC Korea).

The KFTC will grant incentives such as exemption from ex officio investigations of subcontracting transactions and penalty point reductions according to the grade, along with commendations, to companies with excellent results in this non-index company evaluation.

The KFTC stated, "We plan to continuously promote the development of the Fair Trade Agreement to spread a culture of mutual growth among companies through the agreement system."

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