53 Billion Won in Unpaid Supply Fees at Highway Rest Areas... Whistleblower Identity Disclosure Suspected

Ministry of Land, Infrastructure and Transport Conducts Emergency Survey on Unfair Practices at Rest Areas


Small Business Owners File 58 Reports... Follow-up Measures Underway

It has been revealed that unpaid supply payments owed to small business owners by intermediary operators at highway rest areas have reached 5.3 billion won across seven rest areas. Structural issues in rest area operations were also uncovered, including the shifting of facility maintenance costs onto tenants, forced purchases of food ingredients, disclosure of whistleblower identities, and the involvement of former Korea Expressway Corporation officials in securing business interests.

The Ministry of Land, Infrastructure and Transport announced on May 13 that, following an emergency comprehensive survey of small business owners operating in highway rest areas conducted from April 13 to April 30, a total of 58 cases of unfair practices, such as non-payment of supply fees, had been reported.

Cases of non-payment of supply fees were detected at seven rest areas, including Giheung (leased and private), Chungju, and Manghyang. Of the total 5.3 billion won, four rest areas have fully paid approximately 2.6 billion won, and the remaining three (Giheung leased, Giheung private, Manghyang) have additionally settled 2.2 billion won, so that to date, a total of 4.8 billion won has been returned to small business tenants. For the outstanding unpaid amounts, Korea Expressway Corporation has decided to provide legal support, including asset seizure, through its legal consultation center.

There were also reported cases where additional damage occurred during the payment recovery process. Some small business owners at Giheung Rest Area were found to have been asked to terminate their contracts or vacate their premises after requesting payment of overdue amounts. There were even cases where intermediary operators demanded contract termination despite the contract period not yet expiring. The Ministry stated that it will devise measures to help small business owners who have had to cease operations recover from their losses.

In addition to non-payment of supply fees, further reports of abuse by intermediary operators have continued. These include: ▲ passing on facility maintenance costs such as water and sewage management and signage installation, which should be borne by the primary operator, to small business tenants; ▲ forcing the purchase of food ingredients at prices above market rates; ▲ withholding employee wages; and ▲ reselling store operating rights to third parties.

Suspicions have also been raised that whistleblower protection has not functioned properly. One small business owner reported abusive practices by an intermediary operator to Korea Expressway Corporation, only for their identity to be disclosed to the intermediary operator, resulting in disadvantageous treatment. If true, this means that victims who sought help from a public institution were instead exposed to the risk of retaliation.

The issue of former officials from Korea Expressway Corporation has also resurfaced. There have been reports of retired Korea Expressway Corporation personnel being employed by subsidiaries of intermediary operators to lobby at rest areas, or receiving referral fees for introducing small business owners seeking to enter rest areas to operators. The Ministry recently announced the results of an audit, which found that the Korea Expressway Corporation retirees' association 'Doseonghoe' had monopolized rest area operation profits through subsidiaries for 40 years, even awarding themselves self-dividends. The Ministry stated that it will prepare separate countermeasures for the involvement of former officials in rest area operations.

The Ministry and Korea Expressway Corporation have decided to impose punitive deductions in rest area operation service evaluations for intermediary operators found to have committed non-payment of supply fees or abusive practices. Intermediary operators confirmed to have engaged in such acts will receive punitive score deductions in the operation service evaluation, which may result in termination of their contracts. In future bid processes, they will also receive significant score deductions, effectively expelling them from the market.

As a fundamental measure, the Ministry is working to introduce a direct contract system, in which small business owners contract directly with the public institution (Korea Expressway Corporation) without going through intermediary operators. This is intended to eliminate the multi-tiered commission structure altogether.

The Ministry plans to take strict action upon confirmation of facts through the ongoing audit that began on April 8, and to support complaints related to wage arrears in cooperation with the Ministry of Employment and Labor.

Minister Yoon-duk Kim stated, "Through this comprehensive survey, we have uncovered numerous unfair practices that previously remained hidden," adding, "We will work with Korea Expressway Corporation to develop recovery measures so that small business owners who have suffered unfairly, as in the case of forced eviction from Giheung Private Rest Area, can get back on their feet."