Controversy over labor cost for wokrer at Kaesung Industrial Park

Details on labor cost at Kaesung Industrial park reported by Chosun Ilbo

1. Rep. Kim Ki-hyun at the GNP party brought up the issue at the inspection of administration by the National Assembly this morning.

2. He argued based on the official report by Ministry of Commerce, Industry, and Energy which was submitted to the Unification Ministry on December 8, 2005;

the half of monthly salary of North Korean workers in Kaesung Industrial Complex actually goes to the Rodong Party,

about $30 among the salary of $57.5 goes to the party,

even among $30, a worker actually gets only $10 and the remainder is spent on other costs including insurance,

$10 can be translated into $0.3 a day, the lowest possible salary in the world, and
the government should think shame to argue “North Korean workers at the park receive more than the average salary of ordinary North Koreans,”

the government should really reconsider the Kaesung project.

[Official statement posted by the Ministry of Commerce, Industry, and Energy]

The ministry has set up a special team for inter-Korean economic cooperation October 28, 2005 and the team suggested studying difficulties that local companies at Kaesung faced.

According to the suggestion, the ministry conducted a research on the hardships and reported them to the Unification Ministry in December 2005.

During the process, a person in charge included the labor cost issue in the report without a proper background check for authenticity. The Unification Ministry rejected the claim ‘groundless’ at that time and didn’t post any official response.

We feel sorry for bringing up such a ‘groundless’ claim without consultation with the department in charge of the Kaesung park.

[Official statement posted by the Ministry of Unification]

Chosun’s today report that only $10 goes to North Korean worker in Kaesung Industrial park is not true.

Korean companies pay a monthly salary of $57.5 including a minimum wage of $50 and a social insurance fee of $7.5. Except for 30% going for ‘social and cultural policy fee,’ all the remainder goes to a worker in the form of either a ration ticket or cash.

On receiving them, workers should sign on the form of confirmation that he or she receives the salary.

The MCIE report was prepared at the end of last year, and we found no ground to support the claim in the paper, which thus we have not taken any measure on the issue.