Dobong-gu Strengthens Fair Trade in Construction Subcontracting

Dobong-gu Construction Subcontracting Fair Trade Promotion Plan Established, 16 Detailed Plans Implemented... Strengthening Construction Bid Announcement Content and Introducing Integrity Pledge to Eradicate Unfair Practices... Emphasis on Direct Payment System for Subcontracting Fees, Standard Subcontract Agreement, and Payment Confirmation System (Subcontracting Guardian) Settlement

[Asia Economy Reporter Jongil Park] Dobong-gu (Mayor Dongjin Lee) has established and is implementing the '2021 Construction Subcontract Fair Trade Promotion Plan' since April to improve illegal and unfair subcontracting practices, various payment and wage arrears, and other customs arising from construction projects.

Due to the prolonged downturn in the construction market, intensified competition among companies has led to excessive low-price competition and unfair subcontracting transaction practices. However, subcontractors have been unable to exercise their legitimate rights for fear of disadvantages such as severing transactions with the primary contractors.

To eradicate such unfair practices, Dobong-gu emphasized once again the establishment of the ▲Direct Payment System for Subcontract Payments ▲Standard Subcontract Agreement ▲Payment Confirmation System (Subcontract Guardian), which are being implemented under the Framework Act on the Construction Industry and related laws, through the '2021 Construction Subcontract Fair Trade Promotion Plan.'

For project departments, measures have been taken to directly visit construction company offices to inspect and eradicate illegal re-subcontracting and unqualified construction companies (paper companies) that are conducted covertly. Meanwhile, the contract department has mandated that bid announcements include warnings about sanctions against unfair acts by contractors during bidding.

At the time of contract signing, a new provision was added requiring project departments and contractors to fulfill an integrity pledge to eradicate unfair practices.

Mayor Dongjin Lee of Dobong-gu stated, “With the establishment of fair trade measures for subcontracting, we will do our best to manage public construction projects to prevent quality deterioration, wage arrears, and other issues caused by illegal and unfair subcontracting practices.”

Additionally, Dobong-gu has been operating a Subcontract Irregularities Reporting Center since 2011 to handle complaints related to illegal and unfair subcontracting practices and various payment and wage arrears occurring in public construction projects.