[SME Regulation Site ⑤] Unreasonable 'Certification System' Claimed for Safety... Ruining the Elevator Industry

Elevator Safety Corporation's Exclusive Inspection and Certification... Increased Certification Costs Burden SMEs
"Please Improve Institutional Gaps That Prevent Commercialization Despite Advanced Technology Development"
Certification System Reform TF Formed, "Reevaluating from Zero Base, Reform Underway"

An elevator company employee is performing installation work in the elevator shaft of a high-rise building.
[Photo by S Lift].

[Asia Economy Reporter Kim Jong-hwa] "This is a construction project worth billions. We must install the elevator within the deadline to receive the final payment, so even if we have complaints about the Corporation, we cannot speak out. If we fail the installation inspection, we cannot meet the delivery deadline, and the factory might have to shut down."

Kim Hyung-wook (alias, 62), CEO of S Lift, an elevator parts manufacturing company in Gyeonggi-do, said, "Domestic small and medium-sized elevator companies are being pushed to the brink of extinction." Small elevator companies point to the unreasonable 'certification system' that emphasizes 'safety' as the root cause of the crisis.

The domestic elevator market ranks third in the world based on the annual number of new installations and seventh in the world by the number of units owned and operating. Including remodeling of about 20,000 units annually, more than 40,000 units are installed each year, and as of the end of June, about 800,000 elevators are in operation in a market worth 4 trillion KRW. According to the National Elevator Information Center, 1,888 small and medium enterprises?including 279 manufacturers, 605 installation companies, and 1,004 maintenance companies?and five large corporations such as Hyundai Elevator, TKElevator, Otis, Korea Mitsumi, and Schindler employ about 35,000 people.

The problem began when the Korea Elevator Safety Corporation (the Corporation) monopolized elevator inspections (tests) and certifications. Since March 2019, the Ministry of the Interior and Safety revised and implemented the Elevator Facility Safety Management Act, centralizing elevator inspections (tests) and certifications under the Corporation. The number of elevator parts subject to testing and certification increased from six to twenty, and safety certification (model certification) for finished products was also made mandatory.

However, the Corporation revealed various issues such as manpower shortages due to the monopoly of testing and certification for 1,893 companies. The certification processing time took nearly twice the legally mandated period, causing more companies to miss delivery deadlines and pay delay penalties. Additionally, certification-related costs increased for companies due to testing and certification of parts like drives, emergency communication devices, and moving cables, which are not directly related to user safety.

Large corporations, which mass-produce standardized products and mainly receive model certification, incur certification costs of less than 0.5% of total sales, but small and medium enterprises, which produce many varieties in small quantities and mainly receive individual certifications, face certification costs up to 5% of total sales. For example, S Lift spent 50 million KRW annually on certification costs before 2018, but in 2020, the cost rose to 350 million KRW, increasing about sevenfold.

A scene of testing an elevator buffer.
[Photo by Korea Elevator Industry Cooperative]

A bigger problem is the lack of trust in certification. Since the Corporation, the testing and certification body, lacks specific evaluation guidelines, the judgment results vary depending on the examiner, even for similar models. When companies that receive a 'nonconformity' judgment request disclosure of the evaluation results, the Corporation refuses. These companies do not accept the results but yield to avoid antagonizing the Corporation, which holds a monopoly position. Since many procedures such as 'installation certification' remain, and if the Corporation disadvantages the next parts or products, companies may have to worry about their survival.

Especially frustrating are cases where testing and certification cannot be obtained due to technical or facility limitations. For example, the Corporation ignores products like ultra-large freight elevators or those equipped with cutting-edge sensors, citing lack of facilities or technology to test them.

As a result, products certified by the Corporation are not recognized as 'official certification' overseas. Although the Corporation benchmarks European standards (EN) to strengthen safety and mandates certification for six more parts than EN requires, it has failed to secure external credibility. The elevator industry insists on improving the certification system to align with EN, which is accepted worldwide except in North America.

Choi Kang-jin, Chairman of the Korea Elevator Industry Cooperative (Elevator Cooperative), said, "We need to align various aspects such as certification items, certification methods, and certification model classification systems with the European standard (EN) codes." He added, "Our certification does not conform to EN codes. We need to establish a system to be recognized as a national official institution." Chairman Choi emphasized, "If you cannot get certification from the only inspection and certification institution in the country, you have to give up the technology and products you have developed with difficulty. We want to improve this institutional flaw that prevents commercialization even when advanced technology is developed."

In response, the government announced that in July, it formed a 'Certification System Reform Task Force (TFT)' consisting of about 20 members recommended by major elevator-related organizations such as the Elevator Cooperative, the Korea Elevator Association, the Ministry of the Interior and Safety, and the Corporation, and is promoting certification system reform.

Choi Gwi-man, Head of Certification at the Korea Elevator Safety Corporation, explained, "Since August, we have held two meetings and are developing improvement plans such as simplifying regular inspection procedures. We are reviewing the entire elevator certification system from zero, as long as safety is not compromised. Once the improvement plan is prepared, we will begin revising the relevant laws."