LH to Reduce 8 Regional and Project Headquarters... First Announcement of Ministry of Land's Workforce Reduction Plan

Reduction of 120 Employees and Abolition of Functions in 8 Projects Including PF Business
Ministry of Land, Infrastructure and Transport Announces '2023 Work Plan'

[Asia Economy Reporter Cha Wanyong] The Ministry of Land, Infrastructure and Transport announced specific plans to downsize the organization and personnel of Korea Land and Housing Corporation (LH). This is the first downsizing plan among public institutions under the Ministry of Land following the Ministry of Economy and Finance’s approval of the 'Public Institution Innovation Plan including Function Adjustment and Organization and Workforce Efficiency Plan' on the 26th of last month.

Long-term downsizing policy also planned for housing benefit and jeonse rental staff

On the 3rd, the Ministry of Land announced the ‘2023 Work Plan’ at the Blue House State Guest House, stating that LH will reduce a total of eight units, including four regional headquarters and four business divisions, and abolish or downsize ten functions that can be performed by local governments and local public corporations. The resulting reduction in personnel will be 120 people.

The abolished projects include ▲startup incubating ▲e-commerce logistics complexes ▲Smart Challenge ▲port redevelopment ▲public building renewal ▲U.S. military base relocation ▲PF projects ▲district energy, totaling eight, while ▲public support buildings ▲living SOC projects will be downsized in two areas.

Additionally, the Ministry presented a mid- to long-term workforce reduction plan by transferring 751 housing benefit survey staff to local governments and increasing the proportion of local government projects for 374 jeonse rental staff.

Furthermore, the in-house university (LHU), which had issues such as appointing retired professors and golf-related absences during training, will consider closure plans and operational alternatives, while the affiliated research institute (LHI) will prepare fundamental operational plans including expanding its own revenue and enhancing policy contribution within the first half of this year.

The loosely managed wage peak system (lasting 3 to 4 years) will also be revised. Along with shortening the period, a quantitative evaluation will be conducted for employees subject to the wage peak system to differentiate salaries accordingly.

Stronger control over LH employee misconduct such as speculation and preferential treatment for former officials

The strong organizational and personnel downsizing plan for LH comes as employee misconduct and criticisms of institutional management continued even after the 2021 speculation scandal. Accordingly, the Ministry of Land plans to introduce and operate enhanced misconduct control measures alongside the downsizing plan.

First, the Ministry will strengthen prevention and detection of speculation by LH employees. Previously, real estate transaction investigations for LH employees focused on land within project districts, but the scope will now be expanded to include real estate transactions by employees’ families and neighboring areas of project districts.

Moreover, retired appraisers and legal officers of LH who serve as executives in companies or themselves will be restricted from private contracts for five years after retirement (currently only a two-year restriction applies to the individual). Contracts with construction and engineering companies employing retired LH executives of grade 1 or higher will be restricted for one year after retirement (if related to duties in the previous two years), focusing on managing preferential treatment for former officials, especially high-ranking ones, immediately after retirement.

Additionally, the scope of activities of the ‘Compliance Officer’ introduced after the LH speculation scandal to monitor real estate speculation will be expanded, and the ‘Audit Director,’ who oversees public service discipline and unfairness/corruption, will be operated as an open position.

Nam Youngwoo, Director of Land Policy at the Ministry of Land, Infrastructure and Transport, said, “We focused on transforming LH into an organization that can best perform its original role so that it can reflect on past mistakes and become a public corporation that serves the people more faithfully. We will do our utmost to help LH recover public trust and transform into a public institution recognized by the people.”