[Supervision, Their Own Cartel]③ "Hiring Former Officials for Business Purposes and Private Contracts Have Long Been Common"

"There has long been a practice of direct contracts for supervision work between Korea Land and Housing Corporation (LH) and several small and medium-sized architectural offices."

Recently, the role and responsibility of supervision have come under scrutiny in relation to the apartment rebar omission incident. There are also many criticisms of the longstanding problems. This is because the designers and supervisors are at the center of the so-called 'Elpia' (a portmanteau of LH and Mafia) suspicions.

Lee Han-jun, President of Korea Land and Housing Corporation (LH), is offering an apology regarding the recent apartment rebar omission incident during a meeting chaired by the president at the LH Seoul Regional Headquarters in Gangnam-gu, Seoul, on the afternoon of the 2nd. Photo by Yonhap News

◆Mass Production of Elpia Amid Conflicts of Interest Between Former Officials and Supervision Firms

Supervision refers to the auditing activities during the construction phase of a building project. The entities performing this are architectural offices or construction engineering businesses. They operate on a per-project basis and verify whether the construction is carried out according to the design. They also provide technical guidance on quality and other aspects. A representative from A Architectural Office explained, "Supervision is distinct from consulting-type construction management (CM/PM) tasks, and most supervisors hold certifications and are required to have a certain level of experience."

The involvement of supervision in Elpia is related to the issue of public construction contract awards. Just as construction companies have a higher proportion of public projects in small and medium-sized sectors rather than large ones, supervision firms are similar.

M Architectural Office, which supervised the underground parking lots of public apartments in Geomdan New Town, Incheon (ranked 22nd in sales in 2022), was responsible for supervision at 3 of the 15 LH rebar omission apartment complexes, where about 20 former LH executives and employees have been re-employed. However, M Architectural Office stated that all of these individuals are livelihood-type on-site technical staff.

K Architectural Office, ranked outside the top 25, was listed on 2 sites. It is understood that 4 former LH officials are employed there.

That is not all. According to the office of Kim Doo-kwan, a member of the Democratic Party, among service companies re-employed by former LH employees of grade 2 or higher in the past five years, 9 companies had contracts with LH. These companies signed 203 design and supervision contracts with LH from 2019 to the first half of this year, amounting to approximately 231.9 billion KRW.

A representative from B Architectural Office said, "Former officials are generally over 50 years old and many have not sufficiently performed supervision work before, so they are recruited mainly for sales purposes to win public projects," adding, "Since design and supervision contracts are made with clients such as LH or local governments, not construction companies, it can be seen that former officials and small and medium architectural offices have aligned interests."

Temporary reinforcement structures have been installed in the underground parking lot of Byeollae First Foret Apartment in Byeollae-dong, Namyangju-si, Gyeonggi Province. / Photo by Younghan Heo younghan@

◆"Lack of Personnel to Assess Structural Safety... Leading to Poor Quality"

Even supervision firms with former officials would have faced less backlash if no poor quality occurred. However, as personnel shortages and aging issues worsen, the risk of poor supervision has increased. The adoption of new construction methods is inevitably slow.

Architectural designs do not always proceed as originally planned. Contractors sometimes propose alternative designs based on the basic design provided by the client, and in redevelopment projects, changes may be made according to the demands of the association.

The problem is that structural safety must be reviewed each time the design changes, but conditions such as personnel shortages are inadequate. A representative from C Construction Company said, "Only large construction companies can check structural safety when submitting alternative designs," adding, "It would be good if supervision pointed this out, but they often face difficulties starting from the personnel deployed on site, so it is not easy."

Therefore, when construction sites are busy or the architectural office lacks personnel, former officials are sometimes deployed to the site, according to industry sources. This causes poor supervision. In fact, among the 15 poor-quality complexes, the 5 directly supervised by LH had only about half the legally required personnel performing the work. For example, the LH apartment complex in Gongju, Chungnam, was supposed to have more than 8 supervisors assigned, but only 2 were responsible, and even those were non-resident personnel.

A representative from D Construction Company said, "Even in Seoul, there are supervision firms frequently selected by region," adding, "We should not blame only the contractors; the responsibility of supervision and clear design errors must also be firmly addressed."