17th 'Payment for Delivered Goods Committee' Meeting
Attendance by Kim Nam-geun, Member of the National Assembly from the Democratic Party
The small and medium-sized enterprise (SME) sector voiced that legislative supplementation, including the incorporation of energy costs, is necessary for the delivery price linkage system to provide practical assistance.
The Korea Federation of SMEs announced on the 17th that it held the ‘2024 1st Delivery Price Fair Payment Committee’ at the Federation’s office in Yeouido, Seoul. This committee has been operating since June last year to promote the activation of the delivery price linkage system and to identify revision points for fostering a fair trade culture between large and small-to-medium enterprises.
Industry experts emphasized the need to strengthen promotion and education of the delivery price linkage system, include energy costs such as electricity fees in the linkage targets, and prepare linkage methods reflecting the contract specifics such as unit price contracts.
Ryu In-gyu, Chairman of the Korea Electric Wire Industry Cooperative, stated, “In root industries like heat treatment and mold manufacturing, electricity fees account for nearly 30% of manufacturing costs, yet since they are not raw materials, they are excluded from the linkage system application,” adding, “The scope of the linkage system should be expanded to include energy costs such as electricity fees.”
Seol Pil-su, Chairman of the Banwol Surface Treatment Business Cooperative, said, “For small contracts under 100 million KRW, the linkage system is excluded, but in unit price contracts where only the contract period and delivery unit price are set, it is difficult to determine if it is a small contract at the time of contract signing,” and added, “There is a need to prepare a method to apply the linkage system when the cumulative order amount exceeds 100 million KRW after a unit price contract.”
Choi Jeon-nam, Chair of the Delivery Price Fair Payment Committee, explained, “Many consigned companies still do not fully understand the system, making it difficult for SMEs as consigned companies to request and negotiate linkage agreements,” and said, “Since the Korea Federation of SMEs was designated as the support headquarters for the expansion of the delivery price linkage system last March, we will expand education and consulting support for member companies on concluding linkage agreements and do our best to support supplementary legislation based on industry feedback.”
On this day, 18 members attended the committee meeting, including Kim Ki-moon, Chairman of the Korea Federation of SMEs, representatives of SMEs by industry as committee chairs, and external experts. Kim Nam-geun, a member of the National Assembly from the Democratic Party of Korea, also attended to listen to the difficulties faced by the SME sector regarding the application of the delivery price linkage system and to discuss supplementary measures for system activation. Kim has served as a co-chair of the Delivery Price Fair Payment Committee from last year until last month.
Chairman Kim told Assemblyman Kim, “I hope you will take the lead in discovering livelihood tasks and preparing support policies for SMEs and small business owners in the 22nd National Assembly.” In response, Assemblyman Kim said, “Since I have researched legislative measures with the SME sector to enhance the effectiveness of the delivery price linkage system, I will continue to actively communicate with the SME sector and strive not only for the system’s field establishment but also for building a fair trade environment between companies and spreading a culture of win-win cooperation.”
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