Preventing Damage to Domestic Workers When Foreign-Invested Firms Withdraw

DPK Foreign-Invested Companies Special Committee Holds Legislative Debate on "Responsible Investment"
Chair Kim Juyoung Says It Is "Directly Linked to Workers' Right to Livelihood"

The Democratic Party of Korea is moving to improve the system to prevent damage to domestic workers that occurs when foreign-invested companies withdraw from Korea.

Kim Juyoung, lawmaker of the Democratic Party of Korea. Yonhap News

Representative Kim Juyoung, who chairs the Democratic Party’s Special Committee on Improving the System for Protecting Workers at Foreign-Invested Companies (hereinafter referred to as the “Foreign-Invested Companies Special Committee”), held a debate at the National Assembly Members’ Office Building on the 10th under the title “Policy Debate on Legislative Measures to Realize Responsible Investment by Foreign-Invested Companies.”

Under the Foreign Investment Promotion Act, a foreign-invested company refers to a domestic company in which a foreigner (individual or corporation) participates in management by investing at least 100 million won in a domestic corporation or enterprise and holding a stake of 10% or more. According to the current Foreign Investment Promotion Act in Korea, capital goods brought in by foreign-invested companies are granted 100% exemption from customs duties, individual consumption tax, and value-added tax for up to seven years.

In his opening remarks at the debate, Representative Kim Juyoung said, “Strengthening the responsibilities of foreign-invested companies is directly linked to workers’ right to livelihood,” and added, “We must move away from a mindset focused solely on investment and establish an appropriate framework to protect domestic workers.”

Representative Lee Yongwoo, who serves as secretary of the Special Committee, explained, “Our aim is to realize within our legal system the principles of responsible investment that have already been established by the international community, namely the universal norm that the freedom of investment must be accompanied by responsibility for employment stability and protection of the rights of workers in the host country.”

Professor Na Wonjun of the School of Economics and Trade at Kyungpook National University, who delivered the keynote presentation at the debate, said, “As in the United States, it is necessary to systematize regulations on foreign investment from the perspectives of economic security and supply chain management, and to actively conduct multifaceted assessments of the domestic economic and industrial impacts of foreign investment at all stages of prior review and support.”