SK Ocean Plant has been ordered to pay a corrective measure and a penalty surcharge of 52 million won by the Fair Trade Commission for subcontracting parts manufacturing to subcontractors without issuing a contract.

SK Ocean Plant logo. /Courtesy of SK Ocean Plant

According to the Fair Trade Commission on the 25th, SK Ocean Plant is accused of violating the obligation to issue written documents from February 2019 to December 2021 while subcontracting the manufacture of 436 shipments of ship parts to 48 subcontractors.

As a result of the Fair Trade Commission's investigation, it was found that SK Ocean Plant issued only purchase orders without a signature or seal instead of a separate contract document for 20 transactions related to plating and painting of ship parts subcontracted to five companies, citing them as one-time transactions.

Additionally, for 416 cases of revision and additional construction related to the manufacture of ship parts subcontracted to 43 companies, SK Ocean Plant did not issue a written document specifying legal matters such as the contents of the purpose and subcontract price. It was revealed that these were replaced with settlement agreements 9 to 100 days after work completion.

SK Ocean Plant argued that due to the nature of the shipbuilding industry, where predictions are difficult and design changes are frequent, prior issuance of written documents is not necessary when subcontracting revision and additional construction, but this was not accepted.

A representative from SK Ocean Plant said, "This issue occurred during the Samkang M&T period, and since SK's acquisition in 2022, there have been no violations of the subcontracting law." The representative added, "To establish a compliance management system, we have introduced a dedicated management organization and Fair Trade Compliance Program, built a subcontract transaction electronic contract system, and streamlined the issuance procedures of work orders to thoroughly manage and prevent any affected companies."

A representative from the Fair Trade Commission said, "We have confirmed and taken strict measures against the shipbuilding industry's persistent failure to issue documents related to revision and additional construction despite repeated actions by the Fair Trade Commission. Recently, the Supreme Court also confirmed through a precedent that revision and additional construction cannot be an exception to the obligation to issue documents under the subcontracting law."