The Korea Fair Trade Commission said on the 28th that it held a signing ceremony for a construction industry win-win cooperation and fair trade agreement to root out unfair practices in the construction sector.
That day, the Korea Fair Trade Commission (FTC) decided with the construction industry to abolish the practice of retention, under which roughly 90% of progress payments for projects are paid to subcontractors and the remaining balance is deferred until completion. The move is aimed at preventing harm to subcontractors who do not receive payment on time. It also decided to correct unfair special terms that pass on industrial safety expense and waste disposal expense, among others.
The Korea Fair Trade Commission (FTC) and the construction industry agreed to establish a subcontract payment indexation system that swiftly adjusts supply prices in emergencies. Despite higher supply costs for key raw materials due to the Middle East war, those increases have not been reflected in supply prices, frequently forcing subcontractors to shoulder additional expense. As part of implementing the win-win agreement, 19 general contractors plan to raise supply prices by a total of 134.3 billion won.
The Korea Fair Trade Commission (FTC) and the construction industry decided to set up and operate in-house dispute resolution bodies so that subcontracting issues can be discussed smoothly between contracting parties and suppliers. To enhance the effectiveness of the agreement, the Korea Fair Trade Commission (FTC), general contractors, and the specialized construction sector will form a public-private consultative body to check on implementation of the agreement.
Chairperson Ju Biung-ghi said, "I hope the win-win agreement will eradicate unfair practices in the construction industry and serve as a turning point toward coexistence," adding, "We will continue communicating with the field to resolve difficulties and spare no effort to support the spread of best practices."