A bill that expands the scope of designated Daesang inspections, which was limited to public housing with 30 households or more, to include private multi-use facilities is causing ongoing controversy. The intent of the bill is to prevent a "construction cartel" and enhance safety, but there are concerns that it could actually increase the likelihood of safety accidents and poor construction.
According to the National Assembly's bill information system on the 17th, lawmaker Kwon Young-jin of the People Power Party proposed a partial amendment to the Building Act in January. The essence of the amendment is to designate large multi-use facilities such as cultural, assembly, and retail facilities with a total floor area of over 5,000 square meters or buildings over 16 stories as targets for designated inspections. It seeks to expand the existing designated inspection system that currently applies to small-scale buildings directly constructed by builders and multi-family dwellings with 30 households or more. The designated inspection system is a structure that allows permit authorities such as local governments to directly designate inspectors.
This was legislation proposed by lawmaker Kwon Young-jin as a measure to prevent recurrence following the "Incheon Geomdan apartment underground parking lot collapse accident," based on the construction cartel innovation plan announced by the Ministry of Land, Infrastructure, and Transport at the end of 2023. The purpose of the amendment is to prevent inspectors from being subordinate to builders and to ensure independence to prevent poor construction.
However, concerns from the private inspection industry suggest that expanding the designated inspection system could instead exacerbate poor construction and safety accidents. This is because the method of selecting inspection companies by permit authorities such as local governments essentially involves a lottery system among companies that have barely met minimum qualification criteria. Large construction sites associated with the "Incheon Geomdan collapse" and the Gwangju Hwajeong I-Park collapse also involved housing construction sites where inspectors were selected by public institutions and permitting authorities.
A construction industry official noted, "If the amendment passes, it will become possible to win bids simply by meeting certain qualification requirements due to an increase in public orders," adding that "as competition weakens, technology development and innovation in work will decrease, and there will be a stronger tendency to conduct only passive inspections."
Some have criticized that the amendment process is being rushed through "legislative procedures by legislators" rather than "government legislation." Government legislation requires consultation with related departments, public hearings, legislative reviews, cabinet meetings, and presidential approval before a bill is submitted to the National Assembly, while legislator-initiated legislation can be submitted much more easily after obtaining the signatures of over 10 lawmakers. Changing the inspection system involves significant impacts on the safety of buildings and industries, being mainly under the jurisdiction of the Ministry of Land, Infrastructure, and Transport. The biggest issue cited is that proceeding with legislative amendments through legislator initiatives prevents objective verification and discussion through public hearings and discussions.
There are also concerns in the industry about increased construction expenses. Typically, when entering into construction management (CM/PM) contracts, inspections are included, but if local governments select inspection companies separately, clients must pay additional costs. It is said that inspection fees alone can cost more than double, potentially increasing construction costs further.
An executive from a development company stated, "Given the need for innovation in public order inspections due to the LH cartel, expanding the designated inspection system is counterproductive," adding that "the expansion of the public sector's inefficient order systems could increase the risk of poor construction through a downward leveling in the inspection industry."
Kim Seung-bae, president of the Korea Real Estate Development Association (PIDES Development), said, "The inspection criteria should vary based on the scale and use of private buildings, and we should evaluate their performance to recommend multiple suitable companies," urging that "the public should be responsible alongside the project owner if they set the guidelines."
Meanwhile, the Ministry of Land, Infrastructure, and Transport announced its position in a press release on the 20th of last month as opposition from the industry intensified. The Ministry stated, "We are currently preparing the legal basis for expanding designated inspections by permit authorities through amendments to the Building Act and will collect opinions from local governments and related industries regarding the eligibility review method during the future subordinate regulation amendment process."