The Korea Land and Housing Corporation (LH) announced plans on September 7 to enhance its leniency program for reporting bid rigging and other procurement irregularities. The initiative aims to reduce fears of repercussions for whistleblowers and strengthen the reward system for those who report such misconduct.
LH's new measures are designed to eliminate barriers that discourage reporting, such as distrust in the reward system and complicated procedures. The agency has been operating a leniency program since last year, based on the Fair Trade Act, which allows companies involved in collusion to receive reduced or waived penalties if they self-report.
The newly established 'LH-type leniency system' expands the scope of self-reporting beyond just collusion to include all forms of procurement-related corruption. This means that issues such as bid rigging and bribery related to the evaluation process can now be reported under this leniency framework. The program will also apply in conjunction with the Public Interest Whistleblower Protection Act and the Anti-Corruption and Civil Rights Commission Act.
In terms of rewards, LH will provide up to 100 million won for reports that contribute to the public interest. Additionally, if a report leads to increased revenue or cost savings, a reward of up to 3 billion won will be prioritized. Furthermore, LH plans to recommend whistleblowers for additional rewards under the Public Interest Whistleblower Protection Act, which can reach up to 500 million won, with no cap on the recovery amount.
There will also be a separate reward system for reporting misconduct during the evaluation of proposals, such as pre-contact with evaluators or other corrupt practices. Currently, rewards for reporting bribery and collusion can reach up to 30 million won, but LH intends to revise its internal regulations to increase this limit to 100 million won by the end of the year.
As public procurement volumes increase, interest in the fairness of bidding processes is growing. The effectiveness of whistleblower protection and reward systems will be crucial for the successful implementation of these measures.
An LH official stated, “To eradicate bid rigging, we need a system that incentivizes immediate reporting rather than just post-detection and punishment. We will ensure that whistleblowers are thoroughly protected and that their contributions to the public interest are adequately rewarded to activate the reporting system.”
* This article has been translated by AI.
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