The government has identified outdated management systems and excessive direct contracting as the reasons behind widespread violations in more than half of forestry corporations. It plans to impose strict penalties on the offending companies and technicians while also minimizing disruptions to existing forestry projects.
Kim Young-soo, the First Deputy Minister of the Government Policy Coordination Office, announced the findings of a joint inspection of forestry projects at a briefing held at the Government Seoul Building on October 16. He stated, "Concerns have been raised that the poor quality of forestry projects and corruption across the industry undermine the value of national forests and hinder development."
From May to October, the Government Joint Anti-Corruption Task Force, along with the Korea Forest Service and local governments, conducted a comprehensive inspection of 1,907 forestry corporations. The results revealed that 56%, or 1,073 corporations, failed to meet registration requirements, including securing qualified personnel.
Among the total of 12,463 forestry technicians, 4,716 (37.8%) were found to have suspicious activities, such as lending out certificates or holding dual employment. There were also confirmed cases of 33 corporations using the certificates of 38 deceased technicians.
The government cited poor management as a key reason for the prevalence of illegal activities in the industry. A representative from the Joint Anti-Corruption Task Force stated, "This investigation confirmed that the management system was significantly inadequate, and there were limitations in filtering out illegally registered entities."
The representative explained that the system relied on manually inputting documents submitted by registered companies without cross-verifying them with other information. While the number of registered corporations and technicians has increased compared to the past, improvements in management personnel and systems have lagged behind.
In fact, the detection rate of illegal corporations in the regular inspections conducted annually by the Korea Forest Service has remained below 6%. The forestry technology information system is not linked to public information such as employment insurance, making it unable to filter out issues like certificate lending, dual employment, and the use of deceased individuals' certificates.
The structure of projects centered around direct contracts has also been identified as a cause for the proliferation of substandard companies. From 2023 to last year, the proportion of direct contracts in major forestry projects was about 83% based on contract amounts, significantly higher than the average of 38% for other subsidy projects.
Small direct contracts allow only companies registered in the respective city or county to participate, selecting contractors based solely on price without eligibility assessments. This has led to cases where so-called 'grasshopper companies' move their registered locations across various regions, borrowing technician certificates or registering multiple times to meet requirements.
There have also been instances of 'swarm bidding,' where multiple corporations established under the names of family or acquaintances participate in the same bid. By submitting bids under different company names, they increase the likelihood of meeting the winning bid criteria. The government has identified over 120 corporations suspected of swarm bidding, most of which participated in small direct contracts.
To date, the government has referred 342 corporations and 401 technicians for investigation. It plans to verify the remaining suspected violations and either impose administrative penalties or refer them to law enforcement.
However, the government is also considering the potential confusion and project delays that could arise from large-scale penalties. A representative from the Anti-Corruption Task Force noted, "Given that many companies are involved, this could impact the industry," and added, "We will expedite the procedures to ensure a swift self-correcting process." Companies currently engaged in projects will be allowed to complete their existing contracts before facing penalties, in order to minimize disruptions.
Nonetheless, the government has stated that it will not uniformly scale up all projects to avoid harming small businesses during the transition from direct to competitive contracts. It plans to maintain direct contracts for projects suitable for small companies while preventing the fragmentation of projects for administrative convenience.
* This article has been translated by AI.
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