Gaeseong firms to get additional compensation

By Kim Hyo-jin

The Moon Jae-in administration will pay an additional 66 billion won ($59 million) to South Korean firms having factories in the now-closed Gaeseong Industrial Complex (GIC) to help compensate their losses from its shutdown, the unification ministry said Thursday.

The ministry’s panel for inter-Korean exchanges and cooperation is expected to approve the additional payment at its meeting next week.

The move is to extend the government’s compensation for 124 firms that suffered huge losses from their investment in the inter-Korean industrial complex.

The government has already provided 517.3 billion won in compensation since early last year.

“The firms requested additional compensation through an official letter,” a ministry official said. “We plan to approve it at the next panel meeting and offer the compensation to each company in December.”

The official said the panel will also decide the standard for support in the meeting and conduct an official survey on how much the victims suffered in losses.

The government estimates that the damage reached 786.1 billion won. The compensation including the latest payout will offset about 74 percent of financial losses that the businesses experienced.

The ministry said earlier in a statement that the compensation is to “fulfill the state responsibility” for the companies that suffered unexpected business setbacks due to a “shift in the government’s policy decisions.”

It has no plan to provide state compensations again, the ministry said, noting it is considering a request to confirm it from owners of the firms.

The previous Park Geun-hye government closed the complex in February 2016 following the North’s fourth nuclear test. In protest, North Korea announced it would freeze all South Korean assets in the complex and that a people's committee would manage them.

The inter-Korean industrial project in Gaeseong, established in 2000 following the inter-Korean summit, used to have 124 South Korean firms operating there. The facilities and equipment belong to the South Korean businesses.

Concerns were raised after news reports stated that North Korea was operating factories owned by South Korean companies without reporting this to the Seoul government.

North Korea indirectly acknowledged later it had reopened part of the GIC, claiming it has the right to run the complex on its territory. The South Korean government has no particular measure to halt the North’s unilateral operation of the factories.