What’s next for the Kaesong Industrial Complex?

Posted on : 2013-09-12 16:39 KST Modified on : 2019-10-19 20:29 KST
After resuming operations on Sept. 16, the complex could become more stable and international
 Gyeoggi Province
Gyeoggi Province

By Kang Tae-ho, senior staff writer

The agreement that emerged from the second meeting of the Inter-Korean Joint Committee for the Kaesong Industrial Complex on Sep. 11 can be understood as a mutually beneficial compromise, in which the North gave ground on the timeframe for resuming operations at the complex, and the South won systemic improvements including workers’ safety and access to the complex.

But from the outset, the meeting was no smooth sailing. Starting with a general meeting at 10 am on Sep. 10, North and South did not find middle ground until 6 am on Sep. 11, after a twenty-hour marathon round of negotiations that lasted until morning. During the negotiations, two general meetings were held, the joint committee chairs made contact five times, and the chairs of the subcommittee on entrance and sojourn met separately on three occasions. The reasons for this unusually long slog appear to be the pressure of trying to resume operations at the complex before Chuseok (the Korean harvest festival) and a political consideration that the South had to achieve something to coincide with Park Geun-hye‘s return from a trip to Russia and Vietnam.

It appears that the main point of dispute was the issue of guaranteeing workers’ safety in connection with entrance to and sojourn in the complex. South Korea requested that an observer be present when South Korean workers are questioned on suspicion of violating the complex’s laws. The South made clear that it did not want a repeat of what happened in 2009, when an employee of Hyundai-Asan at the complex was detained for a long period of time without being given access to a attorney.

The joint statement announced after the meeting only said that the issue would be discussed in the future by the subcommittee for entrance and sojourn, but the fact that “questioning in the presence of observers” was specified in the statement suggests that the North will take a forward-looking attitude on the issue. However, experts believe that, since the problem is tied up with legal issues including the unique relationship between South and North and North Korea’s criminal code, an attempt to create new regulations would run into difficulties.

The supplementary agreement to implement the accord of the Inter-Korean Arbitration Committee features strong measures to protect the investments of South Korean companies.

Indeed, South and North signed an agreement on regular procedures for conflict resolution in Dec. 2000, and they signed an agreement on the composition and operations of the commercial arbitration committee in 2003. But the agreement was not implemented because practical requirements were not followed through on.

“One reason was that North Korea has been passive, but another reason was that North Korean officials have little if any experience in operating a regular arbitration system,” said one expert. He predicted that again this time it is unlikely that the commercial arbitration committee will begin operating right away.

There are also various difficulties connected with the introduction of the RFID entrance system and the use of internet and mobile phones. At the moment, an RFID entrance system is already in operation at the border crossing from South Korea into Kaesong, but it is unclear whether the North will adopt the same system.

For increased internet connectivity, it would not be very difficult to make some additional network connections in certain areas, but there would be more considerable technical difficulties.

First of all, it is not clear if it is possible to connect the internet using the same system and price scheme as the South Korean internet network. This is due to the same reasons that calls between landlines in the complex and in South Korea, which are routed through the Kaesong telephone office, are charged rates similar to international phone calls (400 won per minute). All of these problems are connected with North Korea‘s communication sovereignty.

In terms of mobile communication such as cell phones, one remaining technical problem is how to bridge the gap between the Orascom mobile communication method used in North Korea and the mobile communication method used by South Korean companies such as KT Telecom and SK Telecom.

Most of the items contained in the statement were either measures for developing and expanding Kaesong investment that had already been agreed upon as in the Oct. 4, 2007 summit declaration or items on which progress had stalled because of deteriorating inter-Korean relations.

In addition, the May 24 measures (enacted by South Korea after the 2010 sinking of the Cheonan warship) are one remaining hurdle before additional investment can be made in Kaesong.

In this sense, Yang Mun-su, professor at the University of North Korean Studies, said the results of the meeting are “not an end, but the starting point for a new beginning.”


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