In Korea, the development of industrial complexes has been implemented according to the directions of the government policy. Regulatory reform was one of Lee Myung-bak government’s major projects. According to 「Industrial Sites and Development Act...
In Korea, the development of industrial complexes has been implemented according to the directions of the government policy. Regulatory reform was one of Lee Myung-bak government’s major projects. According to 「Industrial Sites and Development Act」, it took 2 to 4 years to obtain authorization and permission of the development of industrial complexes, therefore, it could not ensure smooth supply of industrial land. Lee Myung-bak government enacted 「Act on Special Cases Concerning the Simplification of Authorization and Permission Procedures for Industrial Complexes」(2008.6.5.) in order to simplify the authorization and permission process to be able to supply industrial land to the needs of enterprises by integrating a development plan and an implementation plan into an industrial complex plan and applying special exceptions to the authorization and permission process more broadly.
After the Act was introduced, American financial crisis hit and the demand for industrial complexes decreased, but 383 new ones have been designated since 2008 and as of the end of 2015, the size of the undeveloped area amounts to 267㎢.
「Act on Special Cases Concerning the Simplification of Authorization and Permission Procedures for Industrial Complexes」 has contributed to the timely supply of industrial land and the development of industrial complexes, but their business value fell and the financing became difficult, so implementation of the project has remained stagnant and many of the development plans have not carried out yet, which clearly displays the limitations of the supply-side policy.
This study examined the polices for the development of industrial complexes and compared their states and the characteristics before and after the enforcement of the Act in terms of designation, development and sale in order to identify the drawbacks of the 「Act on Special Cases Concerning the Simplification of Authorization and Permission Procedures for Industrial Complexes」 and suggest the improvement strategies.
More specifically, this study categorized the special exceptions applied to the “permission procedures” and “shortening period” as system implementation and approval procedure and analyzed the cases of the development of industrial complexes in Chungnam Province. To confirm the validity and the objectivity of the results of the analysis, in-depth interviews of experts were conducted.
This study classified the drawbacks of the Act into six categories:
First, the guideline for the letter of intent to invest has not been rigorous enough so that it has been hard to evaluate its relevance, which might have allowed some construction companies and real estate development companies to take advantage of the lack of rigorousness for project financing.
Second, Industrial complex plans have not developed properly and the accountability issue for the quality of the plans has not been dealt clearly.
Third, committees for deliberation on industrial complex planning have failed to reflect the views of all the involved parties fairly and have not properly dealt with disproportionate and overlapping deliberation.
Fourth, the hearing opinions from residents has not been effectively conducted, so there has been an increase in civil complaints related to the development of industrial complexes.
Fifth, joint conciliation meetings and investment promotion centers have failed to function to coordinate conflicting interests.
Sixth, the special exceptions applied to the “permission procedures” and “shortening period” have not produced tangible results.
Based on the analysis of the drawbacks of the Act, six strategies were proposed in order to improve the related system. In-depth interviews of experts were conducted to confirm the objectivity of the suggestions.
First, more specific standards for drafting and evaluating a letter of intent to invest should be established and a system that guarantees the implementation of industrial complex development should be introduced.
Second, to ensure the quality of industrial complex plans, expert opinions should be sought from the inception stage of a project. When an industrial complex is not developed for end users but for sale, its plan should follow the steps prescribed in the Industrial Sites and Development Act and a real-name system should be introduced to make certain its quality.
Third, a project implementer should be allowed to make a choice between unitary deliberation and individual one to avoid the overlap.
Fourth, exemption provisions for the hearing opinions from residents should be specified and a more effective governance system should be introduced to settle civil complaints.
Fifth, a designating authority should hold a joint conciliation meeting and gather the opinions of project implementers of the private sector.
Sixth, administrative process should be improved to abide by the current time limit of six months to determine the approval of an industrial complex plan.