North proposes new road rules, fees in Kaesong

In an apparent attempt to tighten its control of the Kaesong Industrial Complex, North Korea gave South Korea a draft proposal late last month for tougher rules on road use in the business park, the JoongAng Ilbo has learned.

Under the proposed regulations, the North would ban certain vehicles that cause excessive air pollution and damage roads. It also would assess a range of new fines on South Korean businesses and workers in the area, such as $30 for jaywalking and $1,000 for illegally blocking streets. Fees for damaging asphalt or concrete would run $50 per square meter, and the South would have to perform year-round road maintenance work or face additional fines.

The North’s Central Special Development Guidance Bureau, which oversees the complex located just north of the border, handed the draft to its counterpart agency in the South, according to sources from South Korean businesses operating in Kaesong.

The North claimed the new rules “contribute to the national economy and road transportation,” according to documents obtained by the JoongAng Ilbo. The document also stated that the North wants to “establish firm order and rules on road construction, management and its use.”

The future of the Kaesong complex, built in 2003 as a symbol of reconciliation following the first inter-Korean summit in 2000, has come into question after the North declared last Friday that all regulations and agreements on Kaesong are no longer valid.

The two Koreas have not been able to agree on a date or an agenda for a second round of government-level talks following a first meeting on April 21. After the meeting, the North demanded that the South raise wages for North Korean workers and start paying fees for the use Kaesong land next year - four years earlier than stipulated in the existing agreement.

A South Korean business source said the proposed new rules would allow “the North to essentially crack down on South Korean businesses and to target those who refuse to raise wages” as the North had demanded last month.

Another business source was also pessimistic.

“It appears that North Korea is really trying to overhaul operations and control of Kaesong,” the source said. “And if we said we don’t want to follow these rules, then the North may push for closing the complex.”

By Chae Byung-gun, Jeong Yong-soo [jeeho@joongang.co.kr]