[Editorial] Construction unions must be transparent

Demand to reform construction unions under the combative Korean Confederation of Trade Unions (KCTU) and the Federation of Korean Trade Unions (FKTU) is growing fast. Industry insiders want to end widespread illegitimate practices such as the unions’ charging of fees from tower crane operators and its coercion of construction workers to join the union. Such irregularities and violence by construction unions are nothing new. The Fair Trade Commission (FTC) has found that union members thwarted construction companies unaffiliated with the two powerful unions from doing business and pressure constructors to hire unionized members.

The police also found that the unions even determined the working order of tower crane operators and compelled construction companies to use manpower and equipment from the unions. Yoon Hak-soo, chairman of the Korea Specialty Contractors Association, complained about additional construction costs from such widespread malpractices.

The illegal practice was possible thanks to the sufficient funds the powerful leadership of the two construction unions secured. But there was no independent mechanism to look into the accounting of the unions due to lack of rules on their accounting or related standards in the Labor Union Act. In the United States, labor unions using an annual budget of $250,000 and above must report to the Department of Labor on how they spent the money. Britain also makes it obligatory for unions to report to related agencies about details of the money spent.

Experts assess that each of the two umbrella unions uses an annual budget of over 100 billion won ($77.6 million) on top of various subsidies from central and local governments. The two unions claim that they receive an accounting audit each year, but transparency is the problem as no independent auditor takes part in the auditing. A former head of a construction union branch under the KCTU was sentenced to prison in April for misappropriating 370 million won, and in June a senior union member under the FKTU was indicted for embezzling over 1 billion won.

Prime Minister Han Duck-soo promised to demand accounting transparency from labor unions. The governing People Power Party already proposed a bill to make it compulsory for unions with over 300 members to submit their accounting records to the government. Attacking the move for oppressing labor unions is not convincing, as the government only wants to lift transparency of their spending. Construction unions must accept it.