Background Briefing

I. Introduction

The Democratic People’s Republic of Korea (DPRK, North Korea) opened the Kaesong Industrial Complex (KIC) in June 2004 under a contract with Hyundai Asan Corporation and state-owned Korea Land Corporation of the Republic of Korea (ROK, South Korea). The complex is located between the city of Kaesong and the western end of the border between the two Koreas, an hour’s car ride from Seoul. As of August 2006, 13 South Korean companies had opened facilities at the KIC, employing about 8,200 northern workers to produce watches, shoes, clothes, kitchenware, plastic containers, electrical cords and car parts, among other items. Ten other companies are preparing to start operations in the near future. North and South Korea have an ambitious plan to expand the complex to employ 730,000 North Korean workers by 2012.1 A specific KIC Labor Law was drafted and adopted to govern the rights of workers employed by enterprises in the KIC.

It is generally accepted that North Korea prohibits organized political opposition or independent civil society. The country has an abysmal human rights record, including arbitrary arrests, pervasive use of torture, lack of due process and fair trials, and executions. There is no freedom of information or freedom of religion. There are no independent trade unions or labor activism. Most North Koreans do not enjoy the freedom to choose their own occupation, because job assignments follow the state’s central economic plan, rather than individual talents or wishes.2

Working conditions at the KIC have been a subject of debate. Jay Lefkowitz, the United States special envoy on human rights in North Korea, has raised concerns about possible worker exploitation at the KIC, particularly the low salaries and their indirect payment.3 South Korea’s Ministry of Unification (in charge of North Korea relations, including joint projects such as the KIC) responded by saying that the North Korean workers at the KIC are paid better than elsewhere in the country and that their labor conditions meet international standards. The Ministry also noted that South Korea is “making technical preparations for direct payment for northern workers,” as required under the inter-Korean agreement on the KIC.4

This briefing paper provides an overview of the work conditions at the KIC and notes ways in which workers’ rights are being compromised. In July 2006, Human Rights Watch sent a list of questions to the Ministry of Unification about the KIC (see Appendix). The ministry sent a written response, which Human Rights Watch followed up with phone and in-person interviews with ministry officials. Separately, Human Rights Watch interviewed a representative of South Korean employers at the KIC. This paper is based on their responses and Human Rights Watch’s analysis, interviews with Seoul-based experts on North Korea’s labor laws and with people who have visited the KIC in an official or private capacity, reviews of the KIC Labor Law, and books and reports written by independent scholars with expertise on North Korea.

Human Rights Watch believes that the KIC is a small step forward, in that it opens a window onto and from an otherwise hermetically sealed nation, one that consistently denies access to international human rights organizations. But for the KIC to represent real progress in North Korea’s human rights conditions, basic workers’ rights must be protected and promoted. Although the KIC Labor Law addresses certain workers’ rights, many of the most fundamental rights are missing, including the right to freedom of association and collective bargaining, the right to strike, the prohibition on sex discrimination and sexual harassment, and the ban on harmful child labor. Absent legal protections requiring that these rights be respected, Human Rights Watch is concerned that they may be violated with impunity.

As a first step towards addressing inadequate workers’ rights protections at the KIC, Human Rights Watch urges North Korea to:

  • Join the International Labour Organisation (ILO);
  • Accede to the ILO’s core treaties;
  • Invite ILO officials to discuss the protection and promotion of workers’ rights; and
  • Amend the KIC Labor Law to meet international labor standards, and ensure the law is effectively enforced.

Human Rights Watch also urges South Korea to:

  • Ensure South Korean companies operating at the KIC are respecting workers’ rights; and
  • Promote the Organization for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises.

1 Kaesong Industrial Complex homepage, (accessed July 25, 2006).

2 Korea Institute for National Unification, “White Paper on Human Rights in North Korea,” March 2006, pp. 177-184.

3 Jay Lefkowitz, “Freedom for all Koreans,” The Wall Street Journal, April 28, 2006.

4 Ihn Kyo-joon, “South Korean Official Tells U.S. Human Rights Envoy Not to Interfere with Domestic Affairs,” Yonhap News Agency, April 30, 2006.