Background Briefing

III. The Labor Conditions Framework at the KIC

The questions Human Rights Watch sent to the Ministry of Unification sought specific information on labor conditions at the KIC and included questions on freedom of association and collective bargaining, sex discrimination, sexual harassment, child labor, hours of work, wages, healthcare, monitoring of labor conditions, safety inspections, enforcement of the KIC Labor Law and measures to address violations, labor-management disputes, and workers’ awareness of their rights. The Ministry of Unification answered most of the questions, though in many cases did not include as much detailed information as requested. Human Rights Watch could not independently confirm the Ministry’s answers—with the exception of those addressing published legal provisions—as it has not yet been given access to KIC workers to corroborate the responses provided.

1. Wages

The KIC Labor Law stipulates that North Korean workers must be paid a minimum of U.S.$50 per month. Their hourly rate is $0.25. North Korean workers at the KIC reportedly worked an average of 54.9 hours per week and received an average of $67.40 per month in 2005.22 North Korea takes 30 percent of the workers’ wages as a contribution to a fund designed to provide free housing, healthcare and education. The Ministry of Unification told Human Rights Watch that South Korean companies ensure that their KIC workers are aware of how much they are supposed to be paid by having the workers sign payroll forms that show their work hours and wages.

Article 32 of the KIC Labor Law stipulates that South Korean companies shall pay wages to North Korean workers directly in cash. However, on North Korea’s demand, South Korean companies remit worker salaries to the North Korean government, which in 2005 reportedly paid the workers an average of 6,300 North Korean won per month,23 or $42 using the official exchange rate of 150 North Korean won for one U.S. dollar.24

2. Hours of Work

The Ministry of Unification told Human Rights Watch that North Korean workers at the KIC work eight hours per day and 48 hours per week, not including overtime. The average overtime for KIC workers in 2005 was reportedly 6.9 hours per week. The KIC Labor Law does not establish the maximum work hours per week, but it stipulates that South Korean companies shall consult with workers’ representatives prior to requesting workers to work overtime, and workers can refuse. North Korea’s Labor Law, meanwhile, states that workers shall maintain a routine of eight hours of work, eight hours of study and eight hours of rest.25

Article 22 of the KIC Labor Law stipulates that employers shall guarantee workers North Korea’s national holidays, off days and rest time.26 KIC workers are thus guaranteed one day off per week. In addition, the KIC Labor Law provides that all workers shall be given 14 days of paid leave per year, while those in dangerous or hazardous occupations shall be given an additional two to seven days of paid leave. Including national holidays, North Korean workers in non-hazardous jobs, therefore, take 71 days in national holidays and off days per year for which they are paid plus 14 days of paid leave.27

3. Healthcare and Industrial Accidents

Under the KIC Labor Law, North Korea is in charge of healthcare for its workers. According to the Ministry of Unification, because North Korea does not have adequate healthcare services, the KIC Management Committee makes significant efforts to prevent industrial accidents. The KIC Labor Law stipulates that in case of death, injury or poisoning of North Korean workers while at work, South Korean companies shall immediately notify the KIC Management Committee, which shall handle the incident in consultation with the General Bureau. Once an injury occurs, the North Korean government reportedly covers the treatment of the injured from a social welfare fund it raises from South Korean companies (equivalent to 15 percent of worker salaries) and North Korean workers (30 percent of their salaries—see above). The KIC Labor Law does not provide for workers’ compensation, however, and it is not clear whether North Korean workers receive monetary compensation for injuries or salaries during a sick leave.

The number and rate of industrial accidents at the KIC are not publicly disclosed, though South Korean companies investing in the KIC are reportedly discussing with the North Korean government the possibility of publicizing such information.

4. Labor-Management Disputes

The KIC Labor Law stipulates that labor-management disputes shall be resolved through consultation between the workers and employers, though it fails to clarify whether the requirement bars workers from exercising their right to strike. Under the KIC Labor Law, if a matter cannot be resolved through consultations, workers and employers can ask the KIC Management Committee to mediate. According to the Ministry of Unification, if the KIC Management Committee is unable to resolve a dispute to the satisfaction of both parties, either party can lodge a complaint with the General Bureau, although there is no such provision in the KIC Labor Law. The KIC Labor Law provides, however, that in cases in which an employer or employee has an “opinion” regarding a penalty imposed against the employer or employee, either can raise the issue with the Management Committee or the General Bureau, which must resolve the issue of concern within 30 days after the complaint is filed.

Although there is no law that bans retribution against workers for requesting mediation, the Ministry of Unification told Human Rights Watch that such retribution is impossible because the KIC Management Committee and the General Bureau monitor working conditions constantly.

5. Monitoring of Labor Conditions

According to the Ministry of Unification, the KIC Management Committee makes daily trips to work sites without advance notice to monitor the labor environment and compliance with the KIC Labor Law. When North Korean workers have concerns about labor conditions, they can raise them with either the KIC Management Committee or the General Bureau. Similarly, South Korean companies operating at the KIC can raise issues regarding North Korean workers with the KIC Management Committee as well. In such cases, the General Bureau and Management Committee visit the work site, with advance notice to employers and workers, and later share the results of their monitoring visit with the South Korean company of concern. Their findings are not made public. The Ministry of Unification did not say whether they share the findings with the workers.

6. Safety Inspections

According to the Ministry of Unification, the KIC Management Committee submits requests for safety inspections at KIC facilities to the Ministry of Unification, which then forwards the requests to South Korea’s Labor Ministry and the (South) Korea Occupational Safety and Health Agency (KOSHA). The agency conducts safety inspections and submits the results to South Korean companies, the Management Committee, and the Unification and Labor Ministries. The committee accordingly makes recommendations to the southern employer to remedy any violations of the KIC Labor Law that are found. Additional KOSHA staff are based at the KIC and work with the Management Committee. KOSHA inspectors conducted two inspections in 2005 and another this year (as of August 2006), with a plan to conduct one more before the end of the year.

7. Violations of the KIC Labor Law

According to the Ministry of Unification, if violations of the KIC Labor Law are found after monitoring, the KIC Management Committee will make recommendations to South Korean companies to remedy the violations. If the conditions do not improve, the committee can impose a fine (from $100 to $2,000) or order the company to stop operations. So far, none of the South Korean companies has been fined, as the KIC Management Committee has found no violations of the law.

It should be noted that despite the law’s stipulation that North Korean workers be paid directly in cash, South Korean companies are clearly violating this by instead paying workers’ wages to the North Korean government, although they claim that the latter has forced them to do so. At a minimum, this reflects the limitations of the KIC Management Committee in being able to ensure that the KIC Labor law is effectively enforced. 

8. Workers’ Awareness of Rights

According to the Ministry of Unification, South Korean companies operating at the KIC do not provide workers with written information on their rights. The ministry told Human Rights Watch, however, that North Korean workers are well aware of the important parts of the KIC Labor Law, including work hours, wages and bonuses.

22 KIC Council of Industry Representatives, “Worker Wage and Labor Conditions at Kaesong Industrial Complex,” May 2006, pp. 19-20.

23 Ibid.

24 In a black market rate, one U.S. dollar is worth about 3,000 North Korean won, or 20 times the official rate. Kwak Dae-jung, “Exchange Rate Stands at Average 3,000 Won in March,” The Daily NK, March 22, 2006.

25 North Korean Labor Law, art. 33.

26 KIC Labor Law, art. 22.

27 The Korea Institute for National Unification says in a report that, in reality, North Korean workers generally do not get eight hours of daily rest as they are forced to take part in various political studies, meetings, etc. after work hours. Korea Institute for National Unification, “White Paper on Human Rights in North Korea,” pp. 177-184.