Kaesong tenant companies in shock after North freezes assets and expels workers

Posted on : 2016-02-12 17:12 KST Modified on : 2016-02-12 17:12 KST
The companies based at the Kaesong Industrial Complex were given only 40 minutes’ notice of the moves, time enough only for workers to gathre their personal effects
Staff of companies with factories in the Kaesong Industrial Complex inspect trucks crammed full of goods on the Imjingak entrance road in Paju
Staff of companies with factories in the Kaesong Industrial Complex inspect trucks crammed full of goods on the Imjingak entrance road in Paju

Tenant companies in the Kaesong Industrial Complex are in deep shock after North Korea responded to Seoul’s Feb. 10 decision to halt the complex’s operation by freezing all assets there and expelling South Korean workers the following day.

“I feel very sad. It feels like it’s all over now,” said Park Chang-su, the 70-year-old CEO of Changsin Metal, as he sat in the offices of the Corporate Association of Kaesong Industrial Complex (CAKIC), headquartered in the Korea Federation of SMEs offices in Seoul’s Yeouido neighborhood.

Park had been operating a factory to make stainless steel bowls in the complex for over five years.

“During that time, we received government approval for US$1.4 million in investments. With the asset freeze, all that money is gone now,” a distressed Park reported.

“With our 150 or so North Korean workers, we reached the point where we were really communicating. I would joke with them and say, ’These are all made in North Korea, so it’s your pride on the line,’” he added.

“How can they just kill all of that in an instant?” he wondered, his words trailing off.

Sources with the companies gave a first-hand account of the urgent mood at the complex on the day of the announcement from Pyongyang, which gave the South only 40 minutes’ notice of the asset freeze and expulsion of South Korea workers.

“Originally, there had been 50 vehicles scheduled to depart in front of the North’s Immigration Office, but customs officials suddenly had 46 of them back out and prevented them from leaving, including around 20 trucks loaded with freight and another 20 or so cars with luggage in them,” reported an employee who had been scheduled to leave at 5:30 pm on Feb. 11 after being on duty at a Kaesong factory during the long Lunar New Year holiday.

“There were two trucks with nothing on them that were allowed to go back South, so I left on one of them,” the employee explained.

In the case of that factory, one 11-ton truck was reportedly able to enter Kaesong during the day and leave with finished products and expensive materials.

“Ordinarily, you would see around 10 or so soldiers around the North’s Immigration Office. That day, it was more like 40 to 50,” the employee recalled.

Another employee at a clothing company entered in the morning and departed around 2:30 pm.

“Often you’d see soldiers walking around outside the barbed-wire fence around the complex, but this was the first time I’d seen them in full gear with backpacks,” the employee said.

For companies in the complex, the asset freeze announcement came like a bolt from the blue. While they had previously asked Seoul for a brief extension to transport raw materials, finished goods, and smaller production equipment - to say nothing of larger infrastructure - most found themselves able to leave with only personal effects after the sudden decision from Pyongyang.

Meanwhile, CAKIC held an emergency board meeting the same day to approve the creation of an emergency countermeasures committee.

“The [South Korean] administration’s decision to shut down the Kaesong Industrial Complex is a death sentence for it,” the association said, adding that it plans to “demand that the administration take follow-up measures and provide compensation measures in line with its responsibility for this unreasonable and unjust decision.”

Members are currently planning to hold an emergency general meeting on Feb. 12 at the Korea Federation of SMEs’ offices.

By Kim Kyu-nam, staff reporter, and Yun Young-mi, senior staff reporter

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