'LH-style leniency' program launched

[Provided by LH]
[Provided by LH]

Korea Land and Housing Corp. (LH) announced Monday it will introduce an "LH-style leniency" program — a system that reduces or waives penalties for companies that voluntarily report bid-rigging — to stamp out procurement corruption and foster a culture of fair contracting.

The new program expands on a leniency regime LH established last year under the Fair Trade Act to combat collusion, broadening both the scope of reportable offenses and the reward structure. LH said the changes are designed to encourage voluntary disclosures and strengthen mutual oversight among bidders to prevent misconduct before it occurs.

Under the updated framework, the range of offenses eligible for leniency has been extended beyond bid collusion. By drawing on the Public Interest Whistleblower Protection Act and the Anti-Corruption and Civil Rights Commission Act, the program now covers all forms of corruption that can arise during the bidding process — including duplicate-document submissions and bribery related to bid evaluations.

Rewards have also been enhanced. Under existing internal guidelines, LH paid up to 100 million won ($73,800) as a commendation award when a tip was recognized as serving the public interest, and up to 3 billion won as a compensation award when a report directly increased revenue or reduced costs.

On top of that, LH plans to recommend whistleblowers to the Anti-Corruption and Civil Rights Commission for additional recognition under the Public Interest Whistleblower Protection Act — including commendation awards of up to 500 million won and compensation awards of up to 30 percent of recovered funds with no ceiling.

A separate reward scheme will apply to reports of improper pre-contact with evaluators, unauthorized briefings, and other irregularities during the proposal-review process for technology and other service contracts. LH plans to revise its internal rules this year to raise the cap on awards for bribery and collusion tips from 30 million won to 100 million won.

"To eradicate bid-rigging, what we need is not just after-the-fact detection and punishment, but a system of institutional incentives that allows immediate reporting when misconduct occurs, along with a culture of mutual checks that prevents it from happening in the first place," an LH official said. "We will thoroughly protect whistleblowers and ensure that public-interest contributions made through reporting are properly rewarded, so that the reporting system can truly take hold."

Meanwhile, starting this year, bid documents for LH public housing projects must be prepared using the designated "Bid Document Preparation Program."


hss@heraldcorp.com