Joint probe by Office for Government Policy Coordination and Korea Forest Service finds 1,073 firms non-compliant

Negotiated contracts account for 83 percent of deals; post-project management of forest care work also found lacking

Kim Young-su, first vice minister of the Office for Government Policy Coordination, briefs reporters Friday at Government Complex Seoul on the results of a joint inspection into forestry project operations. [Yonhap]
Kim Young-su, first vice minister of the Office for Government Policy Coordination, briefs reporters Friday at Government Complex Seoul on the results of a joint inspection into forestry project operations. [Yonhap]

More than one in two domestic forestry companies was found to have hired technicians suspected of illegal credential use or failed to meet office and capital requirements, a government investigation has revealed.

The Office for Government Policy Coordination's joint anti-corruption task force announced the findings Friday alongside the Korea Forest Service, releasing the results of a joint inspection into forestry project operations.

The government said it plans to impose administrative penalties on all firms and technicians confirmed to have fallen short of registration requirements, and to refer cases involving serious violations for criminal investigation.

The task force and the Korea Forest Service examined all 1,907 forestry companies and 12,463 registered technicians operating in the sector. The probe found 1,073 firms — 56 percent of the total — failed to meet registration requirements, while 4,716 technicians, or 37.8 percent, were suspected of illegal conduct.

Among the firms, 1,010 were suspected of fraudulently hiring technical personnel, 82 failed to meet office facility requirements, and 99 fell short of capital requirements, with some overlap across categories.

Technicians were flagged on grounds including failure to verify actual employment, non-enrollment in the four major social insurance programs, absence of written employment contracts, and working conditions that made genuine employment implausible — raising suspicions of credential lending and dual employment.

In one particularly striking pattern, 33 companies were caught using the credentials of 38 deceased individuals. Cases also emerged involving names belonging to prison inmates and people on extended stays abroad.

The government said the probe confirmed that the system for managing firms and technicians, as well as the forestry technology information system, had been poorly operated and lacked real effectiveness. It noted that the detection rate for illegal firms in past investigations had been below 6 percent, and that three flagged cases had gone without follow-up action.

In response, the government said all firms and technicians identified as failing to meet registration requirements will face administrative action following hearings, and that cases warranting closer scrutiny or involving serious violations will be referred for criminal investigation. It has already referred 342 firms and 401 technicians for investigation.

The government also plans to tighten penalties for illegal conduct and to expand re-registration restrictions — currently limited to the company itself — to cover representatives and those directly responsible for the violations. Administrative penalties will also carry over in cases of business transfer or merger.

The system for ongoing inspections and management will also be upgraded to allow for continuous verification.

The investigation additionally uncovered a heavy reliance on negotiated contracts and the awarding of work to substandard firms. A comprehensive review of major forestry project contracts from 2023 to 2025 found that negotiated contracts accounted for roughly 83 percent of total contract value — an unusually high share.

An analysis of bids on the government procurement platform identified around 120 firms suspected of "swarm bidding" — a practice in which multiple companies believed to share the same actual operator submit bids simultaneously.

"Negotiated contracts are not illegal, but they restrict market competition and allow work to be awarded without evaluation, which has been cited as a cause of declining project quality," the government said.

The government plans to shift the contracting system toward competitive bidding, with a target of raising the competitive contract ratio from 52 percent this year to 80 percent by 2030.

Subsidy management guidelines will also be strengthened, including the introduction of a preliminary review process for negotiated contracts. Firms suspected of swarm bidding will face further scrutiny and referral for investigation on charges including bid rigging.

The inspection also found shortcomings in post-project management of afforestation and forest care work. A review of 1,145 afforestation restoration sites damaged by large-scale wildfires and 71 forest care project sites turned up 79 cases of suspected improper management. The government also identified problems with survival-rate data not being systematically integrated and managed.

"We plan to establish a sound market order so that forestry projects can contribute to creating and nurturing healthy forests and preventing forest disasters," the government said.


oskymoon@heraldcorp.com