Ministry of Employment and Labor opens public comment on designation criteria through Nov. 2
Consultation with subcontractors' labor and management made mandatory; designation period up to five years
South Korea is establishing criteria to preemptively designate regions expected to lose jobs or see business conditions deteriorate due to the shift toward carbon neutrality as "just transition special zones."
Local governments will be required to gather input from workers and residents before applying for zone status, and the employment impact on subcontractors and suppliers will also factor into designation decisions.
The Ministry of Employment and Labor said Friday it will open a public comment period through Nov. 2 on a draft notice titled "Standards for the Designation of Just Transition Special Zones." The measure follows up on the "Basic Plan for Employment Stability in Industrial Transition" announced in July and the "Korean Green Transformation (K-GX)" strategy released this month.
Just transition special zones are a support regime for regions where the shift to carbon neutrality has caused or is expected to cause significant changes to industrial and employment structures and the local economy. The system aims to prevent the burdens of the transition from falling disproportionately on specific regions, workers and vulnerable groups.
The draft notice spells out criteria that would allow a region to be designated as a zone even before actual damage occurs.
A region must first meet the prerequisite of undergoing a structural transition driven by carbon-neutrality policy, and then satisfy at least one of the following: a significant change or anticipated change in the employment environment, a deterioration or anticipated deterioration in business conditions, or a need for designation to address socioeconomic inequality.
Difficulties stemming from ordinary economic fluctuations or rising costs will be distinguished from structural transitions driven by carbon-neutrality policy. When assessing employment impact, assessors will consider not only direct employment at the companies undergoing transition but also indirect employment at subcontractors and suppliers, the number of workers needing retraining or career changes, and shifts in wages, working hours and employment type. Assessment indicators will in principle cover changes that have occurred or are expected to occur within five years of the initial transition.
Participation by those directly affected by the transition is mandatory during the application process. Governors and mayors must develop their own regional plans for industrial, employment and economic recovery while soliciting input from workers, business owners and residents. Labor and management at subcontractors and suppliers are also included among those whose views must be sought. Applications must describe how the results of that consultation process were reflected in the regional plan.
Zones will in principle be designated at the city, county or district level, though two or more such units may be grouped into a single application when industrial structure and economic geography warrant it. Governors must publicly announce their regional plans for at least 20 days before submitting designation applications separately to the Ministry of Employment and Labor and the Ministry of Trade, Industry and Energy. Final designation decisions will be made following review by the Presidential Commission on Carbon Neutrality and Green Growth.
The initial designation period is two years. It may be extended once by up to two years following review, and if further special support is deemed necessary, an additional one-year extension is available — allowing a maximum designation period of five years.
Support available to designated zones includes job retention assistance, job-transition training and living-expense subsidies for livelihood stability. Business transition support, carbon-neutrality equipment and financing assistance, management stabilization, local commercial district revitalization and energy bill subsidies for vulnerable groups are also included. Specific support items and funding ratios will be determined separately through consultations among related ministries.
Specialist institutions including the Korea Employment Information Service and the Korea Institute for Advancement of Technology will serve as central support centers to help local governments with applications and regional plan development. After designation, regional support centers established by local governments will assist with plan implementation and identifying locally tailored support projects.
The Ministry of Employment and Labor plans to review comments submitted during the public comment period together with the Ministry of Trade, Industry and Energy, finalize and implement the notice, and then proceed with zone designations based on applications from local governments.
"Carbon neutrality is an unavoidable global trend, but the burdens it creates must not be concentrated on specific regions, workers and vulnerable groups," Minister of Employment and Labor Kim Young-hoon said. "We will do our utmost to ensure that regions expected to face shocks are designated as zones in a timely manner and receive the support they need."
fact0514@heraldcorp.com
