Environment Co. Sought Illicit Profit

The Environmental Management Corporation (EMC) was found to have been making profits by subcontracting orders it received at a lower price to other companies.

The EMC acquired unjust profits of some 814 million won in this manner on eight occasions between 2005 and September 2006, according to a report submitted by the Ministry of Environment (MOE) and the EMC to Han Sun-kyo, a lawmaker of the opposition Grand National Party and a member of the parliamentary committee on environment and labor.

The EMC reported its orderers like the MOE as if they were actually carrying out the projects. For instance, the MOE paid 120 million won to the EMC for a research project called, “A Study on Comprehensive Measures for Maintaining Village Sewerage.” However, the MOE divided the research into specific areas and gave subcontracts to three industry-university cooperation teams at a low cost, earning a wrongful profit of 41.8 million won.

In addition, the EMC made a profit of 6 million won on June 2, 2006 in a similar way by issuing a subcontract to a land surveying company. The EMC received 29.5 million won from the MOE for a research project on Daecheong Reservoir, but only gave 23.5 million won to its subcontractor.

ditto@donga.com