The Board of Audit and Inspection has issued a "serious warning" against the mayor of Yeoju in Gyeonggi Province for unjustly delaying a national project worth 120 trillion won, conditioning its approval on the resolution of long-standing local projects. Similarly, the mayor of Yangju in Gyeonggi Province, who had attempted to nullify a construction project after it had already received construction permits, citing it as an election pledge, also received the same disciplinary action. This is the highest level of punishment that the Audit Board can impose on elected public officials. The board has also called on local governments nationwide to take these cases as a "lesson."
Yeoju Mayor Lee Chung-woo suspended the approval process for the "Yongin Semiconductor Cluster" project, which was already in its final stages, shortly after winning the local election in June last year. He argued that the central government and Gyeonggi Province must resolve Yeoju's long-standing issues before he would approve water use in the Namhan River for industrial purposes. It wasn't until November last year that Mayor Lee finally granted approval, after receiving a guarantee to establish an industrial complex in Yeoju. This caused a temporary halt to a project that was expected to create over 17,000 jobs and generate more than 188 trillion won in added value, all due to the local government's demands for "the price of irrigation."
Yangju Mayor Kang Soo-hyeon attempted to cancel the construction project of the Yangju Okjeong New Town logistics center, which had already received building permits, shortly after taking office in July last year. For the rationale, the mayor cited citizen petitions claiming that property values might drop and the fact that he had made the cancellation of the project a part of his election pledge. He even rejected the construction application for road use permits without legal grounds. As a result, the construction was delayed by more than four months, causing the construction company to incur losses exceeding 2 billion won.
There are numerous cases of local governments using their approval authority and interpretations of laws and regulations as leverage to pressure businesses, causing delays and cancellations of investments. Many local governments make unreasonable demands under the pretext of "mutual cooperation." The Yongin Semiconductor Cluster project, announced in February 2019, only began land development in June this year. In addition to Yeoju's situation, the project faced delays due to environmental impact assessments, industrial complex planning reviews, land compensation, and more. Samsung Electronics' Pyeongtaek semiconductor factory took five years to resolve power supply issues for overhead transmission lines, and the company had to spend 75 billion won for burying the lines.
Every local government emphasizes being a "business-friendly city," but as long as arbitrary and capricious administration and excessive regulations persist, this slogan remains unattainable. While cities worldwide are competing to attract businesses with attractive incentives, it is a shame that our local governments are instead displaying behaviors that drive businesses away. Local governments need self-regulation and reform to ensure that approval authority is not abused and to preserve trust in the administration and facilitate business activities.