Daewoo Shipbuilding & Marine Engineering (DSME) was fined 10.8 billion won ($9.59 million) by the Fair Trade Commission for abusing its power against its contractors between 2013 and 2016.
The Fair Trade Commission (FTC) also stated it will file a charge against the shipbuilder with the prosecution, saying DSME’s practice was an abuse of its power as the ordering body.
DSME did not issue documents containing details of 1,817 contracts before 27 subcontractors began building vessels and offshore plant facilities from 2013 to 2016.
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According to local reports, the subcontractors had to start work without full knowledge of the workload or price, and they were coerced into agreeing to the payment documents that were written unilaterally by DSME.
Furthermore, DSME unilaterally set excessively low subcontracting prices by using an “unfair” formula that did not reflect the subcontractors’ actual workload. The FTC added that other shipbuilders are being investigated as well in relation to unfair subcontracting practices.
