I INTRODUCTION

The incumbent South Korean government has laid out the following as the new administration’s environmental policy agenda:

  • a developing an eco-friendly energy source;
  • b improving the air quality and reducing fine particles;
  • c reforming the nuclear power plant regulatory system and implementing anti-nuclear energy policies;
  • d reducing greenhouse gas and reorganising of the governance system for sustainable growth;
  • e creating a sustainable land environment;
  • f establishing a full compliance system for the new climate regime; and
  • g promoting a society free from noxious chemicals.

The government’s new policy agenda serves as a precursor to more stringent environmental regulations in Korea going forward.2

This chapter sets out to provide an overview of the environmental regulatory framework in Korea as well as the objectives and directions of the environmental policies set forth by the new administration, and proposes ways to respond to the forthcoming changes.

II LEGISLATIVE FRAMEWORK

Article 35 of the Korean Constitution codifies the constitutional rights of citizens with respect to the environment. Paragraph 1 of Article 35 prescribes the obligation of the state and its citizens to preserve the environment in addition to guaranteeing the right of citizens to a healthy and pleasant environment. Paragraph 2 provides that the substance of such right is to be determined by other relevant statutes, and Paragraph 3 guarantees a citizen’s right to enjoy comfortable housing.

The Korean Constitution, therefore, provides a guideline and framework to aid the interpretation of the right of citizens and obligations of the state with respect to the environment and formation of relevant legal principles. Based on Article 35 of the Korean Constitution, the Framework Act on Environmental Policy (which sets forth the purpose of the environmental policy, basic principles and other matters common in the realm of the environmental law) has been enacted, which serves as the cornerstone of Korean environmental law. In addition, other specialised environmental statutes have been enacted and implemented to deal with different sources of pollutants.

Korea’s environment-related laws can be generally categorised as follows:

  • a Constitution: the Korean Constitution lays out the fundamental principles for environmental statutes, including the right of citizens to a healthy and pleasant environment, the duty of the state to preserve the environment, and the organisation of government bodies to handle environmental affairs.
  • b Environmental administrative law: this deals with the organisation and function of environmental administration as well as administrative remedies, which is the most integral part within the realm of environmental laws.
  • c Environmental criminal law: this allows public authorities to punish environmental crimes in violation of environmental regulations. There are generally three forms of penalties that are available for environmental offences:

• administrative penalty provisions for illegal activities prescribed in the penalty chapter of the respective environmental statute;

• the aggravated penalty provision and the criminal negligence provision, which are applied to criminal offences against the environment pursuant to the Act on the Control and Aggravated Punishment of Environmental Offences; and

• the penalty provisions of the Korean Criminal Code that incidentally protects environmental interests.

  • d Environmental civil law: this regulates matters relating to the rights and obligations of individuals related to environmental affairs. It often serves as a source of remedy in environmental infringement cases where a litigant may make a request for certain injunctive relief (request for removal of interference or request for the prevention of interference) or file a claim for damage compensation.
  • e Environmental litigation law: this refers to the law setting forth the litigation procedures used to settle environmental disputes.
  • f International environmental law: this refers to the general principles of international law and customary international law, including international environmental treaties such as the Convention on Climate Change, the Convention on Biological Diversity, the Basel Convention on the Control of Transboundary Movement and Disposal of Hazardous Wastes and the Montreal Protocol on Ozone Depleting Substances.3

III THE REGULATORS

The Ministry of Environment is generally responsible for handling matters related to the preservation of the natural environment, living environment and prevention of environmental pollution (pursuant to Article 39 of the Government Organisation Act, and Article 3 of the Organization Enforcement Decree for Ministry of Environment and its affiliates). In order to handle regulatory matters more efficiently, the Ministry of Environment is backed by its affiliates, who share the workload of the Ministry of Environment and provide other necessary support. Such affiliates include the National Institute of Environmental Research, the National Institute of Environmental Human Resources Development, the National Institute of Chemical Safety, the Watershed Environment Bureau, the Regional Environment Bureau, the Metropolitan Air Environment Bureau and the Central Environmental Dispute Resolution Committee (pursuant to Article 2 of the Organization Enforcement Decree for Ministry of Environment and its affiliates).

For energy-related matters, however, the Ministry of Trade, Industry and Energy4 is the primarily responsible governmental authority. The Ministry of Trade, Industry and Energy is mainly responsible for the establishment of energy policies and plans. Typically, the Ministry of Trade, Industry and Energy establishes and reviews the General Energy Plan (which lays out an energy plan for the upcoming 20 years and is reviewed every five years). Such energy policies and plans are reviewed by the Energy Committee and then by the Cabinet Council.

IV ENFORCEMENT

i Sanctions

Sanction provisions that can be invoked for environmental offences can be categorised as follows:

  • a administrative penalty provisions5 for illegal activities prescribed in the penalty chapter of the respective environmental statute;
  • b aggravated penalty provisions and criminal negligence provisions, which are applied to criminal offences against the environment pursuant to the Act on the Control and Aggravated Punishment of Environmental Offences; and
  • c the criminal penalty provisions of the Korean Criminal Code that incidentally protect environmental interests.

Among these, the Act on the Control and Aggravated Punishment of Environmental Offences was enacted for the purpose of conserving the environment by setting forth matters related to aggravated penalties, enforcement and preventive measures against any act of polluting or damaging the environment that inflicts harm or damage to one’s surroundings or the natural environment (Article 1).

Under the Act on the Control and Aggravated Punishment of Environmental Offences, any person who has inflicted any danger or injury to human life or health by illegally discharging pollutants or posed a risk to potable uses by polluting a water supply source is subject to aggravated punishment.6 Moreover, the same Act provides that a person who illegally discards waste is also subject to aggravated punishment.7 A person who commits an offence prescribed in this statute out of occupational or gross negligence is subject to criminal punishment regardless of their lack of intent (Article 5).

In addition, the Act enables the Minister of Environment to impose and collect a penalty surcharge from a business operator who has illegally discharged specific pollutants.8 The penalty surcharge may be equivalent to two to 10 times the illegal profit gained from the discharge and also includes the expenses incurred in removing the pollutants and restoring the environment (Article 12, Paragraph 1 of the Act). The Minister of Environment may also order any owner or occupant of an illegal discharge facility to suspend the use of, or disband or close, the subject facility (Article 13, Paragraph 1).

ii Remedies

Legal remedies available for those who suffer environmental damage are as follows:

  • a If the environmental pollution is caused by a private entity (e.g., corporations or individuals), the first issue is whether the victim is entitled to civil remedy from the infringing party or offenders, which is usually resolved through civil litigation (i.e., award of damages in tort). Victims encounter practical challenges in finding judicial remedies for environmental damage, owing to, among others, the difficulties in pinpointing the infringing party, proving the fault of the infringing party, showing the illegality of the infringing act, and proving causality between the infringing act and the damage. The Act on Liability for Environmental Damage and Relief expands the scope of relief available for potential victims by adopting a no-fault liability provision and codifying the presumption of causality.
  • b When environmental damage is caused, the competent authority (usually the Ministry of Environment or its affiliates) may issue administrative sanctions (e.g., corrective actions, suspension of business, suspension of use, closure of business, cancellation of permits or authorisation, vicarious execution of corrective actions by the pertinent administrative authorities) or impose administrative fines against the infringing party or offenders.9
  • c Given that some environmental disputes are not easily resolved through judicial proceedings owing to the nature of the dispute, the environmental dispute mediation system is available to complement the judicial system in order to facilitate the quick and efficient resolution of disputes.

V REPORTING AND DISCLOSURE

The Act on Liability for Environmental Damage and Relief Thereof stipulates that if an environmental pollution accident occurs in a business facility, the owner shall immediately report such accident to the relevant administrative agencies (Article 8, Paragraph 1).

Laws on chemicals regulation also stipulate a mandatory reporting and disclosure process. Specifically, any person who installs and operates a facility that handles hazardous chemicals shall submit an off-site consequence analysis on a chemical accident10 to the Minister of Environment in advance (Article 23, Paragraph 1 of the Chemicals Control Act). Any person who handles accident high-risk chemicals11 in excess of the quantity prescribed by Ordinance of the Ministry of Environment shall prepare a risk management plan every five years and submit it to the Minister of Environment (Article 41, Paragraph 1 of the Chemicals Control Act), and inform the local residents living near his or her place of business of such plan at least once a year (Article 42, Paragraph 1 of the Chemicals Control Act).

Furthermore, if a person who transports and stores oils, toxic substances, pesticides or specific substances harmful to water quality pollutes water with the relevant substances, he or she shall immediately report the incident to the relevant administrative agencies (Article 16 of the Water Environment Conservation Act).12

Business owners are further obligated to report accidents13 that are caused by their products to the head of a central administrative agency (Article 13-2, Paragraph 1 of the Framework Act on Product Safety). Failure to report an accident may result in an administrative fine of up to 30 million won (Article 27, Paragraph 1 of the Framework Act on Product Safety). If a business owner conceals, in spite of his or her awareness, the fact that his or her products cause or are likely to cause danger or harm to consumers’ lives, bodies or property due to any serious defect therein, an employee of the relevant business owner may report such fact to the head of the competent central administrative agency (Article 14, Paragraph 1 of the Framework Act on Product Safety).14

VI ENVIRONMENTAL PROTECTION

i Environmental Impact Assessment

To promote environment-friendly, sustainable development and the healthy and pleasant life of citizens, the Environmental Impact Assessment Act mandates the environmental impact assessment to be completed before commencing any business, project or construction. The Environmental Impact Assessment Act thus enables the pertinent authority to forecast and assess the impacts of any plan or project and to formulate any necessary measures to conserve and protect the environment (Article 1).

Article 22 of the Environmental Impact Assessment Act sets forth a list of businesses that are required to conduct an environmental impact assessment. However, there is criticism that the provision does not sufficiently cover the businesses that may seriously impact, although small in scale, the environment and its surroundings. The businesses subject to an environmental impact assessment are:

  • a urban development projects;
  • b industrial site or complex development projects;
  • c energy source, water resource development projects;
  • d harbour development, road and airport construction business;
  • e river, mountainous district, and particular areas usage and development business;
  • f sports facility, waste disposal facility, national defence and military installations facilities establishments; and
  • g business extracting earth, stone, sand, gravel and minerals.

A person shall be held criminally liable if the construction commences without an environmental impact assessment having been performed, or by submitting a fraudulent environmental impact assessment report. In such case, the business entity may be found vicariously liable for such action.15

In addition to the criminal liability, if any administrative measure (e.g., permission or authorisation to proceed with the construction) was made despite the absence of any environmental impact assessment, such administrative measure will be deemed null and void. The Supreme Court of Korea is of the same view. 16

ii Air quality

Air conservation in Korea is governed by the Clean Air Conservation Act, the Special Act on the Improvement of Air Quality in Seoul Metropolitan Area, the Act on Indoor Air Quality Management for Public Facilities, and the Malodor Prevention Act, to name a few.

The most fundamental of these is the Clean Air Conservation Act, which aims to prevent harm to public health and the environment caused by air pollution and ensure that all citizens can live in a healthy and pleasant environment by managing and preserving the atmospheric environment in a proper and sustainable manner. This statute largely regulates the following areas:

  • a emission of air pollutants in places of business and other stationary sources of air pollution;
  • b emission of air pollutants in living environments; and
  • c emission of exhaust gases from motor vehicles, ships and other mobile sources of air pollution.

For the purposes of this chapter, we will limit our discussion to the regulations on emission of air pollutants in places of business.

The law requires that any person who intends to install emission-generating facilities must obtain an installation permit17 from the relevant mayor or do governor or file a report thereon to the relevant mayor or do governor by submitting the following documents. Where the permit-holder intends to make any significant change to the contents of its permit, he or she must obtain a separate permit for such changes. For non-significant changes, the holder only needs to file a report on the changes:

  • a a detailed statement estimating the quantity of raw materials (including fuels), products, and pollutants that are emitted;
  • b a detailed statement on the installation of emission-generating facilities and emission-filtering facilities;
  • c general drawings of the emission-filtering facilities;
  • d an annual plan for the maintenance of emission-filtering facilities;
  • e a detailed statement analysing the ingredients of fuels to be used and estimating the concentrations and quantities of sulfur oxides to be emitted (only applicable to emission-generating facilities referred to in the proviso to Article 41, Paragraph 3 of the Act); and
  • f a certificate of the permit to install emission-generating facilities (only required when applying for a permit for change or alteration).

Business entities that emit air pollutants are subject to emission charges pursuant to Article 35, Paragraph 1 of the Clean Air Conservation Act. There are two types of emission charges: basic charges18 and excess charges.19

Additionally, the Special Act on the Improvement of Air Quality in Seoul Metropolitan Area applies to Seoul Special Metropolitan City, Incheon Metropolitan City and Gyeonggi Province (the Metropolitan Area). Under this law, any person who intends to establish a business within a designated air control zone that emits the specific pollutants subject to total volume control in an amount that exceeds the permissible emission volume, or wishes to alter his or her place of business to such effect, must obtain permission from the Minister of Environment (Article 14). The Minister of Environment allocates the total permissible volume of emissions of pollutants subject to total volume control to the business operator who has obtained permission (Article 16), and may impose and collect penalties from the business operator who discharges pollutants in excess of the total permissible volume of emissions allocated (Article 20).

iii Water quality

The environmental standards used for water quality and the aquatic ecosystem in Korea can be largely divided into three categories – river, lake and groundwater. There are 20 health and safety standards that are applied to both rivers and lakes, while living and environment standards are applied differently for rivers (seven items) and lakes (eight items). For the living-environment standard, the water may be graded as one of the seven levels depending on the water quality, and the water is graded by taking into account the concentration levels of the chemicals included in the pollutants as well as the impact they may have on the aquatic ecosystem (Article 12(2) of the Framework Act on Environmental Policy, Article 2 of the Enforcement Decree of the same Act, table below).20

Health and safety standards (applicable to both lakes and rivers (mg/L))

Cadmium (Cd)

Arsenic (As)

Cyanide (CN)

Mercury (Hg)

Organophosphorus compound

Less than 0.005

Less than 0.05

Below detection limit (limit: 0.01)

Below detection limit (limit: 0.001)

Below detection limit (limit: 0.0005)

Carbon tetrachloride

1,2-Dichloroethane

Methylene chloride

Benzene

Hexachlorobenzene

Less than 0.004

Less than 0.03

Less than 0.02

Less than 0.01

Less than 0.00004

Lead (Pb)

Hexavalent chromium (Cr+6)

PCB

PCE

1,4-Dioxane

Less than 0.05

Less than 0.05

Below detection limit (limit: 0.0005)

Less than 0.04

Less than 0.05

Chloroform

Formaldehyde

Diethylhexylphthalate

Antimony

ABS

Less than 0.08

Less than 0.5

Less than 0.008

Less than 0.02

Less than 0.5

As a means of achieving the objectives of water quality management, the standard stipulates the specific criteria for pollutant discharge for domestic sewage, industrial wastewater and livestock waste, among others. The permissible discharge limits for industrial wastewater varies depending on whether the area of the discharge facility is designated ‘Clean’, ‘A’, ‘B’, or ‘Special Area’ (Article 32(1) of Water Quality and Aquatic Ecosystem Conservation Act, Article 34 of the Enforcement Decree of the same Act, Table 13).

A person who intends to install an industrial wastewater discharge facility must obtain permission from the Minister of Environment or report to the Minister of Environment. In the event that the person installs the discharge facility without a required permit or by fraudulently obtaining the permit, he or she shall be punished by imprisonment of up to seven years or a fine of up to 70 million won (Article 75 of the Water Environment Conservation Act). In the event that the person fails to report the discharge facility or installs the facility after fraudulently reporting the installation, he or she may be punished by imprisonment of up to five years or a fine of up to 50 million won (Article 76, Paragraph 2 of the Water Environment Conservation Act).

On a separate note, the Conservation and Management of Marine Ecosystems Act, which is administered by the Ministry of Oceans and Fisheries, sets forth regulations intended to protect marine ecosystems from artificial damage and conserve and manage marine ecosystems in a comprehensive and systematic manner. By conserving marine biological diversity and promoting the sustainable use of marine biological resources, the Conservation and Management of Marine Ecosystems Act aims to protect the quality of marine life and marine assets (Article 1).

iv Chemicals

When certain chemicals are imported to Korea or manufactured within Korea in their raw material forms, they may be subject to the requirements set forth in the Chemical Controls Act, Act on Registration, Evaluation of Chemicals (K-REACH) and other rules and regulations related to chemical substances depending on the properties of the pertinent chemical (i.e., phase-in substances, toxic substances, phase-in substances subject to registration).21

In addition, if the products contain any ‘hazardous chemical substances’ as defined under K-REACH22 or toxic chemicals, Articles 32–37 of K-REACH will apply. The K-REACH categorises chemicals into phase-in substances, toxic substances and phase-in substances subject to registration, and imposes various obligations on business entities or individuals that handle such chemicals (e.g., reporting, obtaining permits).

Specifically, the definitions of each of the three categories of chemicals and the obligations imposed on those who handle them are as follows.

Phase-in substances

A person who manufactures, imports, or sells non-phase-in substances or phase-in substances in quantities greater than one ton per year is required to report annually the usage of the chemical substances, the quantities thereof, and other relevant matters to the Minister of Environment, as prescribed by the Ordinance of the Ministry of Environment (Article 8, Paragraph 1 of the K-REACH). A ‘person who manufactures’ is further defined as a person who manufactures chemical substances domestically (i.e., within the Korean territory). Failure to make such annual report or falsely reporting the required information may result in imprisonment of up to three years or a criminal fine of up to 50 million won (Article 51, Paragraph 1 of the K-REACH).

Toxic substances

‘Toxic substances’ are defined as poisonous chemicals prescribed and announced by the Minister of Environment (Article 2, Paragraph 2 of the Chemicals Control Act). Any person who intends to import toxic substances must report the kind and purpose thereof to the Minister of the Environment (Article 20, Paragraph 2 of the Chemicals Control Act).

A person who imports toxic substances without making the required report to the Minister of Environment or makes a false report may face imprisonment of up to one year or a criminal fine of up to 30 million won (Article 61, Paragraph 2 of the Chemicals Control Act).

Any person who intends to report the importation of toxic substances per Article 20, Paragraph 2 of the Chemicals Control Act shall submit an import declaration to the head of the competent local environmental agency together with a document showing the ingredients of the relevant toxic substances (Article 17 of the Enforcement Decree of the Chemical Control Act).

Phase-in substances subject to registration

A person who manufactures or imports non-phase-in substances or phase-in substances subject to registration in quantities of one ton or more per year shall register such substances before commencing manufacturing or importing activities. In this paragraph, ‘a person who manufactures’ indicates a person who manufactures chemical substances domestically (i.e., within the Korean territory). Chemical substances that are designated and declared by the Minister of Environment as causing considerable concern to the public health or the environment must be registered even if their annual quantity does not exceed one ton (Article 10 of the K-REACH).

Under the K-REACH, if the total quantity of a hazardous chemical substance contained in a product exceeds one ton per year, the manufacturer or importer shall declare the name, content, hazard information, and intended use of the hazardous chemical substance contained in the product to the Minister of Environment prior to the product’s manufacture or import.

Furthermore, a product containing hazardous chemical substances is subject to:

  • a safety labelling requirements set forth by the Minister of the Environment (Article 34);
  • b customers’ request for information (i.e., name, hazard information, use of the hazardous chemical substance) regarding the product containing the hazardous chemical substance (Article 35);
  • c Minister of Environment’s order to prohibit sales of the product (Article 36); and
  • d the Minister of Environment’s order to recall the product (Article 37).

Act

Criminal liability

Relevant provision

A person who manufactures, imports or sells non-phase-in substances or phase-in substances in quantities greater than one ton per year but fails to report to the Minister of Environment or submits a false report

A person who manufactures, imports or sells non-phase-in substances or phase-in substances by false exemption from registration or without obtaining exemption from registration

Imprisonment of up to three years or fine of up to 50 million won

Article 51 of the K-REACH

A person who manufactures, imports or sells non-phase-in substances or phase-in substances in quantities greater than one ton per year fails to register in advance or registers with false information

Imprisonment of up to five years or fine of up to 100 million won

Article 50 of the K-REACH

v Solid and hazardous waste

The term ‘waste’ and the definition thereof can be found in multiple Korean laws. For example, under the Wastes Control Act, ’waste’ is defined as materials such as garbage, burnt refuse, sludge, waste oil, waste acid, waste alkali and carcasses of animals, which have become no longer useful for human life or business activities (Article 2, Paragraph 1 of the Wastes Control Act).23 Furthermore, the Act on the Transboundary Movement of Hazardous Wastes and their Disposal (Article 2, Paragraph 1) defers to the Basel Convention in that ‘waste’ is defined as wastes that are referred to in the Annexes of the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal24 and substances that are determined as necessary for the regulation of export and import by bilateral, multilateral or regional agreements referred to in Article 11 of the Basel Convention, which are prescribed by Presidential Decree.

Based on the definitions of ‘waste’ that may be found in various Korean legislation, we believe that ‘waste’ may collectively be defined as materials that have become no longer necessary or useful for human life or business activities.

As a general proposition, all wastes must be treated25 or recycled in accordance with the standards and procedures set forth in the Wastes Control Act.26 As such, any business entity shall first identify the designated wastes27 generated from the business site, and then treat the wastes generated therefrom in accordance with Articles 13 and 13-2 of the Wastes Control Act. Violation of the standards and procedures set forth in Articles 13 or 13-2 may result in criminal liability of the offender, and vicarious liability of the company.

More specifically, landfill of wastes in violation of Article 13 may result in an imprisonment of up to three years or fine of up to 30 million won, while treatment or recycling of wastes in violation of Articles 13 or 13-2, thereby contaminating the surrounding areas, may result in an imprisonment of up to two years or fine of up to 20 million won. Separately, the treatment or recycling of wastes in violation of Articles 13 or 13-2 may result in an administrative fine of up to 10 million won, provided that the person is not criminally liable.

For the electrical and electronic equipment,28 the Act on Resource Circulation of Electrical and Electronic Equipment and Vehicles prevails over the Wastes Control Act. Under the Act on Resource Circulation of Electrical and Electronic Equipment and Vehicles, the manufacturers or importers of the electrical or electronic equipment and vehicles shall recycle, recover, or transfer the electrical or electronic equipment to a party granted with the permission to recycle wastes (see Article 15 of the Act on Resource Circulation of Electrical and Electronic Equipment and Vehicles). Failure to comply with the obligation shall result in a recycling charges not exceeding 30 per cent of the expenses incurred from recycling, etc. (see Article 18, Paragraph 1 of the Act on Resource Circulation of Electrical and Electronic Equipment and Vehicles). Article 9 of the Act also provides limits on the quantities of hazardous substances that are used in the electrical and electronic equipment; failure to comply therewith shall be subject to an administrative fine not exceeding 30 million won (see Article 45, Paragraph 1 of the Act on Resource Circulation of Electrical and Electronic Equipment and Vehicles).

vi Contaminated land

The Minister of the Environment or other competent authorities29 may order an offender to take ‘necessary measures’ (as defined below), change the method of treating such wastes, or suspend the treatment of the wastes, in the event that the person violates Articles 8, 13 or 13-2 of the Wastes Control Act.

A ‘person who manufactures’ is further defined as:

  • a a person who has treated such wastes;
  • b a person who has commissioned another person to treat such wastes without confirming that person’s capability of treating designated wastes; or
  • c an owner of the land in which such wastes have been treated or buried, provided that the landowner allowed another person to use the land for the treatment or burial of such wastes.

According to Supreme Court precedent, ‘necessary measures’ include the restoration of the contaminated land, namely, removal of the wastes and implementation of corrective measures to restore the land to its pre-contaminated condition.30 Failure to take such necessary measures may result in criminal sanctions including imprisonment of up to three years or a criminal fine of up to 30 million won (Article 65 of the Wastes Control Act).

v Endangered species of wild flora and fauna

South Korea joined the Convention on International Trade in Endangered Species of Wild Flora and Fauna in July 1993, and in 2004, the Wildlife Protection and Management Act was enacted and came into effect.

The Wildlife Protection and Management Act stipulates that no one shall capture, collect, release, naturalise, process, distribute, keep, export, import, remove, bring in (including dead animals in cases of processing, distribution, keeping, exporting, importing, removing, or bringing in), damage or defoliate endangered wildlife unless otherwise stipulated by law (Article 14, Paragraph 1 of the Wildlife Protection and Management Act). A violation thereof is punishable by imprisonment or a fine, depending on the level and the type of the violation.

Furthermore, those who intend to export, import, take out or bring in globally endangered species and products processed therefrom are required to obtain permission from the Minister of Environment,31 provided, that the same shall not apply to medical supplies permitted for exportation, importation or bringing in under the Pharmaceutical Affairs Act, which have been processed from globally endangered species, and to the globally endangered species and products processed therefrom (Article 16, Paragraph 1 of the Wildlife Protection and Management Act). A violation thereof shall be punishable by imprisonment or a fine, depending on the level and the type of the violation.

VII CLIMATE CHANGE32

In 1993, South Korea became a member of the United Nations Framework Convention on Climate Change, and on 18 November 2002, ratified the Kyoto Protocol to the United Nations Framework Convention on Climate Change.

Furthermore, as part of the 2009 Copenhagen Accord, South Korea pledged to the international society that it would reduce GHG emissions by 30 per cent below its business-as-usual (BAU) baseline by 2020. To achieve this target, the Framework Act on Low Carbon, Green Growth was enacted in 2010, which stipulated the 30 per cent reduction target as the national target, and provided the legal basis for an emissions trading scheme. Later in the year, the Greenhouse Gas Inventory & Research Centre of Korea was established, followed by the foundation of the National GHG Emission Total Information System in 2011 to collect and manage various information and statistics pertaining to greenhouse gas. South Korea also operates the Greenhouse Gas Target Management System, which sets emissions and energy targets for business entities in the industrial, power generation, transportation, building, agriculture, food and waste sectors.33

On 30 June 2015, the South Korean government submitted its Intended Nationally Determined Contribution (INDC). The INDC was a proposal to designate an economy-wide target to reduce GHG emissions by 37 per cent below its BAU emissions level (i.e., 850.6 MtCO2e) by 2030.

To achieve this target, South Korean government declared that it would:

  • a reduce the coal-fired power ratio while expanding the use of new and renewable energy34 (note: the expansion of the nuclear power plant is still controversial);
  • b expand emissions trading schemes;
  • c achieve 25.7 per cent emissions reduction (from the target total reduction of 37 per cent below the BAU) through domestic efforts while obtaining the remaining 11.3 per cent reduction through various international market mechanisms; and
  • d support and develop energy-efficient technologies.

In turn, the Framework Act on Low Carbon, Green Growth and the Presidential Decree thereof was amended to reflect the national GHG emission target to reduce emissions to 37 per cent below BAU levels by 2030.

To achieve this target, South Korea utilises both market and non-market mechanisms. More specifically, in 2017, the South Korean government introduced the Renewable Portfolio Standards (RPS). The RPS requires companies capable of generating 500MW or more units of power to generate at least 4 per cent of the gross generation amount from renewable energy sources. If an applicable company fails to meet the RPS, the company may face an administrative fine of up to 1.5 times the average trading price of the renewables supply certificate (REC).

Furthermore, the South Korean government allocates emissions rights (with emission limits) to entities that exceed 125,000 tons of GHG emissions annually, or 25,000 tons of GHG per workplace. If an entity exceeds its emissions right limits, it may be subject to an administrative fine. Therefore, entities may choose to purchase emissions rights through the emissions trading market to avoid the fines (thereby indirectly stimulating carbon credit trading).

As briefly mentioned above, South Korea has established a GHG emissions rights registry and offset registry to operate and manage GHG reduction registration, and in January 2015, a national cap-and-trade system was introduced. This national cap-and-trade system enables businesses that are subject to the Greenhouse Gas Target Management System (i.e., companies whose total annual emissions are 125,000 tCO2e or more; or companies with places of business whose annual emissions are 25,000 tCO2e or more) to trade GHG emissions rights in the market.

The market was not an immediate success, with the volume of credits traded only amounting to 12,900ktCO2e, while the total cap was 539 million tCO2e (only 2.3 per cent of the cap was traded).35 However, with the government’s efforts to increase the supply of allowance in the market to ease the pressure on market participants, the market became much more robust. More specifically, the share of allowances that companies can borrow for compliance was doubled from 10 per cent to 20 per cent, while an additional 900,000 in allowances were offered from the Allowance Reserve at a floor price of around €12.36 2.3 million Korean Offset Credits were also added to the market, which alleviated the pressure on market participants greatly. In light of the foregoing, starting in 2016, approximately 3 million ton CO2cq was traded in the K-ETS in preparation for the emissions credit settlement.37

Emissions trading38 (1,000tCO2eq)

1Q, 2015

2Q, 2015

3Q, 2015

4Q, 2015

1Q, 2016

2Q, 2016

Trading

0

779.7

0

461.1

350.4

2673.6

As for non-market regulation, South Korea limits the use of greenhouse gas or energy under the GHG mitigation target. Failure to comply with the limit may result in administrative fines of 1.5 times the average transaction price of the REC.

Furthermore, to promote the use of renewables and to further support efforts towards achieving greater reductions in GHG emissions, the South Korean government invests in energy-saving facilities and equipment and also provides financial support (either free-of-charge or at low interest rates) for businesses that are related to or are investing in GHG emissions reduction efforts. For example, to accelerate the installation of renewables equipment or facilities (at a smaller scale) in homes, buildings and social welfare facilities, the South Korean government provides funding to entities that rent solar power facilities to homes and other facilities. The South Korean government further provides financing options at low interest rates to make funds more accessible when producing, installing or operating new and renewable energy facilities.

Meanwhile, there are no specific policies that provide direct support for large-scale renewables facilities. However, the South Korean government allocates emissions rights to specific, eligible entities and imposes administrative fines on entities that fail to stay within the perimeters of its emissions right.

The incumbent government39 declared that it will:

  • a expand the proportion of renewables generation to 20 per cent by 2030 (raising the RPS duty ration to 28 per cent in 2030); and
  • b endeavour to become a leading country in the energy industry by shifting to a high-efficiency, low-carbon system.

It further aims to pursue a ‘zero-nuclear power plant era’ in phases, which will include cancelling the plan to construct six additional nuclear power plants, and banning the life expectancy of old nuclear power plants.40 As such, it is likely that the government may introduce stricter measures to protect the environment and comply with the laws and treaties pertaining to climate changes in the near future.

VIII OUTLOOK AND CONCLUSIONS

As some long-standing environmental problems have recently become more serious and visible in Korea, the public’s interest in the Korean government’s environmental protection policies and measures has also increased. With the new government’s commitment to protecting and improving the environment, as well as its willingness to comply with the various international treaties and laws, significant changes to the current environmental laws and regulations are expected, and enforcement of certain environmental statutes such as those relating to air quality is expected to be strengthened. It is therefore advisable to keep a close eye on the how the new South Korean government’s environmental agenda and policies are evolving and implemented.

1 Soon-Yub Samuel Kwon and Tong Keun Seol are partners and Junghae Kang is an associate at Lee & Ko.

2 National Planning and Advisory Committee. Moon Jae In government five year state administration plan, July 2017.

3 Treaties, if lawfully executed and declared, shall have the same effect as domestic statutes. A considerable number of domestic environmental statutes have been enacted in order to implement international environmental treaties.

4 The Minister of Trade, Industry and Energy is an administrative body that handles matters concerning commerce, trade, industry, trade relations and trade negotiations, overall management and coordination of trade negotiations, foreign investment, policies on the research and development of industrial technology, energy and underground resources (Article 37 of the Government Organization Act and Article 3 of the Organization Enforcement Decree for Ministry of Trade, Industry and Energy and its affiliates).

5 Administrative penalty provisions for violations in individual environmental statute are discussed below.

6 The statutory punishment for this offence is imprisonment for a fixed term of not less than three years but not exceeding 15 years (Article 3). However, the punishment may be aggravated by up to half of the corresponding punishment for an offence committed within a designated environmental protection area.

7 Article 7 of the Aggravated Punishment for Illegal Treatment of Wastes provides the following: ‘if any person who is a constituent member of an organization or a group has committed an offence under Article 63 of the Wastes Control Act for pecuniary gain or profit, he or she shall be punished by imprisonment with prison labour for not less than two years but not exceeding 10 years, and by a fine equivalent to not less than two times, but not exceeding 10 times, the value he or she has acquired as a result of dumping or burying wastes.

8 Specific pollutants include fluorine compound, hydrogen chloride, chlorine, hydrogen cyanide, phenol, cyanide compound, copper and its compounds, cadmium and its compounds, mercury and its compounds, organic phosphorus compounds, arsenic and its compounds, lead and its compounds, hexavalent chromium compounds, polychlorinated biphenyl, trichloroethylene and tetrachlorethylene.

9 As a general proposition, the administrative authority shall hold a hearing and grant the alleged infringer or offender an opportunity to present opinions (see Article 22 of the Administrative Procedures Act). If the infringer or offender wishes to dispute such administrative measures or fines, the applicable legal recourses include administrative litigation (administrative review and litigation), state compensation or loss compensation, similar to general administrative remedies.

10 An off-site consequence analysis on a chemical accident refers to an analysis that assesses the effect of a chemical accident on people or the environment surrounding the facility (Article 23, Paragraph 1 of the Chemicals Control Act).

11 Accident high-risk chemicals are chemicals that are highly likely to cause chemical accidents owing to their high level of hazard, explosiveness, etc., or are likely to cause severe damage where a chemical accident occurs. Such chemicals are designated and publicly notified by the Minister of Environment because the Minister deems it necessary to make preparations for accidents caused by such chemicals.

12 The Water Environment Conservation Act and partial amendments to the former Water Quality and Aquatic Ecosystem Conservation Act shall become effective as of 18 January 2018. For the avoidance of confusion, this chapter will use the new title: the Water Environment Conservation Act.

13 ‘Accident’ refers to fatal accidents such as death; accidents that cause an injury requiring at least four weeks’ medical treatment in a medical institution; fire or explosion, etc. (Article 13-2, Paragraph 1 of the Framework Act on Product Safety).

14 No business owner shall give any disadvantageous treatment to the relevant employee on account of the report under Article 14, Paragraph 1 of the Act (Article 14, Paragraph 2 of the Framework Act on Product Safety). If treated disadvantageously, the relevant employee may request the head of the competent central administrative agency to reinstate his or her status or take other necessary measures (Article 14, Paragraph 3 of the Framework Act on Product Safety). The head of the competent central administrative agency may demand that the business owner takes appropriate measures, provided that the allegation made by the relevant employee is well grounded (Article 14, Paragraph 4 of the Framework Act on Product Safety). Failure to take necessary and appropriate measures demanded by the head of the competent central administrative agency shall be punishable by imprisonment of up to one year or a fine of up to 10 million won (Article 26, Paragraph 3 of the Framework Act on Product Safety).

15 A person who commences construction without completing environmental impact assessments shall be punished by imprisonment of up to one year or a fine of up to 10 million won (Article 74, Paragraph 2, Subparagraph 1 of the Environmental Impact Assessment Act); a person who provides false representation in making an environmental impact assessment report or data shall be punished by imprisonment of up to two years or a fine of up to 20 million won (Article 74, Paragraph 1 Subparagraph 4 of the Environmental Impact Assessment Act).

16 Supreme Court of Korea, Case No. 2005Du14363, 30 June 2006.

17 Refers to an emission facility that discharges air pollutants in excess of a permissible amount or an emission facility established within a special area.

18 Basic charges refer to a penalty imposed on any business entity who emits air pollutants in compliance with the permissible emission levels, based on the quantity and concentration level of the emitted pollutants (Article 35, Paragraph 2, Subparagraph 1 of the Clean Air Conservation Act). Pollutants subject to this basic emission charge include sulphur oxides and dust (Article 23, Paragraph 1 of the Enforcement Decree of Clean Air Conservation Act).

19 Excess charges refer to a penalty imposed on any business entity that emits air pollutants in excess of the permissible emission levels, based on the quantity and concentration level of the emitted pollutants (Article 35, Paragraph 2, Subparagraph 2 of Clean Air Conservation Act). Pollutants subject to this excess emission charge include sulphur oxides, ammonia, hydrogen sulphide, carbon bisulfide, dust, fluoride compounds, hydrogen chloride, chlorine and hydrogen cyanide (Article 23, Paragraph 2 of the Enforcement Decree of Clean Air Conservation Act).

20 Ministry of Environment, 2017 White Paper of Environment, at 232.

21 If certain chemicals are used as ingredients or components of any products designed to serve as sterilisers, insecticides or other similar products, these products are considered ‘quasi-drugs’ and would be subject to the standards and restrictions under the Pharmaceutical Affairs Act.

22 ‘Hazardous chemical substance(s)’ means any toxic substance, substance subject to authorisation, restricted substance, prohibited substance and other chemical substances that pose, or are likely to pose, a hazard or risk (Article 2, Paragraph 10 of the K-REACH).

23 In Korea, wastes may be primarily classified into household and industrial (includes construction wastes) wastes, depending on the source and the amount of waste generated. Industrial wastes are classified further into general waste and designated wastes, depending on the hazardousness thereof.

24 Korea became a party to Basel Convention in 1992, which was ratified in 1994. The Act on the Transboundary Movement of Hazardous Wastes and Their Disposal was enacted to prevent any environmental pollution caused by the transboundary movement of wastes and to promote international cooperation, and to contribute to environmental conservation and qualitative improvement in the lives of people by implementing the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal, and bilateral, multilateral or regional agreements based on the aforesaid Convention and by restricting the export or import of wastes, and the transit of wastes across South Korea (Article 1 of the Act on the Transboundary Movement of Hazardous Wastes and Their Disposal).

25 The term ‘treatment’ means both interim treatment, such as incineration, neutralisation, fragmentation and solidification, and terminal treatment, such as landfill and discharging into the sea (Article 2 of the Wastes Control Act).

26 This chapter provides information pertaining to industrial wastes only.

27 ‘Designated wastes’ refer to the industrial wastes, such as waste synthetic polymer compounds, sludge, corrosive waste and wastes containing toxic substances that may contaminate their surroundings, or medical wastes that may cause harm to human bodies (Article 2.4 of the Wastes Control Act).

28 Electrical and electronic equipment refers to machines and apparatus (including components and parts) operated by electric current or electromagnetic field (see Article 2, Paragraph 1 of the Act on Resource Circulation of Electrical and Electronic Equipment and Vehicles).

29 The relevant mayor/do governor or the head of the competent si/gun/gu (administrative districts) may authorise such order.

30 Supreme Court of Korea, 30 September 2010, Case No. 2009Du6681.

31 The following criteria must be met to obtain permission (Article 16, Paragraph 1 of the Wildlife Protection and Management Act):

a that the endangered species or products shall be compatible with the restriction on transactions according to the species involved in the Annex (I, II and III) to the Convention on International Trade in Endangered Species;

b that the exportation, importation, taking out or bringing in of an animal or plant does not jeopardise the existence of the species; and

c that it shall be compatible with the detailed conditions for permission for each Appendix to the Convention on International Trade in Endangered Species prescribed by Presidential Decree.

32 Non-industrial related information has been omitted for the purpose of this article.

33 The Greenhouse Gas Target Management System does not enable companies to trade credits. Penalties for non-compliance are a maximum of 10 million won regardless of the level of infraction.

34 Many of South Korea’s regulations deal with both new energy resources and renewable energy resources. This chapter collectively refers to both energy resources as ‘renewables’.

35 It is assumed that inter-phase banking allowed under the ETS, frequent government intervention in the market and restrictions on third-party market makers appear to be the main reason of such lack of liquidity in the ETS.

36 International Carbon Action Partnership, Korea Emissions Trading Scheme, 10 October 2017, at 1.

37 The Ministry of Environment, 2017 White Paper of Environment, at 65.

38 The Ministry of Environment, 2017 White Paper of Environment, at 66.

39 President Jae In Moon, inaugurated as of 10 May 2017.

40 Moon Jae In government 5 year state administration plan, July 2017, National Planning and Advisory Committee.