Samsung Heavy Industries offers 11.3 billion won in partner support as Fair Trade Commission opens consent order process

Samsung Heavy Industries has unveiled an 11.3 billion won (approximately $7.44 million) package of measures to improve its business practices with subcontractors, including an expanded partnership fund, new holiday travel and vacation allowances, and a savings program for skilled workers.

The company put forward the voluntary remedies during a Korea Fair Trade Commission probe into alleged delays in issuing written subcontracting agreements, framing the package as a way to strengthen cooperative ties with its contractor partners.

The Fair Trade Commission said Wednesday it had decided to open consent order proceedings in response to Samsung Heavy Industries' application regarding alleged violations of the Subcontracting Act.

Under the consent order regime, a company proposes its own remedies for victim relief and trade-practice improvement. If the Fair Trade Commission finds the proposal acceptable, it suspends any determination of legal liability and closes the case upon swift implementation of the agreed measures.

Samsung Heavy Industries had been under investigation for allegedly issuing written contracts to in-house subcontractors only after work on ship processing had already begun, a practice that violates the Subcontracting Act. Rather than contest the legal findings, the company applied in December to open consent order proceedings, saying it wanted to improve its subcontracting relationships and deepen cooperative ties.

As part of its proposed trade-practice remedies, Samsung Heavy Industries offered to overhaul its contract management system, adopt standard subcontracting agreements across the board, provide training for employees and partner firms, and establish a permanent joint council for prime contractors and subcontractors.

The 11.3 billion won support package includes an increase in the annual partnership fund to 3.05 billion won, new holiday travel and vacation allowances worth 5.25 billion won per year, a 2 billion won savings program for skilled workers, and a 1 billion won top-up to the existing 2 billion won joint labor welfare fund. The skilled-worker savings program is designed so that a worker who contributes 1.6 million won receives 8 million won in return.

The Fair Trade Commission determined that Samsung Heavy Industries' proposed remedies met the requirements for opening consent order proceedings. It also recommended that the company include appropriate partnership measures for the subcontractors involved in the case when drafting the provisional consent order.

This marks only the second time consent order proceedings have been opened under Article 3 of the Subcontracting Act, which governs the obligation to issue written contracts and retain related documents, following a case involving five entertainment companies in June 2025.

The Fair Trade Commission plans to work with Samsung Heavy Industries to refine the remedies, gather input from stakeholders and consult relevant agencies before submitting the final consent order to the commission for approval.

A Fair Trade Commission official said the scale of the support package far exceeds the level of fines that would otherwise be expected. "Samsung Heavy Industries paid 29 billion won in performance bonuses to 6,900 employees at 88 subcontractors in January this year and plans to continue doing so," the official said, adding that if performance bonus payments to subcontractors are included in a subcontracting consent order support package, it would be the first such case.