Hyundai E&C strengthens co-prosperity framework with subcontractors

Hyundai E&C is reinforcing its mutual cooperation framework to establish fair trade practices and pursue sustainable co-growth with its subcontractors.

The company announced Thursday that it signed the "Construction Industry Mutual Cooperation and Fair Trade Agreement" with the Korea Fair Trade Commission and the Korea Specialty Contractors Association at the Specialty Contractors Hall in Dongjak-gu, Seoul, on May 28. The agreement was designed to foster a fair trading environment between prime and subcontractors and strengthen the financial stability of partner firms.

The pact covers four key commitments: prompt cash payment of subcontract fees and the abolition of retainage practices; consultation and implementation of subcontract fee adjustments when construction material supply costs fluctuate; operation of a subcontract fee indexing system; and the elimination of unfair special clauses along with contract review and improvement measures.

Hyundai E&C is actively rolling out systems to put the agreement's core commitments into practice. To root out unfair special clauses in particular, the company has deployed an AI-based contract review system that automatically detects problematic provisions — such as retainage clauses — at the contract stage before they take effect.

Support for subcontractors' stable project execution is also being expanded. Given the growing strain on material procurement amid global supply chain instability, Hyundai E&C is focusing on securing key supplied materials — including insulation, waterproofing and paint products — in advance to ease the procurement burden on partner firms.

In safety management, Hyundai E&C is expanding its support system for subcontractors. The company operates a "Safety Guarantee Right," which allows workers to halt operations when hazards arise on site, and a "Work Exemption Right" to prevent and respond to health warning signs.

To strengthen safety co-prosperity with subcontractors, the company provides executive-level safety leadership education and tailored safety consulting to partner firms. It also runs a subcontractor safety rating system alongside a safety incentive program designed to raise safety management standards, working to embed a site-centered safety culture.

Hyundai E&C also plans to introduce a "Subcontractor Rest Certification Incentive" program to promote a culture of rest breaks during extreme heat, further strengthening its support framework for improving on-site safety management.

Earlier this year, Hyundai E&C reorganized its procurement division into the "PI (Procurement Innovation) Division" to enhance its subcontractor support and management systems. The company plans to operate a co-growth fund worth 166 billion won (about $109 million) and allocate additional safety management costs above the legal minimum, supporting roughly 90 billion won in annual safety investment to help create a stable operating environment for partner companies.

"We operate a range of programs to build a fair trade culture and expand mutual cooperation based on trust with our subcontractors," a Hyundai E&C official said. "We will continue to expand practical support programs to spread a culture of co-growth."

Meanwhile, Hyundai E&C is marking its 79th anniversary by expanding employee-driven social contribution activities and organizational culture programs, accelerating its ESG management efforts this year.