Shipbuilders blindsided by forced-labor dispute over foreign worker program

"We had no idea such a contract even existed. It is truly absurd that a job-transfer penalty created by the Uzbek government to secure employment in Korea for its own citizens is now being treated as a forced-labor issue here."

The head of one of HD Hyundai Heavy Industries' 265 subcontractors reacted with bewilderment as a controversy over a memorandum signed by Uzbek workers — hired through the "shipbuilding-tailored foreign workforce pilot project" — began to spill over into questions of corporate responsibility. The memorandum, drawn up between the workers and Uzbekistan's Agency for External Labor under the prime minister's office, stipulates a monthly fine of $2,000 for failing to comply with lawful employer requirements, including changing workplaces, without written consent from the agency's Korea office.

"Their wages — including overtime — are higher than those of Korean workers, and they receive free accommodation, meals and work clothing," the subcontractor head added. "It makes no sense to pin the fine issue with their own government on the Korean side."

The Ministry of Employment and Labor and the Ulsan city government introduced the "shipbuilding-tailored foreign workforce pilot project" — known locally as the "Ulsan-style employment permit system" — in March last year to address labor shortages in the shipbuilding industry.

The program's core mechanism is to provide shipbuilding-specific training in Uzbekistan and other countries, then channel graduates into Ulsan-area shipbuilders through the employment permit system under the E-9 non-professional work visa.

Under the arrangement, Ulsan city supplied educational equipment for the training center, HD Hyundai Heavy Industries designed the curriculum and dispatched instructors, and the Uzbek government provided the training facility and recruited trainees. The Ulsan Global Workforce Development Center opened in Fergana Province, Uzbekistan, in March last year.

The center runs three-month local training courses in five trades: scaffolding, painting, electrical work, insulation and grinding. Of the 385 workers who completed the program, 366 are currently employed at Ulsan-area shipbuilders.

The controversy erupted after the Ulsan Migrants Center and the in-house subcontracting chapter of the Korean Metal Workers' Union's Hyundai Heavy Industries branch disclosed the contents of a "contract for employment support services in the Republic of Korea for Uzbek citizens" — the document containing the $2,000 fine clause. Critics called it a "poison-pill provision designed to keep workers trapped inside the Hyundai Heavy Industries shipyard."

In response, the Ministry of Gender Equality and Family sent an official inquiry Wednesday to the Ministry of Employment and Labor, the Ministry of Justice and the Ulsan city government, asking them to verify the facts on the grounds that "the fine and job-transfer restrictions may infringe on human rights and need to be examined for compliance with international conventions."

The Ministry of Employment and Labor said the clause "appears to be a measure taken by the Uzbek government to prevent workers from leaving," adding that it has asked Uzbekistan to confirm the facts.

Ulsan city officials are also caught off guard. The city had partnered with the Ministry of Employment and Labor to introduce the Ulsan-style employment permit system specifically to solve the shortage of manufacturing workers on shipbuilding sites, a problem driven by young people's aversion to factory work.

An official from the city's key industries division said the efforts the city had invested in securing a shipbuilding workforce were "spinning off in an unintended direction," and that the city would "carefully review whether to continue the project after seeing the results of the Ministry of Employment and Labor's investigation."