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South Korean firms demand compensation for Kaesong closure

March 16, 2016 | 06:24 pm PT
South Korean firms that operated factories in a now-shuttered joint economic zone in North Korea held a rally on Wednesday near the border, demanding proper compensation from Seoul.

Around 600 people - including business owners and workers at the Seoul-funded Kaesong Industrial Complex - turned up for the march at Imjingak, a park located in the border city of Paju.

"Since the government said there are no legal grounds to compensate us, we will request the enactment of a special law," said Jeong Gi-Seob, the head of an association representing the factory owners.

South Korea on February 10 announced the suspension of operations in Kaesong in protest to North Korea's latest nuclear and long-range rocket tests. 

The shock announcement prompted the North to expel all South Koreans from the estate and freeze all assets there, shutting down the last symbol of cross-border economic cooperation.

Pyongyang later said it would liquidate all assets left behind, with a total value, according to the business owners, of more than 820 billion won ($663 million).

"The government has to compensate our invested assets and raw materials. We are unable to keep our contract with buyers," said one of the protest organisers, Kim Seo-Jin.

Since Kaesong opened in 2004, the 120 South Korean firms operating there have paid wages worth $560 million to the state authorities on behalf of the 53,000 North Korean workers.

Kaesong, born out of the "sunshine" reconciliation policy in the late 1990s, had previously remained largely immune to turbulence in inter-Korean ties. 

The only exception was in 2013 during heightened cross-border tensions when Pyongyang effectively closed the zone for five months by withdrawing its workers - AFP

 
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