The Seoul Metropolitan Government is in a position to pay an estimated 1.5 billion won annually in usage fees to Korea Post for a road covering an area of 1,300 square meters in Jung-gu, Chungmuro. Incheon Bupyeong District reportedly paid 72 million won in compensation to Korea Post for a road covering 694 square meters in Bupgae-dong for similar reasons. This stems from Korea Post's demand for property rights for some of the land included in the road expanded for citizen convenience.
There have been ongoing cases of public institutions demanding property rights to administrative assets, leading to conflicts with local governments. Local governments in a position to pay usage fees are filing lawsuits against public institutions to confirm the invalidity of the imposed compensation. Opinions are divided on whether this is a waste of administrative power or a legitimate imposition.
◇“Demand for usage fees without providing management expenses” vs “Warning for not collecting expenses”
Controversies over usage fees for public institution administrative assets involve local governments in metropolitan areas such as Seoul, Gyeonggi, and Incheon, as well as Daegu and Jeju. The administrative assets used by these local governments are being utilized for the convenience of citizens.
In the case of the metropolitan area, Korea Post owns land that is being used for roads, and both sides have failed to narrow their differences regarding the usage fees. In Daegu, conflicts arose over land near a reservoir owned by Korea Rural Community Corporation (KRC), and in Jeju, a park established on the Jeju Air site became an issue.
The conflict between both sides was triggered by Korea Post's demand for usage fees that public institutions had not imposed on local governments until that point. A local government official noted, “When road damage occurred, maintenance and repair were all covered by our budget, and we have never charged for these maintenance expenses, so we cannot accept the demand for land usage fees.” Another official from a different local government similarly stated, “Shouldn’t there have been support for management expenses if we are to claim usage fees for the property?”
The practice of public institutions starting to impose usage fees on local governments began after the amendment of the National Property Act enforcement decree in 2011. According to the National Property Act, local governments have used administrative property, including roads, rivers, and parks, with the permission of public institutions on a five-year basis.
However, the amendment of the enforcement decree established a previously nonexistent regulation for usage fee reductions. The revised enforcement decree limits the usage fee reduction period based on the premise of purchasing the property to one year. Public institutions argue that if administrative property is not purchased, they should receive the usage fees. A local government official mentioned, “Before this legal amendment, there was an implicit agreement to allow the usage permission.”
Public institutions also have their standpoint. They might face repercussions and responsibilities if they don’t impose fees on local governments. The Ministry of Land, Infrastructure and Transport stated that in January 2022, as a result of an audit of its affiliated organization, Jeju Air, it directed action against two personnel involved, stating that the land owned by Jeju Air was used for free by Jeju City. A public institution official remarked, “Given our responsibility for operations, we have no choice but to act according to the relevant laws.”
◇Local governments: “Legal amendment needed” … Ministry of Land, Infrastructure and Transport and Ministry of Economy and Finance: “Difficult to accept”
Local governments argue that a legal amendment is necessary to prevent wasting administrative power on unnecessary conflicts with public institutions.
Seoul City requested legal amendments from the Ministry of Economy and Finance and the Ministry of Land, Infrastructure and Transport through the National Council of Mayors and Governors. The policy request to the government follows local government policy suggestions, after which 17 cities and provinces review the opinions, and if there is full agreement, they are notified to the relevant ministries, which then respond.
Seoul City claimed to the Ministry of Economy and Finance that the current related laws are in a state of conflict of interest. The Local Government Property Act states that when the state uses local government property for public purposes, it can be exempt from usage fees. In contrast, the National Property Act allows for free use for only one year based on acquisition.
Additionally, the Ministry of Land, Infrastructure and Transport is being asked to establish a special provision for free use of national property incorporated into roads. The intent is to actively utilize the point that the land under the administration of the Ministry of Land, Infrastructure and Transport can be used without charge by local government heads.
However, both the Ministry of Economy and Finance and the Ministry of Land, Infrastructure and Transport stated that it is “difficult to accept.” The Ministry of Economy and Finance mentioned, “If local governments use it free of charge for public or common purposes, there are concerns about side effects such as difficulty securing national property for government policy initiatives.” The Ministry of Land, Infrastructure and Transport added, “Considering the opinions of the Ministry of Economy and Finance, it is difficult to reflect on legal amendments.”
As a result, local governments are prepared to even go to court against public institutions, but the outcomes have not been favorable. Local governments in the metropolitan area, Daegu, Jeju, and others have filed lawsuits against public institutions for the invalidation of imposed compensation. However, most of the local governments lost. Seoul City is currently undergoing an appeals process after losing in the first trial, while Daegu has decided not to appeal after losing in both the first and second trials. As for Incheon, the verdict for the first trial has not yet been released.