Don't unite the two Koreas on the backs of cheap labor

NORTH AND SOUTH Korea plan to strengthen economic ties when they meet next month for their second-ever summit in more than 60 years.

They will build on Korea's largest joint endeavor to date, the Kaesong Industrial Complex just north of the border, which runs on capital investment from the south and low-cost labor from the north.

It's one of several economic partnerships that South Korea hopes will point the way toward political unification.

But to truly build a new nation, both sides must pursue not only economic power but also robust human rights and labor standards – beginning with the workers at Kaesong. Leaders should start working together at the summit to uphold these basic principles.

The industrial complex is a visionary enterprise that might open the door to continued economic integration and eventual political unification on the Korean peninsula. Its location alongside the heavily guarded border is symbolic, especially since the city of Kaesong was a capital of Korea more than 1,000 years ago.

At least in South Korea, the rhetoric of Korean nation-building is clearly in place. "One promise of the nation!" and "New vision of peace and opportunity for the nation" are among the slogans being used to highlight the potential of Kaesong.

The future certainly seems bright. The complex, opened in 2003, is now home to two dozen South Korean factories making $10 million of goods each month and employing 15,000 North Korean workers in some of the best jobs available in North Korea today. Plans for the industrial zone are ambitious: developers hope that in five years, 350,000 North Koreans will be making $20 billion worth of products a year.

However, the basic human rights and liberties of the North Korean workers have been set aside. The North Korean laws governing the industrial complex do not guarantee freedom of association, the right to collective bargaining, or the right to strike. Nor do the labor laws prohibit harmful child labor, sexual harassment, or gender-based discrimination – and nearly all Kaesong employees are women.

Wages are extremely low: about 27 cents per hour. This is about 5 percent of the standard compensation in South Korea and half the going rate in China. The productivity statistics out of Kaesong highlight the injustice: A typical North Korean worker making $60 a month at the complex is now reported to be producing $1,100 worth of goods each month.

North Korean officials require the South Korean businesses to funnel wages – in US dollars – to the North Korean government. It then pays workers with a combination of local currency and rationing tickets for food and other consumer goods, according to South Korean news reports.

It is easy to see how human rights and labor standards have fallen through the cracks. South Korean companies are setting up shop in Kaesong precisely because of the rock-bottom costs of doing business there; they can make the excuse that their operations are located in North Korea. The North Korean government has an abysmal human rights record and can blame the South Korean corporations who manage the zone from day to day.

Nonetheless, standards need to be put in place in Kaesong. First, plain and simple, because it is morally right to uphold the dignity and well-being of each human being. Indeed, both Koreas have signed the landmark United Nations covenants on human rights.

Second, to set the stage for overseas investment. Multinational corporations want to protect their images as responsible and ethical global citizens. They will stay away if Kaesong doesn't shore up its human rights and labor standards.

Third, to build the right kind of Korea. Kaesong is much more than an innovative economic development project – it is a grand experiment in nation-building. Kaesong could help foster peace and prosperity for the entire Korean peninsula.

When the Korean leaders meet on Oct. 2, they ought to send a strong message that the status quo will change. They should promise the workers of Kaesong a bill of rights, backed up with an enforcement system. This likely would involve the formation of a special inter-Korean court with jurisdiction over the complex.

Only by putting in place internationally recognized standards can Kaesong – and whatever economic initiatives might follow – point the way toward a free, open, and democratic Korea. October's summit offers the perfect opportunity to start.

Hans Schattle is assistant professor of political science and international relations at Roger Williams University. He visited Kaesong Industrial Complex in June.