The Democratic Party of Korea has introduced a mega-regional special zone bill to support the government's three mega-projects. The bill eases the mandatory stake that a grandchild affiliate of a general holding company must hold in a great-grandchild affiliate, applying the change only to the semiconductor industry, and includes broad support measures such as electricity bill reductions and workforce training. Each zone would have a politically appointed chief operating officer, informally called a czar, authorized to coordinate regulatory exemptions and permits in a single package.
On labor exemptions, including the most contentious provision allowing exceptions to the 52-hour workweek cap, the party introduced two versions simultaneously — one with the exemptions and one without — and plans to merge them for review later. The National Assembly's Trade, Industry, Energy, SMEs and Startups Committee will also introduce a supplementary bill that includes a full expansion of power purchase agreements. The Democratic Party plans to finalize the three separate bills as an official party position after internal coordination.
According to the Democratic Party on the 20th, Rep. Park Sang-hyuk, the ruling party's liaison on the National Assembly's National Policy Committee, introduced the special act on the designation and operation of mega-regional strategic industry special zones for locally led growth, known as the mega-regional special zone bill. The name was changed from the originally planned mega special zone act in response to criticism that the earlier title suggested support for only specific regions. The bill designates mega-regional special zones and provides tailored support for the three mega-projects and the government's "five poles, three special zones" growth engine plan. It consists of a menu of some 320 regulatory exemptions and more than 40 policy support packages that companies and local governments can choose from.
Under the bill, large-scale investment projects, regulatory exemptions and permits would be overseen by a czar appointed by the president. Czar is a term for an absolute monarch in Russia and the Slavic world. The aim is to resolve disagreements between ministries and consolidate decision-making into a single channel to speed up the process. The bill also introduces a timeout rule, under which a permit will be deemed granted automatically after 60 days if the authority in charge fails to notify applicants of a processing plan or result within the statutory deadline. On holding company rules, the bill lowers the mandatory stake a grandchild affiliate must hold when establishing a joint venture, or great-grandchild affiliate, from the current 100% to at least 50%, but only for the semiconductor industry, opening a path to attract outside capital.
Labor exemptions sought by the business community were also reflected in the National Policy Committee version. The most prominent is a white-collar exemption that would exclude managers and research and development staff in the top 3% of earned income from the 52-hour weekly working cap through a written agreement between labor and management. The bill would also extend the settlement period for flexible working hours from the current maximum of three months to six months, and extend the permitted employment period for fixed-term workers from two years to as long as four years, while requiring payment of a "fairness allowance" if the contract ends without conversion to permanent employment.
Given strong opposition from labor groups, however, a version excluding the labor exemption provisions is set to be introduced through the Climate, Environment and Labor Committee as early as the 21st. The Korean Confederation of Trade Unions and the Federation of Korean Trade Unions called on the 20th for the withdrawal of the version containing the labor exemption clauses, saying that pushing labor exemption legislation before consultations with labor have concluded is clearly a double standard.
At the industry committee, Rep. Jung Jin-wook of the Democratic Party is preparing separate supplementary legislation, intended to complement the bill by reflecting industry demands gathered at the committee level. Its core provision would expand the power purchase agreement system, currently allowed only for renewable energy generators, to non-renewable sources such as liquefied natural gas cogeneration. The change is expected to offset the intermittency of renewable energy, whose output varies with weather conditions, and enable a stable power supply. Some say semiconductor processes, which require both vast amounts of electricity and high-temperature steam, could become more efficient if energy from cogeneration is supplied directly. The legislation is also expected to include provisions cutting electricity bills for companies in the zones by up to 50% and offering military service exemption incentives, giving preference when employees of strategic industry companies designated for alternative military service in the zones are enrolled as industrial technical personnel.
With the three bills introduced at the same time, intense negotiations are expected within the party. The Democratic Party said it will focus first on building social consensus without setting a timeline for passage. Han Byung-do, the party's floor leader, said at a parliamentary audit strategy meeting on the 20th that the party would go through sufficient deliberation and debate, adding that it would actively consider setting up a special committee in the National Assembly, given that the tasks span multiple ministries and standing committees.
The prevailing view in political circles is that passing the bill within the year, as originally targeted, may prove difficult. The Democratic Party had moved jurisdiction over the mega-regional special zone bill from the industry committee, chaired by the opposition People Power Party, to the National Policy Committee in preparation for a fast-track push, but positions have remained far apart and the effort now appears to be pausing. A political source said that because the party has not set a timeline, passage within the year is unlikely, adding that the mood is that sufficient discussion is needed first to reduce social conflict.