4th LD) N. Korea demands steep wage, rent hikes at joint venture

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(ATTN: CHANGES headline, lead, UPDATES throughout with N.K.'s demands, details)
By Kim Hyun
SEOUL, June 11 (Yonhap) -- North Korea raised rental fees and demanded more than
triple the wages for local employees at a joint park on its soil, a Seoul
spokesman said, deepening concerns about doing business at the last remaining
inter-Korean venture.
The rare inter-Korean talks ended without a breakthrough on the release of a
detained South Korean worker, said Unification Ministry spokesman Chun Hae-sung.
The two sides agreed to meet again on June 19, he said.
"North Korea demanded the two sides reconsider 'special favors' at the Kaesong
industrial park, in line with the changed inter-Korean relations and reality,"
Chun said in a briefing.
During the talks that lasted for about two hours, Seoul officials pressed for the
release of the Hyundai Asan Corp. worker who was detained in the North's border
town of Kaesong in March for criticizing the North's political system. Pyongyang
did not respond, sources said.
North Korea demanded that South Korean firms raise their average monthly wages
for North Korean workers to US$300 from the current $70~80 and guarantee an
annual increase of 10-20 percent from the current 5 percent, Chun said.
Pyongyang also asked Seoul to increase the rent for the joint park to $500
million. The 50-year rent contract was set at $16 million when the park opened in
2004, to be paid by the South Korean developers Hyundai Asan and the state-run
Korea Land Corp.
The talks were a follow-up to an April meeting -- the first government-level
dialogue in more than a year -- which broke down in less than half an hour, as
the two sides could not narrow differences.
The Kaesong venture, just an hour's drive from Seoul, is the last remaining
inter-Korean economic project to come out of the first inter-Korean summit in
2000. The park had grown steadily, and now hosts 106 South Korean firms producing
clothing, kitchenware, electronic equipment and other labor-intensive goods. More
than 40,000 North Koreans work there.
North Korea's new demands deepened already serious concerns about the joint park,
but Ok Sung-seok, chief of Nine Mode Co., a clothing company employing about 300
North Korean workers, said he believes North Korea left room for negotiation by
setting a date for more talks. The firms will meet on Friday to state their
position.
"North Korea was not saying, 'take it or leave it.' It set up the next talks, and
I believe there's room for negotiation, and there will be an agreement that we
can accept," Ok said.
A fur clothing company, Skin Net, said this week it will close its factory in the
North Korean park by the end of this month, citing the safety of its employees
and a decrease in sales.
Kim Young-tak, senior representative for inter-Korean dialogue at the Unification
Ministry, led Seoul's 14-member delegation. North Korea's delegation was led by
Pak Chol-su, vice chief of the Special District General Bureau, Pyongyang's
agency overseeing the joint park.
In the previous meeting, North Korea refused to discuss the detained worker, only
identified by his surname Yu, saying an investigation is underway for his
"dishonest hostile act" against Pyongyang.
The North last month declared all contracts regarding the joint park "null and
void," saying it will revise them, and that any South Korean firms that cannot
accept the new terms can leave.
hkim@yna.co.kr
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