1. Reasons for Proposal

Contracts for lease of construction machinery are mostly based on standard contracts and are for a certain number of operating hours, but due to the occurrence of illegal subcontracting practices in the form of “contracts requiring construction works,” this Partial Amendment aims to amend and/or supplement certain shortcomings in the operation of the current system by (a) clarifying the scope of construction machinery leasing/supply to prevent illegal subcontracting practices, while (b) amending provisions regarding requirements applicable to equipment necessary for the operation of a construction businesses so that such provisions are more suited to the relevant Act and facilitate progress of construction work.

2. Major Provisions

A. Encourage improvements in construction machinery contract structure (attached Table 1, remark 1-2, newly inserted)

 - Clearly prescribe that the “work scope of construction machinery leasing/supply” is simply the supply of construction machinery and clearly prescribe that a person who leases construction machinery or supplies machinery/equipment cannot carry out construction work, thereby preventing illegal subcontracting practices using construction machinery lease contracts

B. Prohibit civil engineering and construction business operators from registering also for civil engineering business or construction business (attached Table 1, remark 1-3, newly inserted)

- Prescribe the above principle in the Enforcement Decree while noting that the current Regulation on Management of the Construction Industry limits overlapping registration of civil engineering, construction and civil engineering and construction businesses, in recognition of the fact that limitations on citizens’ rights should be directly prescribed in the law

C. Rationalize criteria regarding construction equipment in the registration of construction businesses (attached Table 2, remark 2 (a))

- Amend the current requirement that possession of the equipment without regard to its condition is sufficient fulfillment of the registration criteria despite the fact that such equipment should be suitable for carrying out construction work, so that possession of a piece of equipment with performance verified in accordance with relevant Acts is required instead

D. Clarify criteria for imposition of administrative sanctions (attached Table 6, subparagraph 1, item d)

- Clearly prescribe, in light of the fact that penalty surcharges in lieu of suspension of business should only be imposed in cases where inconvenience to the general public or public interest concern exists, in keeping with the intent behind penalty surcharges, that penalty surcharges shall only be imposed in cases where, when considering the intent behind the system, the violation is minor or damages due to suspension of business are of concern, etc., and in all other cases, suspension of business shall be imposed, provided that in cases where the sanction subject desires imposition of suspension of business, suspension of business shall be imposed