The Korea Land and Housing Corporation (LH) announced on May 23 that it will implement the Leniency system to root out bid collusion—a common unfair practice within the construction industry.
The goal is to create a fairer competitive environment and establish a transparent bidding culture. LH unveiled their plan to adopt the program, emphasizing its commitment to fair competition.
The Leniency system, also known as the "Voluntary Disclosure Penalty Reduction System," offers companies involved in collusive bidding the opportunity to voluntarily report their misconduct in exchange for reduced or waived penalties. This system is currently operated by the Fair Trade Commission under Korea’s Fair Trade Act. LH’s adoption of the program marks an effort to extend this approach into the realm of public procurement.
Under the new policy, companies that first report their involvement in bid collusion can receive relief or exemption from penalties, including restrictions on participating in future bids, as stipulated by the Korea Public Contract Law. Specific criteria for eligibility include cases where the company has been granted exemption from corrective measures by the Fair Trade Commission, cases involving reduced or waived fines, or instances where fines are reduced despite penalties imposed.
Detailed information about the Leniency system is available through LH’s electronic procurement system (e-Bid), where a dedicated notice has been posted. Additionally, anonymous real-time counseling can be accessed via the KakaoTalk open chat room titled ‘LH Bid Collusion Reporting.’
LH President Lee Han-jun emphasized, “As a public institution, it is our fundamental duty to establish a fair and transparent competitive order. Through the Leniency program and other institutional measures, we will work to foster a genuine culture of fair bidding in the construction sector.”
