The Foreign Investment Ombudsman helped a city and company obtain the authoritative regulatory interpretation it needed
Odfjell Terminals Korea(OTK), a Norwegian company that stores and manages liquid cargo, today awaits the green light to build underground pipelines in the Ulsan Petrochemical Complex. But the process the company went through to achieve authorization illustrates an administrative ping pong phenomenon at play, and how Foreign Investment Ombudsman Dr. Ahn Choong Yong helped resolve a situation in which no-one wanted to claim responsibility.
For 10 years, OTK, most of whose liquid cargo customers are chemical businesses in the Ulsan Petrochemical Complex, has transported liquid cargo via trucks from storage tanks at Onsan Port to the complex. While the trucks are appropriate for long-distance inland transport, the company determined that transport via underground pipes would be safer and more efficient for shorter distances. The shortest route from the Onsan Port to the Ulsan Petrochemical Complex, which is still under construction, would be about 5km if pipes were to be built below and along a new main road that runs through the industrial complex.
However, OTK discovered last year that such construction would require road repaving, and that Korea’s Road Traffic Act prohibits the repaving of new roads within three years of their construction. So the Ulsan Metropolitan City government suggested that the underground pipelines be constructed in a green zone located along the road in the complex.
OTK came up against a challenge when it learned that Article 22 of Korea’s Enforcement Decree of the Act on Urban Park, Greenbelts, etc. stipulates only that objects including water pipes, waste pipes and gas pipes are permitted in urban parks. The decree did not include liquid cargo transport pipes per se. What the company discovered, though, was that according to paragraph 17 of Article 22, facilities with functions similar to water pipes, waste pipes and gas pipes could be permitted.
OTK went to the City of Ulsan for assistance interpreting this information. City officials requested a formal interpretation of the decree from the Ministry of Land, Transport and Maritime Affairs. But officials from the Ministry responded that, as it is the right of local governments to make such decisions, the city of Ulsan should decide for itself whether OTK’s liquid cargo pipelines qualified as being similar to the facilities already permissible. OTK, wanting an explicit authoritative interpretation of the decree paragraph in question, turned to the Foreign Investment Ombudsman for assistance.
Dr. Ahn, together with Mr. Suh Sung-bong, a Home Doctor at the Office of the Foreign Investment Ombudsman, appealed to the Ministry for the need for a higher body to provide authoritative interpretation in the situation. They also convinced Ministry officials that liquid cargo pipelines should be allowed in the green zone because, while they may not be allowed in green zones of residential cities like Seoul, Ulsan is a largely industrial area. Plus, it would be safer to transport liquid cargo via underground pipelines than with trucks on roads, Dr. Ahn and Mr. Suh emphasized.
Ministry officials agreed, finally and explicitly interpreting paragraph 17 to mean that liquid cargo pipeliness are permitted in the urban parks of Ulsan.
Today OTK awaits full resolution of its situation, as a separate barrier remains. The company needs permission to build the pipelines under the green zone from Ulsan’s Department of Parks & Green Zones. But for the duration of the complex’s construction, this green zone falls under the jurisdiction of the city’s Department of Industrial Development. With the complex scheduled to be completed this summer, the Department of Parks & Green Zones has said it will grant OTK permission once it gains management rights for the green zone.
In the meantime, OTK is preparing to begin pipeline construction, which is slated to take more than three months.
By Ahn Choong Yong, Ph.D.
Foreign Investment Ombudsman
Distinguished Professor, Chung-Ang University
Source : Invest Korea
