Korea pilots escrow system to pick environmental assessors

South Korea's environment ministry said Monday it will run its first pilot project for an escrow-style system that puts the selection of environmental impact assessment contractors in the hands of a third party, a step aimed at curbing falsified or shoddy assessments. The trial covers the environmental impact assessment contract for the Korea Water Resources Corporation's modernization of the Daecheong Dam power facilities, with the utility due to post the notice on its electronic procurement system on Tuesday.

Under the current arrangement, the project owner picks the contractor directly, which has raised concerns that low-cost contracts and pressure arising from the client-contractor relationship can degrade the quality of the assessment. The escrow model would instead have an independent body choose a qualified contractor on objective criteria. The ministry selected the escrow system as a national policy task last year and drew up the introduction plan through discussions with civic groups and industry.

The escrow institution selecting the contractor in the pilot will be the Korea Environment Corporation, which will evaluate candidates on the technical capabilities of their staff, their track record and any history of administrative penalties.

"This pilot project is the first step toward reviewing the procedures and effects of the environmental impact assessment escrow system and its applicability in the field," said Lee Chae-eun, director-general of the ministry's nature conservation bureau. "We will do our best to successfully establish the escrow system and raise the objectivity and credibility of environmental impact assessments."

The government plans to run at least two more pilot projects within the year, then gather views from civic groups and industry before drafting legislation to introduce the escrow system.