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(3rd LD) N. Korean workers fail to report to work at Kaesong complex
SEOUL, April 9 (Yonhap) -- North Korean workers failed to show up for work at the inter-Korean industrial complex in the North's border city of Kaesong on Tuesday, bringing their operations to a complete halt and putting the complex's future in limbo.

   The Ministry of Unification said workers did not report to work as the North announced the day before that it would pull out all of its laborers in protest of South Korean provocations. Pyongyang claimed that Seoul was using Kaesong to find a pretext for igniting war.

   "All manufacturing sector workers did not report to work, although security personnel hired to guard factories, and North Korean administrative personnel at the Kaesong Industrial District Management Committee showed up for duty," a ministry official said.

   He added that the North did not schedule bus services to transport workers to the complex, located just north of the demilitarized zone (DMZ) that separates the two Koreas.

   A total of 123 South Korean companies employ 53,000 North Koreans at the industrial part that produces around US$40 million worth of goods every month. South Korean companies pay the workers $87 million per year in salaries.

Barricades and traffic signs set up asking cars to turn back on a road leading to the Kaesong Industrial Complex in North Korea (Yonhap file photo)

The official, who declined to be identified, added Seoul will never take action to close down or withdraw from the joint venture and will continue to emphasize that actions taken by the North are unacceptable and should be reversed.

   "South Korea's stance remains resolute on this matter," the official stressed and pointed out that Kaesong's significance should be looked at in terms of future of South-North relations.

   Announcing the unilateral withdrawal of its laborers, Pyongyang also said operations at the complex will be suspended temporarily so the North can examine the issue of whether or not to permit future operations at the complex.

   The latest move poses the most serious challenge to the industrial complex that started producing goods in late 2004. The two Koreas had not taken steps to disrupt Kaesong operations even after the sinking of a South Korean warship and the shelling of Yeonpyeong Island in 2010.

   Before pulling its people out, the North announced Wednesday that it will not permit South Korean personnel and materials into the complex as it fueled tension along the DMZ.

   The official said, for the moment, top priority for the South was to ensure the safety of South Korean workers and property at the industrial zone.

   "Seoul will respect the wishes of businesses at Kaesong on a future course of action, but the government must, at the same time, do its job to protect its citizens, especially since there is nothing they can do over there," the official said, hinting that measures will be taken to ask all non-essential personnel to return home.

   There are usually some 800 South Koreas at the complex, although the number stands at just 475 at present, with 77 expected to return home during the day.
South Korean businessmen with factories in Kaesong hold a press conference to urge Pyongyang to normalize operations at the industrial complex in Seoul on April 9, 2013. (Yonhap)

Meanwhile, presidential spokesman Yoon Chang-jung denied speculations by some local media that South Korea is bracing for all possibilities over the fate of the factory park, including its closure.

   "The government remains unchanged in its position that the Kaesong industrial complex should continue normal operations," Yoon said. "It is not true that the government has been drawing up measures with the shutdown of the Kaesong industrial complex in mind."

   Yoon also said all responsibilities for Kaesong's suspension lie with North Korea.

   "The government will appropriately handle this while urging North Korea to make the right choice," he said.

   Other government sources said companies at Kaesong that suffer losses will be covered to some extent by the special insurance policy set up for companies operating in the zone. They said for losses that exceed the coverage, separate talks can be arranged to see what can be done. It has been estimated that losses could reach 6 trillion won (US$5.2 billion).

   "There are agreements that cover losses and damages to property that were signed when the complex was set up, but the problem has always been that the North opts not to respect them," an independent observer said.

   Related to Pyongyang not respecting agreements, the North's actions to disrupt operations and limit movement not only violates the 2003 economic cooperation pact, but the 2005 agreement on safe passage and the 2002 law that North Korea set up to regulate the Kaesong zone.

   Experts said in regards to Kaesong, most clauses demand both sides discuss and agree on measures that could impact the complex. They warned that the latest actions by the North will eventually hurt the country because it will scare off foreign investors.