Legal Review of Anti-corruption in Urban Development projects: Regarding the Daejang-dong development project
Authors:   Korea Anti-Corruption Law Association, Bae Myung-Ho 
Published: April 2023

The corruption perceptions index (CPI) of our country has improved. It is difficult to define in a single word what the concept and range of urban development projects are. The laws related to the return of development profits encompass <the Act on Urban Development>, <the Act on Return of Development Profits>, and <the Housing Act>. Although anti-corruption laws have a criminal law nature in terms of the form. However, since legal ethics are considered important in terms of justice and the rule of law, they belong to the area of the crime prevention law. The main concern is focused on whether they have served as check laws to strengthen publicness for project operators in urban development projects, and whether they will be able to continue this function. This study was intended to review my study conducted about one year ago regarding the return of development profits and reinforcement of publicness in the urban development projects. This study examined the history of the Act on Urban Development Projects and reviewed the content of the return of development profits pursuant to <the Act on Return of Development Profits>. At the same time, this study dealt with the issues related to the Daejangdong development projectas the subtitle of this study as well as the conjoint development. While presenting the outline and progress of the Daejangdong urban development project, this study explained how the Daejangdong urban development project has been implemented in accordance with the Act on Urban Development Projects before the revision. Then, this study discussed the contents of revision of the Act on Urban Development Projects.
The project operator claimed that a huge development profit of 550.3 billion KRW was returned through the Daejangdong development project. Therefore, this study reviewed whether this claim was a law enforcement act pursuant to <the Act on Urban Development>. As a result, different from the claim made by the project operator regarding the return of enormous development profits, the development cost is the due cost that must be borne by the principal agent of the development project according to the <Act on Urban Development> and it cannot be regarded as the return of development profits.
The method of supplying the developed land by private project operators obeys the Article 26, Clause 2 of <the Act on Urban Development>. However, the competitive bidding under the Article 57, Clause 2 of the Enforcement Decree of the same Act corresponds to a binding rule. The Clause 3 is, in principle, a discretionary rule, but the proviso is the binding rule. The rules that can be supplied through a private contract (at-will contract) follow, in principle, the method of competitive bidding and drawing lots. Exceptionally, it is possible to supply the developed land based on a private contract. Considering that the method of competitive bidding, drawing lots, and private contract is a critical issue in which sharp conflicts of interest collide between the public-private interest and between private-private interests, 11 ways to reduce the room for discretionary intervention by the administrative body were established allowing the private contracts only in exceptional cases. The Daejangdong development project leaves a number of doubts about the legal basis for the private contract for the 5 lots secured by the project operator Hwacheon Daeyu through a private contract.
This study dealt with the “Legal review of anti-corruption in the Daejang-dong development project.”As a jurist, I intended to approach matters related to legal principles.