S. Korea to track engineers' travel to control tech leaks

South Korea will create a roster of engineers in its core business sectors to monitor their travel in and out of the country. The decision aims to discourage poaching by Chinese companies and to contain technology leaks. 

The Ministry of Trade, Industry and Energy announced this week that the government will monitor departure information of engineers in 12 sectors – including semiconductor, automobile, battery, display, steel, robotics, and bioengineering.

Businesses and research institutions will be required to register their employees who fall into the categories. Non-Korean engineers are also subject to the new regulation.

The measure is part of the South Korean government’s five-year plan to bolster intellectual property safeguards. The National Assembly passed the bill last month, which will go into effect in July. 

In addition to the legal grounds, Seoul also set up detailed plans of the measure's execution.

Between 2018 and 2021, South Korea saw 453 instances of technology leaks, 79% of which occurred in the electronics, semiconductor, display, shipbuilding, telecommunications, and automobile industries. 

South Korean conglomerates such as Samsung Electronics Co., Hyundai Motor Co., LG Display Co. and more are leading in the global markets. 

Industry insiders say, however, that the government’s priority should be on monitoring foreign corporations and their poaching schemes rather than controlling  domestic companies. 

A South Korean government official who preferred to remain anonymous told The Korea Economic Daily that Seoul has “yet to request related information from the companies.” 

AN ISSUE OF PRIVACY

Critics of the planned measure are especially concerned about Article 14 of "The Act on Special Measures for Strengthening and Fostering the Competitiveness of the Advanced and Strategic Industries."

The article stipulates that the government can look up the departure information of key researchers and developers in the case of severe technology leaks. This is why the trade ministry plans to build a database of key talent in the industries where poaching and technology leaks are serious points of concern.

Seoul will build the first roster based on information provided by the corporations; and once the regulation goes into effect, it will add the database to the list.

A ministry official familiar with the development said, “The restriction on technology leaks by key talent was first requested by the corporations. To meet the request, we need to preemptively supervise them [human resources at the companies].”

To build the database, the corporations need to receive consent from each of their core engineers to share their information with the government. 

Based on the information, the trade ministry has the authority to look up their travel information in and out of South Korea. Looking up departure information without consent is against the country's Personal Information Protection Act.

Experts expect Seoul to amend the privacy law to exclude top engineers in the country’s core technology sectors.

The Intellectual Property Office will also help keep the trade secrets within the border. It plans to expand its new Technology and Design Police Division, nicknamed the Tech Police.  

The Tech Police division’s headcount and authority are slated to increase; as well their scope of investigation to encompass crimes related to technology leaks.

WOES OF FURTHER LEAKS 

South Korean companies are reluctant to submit the list of their top engineers to the government. They are worried that the information could be leaked to competitors during the building of the database. 

Major conglomerates keep their top engineer rosters confidential as they are considered trade secrets. Building a firewall within a company to deter engineers from finding out who works in other departments is a common practice. 

Corporations also find it risky to compile a list of their employees for the government to monitor. Being on the list means that the company is viewing the individual as a potential criminal, which will take a toll on corporate image. 

Last but not least, the government possessing the major corporations’ trade secrets leads to "Big Brother" concerns. 

“Even though I agree with the objective of preventing poaching of key talent by overseas corporations and technology leaks, I am not comfortable with the government overseeing engineers’ personal information,” an industry insider said with a sigh. “I also doubt whether the government can safely manage such a database.”

FOREIGNERS NOT EXEMPT

The roster will not be limited to South Korean nationals. 

Foreign nationals employed at South Korean companies or local subsidiaries of foreign enterprises could also be included. 

“When recruiting foreign nationals, the recruiters must disclose that the government can monitor the engineers’ departure information to and from Korea,” a legal counsel who preferred to remain anonymous said. “This could significantly hamper the already difficult battle to bring in top global talent.” 

Industry insiders also worry that such restrictions could dampen engineer morale. 

“Does this not equate to treating engineers as potential criminals?,”said a top engineer at a conglomerate. “What kind of engineer would find it reasonable for a government to collect information on his or her holiday travels?”

Sungkyunkwan University Law School professor Choi Joon-sun said, “I have not heard of a government making a roster of private citizens for management purposes.” 

The renowned legal professional cautioned, “This could potentially degenerate into an excuse for monitoring private citizens.” 

Write to Su-bin Lee at lsb@hankyung.com
Jee Abbey Lee edited this article.