Economics, Foreign Affairs, Governance

Kaesong Industrial Complex Not Operational Despite Minor Activity

The Kaesong Industrial Complex (KIC) first opened in December 2004, just across the border from the Demilitarized Zone (DMZ) and is less than 45 miles away from Seoul. In February 2016, in response to an increase in North Korean ballistic missile testing and continued nuclear weapons development, the government of the former South Korean president Park Geun-hye decided to close the complex. While in operation, the KIC contained approximately 120 small and medium-sized tenant South Korean companies, and employed over 50,000 North Korean workers.1 Once closed, North Korea prohibited access to South Korean owned factories and materials in the complex making it difficult for owners to retrieve their property.2

In October, it was reported that North Korea was “secretly operating 19 textile factories in the Kaesong Industrial Complex without notifying South Korea.”3 These media reports quoted North Korean sources as stating that the complex was “running with more vigor” than when South Korean managers oversaw production.” Additionally, North Korea released statements asserting that “[i]t is none of anyone’s business whatever we are doing in the Industrial zone where the sovereign rights of the DPRK are exercised.”4

A detail analysis of commercial satellite imagery from October 19, 2016 and October 17, 2017, however, finds no evidence to support the North Korean statements. While there may be some token industrial activity occurring, the KIC is not operational any real sense of the term.

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Among the more general observations that support this assessment are,

  • With one or two exceptions, no vehicles are present on the complexes internal roads or on the immediate approach roads
  • No activity is observed at either of the zone’s entrances/security checkpoints
  • With extremely few exceptions all parking areas are devoid of vehicles including the buses used to transport workers
  • Many of the cargo trailers in the truck yard haven’t been moved in over a year’s time and the total number present over the past year has declined by 17 during the same period
  • No rail traffic is observed in the rail transfer yard or associated engine servicing facilities
  • No exhaust is observed emanating from any of the buildings
  • No activity is noted at the water treatment plant

 
Despite the lack of any significant industrial activity the KIC is not abandoned. It continues to be relatively well maintained by North Korean standards, observation of both minor ongoing agricultural activity (e.g., gardening and drying of grain in parking areas) and low-level activity at the freight yard, gas station and vehicle support facility. These activities are most probably the result of the presence of maintenance and security personnel.

Area A




Area A appears to consist primarily of support buildings. With the exception of some minor agricultural activity (probably gardening) no significant changes are observed since October 19, 2016.

Area B


This area appears to consist of housing, office and support buildings. With the exception of some minor agricultural activity (probably gardening) no significant changes are observed since October 19, 2016.

Areas C and C1


Area C consists of numerous industrial buildings. With the exception of activity in the truck yard (Area C1) no significant changes are observed since October 19, 2016. At the truck yard, a change in the number cargo trailers present and their parking pattern is observed between the October 2016 and October 2017 images. In October 2016, there were approximately 287 cargo trailers present and in October 2017 there were approximately 270. Given the total number present, the decrease of approximately 17 is deemed relatively insignificant. Additionally, the cargo trailers in October 2016 are predominantly parked in what appears to be a long-term storage pattern, while this remains true for October 2017 there has been some shifting of trailers and a small number (approximately 12) in 2017 appear to be positioned in preparation for movement.

Areas D, D1 and D2



Like Area C, Area D consists of numerous industrial buildings. Only two activities of note were observed in imagery of the area between October 2016 and October 2017. First, was the removal of approximately 179 vehicles (i.e., truck, vans and cars) stored in front of an administrative or office type building (Area D1) on the west side of the area. These vehicles were assembled here by the North Korean Government shortly after the closure of the complex by the South Korean Government in February 2016 and remained here until early 2017 when they were removed.5 The second activity noted is the removal of approximately 50 pallets of either equipment or supplies from a storage facility (D2) in the center of the area.

Areas E, E1 and E2




This area appears to consist primarily of support buildings. Located on the south side of Area E are the KIC’s water treatment plant and vehicle maintenance and support facility. The latter includes the local gas station. No changes of significance are observed at the water treatment plant (E2) between October 2016 and October 2017, and no vehicles are present in either image. The absence of vehicles strongly suggests that the facility is not operational, which is opposite of activity observed when the KIC was known to be operational. Minor activity is noted at the gas station and vehicle maintenance and support facility (E1) located adjacent to the water treatment plant. In October 2016, there were approximately 68 vehicle of all types (cars, vans, trucks, cranes, excavators, etc.) present. The majority of these vehicles were parked in what appears to be a long-term storage pattern. In October 2017, there were approximately 72 vehicles of all types present and a number of these are parked in patterns suggesting recent or ongoing usage.

Area F


Area F consists of a mixture of the western entrance/security checkpoint and administrative and industrial buildings. With the exception of minor agricultural activity (i.e., the drying of grain in parking areas, which is typical in October) no activity of significance is noted in Area F. Notably, there is no activity at the western security checkpoint or the adjacent security/administration buildings, which would be expected for an operating complex.

Area G


This area consists of an old cemetery on the west side and a gravel pit with several associated batch plants on the east side—for the extraction and production of sand and gravel and the mixing of concrete. No activity or new excavations are observed at either location since October 19, 2016.

Area H

With the exception of minor agricultural activity (i.e., the drawing of grain in parking areas) no activity of significance is noted in Area H. Notably, there is no activity at the eastern security checkpoint or the adjacent security/customs administration buildings. No activity is observed in the rail transfer yard or its associated rail engine shops. Activity at both these locations would be expected for an operating complex.

References

Show 5 Footnotes

  1. Mark E. Manyin, “The Shutdown of the Joint North/South Korean Kaesong Industrial Complex,” CRS Insight, February 11, 2016.
  2. For example, see: Kim, Hyo-jin. “N. Korea secretly reopens some Gaeseong factories,” Korea Times, October 8, 2017; Elizabeth Shim, “North Korea: Kaesong factories are up and running,” UPI, October 6, 2017; and “North Korean workers operating in closed, South-invested factory zone,” Reuters, October 6, 2017.
  3. 북, 개성공단 내 의류공장 은밀히 가동(North Korea is secretly running a textile factory in Kaesong Industrial Complex), Radio Free Asia, October 2, 2017.
  4. North Korea says it is operating Kaesong factories, ‘freezes’ assets valued at $663 million left by Seoul,” Japan Times, October 6, 2017.
  5. Over 100 South Korean-owned cars no longer visible at Kaesong Industrial Complex,” NK News, April 25, 2017.