Lawmaker Urges Korean Defense Firms to Raise Social Contributions

A ruling-party lawmaker has called on South Korea’s largest defense companies to increase their social contributions after their combined earnings rose sharply during the country’s defense export boom.

Rep. Kim Byung-joo of the Democratic Party of Korea said Friday that five major contractors posted a combined operating profit of 2.69 trillion won, or about $2 billion, in 2024. The companies were Hanwha Aerospace, Hyundai Rotem, LIG Defense & Aerospace, Korea Aerospace Industries and Poongsan.

Data submitted by the Defense Acquisition Program Administration showed that the five companies spent a combined 17.32 billion won on social contribution programs that year. That was equivalent to 0.64 percent of their operating profit.

Kim said the companies’ combined operating profit had increased 3.5-fold compared with 2022. He argued that the favorable business environment and strong earnings should be matched by greater efforts to support society.

The figures also showed that social contribution spending represented 0.09 percent of the companies’ combined revenue of 20.35 trillion won. That level was below the 0.19 percent average for major South Korean corporations in 2024, based on data compiled by the Federation of Korean Industries.

Each of the five defense companies recorded a year-on-year decline in the ratio of social contribution spending to operating profit. Hanwha Aerospace, which had the highest operating profit in the group, saw its ratio fall from 1.46 percent in 2023 to 0.95 percent in 2024.

Hyundai Rotem’s ratio declined from 0.58 percent to 0.24 percent. Korea Aerospace Industries’ ratio moved down from 0.39 percent to 0.25 percent, while LIG Defense & Aerospace’s figure fell from 0.71 percent to 0.46 percent. Poongsan’s ratio edged lower from 0.12 percent to 0.09 percent.

The criticism puts a spotlight on corporate responsibility in an industry that has become an increasingly prominent exporter. Korean defense companies have benefited from growing overseas demand, but the disclosed figures indicate that spending on community and other social programs has not kept pace with profit growth.

Kim’s intervention does not itself impose a new spending requirement. It instead raises a broader question for defense contractors and policymakers over whether companies whose business has expanded rapidly should make larger voluntary contributions, particularly as public institutions and national industrial policy play important roles in supporting the sector.