Korea's deposit-refund system became effective January 1992. Unlike deposit-refund systems in the United States and Europe, producers and importers, not consumers, pay the deposits into a "Special Account for Environment
Improvement." They are required to collect and treat their waste and the Account reimburses them according to the recovery rate achieved. The government did not set criteria for how materials subject to deposits were to be collected. (Each municipality operates its own trash and recyclable collection program.) The products covered under the system were modified in June 1993 and December 1996. Table 5 lists products subject to the deposit-refund system and their respective deposit amounts.
In 1993 the Ministry of the Environment created the Korea Resources Recovery and Reutilization Corporation. The Corporation is responsible for collecting and sorting discarded plastics, paper, scrap iron, and agricultural pesticide containers;
enforcing recycling laws; and managing the funds in the Special Account for Environment Improvement. The Corporation also plays a central role in the development of new recycling capacity through research; construction of recycling centers, and processing and manufacturing facilities; and providing financial and technical support for private-sector recycling industries.
In 1995, the Korea Resources Recovery and Reutilization Corporation refunded only 13.7% of deposits manufacturers and importers owed to the Special Account for Environment Improvement. In general, the deposit-refund system failed to motivate manufacturers to collect and treat waste because the deposit was much less than the cost for collection and treatment of wastes. Therefore, manufacturers found it more economic to forfeit deposits than recycle. The Korean Ministry of Environment has announced plans to gradually increase deposit amounts.
Some industries have made more aggressive efforts to recycle than others have. In 1996, largely due to the establishment of a recovery and recycling system for metal cans instituted by producers, the total amount of refunds rose to 29.3% of the total amount of deposits due. Metal can producers have also changed their production as a result of the deposit-refund system. They increased production of metal cans with "push-down" type tabs (deposit of 2 won per container), while production of cans with removable tabs (deposit of 5 won per container) decreased.
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