Korea Environment Corporation Imposes $90K Plastic Waste Disposal Fee on HYBE

HYBE, recognized as a major player in the K-pop sector and the mastermind behind the global sensation BTS, has recently faced backlash for significantly misreporting its revenue for the year 2023. This clerical error has resulted in the company paying far less in waste disposal fees for its plastic waste.

On October 24, 2024, Naver journalist Park Se-yeon revealed details of an audit report released by Democratic Party representative Park Jeong, which highlighted these discrepancies.

The audit disclosed that HYBE mistakenly recorded its 2023 revenue as 2.17 billion KRW (around 1.6 million USD) in the Korean Environmental Corporation’s database. However, actual financial records indicated that the revenue was 2.17 trillion KRW (approximately 1.5 billion USD).

This means that the entertainment enterprise omitted three zeros from its reported figures, leading to significantly understated revenue figures.

This underreporting has serious implications, particularly for the waste disposal fees associated with the non-recyclable plastic waste generated from their albums and merchandise. Under South Korean laws, firms that produce large quantities of plastic waste are mandated to pay fees intended to mitigate the environmental consequences of that waste.

HYBE embroiled in plastic waste disposal scandal

Initially, HYBE had remitted approximately 149.64 million KRW (about $110,000 USD) for plastic waste disposal. However, given the company’s actual revenue, this fee should have been close to 275.83 million KRW (around $200,000 USD).

As of 2023, HYBE was responsible for producing nearly 1,397 tons of plastic waste, representing around 75% of the total plastic utilized by the eleven largest record labels in South Korea. Notably, 89% (1,249 tons) of this waste was attributed to album production, and 11% (148 tons) stemmed from merchandise production.

After Rep. Park’s office raised concerns, the Korean Environmental Corporation, which oversees the waste fee framework, discovered the reporting error. As a result, they issued an additional bill to HYBE for 125.12 million KRW (approximately $92,000 USD), which the company must now pay.

Rep. Park’s office criticized the Korean Environmental Corporation for its failure to identify the reporting error earlier, accusing them of negligence in reviewing the data submitted. According to the representative’s office, the environmental authority should have cross-referenced the reported revenue with accompanying documentation to catch the mistake promptly. The Korean Environmental Corporation has acknowledged its oversight and has issued a rectification notice to the entertainment giant.

HYBE has admitted to the reporting error and announced that an internal investigation is underway to understand how this mistake occurred. A spokesperson for the company stated that they are actively reviewing the situation and intend to provide a comprehensive response following their assessment.

This situation raises broader issues concerning the environmental ramifications of the K-pop industry, particularly as the production of albums and merchandise continues to surge.

Additionally, HYBE’s Chief Operating Officer, Kim Tae-ho, who also serves as the CEO of Belift Lab, was called to a National Assembly audit by the Ministry of Culture, Sports, and Tourism Committee. The committee is scrutinizing ongoing controversies tied to the entertainment company, including copyright disputes and allegations of plagiarism concerning HYBE’s subsidiary labels.

As reported by the Korea Herald, Kim Tae-ho has refuted claims that Belift Lab’s girl group Illit plagiarized any concepts from NewJeans. He also dismissed accusations that the group artificially influenced music charts through bulk album purchases.

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