HYBE ordered to pay $90K in plastic waste disposal charges by The Korea Environment Corporation

HYBE, one of the leading companies in the K-pop industry and also the one behind supergroup BTS, has recently come under fire for drastically underreporting its 2023 annual revenue, which led to a significant underpayment of waste disposal fees for plastic materials.

On October 24, 2024, reporter Park Se-yeon reported via Naver that representative Park Jeong of the Democratic Party released an audit report revealing the discrepancy.

According to the report, HYBE incorrectly entered its 2023 revenue as 2.17 billion KRW (approximately 1.6 million USD) into the Korean Environmental Corporation’s system. However, the actual revenue for the year, according to financial statements, was 2.17 trillion KRW (approximately 1.5 billion USD).

Reportedly, the entertainment company should have added three more '0's, but they were omitted and this led to underreported sales figures.

This massive underreporting affected the waste fees the company had to pay for producing non-recyclable plastic waste, such as from albums and merchandise. Under South Korean regulations, companies that generate significant amounts of plastic waste are required to pay a fee to offset the environmental impact of that waste.

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HYBE finds itself in the middle of a plastic waste disposal controversy

Reportedly HYBE initially paid about 149.64 million KRW (around $110,000 USD) in plastic waste disposal fees. However, considering the company's actual revenue, the fee should have been nearly double, amounting to 275.83 million KRW (approximately $200,000 USD).

HYBE reportedly generated nearly 1,397 tons of plastic as of 2023, which accounted for about 75% of the total plastic used by South Korea's 11 major record labels. Of this, 89% (1,249 tons) came from the production of albums, while 11% (148 tons) came from the production of merchandise.

The Korean Environmental Corporation, responsible for managing the waste fee system, discovered the error after Rep. Park’s office raised the issue. In response, it issued HYBE an additional bill for 125.12 million KRW (about $92,000 USD), which the company is now required to pay.

Rep. Park’s office criticized the Korean Environmental Corporation for failing to detect the discrepancy earlier, accusing the agency of negligence in reviewing the data submitted by the company. According to Park’s office, the environmental agency should have compared the reported revenue with its supporting documentation to catch the mistake sooner. The Korean Environmental Corporation acknowledged the error and sent a correction notice to the music label.

The entertainment conglomerate admitted the mistake and stated that an internal investigation was underway to determine how the error occurred. A company spokesperson said they are in the process of reviewing the situation and will provide a more detailed response once the review is complete.

This incident highlights broader concerns about the environmental impact of the K-pop industry, especially as album sales and merchandise production continue to increase.

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Meanwhile, HYBE Chief Operating Officer Kim Tae-ho, who is also the CEO of Belift Lab, was summoned to the National Assembly audit by the Ministry of Culture, Sports, and Tourism Committee. The committee examined the ongoing controversies related to the entertainment company. These include issues such as copyright disputes and accusations of plagiarism between HYBE subsidiary labels.

According to the Korea Herald, Kim Tae-ho refuted all allegations that Belift Lab's girl group Illit plagiarized NewJeans' concept. He also rejected allegations that the conglomerate manipulated music charts by forcing distributors to bulk purchase their albums.