[Editorial] Lax Management of Public Corporations

On its foundation day, the Korea Broadcasting Advertising Corporation provided a two million won laptop to every employee and created a new benefit for its employees – a 50,000 won reimbursement for those joining a gym or a fitness related class. The Korea Railroad has 64 full-time unionists, more than threefold of the government standard of 21. The Korea Racing Authority has promised its voluntary retirees to expenses for medical check-ups and gifts in the event of family members` marriages, birthdays, or deaths for three years. The moral hazard of public corporations, often dubbed as “God-given places to work,” has reached a serious level due to lax management and the give-and-take relationship between the labor union and management, according to a report which has been submitted to the National Assembly by the Ministry of Planning and Budget.

Public corporations, which have been passing their mismanagement burden on taxpayers, have pushed the limits of self-indulging parties too far. However, the Roh Moo-hyun administration has played the role of a carefree spectator instead of a stern supervisor. Some may even argue that the government has encouraged the inefficient management of public corporations. After the financial crisis, the Kim Dae-jung administration set the overhaul of the public sector as one of its four main reform agenda and made efforts to cut down the number of public entities or privatize them. However, the incumbent administration claimed that it had reviewed the planned privatization from the very first moment it took office under the excuse of reforming family-owned conglomerates. One year later, when the labor union of the Korea Electric Power Corporation went on a strike for 37 days, the government announced that it would not push the privatization of state-owned companies, removing the privatization plan from its roadmap. This is all because of the left-leaning Roh administration which preferred a government-led economy and a big government instead of a big market.

Those who seized power in the administration regarded public corporations as war booty and appointed his fellow politicians who lack in expertise as their CEOs or auditors. The CEO of the Korea Broadcasting Advertising Corporation who gave a surprise gift to its employees on the company foundation day, is former Spokesman of the Presidential Transition Committee Jeong Sun-gyun. The president of the Korea Minting and Security Printing Corporation is former Presidential Secretary Lee Hae-seong and the auditor of the Korea Land Corporation is Choi Gyo-jin, a former Korean language teacher who had always been an active member of the Korea Teachers and Educational Workers Union. Most of the auditors of public corporations, who took a trip to Iguazu Falls under the excuse of attending a forum in South American, were appointed through someone higher up having pulled some strings. However, President Roh told the media, “Their lack of experience is their strength.”

Whenever someone is hired as an executive member of public corporations through influence from the government, the union pretends to protest against it. However, the labor and the management eventually make concessions. However, it is the taxpayers who have to shoulder the burden of the costs. “If the organization is to change its constitution, the labor and the management must wage a war. However, those who pulled strings to get the job cannot assume the task,” one auditor of a public corporation said.

The government, which has the authority to supervise, is responsible for the reform of public corporations. However, we cannot expect it to reform them in the present situation when the government is too busy to get bigger.