Business Deregulation Proceeding at Slow Pace

The government has accepted less than a third (31.5 percent) of deregulation requests from the Federation of Korean Industries on creating a more business-friendly environment.

According to a preliminary report on the review of deregulation requests obtained by The Dong-A Ilbo yesterday, the National Competitiveness Committee under the president reviewed 200 deregulation requests from the federation, along with 19 ministries and agencies. Among them, 23 cases (11.5 percent) were accepted and 40 (20 percent) were partially accepted.

One hundred cases (50 percent) were rejected, 25 (12.5 percent) were shelved for long-term review, and 12 (six percent) were unanswered.

The federation said the deregulation project for 200 rules was drawn up based on meetings of relevant industries after listening to 512 corporate complaints. "Though the government’s report is a tentative one, it falls short of our expectations.” said a federation source.

Of 11 tasks sent to the Fair Trade Commission, 10 (90.9 percent) were rejected, including scrapping of the designation of business groups; simplifying disclosures by conglomerate subsidiaries; and granting autonomy on forming holding companies. One request accepted by the commission was consideration of overseas market conditions when examining mergers and acquisitions.

The Environment Ministry returned 12 (60 percent) of 20 deregulation requests, completely or partially accepted five (25 percent), and left three for long-term review (15 percent).

Of 17 cases sent to the Labor Ministry for review, nine (52.9 percent) were rejected, including allowing substitute workers during labor disputes; strengthening conditions to commence labor disputes; and adopting a competitive system for insurance covering industrial accident compensation.

On the report, many in the business community said deregulation comes with the surrender of government organizations’ authority, adding many of their requests were rejected.

According to a federation survey of 335 member companies in March on their expectations for the government’s deregulation drive, 21.8 percent had “very high” expectations and 57.8 percent “high” expectations.

The competitiveness committee reportedly told the federation, “On the rejected requests, the government will continue to review them in cooperation with relevant ministries to accept some of them.”

bookum90@donga.com