80 pct. of submitted bills seek to toughen biz regulations

Eighty percent of bills submitted by the ruling and opposition parties over the three months after the inauguration of the 19th National Assembly are related to tougher regulation of corporate activities.

Many of them have resulted from the race among rival parties to blame business to secure economic democratization issues as their agenda ahead of the presidential election in December.

The Dong-A Ilbo on Thursday analyzed 1,347 bills submitted from the opening of parliament ｏｎ　May 30 to ｌａｔｅ　Ａｕｇｕｓｔ with support from LG Economic Research Institute, the Korea Financial Investment Association and the Federation of Korean Industries. Bills that would affect corporate activities numbered 155, and just 31 of them (20 percent) were designed to ease regulations on companies or support the business community. The majority of 124 bills, or 80 percent, were focused on strengthening regulations.

Bills meant to toughen regulations far outnumbered those meant to support companies among bills submitted by both the ruling and opposition parties. The ruling Saenuri Party submitted 41 bills on business regulations but submitted just 17 related to support of companies.

The main opposition Democratic United Party submitted 83 bills, 73 (88 percent) of which were intended to regulate business activities.

Among major bills designed to toughen regulations, eight were related to corporate governance, including a ban on cross-subsidiary circular shareholding, and a system imposing a ceiling on the permissible amount of investment in affiliates. Eight other bills were about regulation of large retail stores, including limits to operating hours and forced closure on certain holidays. Ten other bills were submitted that seek to further burden labor and management relations, including the raising of the retirement age.

Just a few bills were designed to ease regulation and assist businesses, including the proposed Act on Capital Market and Financial Investment meant to galvanize domestic financial investments, and the Housing Act, which allows vertical expansion of floor space through renovation of old apartment buildings.

Yoo Jeong-joo, assistant general manager of the regulatory reform team at the Federation of Korean Industries, said, “Ａｍｏｎｇ the 31 bills urging deregulatory measures to benefit business activities, only two acts -- the Act on Capital Market and Financial Investment and the Housing Act -- will benefit business activities,” adding, “Companies in the respective industries concerned say most of the other acts will be of little help, if at all."

Jwa Seung-hee, adjunct economics professor at Seoul National University, said, “Regulatory bills that are similar to each other are being generated en masse, as parties lack policy consistency and are scrambling to use seductive promises to attract the public’s attention,” adding, “If bills restricting business activities increase in number, they will inevitably lead to less investment and fewer jobs, among other side effects."

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