President Moon says anti-corruption should be first priority of new government

September 26, 2017

Cheong Wa Dae

The Republic of Korea

Today from 11:30 a.m. to 1:30 p.m. at Jiphyeonsil (the presidential office) of the Blue House, president Moon Jae-in presided over the 1st Anti-Corruption Policy Consultation Council participated in by the heads of anti-corruption related agencies, including the Chairperson of the Anti-Corruption and Civil Rights Commission, the Chairperson of the Korea Fair Trade Commission, the Chairperson of the Financial Services Commission, the Minister of Justice, the Minister of National Defense, the Minister of the Interior and Safety, the Minister of Personnel Management, the Minister of the Office for Government Policy Coordination, the Prosecutor General of the Supreme Prosecutors’ Office, the Commissioner of National Tax Service, the Commissioner of Korea Customs Service, the Commissioner General of the Korean National Police Agency, etc., and discussed future direction of anti-corruption policy at the national level and measures to deal with pending issues related to corruption.

The council was convened for the first time in line with the Moon Administration’s policy task for ‘making Korea a nation of integrity through anti-corruption reforms.’ Through this council, the government is planning to establish and pursue more systematic anti-corruption policies at the national level, while effectively managing various tasks carried out by each government agency.

President Moon Jae-in said “there is a saying that corruption turns everything into naught. we must fight corruption in order to realize a fair and just society.” And he also added that “over the past several years, the power squeezed the livelihood of the people through unjust and corruptive ways and wasted the people’s tax money as if their own while executing state powers, thereby routinizing cheating and special privileges in our society. And as a consequence, Korea’s Corruption Perceptions Index (CPI) dropped 15 notches.”

The president requested that “with the eradication of corruption being the top priority of all policy measures pursued by the new Administration, the anti-corruption policy consultation council should play a pivotal role in anti-corruption efforts to establish justice in our society.”

The president also called for “comprehensive and multidimensional anti-corruption policies and strategies to fight corruption at all government offices,” and added that “Cheong Wa Dae cannot be an exception when it comes to the eradication of power-linked corruption, and as there is a saying that the fish always stinks from the head downwards, Cheong Wa Dae must be the starting point in efforts to improve transparency and fight corruption.”

In addition, the president said “we will only be able to improve the people’s livelihood and build a fair society with no cheating and no special privileges when we remove deep-rooted corruption in the private sectors as well as in the public sectors” and also added that “improvement in fairness will lead to an increase in the growth potential in our economy and the establishment of the culture of integrity in our society.”

□ The major contents of the briefing given by each government agency are as follows:

▲ The Chairperson of the ACRC, Pak Un-jong

○  briefed the President on the anti-corruption strategies for the new Administration to make Korea a nation of integrity free from corruption and said as follows:

-  due to lack of measures to tackle power-related corruption and the private sector corruption, aggravated distrust of the public as to the national anti-corruption system, etc., the CPI has been stagnant or even dropping since 2008 with the global ranking of local businesses’ anti-corruption ethics plunging to 98th from 27th last year.

-  with a view to overcoming this, the ACRC will pursue government-wide anti-corruption policies covering corruption in the private sector as well as corruption in the public sector through cooperation between the government and the civil society while going beyond the existing government-led anti-corruption policies limited to corruption in the public sector that had been pursued at the individual agency level.

-  more specifically, the ACRC will facilitate people’s participation in the overall policy-making process through online and offline communication platforms such as Gwanghwamoon 1st street and the People’s Idea Box, etc., and will identify those subject to intense reporting such as collusion and rebating, etc. to actively address corruption in the private/corporate sector,

-  in the meantime, government-wide preventive anti-corruption system will be set up through effective operation of the anti-corruption policy consultation council in order to reach an OECD top 20 countries’ average CPI score of not less than 60 by 2022.

▲ The Minister of Justice, Park Sang-ki said as follows:

○  stern enforcement actions will be taken against five serious corruption offenses (i.e. bribery, influence peddling, acceptance of properties through good offices, embezzlement, dereliction of duty) and regional indigenous corruption and irregularities.

-  for this, with special anti-corruption investigation squads under Prosecutors’ Offices nationwide at the center, a far-reaching and regular crackdown will be launched, while conducting investigations with actual circumstances of each region being taken into account by analysing chronic harmful consequences of indigenous corruption region by region.

-  also, ceaseless efforts will be made to ensure that the prosecution’s standard for handling cases of five serious corruption crimes and regional indigenous corruption will be levelled up so that a sentence commensurate with the severity of the crime can be imposed.

○  on top of that, in a bid to instill the perception in people that “Nobody can earn money by committing crimes,” proceeds of crime will be tracked down and confiscated to prevent people from being motivated to commit corruption.

-  in terms of corruption-causing factors identified during the course of investigations, active efforts will be made to develop measures to eliminate those factors in cooperation with relevant agencies.

▲ The Chairperson of the Korea Fair Trade Commission, Kim Sang-jo

○  briefed the President on “measures aimed at rooting out the conduct of unfair practices in areas linked with the public livelihood,” including power abuse and collusion, etc. that are chronic irregularities in the private sector and said as follows:

○  as for 4 areas of subcontract, distribution, franchise, and agency where there is a serious unbalanced relationship between the market-dominant entity and its counter-party who is in a financially weaker position, the KFTC will try to come up with comprehensive measures adapted to each area.

-  above all, in the case of subcontracting, the KFTC will institutionalize a system to prohibit large conglomerates from coercing their small- and medium-sized subcontractors into signing exclusive contracts and will also set up a task force to more intensively monitor large corporations to deter their extorting technologies from SMEs, which hinders the core competitiveness of SMEs.

-  in the case of franchise, strict sanctions will be imposed on power abuse by franchise headquarters and more efforts will be put into fostering a sound franchise market environment by requiring large franchisers to disclose a detailed list of items their franchisees must purchase from themselves or specific suppliers.

-  with regard to the areas of distribution and agency, the system of punitive indemnification will be introduced and expanded to reinforce the civil remedy, and at the same time, measures will be taken to strengthen the bargaining power of small businesses by stipulating the rights for agencies to form an organization, etc.

○  in the meantime, cases of collusion distorting the market order will be further exposed while sanctions against them will be strengthened.

-  to this end, the KFTC will improve the efficiency of the system for analysing the symptoms of bid-rigging, beef up the capacity to expose those involved in collusion in stronger partnership with overseas rival authorities, etc., and take measures to improve a system, including facilitation of reporting and an increase in the ceiling on the penalty charges.

▲ the Minister of National Defense, Song Young-moo said as follows:

○  “wide-ranging and various types of corruption take place across all phases of defense acquisition programs, so we will try to push ahead with fundamental policy measures to eliminate corruption-causing factors and prevent corruption.”

-  above all, as for the countermeasures to deal with defense industry brokers, we will reinforce reviewing of the implementation process of ‘brokerage commission reporting system’ which started to be implemented in July this year so that the system can be established at an early stage and also will convert the current system for reporting of defense consultant firms which is done on a voluntary basis into a system on a mandatory basis by stipulating in laws.

-  in addition, in order to prevent colluding with retired soldiers, the scope of those subject to the limitation of employment of retiree will be expanded to cover ‘small-scale defense businesses and defense trade agents,’ and the code of conduct will be amended in a way that where a meeting is held with persons involved in the defense industry (including retired public officials), the contents of the meeting will have to be reported.

○  in the meantime, as for companies committing malignant and intentional corruption, to establish the perception that “loss incurred by corruption can be greater than expected profits,” penalty provisions will be further strengthened and much stronger sentence will be handed down on corrupt public officials.

-  last but not least, in order to improve ‘closed process of defense acquisition’ centered on confidentiality, measures* will be taken to greatly increase the participation of companies and civilian experts.

*  such measures include ‘expanding participation of civilian experts in defense industry promotion committee,’ ‘further utilizing private research institutions prior to requirement decision,’ ‘guaranteeing opportunities for participation in an advanced study by defense industry companies,’ ‘providing opportunities for supplementing performance and quality of defense system after test and evaluation,’ etc.