Government Reorganization 'Finalized'... Confusion Unavoidable for National Assembly Audit and Budget Review

Details of Work Division Deferred for Further Consultation
Inevitable Impact on National Assembly Audit and Budget Review
Key Issues of Prosecution Reform Remain Unresolved

On September 7, the ruling party and the government finalized the direction of the government reorganization plan. However, as the overall framework of government organizations is being changed, confusion has become inevitable, not only due to the controversial details of prosecution reform. This is expected to significantly impact the review of the regular National Assembly budget, legislative deliberations, and even the National Assembly audit. The government organizations subject to restructuring are also expected to require considerable time to clarify their specific roles, scope, and affiliated agencies.

Han Jeongae, Policy Committee Chair of the Democratic Party of Korea, and Yoon Hojoong, Minister of the Interior and Safety, disclosed the direction of the government reorganization at a briefing following a party-government consultation on the same day. The main points of this reorganization include adjusting the functions of major ministries such as the Ministry of Economy and Finance, the Financial Services Commission, the Prosecutors' Office, and the Ministry of Environment, as well as establishing a new Deputy Prime Minister for Science and Technology. In particular, the reorganization involves separating the Ministry of Economy and Finance and the Prosecutors' Office, which were previously considered power agencies, and integrating energy functions into the Ministry of Environment, thereby clarifying the division of roles among ministries in a large-scale overhaul.

1) Details Remain Unresolved: Ministries Face Numerous Tasks in Redefining Roles

Following the government reorganization, the media focused on the division of work among ministries and the affiliation of subordinate agencies. In response, the government explained the changes from the perspective of the Government Organization Act revision but stated that specific issues would be decided through further consultations between ministries.

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For example, in the case of financial authorities undergoing a major overhaul of the financial supervisory system, there are concerns about the possibility of overlapping sanctions. A government official stated, "In the initial phase of implementation, we must avoid overlapping sanctions or duplicated work, especially regarding financial institutions. Therefore, we plan to clearly define responsibilities and prevent overlapping supervision through MOUs (memorandums of understanding)." However, the management of affiliated agencies such as financial public enterprises will require further adjustment within the financial authorities. Depending on their functions, financial public enterprises under the Chairman of the Financial Services Commission may be transferred to the Ministry of Economy and Finance or remain under the Financial Supervisory Commission, and these decisions will be made through additional discussions. There may inevitably be confusion for some time regarding the location and authority of supervisory agencies, as well as their subordinate organizations and regulated entities.

Additionally, the reassignment of responsibilities is expected to be unavoidable for policies such as nuclear power. While Korea Electric Power Corporation and Korea Hydro & Nuclear Power are expected to be affiliated with the Ministry of Climate, Energy and Environment, there is interest in whether the function of nuclear power exports will remain with the Ministry of Trade, Industry and Energy.

2) Prosecutors' Office to Be Dissolved: Ministries Face Numerous Tasks in Redefining Roles

The highly anticipated separation of the prosecution's investigative and indictment powers has been settled through this reform. The Prosecutors' Office will be split into the Serious Crimes Investigation Agency (Jungsoo Agency), which will assume investigative authority, and the Prosecution Agency, which will handle indictments. Although there was discussion about whether the Jungsoo Agency would remain under the Ministry of Justice, the Government Organization Act places it under the Ministry of the Interior and Safety. The head of the Prosecution Agency will become the Prosecutor General.

However, issues such as whether the prosecution will retain supplementary investigative authority and the controversy over establishing a National Investigation Committee remain unresolved. While the principle of abolishing the Prosecutors' Office has been firmly established, questions regarding the scope and role of investigative powers, including supplementary authority, still need to be addressed. A government official stated that the Jungsoo Agency will be "designed to have a clearly different investigative scope and targets compared to the National Investigation Headquarters." The Corruption Investigation Office for High-ranking Officials is not subject to this revision of the Government Organization Act. The National Investigation Committee, which was controversial regarding its introduction, has also been excluded from this revision. Adjusting investigative authority between the Jungsoo Agency and the National Investigation Headquarters remains a new challenge to be addressed.

In this regard, the government plans to discuss specific reorganization measures at a later date. Han Jeongae, Policy Committee Chair, stated, "We will establish a pan-government prosecution reform task force under the Prime Minister's Office and, through close consultations between the ruling party and the government, prepare a plan as soon as possible." Minister Yoon also explained, "The establishment of the Prosecution Agency and the Serious Crimes Investigation Agency will be implemented one year after the promulgation of the relevant legislation, taking into account the preparation period for detailed reorganization." The adjustment of investigative powers and other specific tasks will be finalized by next year.

Previously, there were strong voices within the Democratic Party calling for the completion of detailed prosecution reform measures before Chuseok. However, as disagreements over the specific direction of prosecution reform emerged both publicly and privately, it appears that discussions have been concluded at the level of outlining the basic direction of reform. Nevertheless, the proliferation of investigative agencies has made the issue of adjusting investigative authority unavoidable.

3) National Assembly Audit and Budget Review: Scheduling Disruptions Unavoidable

Last year's National Assembly audit session. Photo by Kim Hyunmin

The ruling party and the government have decided to postpone the reorganization of the Prosecutors' Office, Planning and Budget Office, Ministry of Economy and Finance, and Financial Supervisory Commission until January 2 of next year. However, as the large-scale government reorganization will occur during the regular National Assembly session, there will be a need to reassign work for budget and legislative reviews, as well as the National Assembly audit. Changes within the National Assembly itself will also be inevitable. Adjustments to standing committees and other bodies will be necessary in accordance with the government reorganization.

For now, the Government Organization Act will be submitted to the National Assembly as a bill sponsored by lawmakers and will go through the legislative process. The Democratic Party, the government, and the presidential office finalized the Government Organization Act through a high-level party-government consultation on this day. The Democratic Party plans to pass the Government Organization Act at the plenary session of the National Assembly on September 25, before Chuseok.