Public and Private Sectors Unite to Overcome COVID-19 Economic Crisis... IT Industry Urges "Regulatory Relief Needed Quickly"

Review of Regulatory Relaxation Measures Including Easing Overlapping Regulations on Chemical Handling Tasks and Shortening Inspection Periods for Chemical Handling Facilities

[Asia Economy Reporter Ki-min Lee] To overcome the economic crisis caused by the novel coronavirus infection (COVID-19) at an early stage and regain vitality, the Korea Chamber of Commerce and Industry (KCCI) and the Public-Private Joint Regulatory Improvement Task Force held their first meeting. At this meeting, the information technology (IT) industry requested the government to promptly resolve unreasonable regulations to overcome the COVID-19 crisis early.

On the 15th, the KCCI and the Public-Private Joint Regulatory Improvement Task Force jointly held the "1st Meeting on Regulatory Improvement for Key Industries" to listen to regulatory difficulties in the IT industry and seek solutions. This meeting was jointly planned by the Public-Private Joint Regulatory Improvement Task Force and the KCCI with the purpose of resolving regulatory difficulties in key industries through public-private cooperation.

The first meeting was attended by Woo Tae-hee, Executive Vice President of KCCI (Co-Chair of the Public-Private Joint Regulatory Improvement Task Force), Nam Ki-man, Vice President of the Semiconductor Industry Association, Seo Kwang-hyun, Vice President of the Display Industry Association, Lim Ho-gi, Executive Director of the Electronics and Information Communication Industry Promotion Association, and other industry-specific associations and major companies within the IT industry. Government officials from the Office for Government Policy Coordination, Ministry of Trade, Industry and Energy, Ministry of Environment, Ministry of Employment and Labor, and other related departments also participated, including Lee Ryeon-ju, Director of the Regulatory Coordination Office at the Office for Government Policy Coordination (Co-Chair of the Public-Private Joint Regulatory Improvement Task Force).

In his opening remarks, Lee Ryeon-ju, Director of the Regulatory Coordination Office, stated, "It is a situation that requires extraordinary measures more than ever to overcome the COVID-19 crisis early and restore economic vitality. We will actively strive within the government to listen directly to the voices calling for regulatory innovation from key industries that strongly support our economy and to implement regulatory reforms that companies can feel."

Regarding the request to resolve various regulatory difficulties in the IT industry, the public and private sectors discussed solutions together. First, the issue of overlapping regulations on hazardous chemicals was discussed. Currently, companies intending to subcontract hazardous chemical handling tasks must obtain 'subcontract approval' from the Ministry of Employment and Labor under the Industrial Safety and Health Act. Separately, they must also submit a 'subcontract report' to the Ministry of Environment under the Chemical Substances Control Act. Although the management contents and submitted documents of the two ministries are practically similar, the overlapping procedures cause difficulties for companies. The related ministries agreed to review the procedures and submitted documents of each system in the future to improve the overlap.

There was also a request to improve administrative procedures. When establishing or expanding hazardous chemical handling facilities, the facility inspection alone takes a certain amount of time, causing delays in factory operations. Companies attending the meeting suggested that companies be allowed to designate their preferred inspection dates to increase predictability. The government also decided to explore various alternatives to minimize operational delays for companies.

Additionally, the IT industry conveyed improvement opinions such as extending the settlement period for the flexible working hours system to alleviate difficulties in managing working hours after the implementation of reduced working hours. Furthermore, various policies were proposed to enhance the competitiveness of the IT industry through new industries and expanded research and development (R&D) investments.

The most discussed issue at the meeting was the "expansion of eligibility requirements for tax credits for new industries." The IT industry complained that although large-scale facility investments are frequent, it is difficult to receive tax benefits. To receive tax benefits, requirements such as maintaining the number of regular employees must be met, but due to the nature of the IT industry, where a single company operates both new and existing industry sectors and experiences frequent personnel movement, meeting these requirements is difficult. Therefore, business representatives requested that the employee number requirements be limited to the "new industry sector personnel" rather than the "total workforce."

There was also a request to expand financial support for mid-sized companies. Currently, government financial support for COVID-19 damage is mainly focused on small business owners and small and medium-sized enterprises, leaving mid-sized companies in a blind spot. In particular, mid-sized companies that do not have the capacity to issue corporate bonds or commercial papers need support such as loan maturity extensions or preferential interest rate loans to resolve funding difficulties.

Executive Vice President Woo Tae-hee emphasized, "Now, when the world has stopped due to the impact of COVID-19, is the right time to proactively prepare for the post-COVID era and enhance the international competitiveness of key industries," adding, "The role of the IT industry, which is at the forefront of the transition to a digital economy, is especially important."

The KCCI stated, "Despite the difficult situation of low growth and the COVID-19 crisis amid China's pursuit, key industries continue to play a solid supporting role in our economy," and added, "Starting with the IT industry meeting, we will help resolve regulatory difficulties in key industries to turn the current crisis into an opportunity."

Meanwhile, the KCCI and the Office for Government Policy Coordination plan to hold monthly meetings in the order of equipment industries (chemicals and steel), core industries (automobiles and machinery), and consumer goods and bio industries, starting with this IT industry meeting, to review all major domestic industries.

This content was produced with the assistance of AI translation services.