Democratic Party Also Pushes 'Expressway Legislation' for Economic Democratization... "Key National Assembly Task Next Month"

Lee Hae-chan, leader of the Democratic Party of Korea, is attending the Supreme Council meeting held at the National Assembly on the 7th and delivering opening remarks. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Park Cheol-eung] The Democratic Party of Korea has decided to prioritize the passage of so-called 'economic democratization' bills, including the Fair Trade Act, the Commercial Act, and the Subcontracting Act, at the regular National Assembly session next month. Following the enactment of real estate-related bills, the party aims to transform the ecosystem centered on large corporations. A full-scale confrontation with not only the opposition parties but also the business community, which has argued that these are anti-market policies, appears inevitable.

On the 7th, a key official from the Democratic Party's Policy Committee stated, "The amendments to the Fair Trade Act and the Commercial Act, which the government announced for legislative notice in June, were sufficiently discussed during the 20th National Assembly, so they will proceed as is," adding, "They will be discussed during the September regular session and can be considered one of the core agendas."

Kim Tae-nyeon, the Democratic Party floor leader, declared in his speech on August 20th at the National Assembly's negotiation group representatives' meeting, "Social grand compromise and economic justice are stepping stones for inclusive growth," and pledged, "We will promote amendments to the Fair Trade Act and the Commercial Act, which were not discussed in the 20th National Assembly, in consultation with the opposition." He also announced legislative efforts to promote coexistence and cooperation between large corporations and small and medium enterprises, protect and support small business owners, and revitalize local commercial districts. These are regarded as timely tasks to be achieved in the economic sector, alongside housing issues described as a 'real estate republic,' balanced national development, and prosecution reform.

Lee Hak-young, chairman of the National Assembly's Industry, Trade, Energy, Small and Medium Enterprises and Startups Committee (SanJaWi) from the Democratic Party, mentioned the Subcontracting Transactions Fairness Act, the Distribution Industry Development Act, the Win-Win Cooperation Act, and the Franchise Business Act as bills under SanJaWi's jurisdiction that must be addressed in the September regular session, emphasizing, "In some ways, these are even more important than real estate-related laws and must be pursued."

Shin Dong-geun, a Democratic Party lawmaker running for the party's Supreme Council election, recently appeared on YTN Radio and said, "The reform tasks demanded by the candlelight citizens start with reforming power institutions such as the prosecution and must complete economic democratization tasks such as resolving inequality and polarization." On September 5th, Democratic Party lawmaker Lee Yong-woo also proposed a special bill for listed companies, including the introduction of a mandatory tender offer system to allow minority shareholders to enjoy management premiums and enhance shareholder value.

The Fair Trade Act amendment, which the Korea Fair Trade Commission announced for legislative notice in June, was originally submitted to the National Assembly in August 2018 but was discarded without proper discussion. It includes abolishing the exclusive prosecution system of the Fair Trade Commission for serious matters such as price-fixing or bid-rigging. This means that collusion can be reported to the prosecution even without the Fair Trade Commission, and the prosecution can initiate investigations on its own discretion. The Fair Trade Commission plans to submit the amendment to the National Assembly within this month.

The Commercial Act amendment was announced for legislative notice by the Ministry of Justice in June. A Ministry of Justice official said, "It is currently under review by the Office for Government Policy Coordination, and after going through procedures such as the Cabinet meeting, it will be submitted to the National Assembly, with a policy to proceed as quickly as possible." A representative provision is the introduction of a multiple derivative suit system, allowing a certain number of parent company shareholders to file derivative lawsuits against subsidiary directors if the subsidiary directors cause damages by failing to fulfill their duties.

Democratic Party lawmaker Jung Chung-rae proposed a bill to abolish the exclusive prosecution system last month, stating, "The Fair Trade Commission exercises its prosecution rights passively, resulting in inadequate punishment for unfair trade practices by companies, effectively exempting illegal acts from criminal punishment, restricting the prosecution's right to indict, and violating the principle of separation of powers."

Additionally, the bill allows victims of unfair trade practices to directly request courts to prohibit or prevent such acts and doubles the upper limit of fines. The regulation criteria for internal transactions (self-dealing) will be expanded from the current 30% or more ownership by the controlling family in listed companies and 20% or more in unlisted companies to 20% or more in both. If the bill passes, the number of regulated companies will increase from 210 to 591.

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