[Inside Chodong] The Answer Lies in the Field of Environmental Regulations

The Grace Period for Regular Inspections Should Be Extended Until the End of Next Year
Small Business Owners Struggle to Comply with the Chemicals Control Act
Government Measures Fall Short of Industry Needs

[Asia Economy, Kim Daeseop, Deputy Director of the Ministry of SMEs and Startups] Business owners operating small and medium-sized manufacturing companies are persistently pleading for improvements, claiming that they are facing an existential crisis due to compliance with the Chemical Substances Control Act (Chemicals Control Act). Listening to the difficulties of small business owners, one can feel their pain and desperation. It is truly regrettable.

In an environment already made difficult by the economic downturn caused by the novel coronavirus disease (COVID-19), the Chemicals Control Act has become another source of trouble. Small business owners are repeatedly requesting the government to amend the law to ease the standards of the Chemicals Control Act and make regulations more suitable for the field.

Although the Ministry of Environment has partially reflected field voices in its policies, frustration runs high on the ground. Why is there such anger? The industry says the government has not fully grasped or understood the actual conditions on site and the regulatory improvements desired by small business owners. There are noticeable shortcomings.

In fact, the government's policy implementation process is inadequate. Recently, the government announced the "Field-Centered Regulatory Innovation Plan to Reduce Corporate Burden," extending the grace period for regular inspections of hazardous chemical handling facilities, which was scheduled to end this month, by an additional three months until the end of this year. They stated this decision was made considering the management burdens on small businesses due to the prolonged COVID-19 pandemic. Of course, it is fortunate that such a regulatory innovation plan has been introduced. It may provide some relief to small businesses.

However, the opinions of the small business community were not sufficiently reflected. This is why frustration on the ground is inevitable. According to a recent survey conducted by the Korea Federation of SMEs titled "Survey on the End of the Grace Period for Regular Inspections of Facilities under the Chemicals Control Act," 39.0% of respondents selected "one year" as the necessary additional grace period, the highest proportion. This was followed by "two years or more" (29.0%), "six months" (13.3%), and "less than two years" (12.9%).

It is difficult to predict how long the COVID-19 situation will continue. Even if COVID-19 disappears immediately, the management status of small businesses that have suffered damage will not recover overnight. A longer grace period is needed until the damage caused by COVID-19 is restored and stabilized. Nevertheless, it is very disappointing that the government chose to extend the grace period by only three months.

Due to the prolonged COVID-19 pandemic, the operating rates and sales of numerous small businesses' factories have plummeted. They are in a situation where they can hardly afford to invest, let alone make payments. For micro small businesses with no funds, even extending the grace period is not very meaningful. Small businesses lacking the capacity to comply with the Chemicals Control Act face a high risk of being unable to operate because they cannot meet the standards for handling facilities.

However, along with law amendments suited to the field, the government can solve the problem by further extending the period to allow small businesses struggling due to COVID-19 to prepare adequately or by providing financial support. The grace period for regular inspections of hazardous chemical handling facilities should be sufficiently extended until the end of next year.

The burdens small business owners feel in complying with handling facility standards lie in equipment investment costs, lack of response personnel, and physically impossible standards. To facilitate smooth implementation of the Chemicals Control Act, it is necessary to revise the notification to differentiate handling facility standards by industry and company size, and to provide financial support.

The Chemicals Control Act is a law that strengthens safety management by systematizing the management of chemical substances, specifying standards for handling, installation, and operation of hazardous chemical substances. The Ministry of Environment fully revised the Chemicals Control Act in January 2015 and granted a five-year grace period. The revised Chemicals Control Act has been fully enforced since January this year.

Environmental regulations are becoming increasingly stringent. This is essential for public safety. Small business owners also agree with the purpose of the Chemicals Control Act. What is important is to enable small businesses to comply with the regulations. The government needs more meticulous policies. It must listen carefully to the voices from the small business field and boldly amend the laws.

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