Comprehensive Reform of On-Site Regulations Blocking the Spread of Social Value Pursuit

Improvement of 59 Core Regulations for Social Value Pursuing Companies such as Disabled-Owned and Women-Owned Businesses

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[Asia Economy Reporter Kim Heeyoon] Legislation is being promoted to mandate the purchase ratio of social enterprise products bought by public institutions. Additionally, to address difficulties arising from the undervaluation of social economy enterprises' corporate value, a plan is underway to reflect social value in the evaluation model of regional credit guarantee foundations.

The Ministry of SMEs and Startups and the Small and Medium Business Ombudsman announced these measures jointly with related ministries on the 15th at the '115th National Policy Issue Inspection and Coordination Meeting' under the title "On-site Consensus Regulatory Improvement Plan to Promote Growth of Social Value Pursuing Enterprises."

At the meeting, the Ministry of SMEs and Startups stated, "Under the leadership of the SME Ombudsman, customized on-site communication by enterprise type will be conducted, and 59 core regulations in four major areas?fairness, inclusiveness, rationalization, and realism?will be collectively improved to promote business growth."

The improvement plan includes ▲ enhancing fairness and self-sustainability among enterprises (12 items) ▲ promoting entry into government procurement and reducing burdens (24 items) ▲ realizing regulatory realism and reducing administrative burdens (12 items) ▲ establishing a foundation for growth promotion and strengthening support (11 items).

A social cooperative established by local parents to create jobs for people with developmental disabilities, mostly composed of female members, faced difficulties because it was not recognized as a women-owned enterprise due to its status as a non-profit corporation, resulting in disadvantages. Accordingly, the Ministry of SMEs and Startups decided to recognize social cooperatives meeting the relevant requirements as women-owned and disabled-owned enterprises, similar to general cooperatives, granting preferential benefits such as participation in related projects. The Ministry of Employment and Labor also plans to distinguish and review preliminary social enterprises and certified social enterprises separately during the evaluation of the 'Social Enterprise Job Creation Project' to expand participation opportunities for preliminary social enterprises.

There was also an issue where a social enterprise submitted a quotation for a contract under 50 million KRW, but the local government contract officer felt burdened in determining the validity of the quotation, leading to the contract's cancellation. In response, the Ministry of the Interior and Safety decided to remove the requirement that local government direct contracts (single quotation) must be made at the "most economical price," easing contract burdens and promoting priority purchasing. The Public Procurement Service will also collectively improve 20 procurement systems for social value pursuing enterprises, such as small-scale goods under 200 million KRW and competitive procurement among SMEs, providing credibility points and supporting successful bids.

Minister Park Young-sun of the Ministry of SMEs and Startups said, "Social value pursuing enterprises may be somewhat vulnerable in competition with general enterprises due to their characteristics, but they hold great significance in pursuing public interest alongside profit. We will do our best to enhance their self-sustainability and promote growth."

Ombudsman Park Joobong stated, "We will continue to communicate regularly to activate social value pursuing enterprises, a kind of 'good company,' and continuously discover and rectify unreasonable regulatory difficulties."

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