[In-Depth Look] The Devil Is in the Details

Jung Woo-yong, Vice Chairman of Policy, Korea Listed Companies Association

There appears to be a recent movement to push the three economic laws (Commercial Act, Fair Trade Act, Financial Group Supervision Act) through as originally proposed. Although ruling party lawmakers have continued to hold meetings with the business community, seemingly to listen to corporate voices, they have not relented in their insistence on advancing the bills as originally drafted by the power of the ruling party majority, similar to recent bills. Despite continuous communication to the government and National Assembly about the problems and risks that would arise if the bills pass, and despite economic organizations and experts expressing the need for in-depth review of the three economic laws through the media, statements, and forums, it has been completely ineffective.

We must reflect on cases where stakeholders suffered due to laws that were passed quickly, ignoring thorough review and discussion. The Real Estate Lease 3 Acts, which were passed in just three days, naturally come to mind. The policy's introduction was well-intentioned and initially received public support. However, the revision focused solely on passing the bill without reflecting detailed issues such as Korea’s unique environment and culture, and various problems that arose after implementation. The result was devastating, and the ordinary citizens who should have benefited from the law are currently experiencing the greatest harm.

The phrase "the devil is in the details" is often seen whenever policies are announced. While the intent of policies and legislation is good, it implies that significant side effects occur in very trivial areas that are overlooked.

Details that could cause problems in the business community due to the introduction of the three economic laws are already emerging here and there. The legislative intent to improve corporate governance and significantly expand the institutional foundation for a fair economy is far removed from reality. The mid- to long-term policy goals are unclear, making the argument unconvincing. Moreover, there are no sophisticated policy alternatives addressing the risks that companies will unilaterally face if the bills pass.

Recently, mid-sized and small business owners have expressed great concern that the government is amending laws applicable to all companies to regulate a few conglomerates. This is because mid-sized and small companies are likely to suffer much more than large corporations that are well-prepared for legal risks. This situation closely resembles how the intended beneficiaries of the Real Estate Lease 3 Acts?homeless people and tenants?ended up with nowhere to go due to skyrocketing housing prices and a rental crisis.

The government and ruling party argue that since these policies are not new but have been discussed for years, they should not be delayed any further. However, conversely, the fact that they were not passed in the previous National Assembly could be interpreted as a rational choice made after detailed review and discussion not to introduce the policies.

Beyond the three economic laws, regulations that cannot even be seen in the legislative examples of major countries with long corporate histories and large economies are continuously being discussed, making them far from global standards. Our economy still has a long way to go. The total market capitalization of our entire capital market is smaller than that of a single company like Apple, and only about 9% of listed companies are large corporations, reflecting the reality of Korea’s economic scale. Furthermore, while governments worldwide are expanding policy support and tax benefits for their domestic companies due to COVID-19, it is disheartening as a member of economic organizations to see Korea’s corporate policies moving backward.

If the three economic laws pass, countless entrepreneurs and workers who have worked hard to build our economy will have to compete with leading global companies on a tilted playing field due to regulations, and will inevitably be exposed defenselessly to threats from speculative forces. It is not too late yet. If the government and ruling party listen openly to economic and corporate experts and stakeholders, carefully examine the detailed issues that the three economic laws may bring, and identify the devil in the details, the policy introduction will be recorded in history as one that everyone can accept for economic development.

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