8 out of 10 Companies Say "Current Punitive Administrative Regulations Need Improvement"

"66% Support Introducing Incentive Systems to Encourage Desirable Behavior"

Jeong Manki, Chairman of the Korea Industrial Federation Forum, is giving a greeting speech at the "9th Industrial Development Forum and 13th Automotive Industry Development Forum" held on the 25th at the Automobile Hall in Seocho-gu, Seoul. Photo by Moon Honam munonam@

[Asia Economy Reporter Yu Je-hoon] A survey found that 8 out of 10 domestic companies believe that the current punitive administrative regulations need to be improved.

The Korea Industrial Alliance Forum (KIAF) announced on the 28th that the results of the 'Corporate Awareness Survey on Punitive Administrative Regulations,' conducted from the 21st to the 25th with 68 companies, showed this trend. The survey included 6 large companies, 35 medium-sized companies, and 27 small and medium enterprises.

According to the survey, punitive administrative regulations were reported in the following order: industrial safety and health sector 61.8%, labor sector 57.4%, fair trade sector 48.5%, and environmental sector 47.1%. By company size, large companies reported the highest in the fair trade sector (83.3%), medium-sized companies in the industrial safety and health sector (77.1%), and small and medium enterprises in the labor sector (58.3%).

Regarding the level of punishment under the current punitive administrative regulations, 22.4% responded that it is 'very excessive,' and 41.8% said it is 'excessive,' totaling 64.2% who viewed it as generally excessive. Opinions of 'average' (23.9%), 'weak' (10.4%), and 'very weak' (1.5%) accounted for about half. Especially by company size, 83.3% of large companies (33.3% very excessive, 50% excessive), 62.9% of medium-sized companies, and 63.3% of small and medium enterprises considered the regulations excessive.

Additionally, a separate survey was conducted on 16 companies (23.5%) that had actually been penalized. The reasons for punishment (multiple responses allowed) were most frequently violations of the Fair Trade Act at 43.8%, followed by unfair labor practices (31.3%), environmental regulation violations (25.0%), and violations of the Industrial Safety and Health Act (18.8%). Regarding the types of penalties, 50.0% were fines, 31.3% were administrative fines or penalties each, and 12.5% were damages or business suspension each.

Regarding the greatest damage caused by the penalties, 62.5% cited 'contraction of business activities,' followed by deterioration of the company's external image (50.0%), management difficulties due to penalties on executives (18.8%), weakening of corporate competitiveness (18.8%), and contraction of investment opportunities (6.3%).

Accordingly, 83.8% expressed the opinion that improvement of the current punitive administrative regulations is necessary. As for improvement measures, the most common response (multiple responses allowed) at 66.2% was to introduce an incentive system to encourage desirable corporate behavior rather than strengthening penalties. Other suggestions included introducing a system to improve regulations through validity surveys of the current punitive system (39.3%) and gradually strengthening the severity of penalties from a minimal level (37.5%).

Meanwhile, regarding whether sufficient consultation is conducted when new regulations are introduced, 51.5% responded 'not sufficient.' As for necessary measures when introducing new regulations, the most common opinion at 70.6% was to implement a demonstration and experimental procedure of more than two years when introducing punitive regulations, followed by strengthening regulatory review systems within the government (42.6%) and introducing an independent regulatory review system within the National Assembly (22.1%).

Meanwhile, KIAF plans to discuss the results of this survey at the '11th Industrial Development Forum and 16th Automotive Industry Development Forum' to be held on the 29th.

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