Medium-sized Enterprise Ombudsman Passes 'Regulatory Improvement Recommendation' After 2 Years

Active Exercise of Authority by Government Ministries, Affiliated Agencies Must Establish Implementation Plans Within 30 Days

Jubong Park, Small and Medium Business Ombudsman (center), is taking a commemorative photo with the committee members after concluding the regulatory improvement recommendation meeting.
[Photo by Small and Medium Business Ombudsman]

[Asia Economy Reporter Kim Jong-hwa] The Small and Medium Business Ombudsman has decided to issue improvement recommendations on three matters, including allowing the lease of idle land owned by agricultural corporations for solar power generation projects. The Ombudsman can make improvement recommendations regarding regulatory difficulties faced by small and medium enterprises (SMEs), and this is the first time in about two years since December 2019 that the Ombudsman has made such recommendations.

On the 21st, Park Ju-bong, the Small and Medium Business Ombudsman (at the vice-ministerial level), announced that the 'Small and Medium Business Ombudsman Committee' was held at the Government Seoul Office Building to discuss and resolve these matters.

The Ombudsman Committee serves as an advisory body on major decisions of the Small and Medium Business Ombudsman, such as improvement recommendations. The committee is chaired by the Small and Medium Business Ombudsman and consists of 13 experts from various fields.

According to Article 22 of the Framework Act on Small and Medium Enterprises, the Ombudsman has the authority to make improvement recommendations related to regulations to various institutions. The targets of recommendations can be diverse, including government ministries, local governments, public institutions, and policy fund management agencies.

However, until now, the Ombudsman has not actively exercised the recommendation authority because the willingness of each ministry to improve regulations has significantly increased, and many cases have been resolved through consultations without the need for formal 'recommendations.'

Nevertheless, some proposals were judged to have considerable validity for regulatory improvement and significant impact on SMEs and industries, leading to the decision to hold the committee and issue improvement recommendations.

The committee reviewed a total of three agenda items for recommendations. First is the issue of 'whether to allow the lease of idle land owned by agricultural corporations for solar power generation projects in rural areas.'

Recently, social enterprise G Company attempted to lease idle spaces such as rooftops of agricultural corporations to promote solar power generation projects but was rejected on the grounds that leasing is not a primary business of agricultural corporations. Agricultural corporations are only allowed to engage in businesses directly related to agriculture according to relevant laws, and solar power generation facilities can only be installed for self-use.

The committee recommended the Ministry of Agriculture, Food and Rural Affairs to "prepare a plan to exceptionally allow leasing for agricultural corporations that meet minimum requirements such as having sales records for more than five years," stating that "to successfully promote the government's 2050 carbon neutrality strategy, fostering solar power generation projects utilizing idle land is necessary."

The second matter concerns the regulation on 'exemption from traffic inducement charges for unused facilities.' Current law stipulates that traffic inducement charges are imposed on facilities with a floor area of 1,000㎡ or more. However, this regulation has been uniformly applied even to facilities with actual usage areas less than 1,000㎡ due to unsold units, raising fairness issues.

The committee recommended that "traffic inducement charges should be based on the actual usage area of the facility," and "even if the facility subject to the charge is 1,000㎡ or larger, exemption should be granted if it is unsold or the actual usage area is smaller."

The third issue discussed was the regulatory improvement regarding the 'scope of small-scale environmental impact assessments for forest camping sites.' Current regulations require forest camping sites to undergo small-scale environmental impact assessments for the entire project site. However, natural recreation forests, which are similar in nature and facilities to forest camping sites, are assessed based on the actual development area, raising fairness concerns.

The committee recommended that "it is unfair to differentiate the scope of environmental impact assessments for two facilities that are essentially the same project but have different operators," and "forest camping sites should also be assessed based on the actual development area."

The Ombudsman plans to officially notify the relevant ministries of the improvement recommendations based on the committee's review. Park Ju-bong stated, "Recently, there have been many cases of improvements made by working-level officials due to the active willingness of government ministries and public institutions to improve regulations. However, for regulations that are difficult for working-level officials to improve and have significant ripple effects, the Ombudsman will actively respond by making recommendations through the committee's review."

Meanwhile, the National Assembly recently passed the 'Framework Act on Small and Medium Enterprises,' which significantly strengthens the regulatory improvement recommendation authority of the Small and Medium Business Ombudsman. Going forward, institutions responsible for matters recommended for improvement by the Ombudsman must establish an implementation plan within 30 days and, if not implemented, must provide an explanation to the Ombudsman within the response deadline. If these requirements are not met, the Ombudsman is obligated to publicly disclose the matter.

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