[Insight & Opinion] Collusion Between Politics and Business Must Become Uncomfortable to End

The Federation of Korean Industries (FKI) has changed its name back to the Korea Economic Association, its original name when it was founded in 1961, and declared a new beginning. The name change will take effect after the Ministry of Trade, Industry and Energy approves the amendment to the articles of incorporation. The four major conglomerates that had withdrawn from the FKI following the Park Geun-hye administration’s political scandal are naturally returning. Samsung’s Compliance Committee approved rejoining on the condition that it will immediately withdraw if any collusion between politics and business occurs.

Many demands are being made for the newly relaunched FKI, but the top priority remains the eradication of collusion between politics and business. This is a natural demand, but a crucial link is missing. Cutting off collusion between politics and business cannot be achieved by economic organizations alone. Calling for the dissolution of the FKI as a channel of collusion misses the point. Power can use any organization if necessary, and collusion cannot occur unless power demands or desires it. To end collusion, power must first change. The most important factor in eradicating collusion is that political power must not even attempt such collusion. The problem is exacerbated by unreasonable regulations, systems, and opaque procedures. The typical form of collusion is companies providing political funds to political power, which in return grants various favors to the companies. However, government and economic organizations inevitably have a relationship where one side voices concerns and the other listens. While there are times without controversy, in reality, legal activities and collusive acts are often not clearly distinguishable. If there is a criterion for distinction, it is transparency.

Companies played a relief pitcher role in the disruption of the Jamboree event. They provided relief supplies and beverages, supported accommodations, opened workplaces to host the event, and mobilized a considerable number of employees in the process. Corporate support for the Jamboree was commendable. However, it is difficult to say that the process and procedures were entirely rational and transparent. There was likely a government request for cooperation, and the support was not entirely voluntary. The problem is not that companies had to bear the burden for a poorly managed government event, but that proper procedures were lacking. There is no reason to view government and corporate cooperation negatively. Cooperation between government and companies is often necessary and sometimes desirable. However, it must be conducted publicly and transparently at a reasonable level. In the future, if the government requests corporate support, the FKI is likely to take charge of organizing it concretely. If companies had stepped in to help the Jamboree disruption through public procedures, it could have gained much public understanding. That is the kind of action that should be taken. Conversely, if something is difficult to disclose, it is better not to do it. The so-called 'New York Times Rule,' which states that one should not do anything that would be embarrassing if it appeared on the front page of a newspaper, is also necessary to prevent collusion between politics and business.

The FKI also announced an ethics charter. The charter includes a firm rejection of undue pressure from political and administrative powers. However, collusion does not disappear through declarations alone. While urging change and reaffirming commitment are important, above all, collusion must become uncomfortable. Active disclosure of information is necessary. There is no better mechanism than institutional checks and public oversight to cut off collusion. Unfortunately, the outlook is not bright.

Was there no influence of political power in the immediate revival of the FKI and the return of the four major conglomerates? Upon closer examination, the process of appointing the chairman was shrouded in fog. The FKI reportedly plans to assist the Japanese business community in the government’s ongoing ‘three-party compensation plan for forced labor.’ From this process onward, the FKI will face a serious test of transparency.

Kim Sang-cheol, Economic Columnist

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