SME Sector: "Cooperatives Must Be Able to Request Negotiation of Transaction Terms on Behalf of SMEs"

Korea Federation of SMEs Holds Forum on Introducing the Right to Request Consultation for Cooperatives

The Korea Federation of SMEs announced on May 15 that it held a forum on "Introducing the Right to Request Consultation for Cooperatives" at its Yeouido headquarters. The forum was organized to discuss legislative measures related to the introduction of the right to request consultation, which is necessary to strengthen the bargaining power of small and medium-sized enterprises (SMEs) and to revitalize joint projects by cooperatives.

Yoo Youngguk, a professor at the College of Peace Liberal Arts at Hanshin University, who delivered the keynote presentation, analyzed cases in which existing laws and systems, such as the Franchise Business Act and the Specialized Credit Finance Business Act, guarantee "the right to request negotiation (consultation) for the purpose of ensuring equal status and forming balanced trading relationships for parties in a weaker bargaining position." He emphasized the need to grant cooperatives of SMEs the right to request consultation in order to enhance their bargaining power.

In the subsequent panel discussion, Jang Jongik, president of the Korea Cooperative Studies Association, served as moderator. The panelists included ▲Kim Namju, managing attorney at Dodam Law Firm ▲Kim Kyungman, former National Assembly member and vice president of the Korea Management and Technology Consultants Association ▲Park Sooyoung, professor at the Jeonbuk National University School of Law ▲Yoo Seunggil, director of the Korea Box Industry Cooperative. Various proposals were discussed.

Attorney Kim Namju stated, "The right to request consultation can serve as a fundamental measure to improve the underlying situation of SMEs as a means to address economic power imbalances." He added, "Further consideration is needed regarding the expansion of the scope of transactions subject to consultation, the gradual expansion of counterparties, and dispute resolution measures." Vice President Kim Kyungman commented, "The right to request consultation should be introduced because it can both revitalize joint projects by cooperatives and strengthen the bargaining power of socially disadvantaged groups. As seen in similar systems in Japan and Australia, legislation is needed to exclude the application of the Fair Trade Act to consultation requests and consultation activities."

Chae Jungmook, chair of the Cooperative Activation Committee at the Korea Federation of SMEs, stated, "In order to improve the economic status of SME business owners, cooperatives must be able to request consultation on transaction terms on behalf of SMEs on an equal footing." He added, "I hope that the diverse and rational discussions at this forum will lead to actual institutional improvements."

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