[EDITORIALS]With Freedom Comes ResponsibilityThe government and the business community are in a tug of war over the planned introduction of legislation to permit class-action lawsuits. The business community, led by five major business organizations, has announced that it will begin collecting signatures on a petition from 20,000 local businesses against the collective lawsuit system, while Deputy Prime Minister Jin Nyum has reaffirmed his commitment to phase in the system beginning next year. The People's Solidarity for Participatory Democracy, a civic group which is championing small shareholders, has reportedly gathered 17,000 signatures during its campaign for legislation on the class-action system and cumulative voting.
We believe it is never desirable for the class-action issue to be dealt with through such political muscle flexing. The purpose of the system is to enhance companies' management transparency and soundness and to strengthen their competitiveness. The business community has a point in its complaint that it is not fair for the government to apply global standards in transparency when regulations not found in other countries, like rules applying only to the 30 largest business conglomerates, tie the hands of local businesses. The government and civic groups also have a point; companies should not oppose the system because it will be applied only to companies with a capital of more than 2 trillion won ($1.6 billion) when they are accused of false disclosures, fraudulent accounting reports and irregular audits.
Despite the controversy, one thing is clear: The proposals will have a significant impact on the national economy as well as on corporate management. Therefore, decisions concerning this issue should be dealt with from an economic point of view, not through signature collections and shows of force. Political considerations should be excluded from the issue. The government and the business community have formed a joint task force to negotiate deregulation issues. This time, too, they should sit together and study thoroughly whether it is the right time to allow class-action suits and if it is, what should be done to prepare for the legislation. We admit there is a positive side to the class-action system. Still, such rules are only admissible when the business freedom of local corporations is ensured. Then the answer becomes clear: Set businesses free from the sea of regulations and make them bear the responsibilities of their freedom.
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