[EDITORIALS]Reform the regulatorIn a report yesterday, the Federation of Korean Industries insisted that the Fair Trade Commission be reborn as a competition-promoting body. This raises an essential question on the roles and limits of government.
It is accurate to say that the commission has strayed from its original responsibility of promoting competition among companies and is instead leading moves to regulate businesses. Especially since Roh Moo-hyun assumed the presidency, the commission has concentrated efforts on developing its so-called “market reform roadmap.” The reforms it emphasizes consist of enhancing restraints on company ownership and management; regulating business conglomerates has become its main concern.
We insist that it is improper for the government to designate preferable ownership structures and management practices, and adapt them to its policies. This is something that stockholders, investors and company officials should work to solve ― not the government.
Also, even if the need to supervise conglomerates is acknowledged, regulations dealing with a company’s ownership structure, debt-to-equity ratio and investment style should not be administered by the Fair Trade Commission. Rather, the Financial Supervisory Commission should be responsible, since maintaining soundness in loan-providing financial firms and protecting investors is unrelated to promoting competition.
There is no other country in the world where a fair trade agency reviews these matters.
The government must also pay attention to how the Fair Trade Commission is operated. The logic behind giving the commission the status of an independent administrative body is to make it free from government influence.
This is the same rationale behind the Financial Supervisory Commission and Service being guaranteed independence. Just because the Fair Trade Commission chief receives the same level of treatment as a minister does not mean that he can make decisions like the head of a government ministry. The commission must operate according to its original purpose and allow the independent opinion of its commissioners to be reflected in its policies.
We ask the President’s Committee on Government Innovation and Decentralization to sincerely consider major reforms to the duties and operations of the Fair Trade Commission.