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[EDITORIALS]Two steps toward transparency

Published: 22 Feb. 2005, 22:39

Lawmakers in the National Assembly’s legislation and judicial committee have agreed to delay for two years a policy that would permit class-action lawsuits over past accounting irregularities. And yesterday, representatives from the government, civic groups and the political and corporate sectors signed an agreement to promote anti-corruption. At last, a stepping stone has been prepared to enable Korea to head toward a transparent society and shake off its corrupt past.
The rigging of accounts has been key to nearly all major corruption cases in Korea, such as the slush funds for ex-President Roh Tae-woo. It was a source of corruption and the link that enabled under-the-table dealings between politicians and corporations. Much of the anti-corporate sentiment in Korea stems from outrage over such practices. Transparent accounting is an irreversible trend that no company has a choice but to abide by.
This is why we find hope in the two recent developments. The active participation of corporations and civic groups puts the anti-corruption accord on a different level from past campaigns, which were mostly short-lived. The Korean people will watch closely to see whether the voluntary agreement is honored.
Meanwhile, postponing the class-action measure means firms can let their breath out again. (Incidentally, U.S. President George W. Bush recently signed legislation curbing class-action suits.) But to live up to the anti-corruption accord, they must do business transparently and ethically. The two-year delay is a delay, not an indulgence of past practices. They must clean up their past books to meet current standards. Company heads must also consider that they can still be sued if they are caught trying to hide past irregularities, or if they commit new ones.
The agreement on class-action suits does leave something to be desired, in that it lacks a clause pardoning companies for past accounting manipulations, which civic groups fiercely opposed. And businessmen involved in past irregularities are still subject to prosecution and civil action. This does not satisfy our early expectations of complete amnesty. We stress the need for a pardon, at some point, for all companies with such malfeasance in their pasts. Otherwise, the issue will continue to tie businesses down. Such a pardon would leave firms that commit future misdeeds with no excuses.