Language matters in lawsFour laws intended to bolster the so-called economic democratization, or more fairness in the corporate sector, were formally approved in a cabinet meeting on Tuesday after earlier being passed by the National Assembly.
The laws are not specific in defining their scope or targets in regulating corporate activities. The laws are full of ambiguous and subjective rhetoric in describing actions that deserve penalties, such as “substantial” (sangdanghi), “apparent” (hyeonjeohi) and “wrongful” (budanghan).
In the article prohibiting unfair trade in the Fair Trade Law, the word “wrongful” comes up repeatedly. But it does not specify what actions and practices fit into a “wrongful” definition. It bans corporate activities that support another company or an individual with “substantially” favorable conditions, but it does not define how “substantial” a practice has to be to become unlawful. It bans “irregular” profit-taking for self-interest and internal transactions among conglomerate owner families who own a certain percentage of shares in affiliates. Again, it is not clear how much a stake one has to own in order to be subject to the regulation.
An article of the subcontract law bans activities wrongfully restricting competition and undermining businesses or activities of another. But it has to spell out exactly what a wrongful activity is. The chemical material control and capital market laws are also peppered with equivocal wordings like “substantial” and “wrongful.” These laws are excellent examples of half-baked legislation that does not define who or what it intends to regulate.
Because of the ambiguity in the laws, they must be elaborated upon and supplemented with revisions. The legislators who proposed the laws are actually thrusting the responsibility of coming up with specific corporate regulations onto the administration. Companies now have to plead for generosity and mercy from public officials. Poor laws can breed regulations that come from the whims of individual bureaucrats.
The Constitutional Court recently ruled that a water and environment conservation law article that uses unspecific terms such as “a large sum” and “substantially large” was unconstitutional. But the legislature continues to generate similarly unconstitutional laws in a “substantially large number.”