FTC chief assures steady reform

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FTC chief assures steady reform

Published: 14 Jun. 2017, 20:11

Kim Sang-jo, a fiery economics professor who has long been critical of Korea’s powerful conglomerates, began his first day as head of the country’s Fair Trade Commission on Wednesday with measured reassurances, despite heavy protest from opposition parties against his appointment.

In his first press conference as commissioner, Kim stressed the need to establish an economic structure that guarantees fair competition and said such an effort would play a significant role in the Moon Jae-in administration’s policy priority of creating jobs.

However, Kim said, he would not force dramatic changes while reforming the family-led conglomerates known as chaebol. “Work related to companies is very complicated because of different interest groups,” he said. “Therefore, reforms shouldn’t be rushed.”

During his more than two-decade career as a consumer rights activist, Kim earned the nickname “chaebol sniper” for his anti-conglomerate rhetoric. He has often raised the need to change the governance structure at Korea’s family-owned conglomerates, where management control is handed down from one generation to the next without much consequence.

The commissioner said the first thing that needs to be done before the National Assembly passes a chaebol reform bill is to assess the situation through close cooperation with related government agencies, including the Financial Service Commission. “Corporate reform and chaebol reform is something that has to be rationally consistent and predictable,” he said.

According to Kim, when Moon confirmed him to lead the Fair Trade Commission, the president told him to focus on corporate reform to help create more opportunities for growth rather than tightening the government’s grip on businesses.

Although Kim did not disclose any details about his chaebol reform plans, he confirmed he would heavily monitor the country’s top 10 conglomerates and place more scrutiny on the top four. He defended the approach as efficient, arguing that monitoring the top 30 companies would be ineffective.

Kim added that unlike other advanced economies where trade between companies is considered an agreement between two equal businesses, Korean conglomerates have significantly more advantage and power over their businesses partners, which could lead to unequal deals.

The commissioner said his agency would try to solve this issue through the administrative power it has and push for legislative reform in areas where it faces limits.

Kim’s appointment to the office remains shrouded in controversy because President Moon bypassed the National Assembly and installed him without confirmation. Opposition parties have expressed discontent with the former consumer rights activist taking the helm of the agency.

While Kim’s position does not legally require legislative confirmation, the executive maneuver widens the gulf between Moon and the opposition parties with whom he needs to collaborate to pass policies like his supplementary budget.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]