ACRC removes 125 corruption factors from new and revised laws to prevent corruption practices

ACRC recommended the improvement of corruption-causing factors in the laws regarding people’s daily life, safety, and customer’s rights

June 4, 2018

Anti-Corruption and Civil Rights Commission

The Republic of Korea

On June 4, the ACRC announced that it had conducted an Corruption Risk Assessment from January to May 2018 on 701 proposed and revised laws of central administrative agencies and recommended the concerned agencies to improve 125 corruption-causing factors in the laws.

※ The ‘Corruption Risk Assessment’ was provided to systematically analyze possible corruption-causing factors in laws from the enactment stage in order to remove and improve them. Introduced in 2006, it is being exported to other countries as an outstanding Korean anti-corruption policy.

At this year’s assessment, the main corruption-causing factors were identified in the following areas: ▲ specifying discretionary rules related to people’s life and safety (30 cases, 24.0%) ▲ securing predictability of administrative procedures related to relief of customer’s rights (26 cases, 20.8%) ▲ improving responsibility of outsourcing contract organizations as the contracting-out of administrative tasks is increasing (18 cases, 14.4%) ▲ improving fairness in operating various committees that impact the rights and obligations of citizens (18 cases, 14.4%).

<Recommendations by assessment criteria>

ACRC Director General of the Anti-Corruption Bureau stated, “The ACRC conducts a Corruption Risk Assessment on regulations and rules that are closely related to people’s daily life, such as safety and customer’s rights, so that corruption-causing factors can be removed from the laws in advance. In order to enhance the transparency and fairness of the government administration, we will continue to proactively identify and improve such corruption-causing factors in various laws so that people can feel the change.

□ Assessment objectives

○ There is a limit to preventing corruption in systematically corruption-prone areas through passive corruption control that focuses on discovering and punishing individual cases.

○ A preventive corruption-control tool is required to systematically analyze and remove or improve corruption-causing factors in laws and regulations from the enactment stage.

□ Assessment target and handling period

○ When they enact or revise their acts, presidential decrees, and ordinances, central administrative agencies request the ACRC to conduct the Corruption Risk Assessment after preparing assessment materials.

※ Provisions on organization or establishment of administrative institutions, which have little possibility of causing corruption, are exempted from the target of assessment.

○ After receiving an assessment request, the ACRC shall complete the assessment within the due date (generally 40 days) of pre-announcement of legislation and notify the results to the competent agencies.

□ Statistics

○ Statistics of new and revised acts received and assessed (Recent 3 years)

(Unit: case)

* Multiple improvement recommendations can be presented for one act.

① Precluding the possibility of special favors to certain financial institutions

(Recommendation on the revised Enforcement Decree of the 「Distribution Industry Development Act)

Managers of superstores such as large-scale supermarkets, department stores, and complex shopping malls, should deposit management fees collected from salesroom occupants in a financial institution for the transparent management of the fees. The Enforcement Decree of the Distribution Industry Development Act, however, confined 4 types of financial institutions (Industrial Bank of Korea, mutual savings banks, insurance companies, and banks according to the Banking Act), causing concerns of possible special favors to and collusion with certain financial institutions.

Therefore, the Commission recommended the Ministry of Trade, Industry and Energy to improve the act so that management fees can be deposited in all financial institutions that have normal deposit functions, such as Nonghyup (Agricultural Cooperative Federation), Suhyup (Fisheries Cooperative Federation), Sinhyup (Credit Union Federation), Saemaeul banks (Korean Federation of Community Credit Cooperatives), and post offices. The Ministry accepted this recommendation and completed the legislation process.

② Improving the manufacturing/certifying system for the safety of aircraft operations

(Recommendation on the revised draft of the 「Enforcement Decree of the Aviation Safety Act」

After an aircraft manufacturer acquires manufacturing certification from the Ministry of Land, Infrastructure, and Transport and manufactures aircraft, if an issue occurs that can affect the quality management and safety of operating aircraft, the manufacturer must report the issue to the Ministry of Land, Infrastructure, and Transport and be verified to see if the issue meets the certification standards of aircraft operation safety.

But some reporting conditions stipulated in the draft were too vague. For example, “if the manufacturing restarts after a long period of suspension of manufacturing facility operation” or “if a number of the labor force is reduced or relocated.” As such, some issues that can impact aircraft operation safety could be omitted from the subject items to review by an arbitrary decision of the manufacturer or public servant in charge, or could be interpreted or applied in a way favorable to certain manufacturers, causing risks in the safe operation of aircraft.

Therefore, the ACRC recommended the Ministry of Land, Infrastructure, and Transport to clearly stipulate the suspension period of manufacturing facilities or the scope of manufacturing volume or reduction of quality control laborers by giving specific numbers. The Ministry accepted the recommendation and is going through the legislation process.

③ Improving the management and supervision of private organizations carrying out administrative tasks

(Recommendation on the revised draft of the 「Software Industry Promotion Act)

When the Software Industry Promotion Act was wholly revised to include various reinforced policies to support the software industry such as quality certification, standardization, talent training, start-ups support and financial support, the Ministry of Science and ICT established the legal basis to designate exclusive institutions by work area and provide the necessary budget for operation, in order to effectively push forward the policies using the expertise of the private sector.

However, there was no management/supervision tool to guarantee the responsible execution of the tasks by private institutions, causing concerns on the poor execution of policies and financial leaks.

Therefore, the Commission recommended the Ministry of Science and ICT to improve the act so that it can cancel the designation of the exclusive institution and recover the provided contributions if the institution was designated through improper methods, its qualification doesn't meet the requirements after being designated, or its wrongful/illegal behaviors including poor operation, are discovered. The Ministry accepted the recommendation and is going through the legislation process.