ACRC’s Corruption Risk Assessment improves 60 internal rules in 18 public organizations in the energy sector

- ACRC recommendations issued include improvement measures such as digital registration of private contracts and prohibition of a private contract with companies employing retired executives for two years -

June 10, 2020

Anti-Corruption and Civil Rights Commission

The Republic of Korea

On 8 June, the ACRC issued recommendations to 16 state-owned corporations and two local public corporations in the areas of gas, electricity and oil industry recommendations to improve internal rules. The recommendations include: (a) mandating signing private contracts of small amount digitally, (b) prohibiting private contracts for two years with agencies employing their retired executives, (b) keeping and managing s of investment deliberation committee.

The recommendation on private contracts were issued to four organizations including Korea Gas Coperation, requesting private contracts of small amounts should be digitally managed. As for (b) above, with an aim to block improper influence from a company for which retirees serve as its executive, private contract with the company for two years is prohibited. In addition, companies subject to the prohibition of signing private contracts should be able to be checked on contract management system.

As of 2019, private contracts signed by four public corporations including Korea Oil Corporation took up 30% of their total contracts. The amount of such private contracts reached 2.3 trillion won(USD 1.9 billion) in total. It is expected that the small and medium sized businesses will benefit from the recommendation because the recommendation will enhance fairness and transparency in private contracts.

Corruption Risk Assessment is a corruption control instrument. It systemically analyzes corruption-causing factors in laws from the drafting stage. Any public organizations intending to implement or amend a law must undergo the CRA.

Under the Anti-Corruption and Civil Rights Commission Act amended in October last year, the ACRC can analyze and review internal rules of public corporations under the Act on the Management of Public Institutions and local public corporation stated in Local Public Enterprises Act.