Major Economic Issues '3 Laws' and Serious Accident Punishment Act Still Uncertain

On the 25th, the second day of raising social distancing to level 2 in the metropolitan area, the "Stop Labor Deterioration! Achieve the Jeon Tae-il 3 Laws! Korean Confederation of Trade Unions General Strike and Nationwide Simultaneous Rally" is being held in front of the Democratic Party of Korea Seoul Metropolitan Party Office in Yeongdeungpo-gu, Seoul. Photo by Moon Honam munonam@

[Asia Economy Reporters Park Cheol-eung, Won Dara, Lim Chun-han] With the regular National Assembly session ending on the 9th, discussions on the three major economic bills ('3 Laws' - Commercial Act, Fair Trade Act, and Financial Group Integrated Supervision Act) and the Serious Accident Punishment Act remain sluggish despite being the most critical economic issues.

The Legislation and Judiciary Committee of the National Assembly has been dominated by the ruling party alone due to disputes over the High-ranking Officials' Crime Investigation Unit Act (HOCIU Act), resulting in no changes to the Commercial Act from the government's amendment proposal. Considering procedural steps such as public hearings, the timeline is tight for the full revision of the Fair Trade Act and the enactment of the Financial Group Supervision Act, and there are differing opinions within the ruling party regarding the key issue of abolishing the exclusive prosecution system. The Serious Accident Punishment Act is being urgently pushed by the Justice Party, but it seems unlikely to be passed within this regular session.

On the morning of the 4th, the Legislation and Judiciary Committee's Bill Review Subcommittee 1 held a meeting to put the HOCIU Act amendment and the Commercial Act amendment back on the discussion table. Members of the People Power Party (PPP), who had previously boycotted the committee, reportedly attended this time. Outside the meeting room, some PPP members protested holding signs with phrases such as "Oppose Pro-Moon Jae-in Task Force" and "Oppose HOCIU Act."

The government's Commercial Act amendment proposal is similar to the content proposed by Kim Jong-in, the PPP Emergency Committee Chairman, in 2016. Chairman Kim has repeatedly expressed the opinion that it must be passed, but PPP members of the Legislation and Judiciary Committee are critically reviewing it.

PPP lawmaker Yoo Sang-beom, a member of the Legislation and Judiciary Committee, told Asia Economy in a phone interview, "We need to discuss this while considering the economic situation, international affairs, and concerns about hedge fund attacks," adding, "Expanding the 3% rule established in 1962 is a comedy. If necessary, we can review and discuss it overnight."

At the subcommittee meeting held on the 17th of last month, he also said, "There might be people holding 50% of shares, but if the 3% rule is applied, 47% of voting rights would disappear. It only makes sense when there is a relative benefit that infringes on the basic value of shareholder equality and voting rights, so this is a significant concern," and added, "The 3% rule was introduced in 1962 during President Park Chung-hee's dictatorship. At that time, there were hardly any companies that could be considered stock companies in Korea."

The separate election of audit committee members and the 3% voting rights restriction on the combined shares of the largest shareholder and related parties are the hottest issues among the '3 Economic Laws.' Some suggest a compromise plan recognizing voting rights individually without aggregation, but this has not yet been discussed in the Legislation and Judiciary Committee meetings.

The Fair Trade Act and Financial Group Supervision Act fall under the jurisdiction of the Political Affairs Committee. The Political Affairs Committee planned to hold public hearings in September and last month but could not proceed due to National Assembly quarantine policies amid the COVID-19 pandemic. Additionally, the bills must pass through the Bill Review Subcommittee within the Political Affairs Committee, chaired by the opposition party, making it difficult to process without procedural consensus.

Within the Democratic Party, there are opinions that the abolition of the exclusive prosecution system should be removed from the bill. A Democratic Party lawmaker from the Political Affairs Committee expressed concern, saying, "Abolishing the exclusive prosecution system could impose a burden on small and venture companies compared to large corporations with legal teams." Public opinion must also be considered. A Democratic Party official said, "The recent drop in approval ratings is a concern," adding, "Among supporters, many voices say that if the bill must be pushed through, reform legislation like the HOCIU Act should be prioritized over the Fair Economy 3 Laws."

The Serious Accident Punishment Act has been deprioritized in the Democratic Party's legislative agenda. On the 3rd, Democratic Party Floor Leader Kim Tae-nyeon said at a policy coordination meeting, "We will pass reform bills such as the HOCIU Act and the Fair Economy 3 Laws by the 9th," without mentioning the Serious Accident Punishment Act. Last month, Democratic Party Chief Spokesperson Choi In-ho stated, "Considering that the Serious Accident Punishment Act is a statutory law requiring procedures such as public hearings under the National Assembly Act, it is confirmed that it cannot be passed in this regular session," but added, "However, it will definitely be pursued."

In the People Power Party, lawmaker Lim Eui-ja has proposed the Serious Accident Punishment Act, but the party maintains a cautious stance. On the 2nd, PPP Emergency Committee Chairman Kim Jong-in said regarding the party's adoption of the Serious Accident Punishment Act, "We are currently in discussions," adding, "We may accept (Lawmaker Lim's bill) or make amendments." The Legislation and Judiciary Committee held a public hearing on the Serious Accident Punishment Act on the same day, but PPP members did not attend.

The Justice Party has begun a sit-in at the National Assembly, urging both major parties to legislate. Justice Party Floor Leader Kang Eun-mi said on MBC Radio on the 4th, "It is fully possible to pass it within the regular session. Since consensus between the ruling and opposition parties has already been reached, only minor disagreements need to be adjusted," emphasizing, "The second anniversary of Kim Yong-gyun's death is on the 10th, and the National Assembly must enact a law to prevent workers from dying before then."