[Regulatory Republic] Ombudsman Park Joobong "Regulatory Improvement through Proactive Administration... Companies Should Work Enthusiastically"

Interview with Park Joobong, Small and Medium Enterprise Ombudsman
Achieved over 2,500 system improvements last year
"Must break public service complacency"
Emphasized government leadership for SME coexistence
Resolved issues through 'top-down' approach with ministers

Jubong Park, Small and Medium Business Ombudsman. Since February 2018, he has served as the 4th and 5th Ombudsman, visiting industrial sites nationwide. He listens directly to the management difficulties of small business owners and SMEs and works to improve regulations that hinder business growth. Photo by Dongju Yoon doso7@

"It is the role of the government and the National Assembly to create an environment where companies can work enthusiastically. Various systems and regulations must be improved through 'active administration.'

Park Ju-bong, the Small and Medium Business Ombudsman (photo), has handled a total of over 14,000 regulations, both large and small, since his appointment in 2018 until last year. Last year alone, there were about 2,500 cases of system improvements. He says, "Regulatory improvement work is endless." Last year, he made 139 field visits, covering more than 20,000 km, which is equivalent to 26 round trips between Seoul and Busan. He met 1,225 people in the field over the course of a year. After being reappointed as the 5th Ombudsman in February last year, he plans to continue regulatory improvement activities for three years until 2024. In a recent interview with Asia Economy, Park said, "The government should act as a logistics unit supporting companies to work enthusiastically," and questioned, "Can a logistics unit that is supposed to support soldiers (companies) hold them back?"

"Can't do it because of the law? Active administration makes it possible"

Having listened directly to voices from the field for several years, Ombudsman Park emphasized that active administration in the public sector is essential for regulatory improvement. He stressed the need to break away from the 'laissez-faire attitude' that passively maintains the status quo. Park said, "People say it is difficult to ease regulations because of laws or enforcement decrees, but if you look closely, it is quite possible through active administration."

He cited the case where Korea Expressway Corporation decided to improve regulations prohibiting the transfer of corporate bonds in consultation with related ministries. Until now, the Expressway Corporation has conducted projects by securing funds from energy-saving specialized companies when installing lighting for street lamps and tunnels, guaranteeing the installation and energy-saving effects, and repaying the investment with the savings generated later. In this process, the Expressway Corporation prohibited the transfer of accounts receivable, which are repayments of investment funds, causing companies without immediate financial capacity to frequently face liquidity crises.

The Ombudsman conveyed the difficulties faced by companies to the Expressway Corporation and proceeded with consultations on related regulatory improvements. The Expressway Corporation also cooperated with the Ministry of Economy and Finance, the Ministry of Trade, Industry and Energy, and others to resolve the regulation in about a month. It is expected that 35 small and medium enterprises will secure about 100 billion KRW in liquidity. One company, which was struggling to pay wages on time due to difficulties caused by COVID-19, was relieved by being able to transfer accounts receivable worth 3 billion KRW from the corporation.

Park said, "The prohibition on the transfer of accounts receivable is a regulation that has continued because of the possibility of disadvantages in public institution evaluations," and added, "The problem was solved through authoritative interpretation rather than revising laws or enforcement decrees." He pointed out, "There is widespread concern in the public sector that easing regulations could lead to audits by the Board of Audit and Inspection and other disadvantages," and argued, "Minor accidents occurring while actively working should be boldly exempted from penalties."

Jubong Park, Small and Medium Business Ombudsman. / Photo by Dongju Yoon doso7@

Furthermore, Ombudsman Park raised his voice that the government should take the lead in coexistence and fair trade with small and medium enterprises. He said, "Public institutions dealing with small and medium enterprises should raise delivery prices in line with rising raw material costs, but they are not doing so because there are no legal provisions and they fear accusations of favoritism," and questioned, "Does a large corporation have the right to demand 'fair delivery prices' from companies when public institutions themselves are not implementing it?" He continued, "Our society is entering the digital age, but the regulatory system and the speed and methods of public officials' work still seem to remain at an analog level," appealing, "The government must help entrepreneurs so they do not give up and can keep running."

Difficulties worsened by COVID-19... Need to elevate the status of the Ombudsman

Park's activities can be divided into before and after the COVID-19 pandemic. There was a significant difference in the atmosphere on the ground, and the smaller small and medium enterprises and small business owners voiced more suffering due to COVID-19. He said, "We have been consistently conveying the industry's voices asking for a slowdown or preparation time for major policies such as the 52-hour workweek and the Serious Accident Punishment Act promoted by the government."

Ombudsman Park also emphasized the importance of overcoming the anti-business sentiment prevalent in our society. He criticized that while the government and political circles apply strict standards to entrepreneurs, they are relatively lenient toward labor union activities and pursue pro-labor policies.

Although the Ombudsman position is at the vice-ministerial level, he said that initially he was not included in major meetings such as the National Agenda Coordination Meeting. Park said, "Many things were not properly achieved because regulatory improvement consultations were held only among working-level officials," and added, "I thought we should improve regulations through a 'top-down approach' by attending meetings like the National Agenda Coordination Meeting, so I requested to attend early in my term."

He is resolving a considerable portion of regulations through top-down methods at meetings or roundtables attended by the Deputy Prime Minister and ministers. Core regulations or bundled regulations spanning multiple ministries are difficult to resolve by crossing ministry boundaries, and efforts by responsible public officials alone have limitations. Park said, "Even when there are differences in positions among related ministries overseeing regulations, I strive to create a cooperative atmosphere for regulatory improvement by conveying opinions frankly."

Finally, he expressed his hope that the next Ombudsman’s status will be elevated and the scope of activities expanded. Park said, "In the United States and European countries, the Ombudsman is positioned directly under the president and carries out powerful work," and added, "The current Ombudsman system needs to be supplemented to promote the development of small and medium enterprises."