Regulatory Challenges Poured Out by SMEs... "Promise of Improvement"

SME Regulation Improvement Meeting
Joint Meeting of the Ministry of SMEs and Startups and the Korea Federation of SMEs

On the morning of the 7th, the 'Small and Medium Business Regulation Improvement Meeting' was held at Hanam City Hall, Gyeonggi Province.

[Asia Economy Reporter Donghyun Choi] #The demand for migrant workers has increased, but the employment limits stipulated in the Employment Permit System have not been expanded. The employment limits for migrant workers should be raised, and the number of times they can change workplaces should be reduced from the current 5 times to 2 times." (Kim Donghyun, Chairman of Gyeonggi Foundry Industry Cooperative)

#The border area in northern Gyeonggi is experiencing stagnation in regional development due to overlapping regulations such as military facilities and ecological landscape preservation. This area should be designated as a ‘Regional Innovation Special Zone’ to grant regulatory exemptions." (Paju Sinchon Industrial Complex Business Cooperative)

At the ‘Small and Medium Enterprise Regulation Improvement Meeting’ held on the morning of the 7th at Hanam City Hall in Gyeonggi Province, more than 30 small and medium-sized business owners from across the country voiced the regulatory difficulties they face on site. Officials from five government ministries, including the Ministry of SMEs and Startups, listened to their voices and promised to improve the issues.

Chairman Kim Donghyun requested improvements to the Employment Permit System, introduced in 2004, to improve the hiring conditions for migrant workers in small and medium enterprises. He pointed out that the ‘Non-professional Employment Visa (E-9) quota,’ which limits the number of migrant workers hired to protect domestic jobs, does not properly reflect the field situation. Chairman Kim emphasized, "The expected production volume of small and medium enterprises this year is anticipated to recover to the 2019 level before COVID-19," adding, "As labor demand is expected to increase, the employment limit for small-scale businesses with fewer than 50 employees should be raised by 50%, and the employment limits for companies located in provincial areas and core industries should also be adjusted to over 30%."

Choi Gukhyeon, Chairman of the Korea Expanded Plastic Industry Cooperative, expressed difficulties caused by overlapping regulations as the quality certification system for major building materials expanded due to the ‘Construction Site Fire Safety Measures’ (June 2020) and the ‘Building Act Amendment’ (December 2020). Chairman Choi said, "For organic sandwich panels, the ‘Physical Model Test for Sandwich Panels (KS F 13784-1)’ and the ‘Physical Model Test for Exterior Wall Insulation Materials (KS F 8414)’ must be passed, but there are only two facilities nationwide capable of conducting these tests," adding, "The waiting time after test application is expected to exceed one year, so urgent system improvements are needed."

In addition, the meeting discussed regulatory difficulties and improvement measures caused by ‘sandbag’ regulations that hinder business activities, such as ▲ restrictions on public procurement bidding participation by SME cooperatives ▲ government approvals and certifications related to the environment ▲ restrictions on industries allowed to enter industrial complexes.

Cho Juhyun, Vice Minister of the Ministry of SMEs and Startups, responded, "Since the Ministry of SMEs and Startups co-hosts the ‘On-site Difficulty Resolution Team’ and the ‘New Industry Regulation Team’ within the pan-government ‘Economic Regulation Innovation Task Force,’ we will closely cooperate with related ministries, companies, and experts," adding, "We will focus on identifying and improving major regulations that have a significant impact on small and medium enterprise activities."

Kim Gimun, Chairman of the Korea Federation of SMEs, said, "With the new government launched and immediately communicating with the business field, there is greater determination for regulatory reform than ever before, raising high expectations among small and medium business owners," and added, "To achieve economic re-leap through regulatory innovation, all executives and employees of the Federation plan to visit business sites nationwide to discover specific regulatory cases and propose them to the government."