Choi Kyung-hwan, South Korea's finance minister, denied Tuesday that he personally made the order to buy a disputed Canadian oil company Harvest Operation Corp. during the previous government.
In a parliamentary hearing to investigate problems with overseas resource development carried out by the 2008-2013 Lee Myung-bak government, lawmakers from rival parties exchanged strong words over Choi's role in the purchase of the Canadian company, which has been losing money and become the target of criticism for bad policy decisions.
At that time, Choi led the knowledge economy ministry that oversaw the government's overseas resource development projects, which proved schemeless and nonviable.
Opposition lawmakers claimed that state-run Korea National Oil Corp. bought Harvest Operation for $2.77 billion in 2009, when a local public think tank estimated the value at little over $1.61 billion.
"Choi Kyung-hwan who was the knowledge economy minister at the time, received the report but did nothing," Choi Min-hee, a lawmaker from the New Politics Alliance for Democracy said.
She claimed that because of this inaction the government lost money, so the minister must take responsibility.
Others citing testimony given by former KNOC president Kang Young-won, said Choi personally ordered the purchase during a meeting held in mid-October 2009.
In response, Choi said the purchase of Harvest was planned before he was tapped as knowledge economy minister and that while he did meet the KNOC chief he gave no orders for the purchase.
Other ruling Saenuri lawmakers took Choi's side and pointed out that Kang is under investigation for lying to the board of directors, and that his testimony against the minister has changed over time, making any statement questionable.
Rep. Kim Tae-heum argued that the opposition's attacks are politically motivated and that pressing the case will only hurt ongoing efforts to expand the country's presence in overseas resources development.
Related to the standoff, Choi told lawmakers at the start of the hearing that resource poor South Korea has no choice but to develop overseas resources to support economic growth and counter sudden spikes in prices.
Choi pointed out that due to the very nature of the resource development business, it is effectively impossible to gauge the success or failure of an investment in a short period of time.
The official, who was tapped for his second Cabinet post last year and doubles as deputy prime minister, elaborated that while resource development requires substantial initial investment, the profits generated are only felt over a long period of time. Profit margins are also affected by market conditions.
"Highlighting specific projects that did not meet expectation and saying the entire endeavor failed is a dangerous way to approach the matter," he claimed.
The policymaker said that South Korea imports 96 percent of its energy resources from abroad, and at the start of the previous Lee Myung-bak government, the average price for Dubai brand crude soared to US$140 a barrel.
Choi said that while the Lee government has taken flak for spending large sums of money on "failed" projects, all past governments were equally aware of the country's shortcomings in natural resources and laid out long term plans.
He said in 2001, the Kim Dae-jung government laid down the overseas resources development basic plan that has become the reference point for successive policymakers.
"The following Roh Moo-hyun government pledged to push up self-sufficiency in the energy field from 3.2 percent in 2006 to 28 percent in 2016," he pointed out, hinting that resource development has been a consistent agenda regardless of who became president.
The official said that despite some problems encountered, the government's stance is to acquire more overseas resource assets in an open and transparent manner that can gradually reduce the country's exposure to sudden spikes in commodities prices. (Yonhap)
