Opposition parties, labor unions and civic groups launched a committee on Tuesday to spearhead a movement to reform what they see as family-owned conglomerates’ abuse of power and illegal business practices.
During a press briefing in central Seoul, the committee, consisting of the main opposition The Minjoo Party of Korea, the Justice Party, the nation’s two biggest umbrella labor unions and progressive civic groups, urged the government to abolish polices that favor the personal interests of family-controlled conglomerates.
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Participants of a committee aiming to reform chaebol attend a press conference in Seoul on Tuesday. (Yonhap) |
“Since the 1997 financial crises, wealth inequality has widened in tandem with the Korean economy’s deepening reliance on chaebol. It’s because the government has shifted responsibility for economic crisis to laborers while protecting big businesses,” said Choi Jong-jin, the acting leader of the Korean Confederation of Trade Unions. “The chaebol system, which worsens inequality and destroys labor unions, should be reformed.”
Chaebol or conglomerates, a legacy of South Korea’s development-focused economic growth, have contributed to rapidly growing the economy under business-friendly polices such as tax benefits and cheap bank loans.
But they have been increasingly criticized of bending laws to hand over their businesses to their family members, allegedly exploiting subcontractors and securing control over their companies through cross-shareholding practices.
The participants read out their demands to improve corporate governance in a statement and chanted “Let’s change chaebol!” Their demands include stricter regulations on succession of their businesses to their family members, heavier punishment on companies exploiting subcontractors and an increase in corporate taxes.
The committee also released a plan to hold an event on July 22 in central Seoul to raise awareness of the campaign, with nearly 50,000 unionists and activists set to attend.
“I expect the upcoming event to be a stepping stone for a social discourse on chaebol’s illegal business practices, The Justice Party will contribute to reforming the structure not just temporarily, in solidarity with workers,” said Kim Se-kyun, co-leader of Justice Party. “The core of economic democratization is to protect workers being exploited under the chaebol system.”
In a survey of 800 Koreans released in 2015 by the People’s Solidarity for Participatory Democracy, 87.5 percent of them advocated reforming family-controlled companies.
Nearly 35 percent of them pointed to the monopoly of power and illegal practices as the most serious problems in the chaebol system, followed by family-controlled corporate governance at 24.8 percent, intragroup deals between subsidiaries at 21.2 percent and cross-shareholding arrangements at 11.3 percent.
By Ock Hyun-ju(
laeticia.ock@heraldcorp.com)
