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Government Designates Industrial Safety Regulations, etc. as “15 Killer Regulations,” the Chemical Substances Evaluation Act, Chemical Substances Control Act, and Serious Accident Punishment Act Emerge as Key Issues.
Moon Kyu BANG, the Minister for Government Coordination of South Korea, opened a second conference for the Killer Regulations Innovation Task Force on the 14th, where the task force selected and announced 15 regulations in need of urgent revision. This conference took place ten days after President Suk Yeol YOON’s call on the 4th for a policy overhaul that aims to “lift killer regulations hampering corporate investment.“ As the government accelerates the reform by forming a dedicated task force and focusing discussions on how to revise the regulations, relevant industries have begun anticipating the coming changes.
In the land-based sector, the first regulations subject to deregulation were (i) industrial complex location regulations, including business type regulations; (ii) regulations related to the use of agricultural and industrial land; and (iii) shadow regulations that exist in regional government policies.
In the environmental sector, policies selected to be amended included (i) regulations on chemical substances such as the Chemical Substances Evaluation Act and Chemical Substances Control Act; (ii) Environmental Impact Assessment (“EIA”) regulations for private investments; and (iii) carbon-neutral circular economy regulations.
The government also found several industry entry regulations in need of review, including (i) entry regulations for the financial industry; (ii) entry regulations for the platform industry; (iii) discriminatory regulations based on business size and type; and (iv) hidden regulations that unfairly put micro and self-employed businesses at a disadvantage.
In the new industry sector, the regulations it selected for reform were (i) regulations on new medical technology; (ii) regulations that hinder the growth of venture businesses and start-ups; and (iii) regulations that discourage new businesses in the tourism industry. For the employment sector, the government viewed (i) regulations on foreign employment and (ii) regulations on industrial safety to be problematic.
Most notably, regulations on chemical substances, such as the Chemical Substances Evaluation Act and the Chemical Substances Control Act, were selected as “killer regulations” in the environmental sector. These acts were initially established to implement a comprehensive safety management system for handling toxic chemical substances by evaluating the toxicity of chemical substances. However, critics have mentioned that the excessive time and economic costs required by this system have greatly limited the business activities of small and medium-sized enterprises.
The “EIA regulations for private investments” and “carbon-neutral and circular economy regulations” have also been named “killer regulations” in the environmental sector. The EIA is a procedure for evaluating how much development would affect the environment in terms of pollution and the amount of sunlight. However, it has been criticized for delaying and encumbering corporate investment due to its unreasonably time-consuming and complicated process.
The Serious Accident Punishment Act, which will be applicable to business sites with less than 50 employees starting next year, is another regulation that has been challenging for financial circles. Although this act was enacted a year and a half ago, in January last year, it continues to be considered confusing for many. Companies have continuously complained that “the regulations are ambiguous and the act is focused more on punishment rather than prevention.” In particular, SMEs have found it hard to respond to this act. According to a survey by the Korea Chamber of Commerce and Industry (“KORCHAM”) in February, only 35.0% of companies with less than 50 employees newly installed a safety and health department compared to 87.9% of large businesses.
At the conference, the government and economic circles discussed plans to expeditiously identify and amend “killer regulations” in each industry that discourage corporate investments. The government has decided to first target cases where corporates are unable to initiate investment plans due to regulations in land use, environment, employment, etc., or have had to stop their investments because of regulations that exist only in Korea. Financial circles have also promised to identify the tasks required for regulatory innovation, which reflect the practical needs of people on-site. The Office for Government Policy Coordination stated, “We plan to do the best we can to expeditiously amend the killer regulations that have been urgently requested by the industry.”
After this conference, the government plans to hold weekly sessions to discuss the specific remedies for the killer regulations in each field, including land use, environment, employment, and new industries. The Office for Government Policy Coordination added, “We will work closely with the ruling party for tasks that require legislative amendments.
As the first-ever Korean law firm to issue specialized legislative journals, DR & AJU LLC has been publishing the monthly Policy & Business Report since August 2019. The July 2023 issue of the P&B Report conducted a full inspection of legislation proposed to the National Assembly Subcommittee, Standing Committee, and Plenary Session from June 15, 2023, to July 14, 2023, and selected and analyzed legislation with a significant impact on corporate activities. In the case of major legislation, key mentions of legislators, members of the Standing Committee, and government officials are included.
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