regulatory reform in korea : institutional framework & operation february 2001 daeyong choi...
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Regulatory Reform in Korea :
Institutional Framework & Operation Regulatory Reform in Korea :
Institutional Framework & Operation
February 2001
Daeyong Choi Director for Regulatory Reform
Office of the Prime Minister, KoreaTel : 822-734-9345
E-mail : [email protected]
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1. Background of Drastic Reform
1.1 Economic crisis in 1997
◆ Reconsideration of a state-led economic development
◆ National consensus for comprehensive and drastic reform
1.2 Inauguration of the new government in 1998
◆ Guiding principle : “Democracy and Market Economy”
◆ Four key reform areas including structural adjustments
• Financial sector • Corporate sector
• Public sector (Regulatory reform, Public sector reform)
• Labor sector
1.3 Past reform experience ◆ Build-up reform capacities with public participation focusing on red- tape and deregulation
◆ Dispersed approach by several bodies on an ad-hoc and advisory basis
※ To reinforce this weakness the Basic Act on Administrative
Regulations(BAAR) was enacted in 1997.
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Financial Sector
Regulatory Regulatory ReformReform
(Laws & Systems)
CorporateSector
PublicSector
LaborSector
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2. Institutional Framework of Regulatory Reform 2.1 Coverage of BAAR
◆ General terms of objectives, principles and legal authority.
Rules dealing with making new regulation, including the use of RIA, ◆ sun-setting, review by the Regulatory Reform Committee (RRC)
A comprehensive regulatory improvement plan, requiring that all ◆ existing regulation be reviewed by agencies in conjunction with RRC.
The establishment, membership and functions of RRC◆
Regular reviews of progress and publication of an annual white paper.◆
2.2 Central role of RRC
Basic direction of regulatory policy and research and development ◆ on the regulatory system
Review of new and strengthened regulations.◆
Review of existing regulations and annual plans of regulatory clearance ◆ submitted by ministries.
Registration and publication of regulations◆
Collecting and responding to public opinions on regulatory ◆ improvement.
Monitoring and evaluation of regulatory reform efforts of ◆ agency.
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2.3 Principles of regulatory reform
“Business Friendly Country, Life Friendly Country”
◆ Eliminating, in principle, all anti-competitive economic regulations.
◆ Improving the efficiency of social regulations such as environment,
health and safety.
◆ Shifting methods of regulations from ex ante control to ex post
management.
◆ Basing regulations on adequate legal authority.
◆ Benchmarking global standards.
2.4 Strategies for regulatory reform
◆ Examine all existing regulations, under the established guiding principles.
◆ Establish systematic network between the RRC and ministries to facilitate reforms..
◆ Set targets to concentrate reform efforts.
◆ Establish partnership with the private sector to maximize reform
capacities in expertise and participation.
◆ Mobilize available administrative resources to speed up reform
implementation.
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2.5 Organization for regulatory reform
2.5.1 Organizational chart
President
RRC
Prime Minister
OPM
Minister Minister Minister Minister
2.5.2 Composition of RRC
◆ Civilian majority with the PM and a civilian as co-chairmen
* Appointment by the President
•13 civilian members including university professors (co-chairmen),
economists, business person, lawyer, press person and NGO
representatives.•7 government members from PM, Ministers of Finance & Econom
y,
Industry, Home & Administration, Heads of OPM, Fair Trade
Competition and Legislation
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2.5.3 Working Channel
R R C
OPM
Ministries
Local Governments
Assistant Minister for RR
Office of Panning and Management
MOHAMOE
2.6 Process of Regulatory Reform work
* Incorporated into law drafting process
2.6.1 Review Process of regulations
Vice Minister Meeting
Vice Minister Meeting State Council
Meeting
State Council Meeting PresidentPresident National
Assembly
National Assembly
(Checking Review) (Acts)
PresidentialDecrees Completed
MinistriesMinistriesRRCRRC
Legislation Ministry
Legislation Ministry
(Law Drafting) (Regulatory Review) (Legal Review)
Public notification
Public notification
(Administrative procedure)
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2.6.3 Review of existing regulations
Ministries
Self Review
Working Group
Review, OPM
Subcommittee
ReviewFull Committee
Review
First stage Second stage Third stage
2.6.2 Process of formulating regulations(laws)
Drawing-up Regulation
Public Consultation
Consultation withother ministries
RIA on the regulation
Regulatoryreview by RIA
Legal review
※ Why eliminate existing regulations?
- Outdated regulation incompatible with market-driven economy
- Excessive regulations of command and control ways coupled with a
state-led development
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3. Achievements
3.1 Review of existing regulations on a zero basis
* Across-the- board approach with targets set by the strong political leadership
◆ Vigorous, remarkable work to reduce the number of regulations by half
◆ For implementation : 364 bills revised at the National Assembly ◆ 1,242 subordinate rules revised
3.2 Tackling packaged regulations complicated with
multi-parties
◆ Planning and targeting regulations for economic recovery and
market-driven economy.
Year
1998
1999
Regulatings
11,125
6,820
Eliminated
5,430(49%)
503( 7%)
Modified
2,411(22%)
570( 8%)
Remaining
5,695
6,308
1998
37
1999
33
2000
56
2001
25
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◆ Ways of handling these items led by the RRC
Planning
item-selecting
Research entrusted
to expertsDrafting reform
proposal
Discussion and decision
on proposal
Consultation with
interested groups
and ministries
◆ Examples of regulations handled by RRC
• Regulations on foreign investment inducement
• Regulations on market entry and exit
• Regulations on venture business
• Regulations on industrial safety and test
• Regulations on professional associations
• Regulations on consumer and environmental protection and so on
※ Currently focusing on a knowledge & information based society
• Creating regulatory systems for e-government and e-commerce
• Rearranging regulations workable with ICT
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3.3 Ex-Ante review of new regulations since June 1998.
◆ Utilization of regulatory management systems to control regulatory quality
with RIA.
◆ 2,454 cases reviewed: 594 revised 261 declined or withdrawn
3.4 Review of informal regulations contained in
guidelines or instructions
◆ Improving regulatory transparency and accountability by removing
administrative discretion
◆ 1,840 founded : 1,678 abolished, 162 legitimized
3.5 Enhancement of public consultations and
transparency
◆ Checking actual performance of public consultation as compulsory review
process.
◆ Incorporating with the Administrative Procedure Act & the Act on
Disclosure of Information by Public Agencies.
◆ Establishing central registry of regulation open to the public
(www.rrc.go.kr)
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4. Implications
“Korea’s reforms brought the stabilization of the economic crisis and
would produce important benefits over the longer term”(OECD)
◆ Regulatory reform would create the foundation for sustainable long
term growth by moving toward market-driven economy.
- Increase of GDP growth rate by 8.6 % over 10 years
◆ Radical elimination of existing regulations was made possible by
the strong political leadership combined with a sound institutional
framework.
- Central role of RRC with strong political support.
- Target-oriented approach coupled with sound implementation
capacities in public administration.
◆ Establishment of regulatory reform and management systems as
permanent part of the administrative organization based on
legislative authority:
- Ex ante review for new regulations, RIA, central registration.
◆ Shifting toward regulatory quality suiting for market-oriented
economy with structural adjustments.
◆ Giving impact on administrative culture by reducing administrative
intervention and control.
.
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5. Concluding
※ Much progress was made but regulatory reform is not yet completed.
◆ Continuity and responsiveness
- Sustaining reform dynamism with strong political commitment
- Improving responsiveness to infusing information-based economy
◆ Regulatory quality and Implementation
- Improving regulatory quality compatible with open and
global economy
- Enhancing reform feasibility and tangible benefits
- Further abolishing subordinate rules and quasi-regulations
◆ Cultural change and adaptability
- Transforming regulatory behavior and public administration transparent
and accountable
- Changing relations between the state, market and civil society