Choi Seung-jae, the Small and Medium Enterprises Ombudsman, announced on October 12 that he has begun a comprehensive review of regulatory proposals that various ministries have been considering for an extended period. He plans to scrutinize these proposals closely, particularly those that have been handled superficially.
In his opening remarks, Choi stated, "Regulatory innovation has been repeatedly emphasized, but the on-the-ground experience remains low." He criticized the temporary nature of the approach, which focuses on eliminating a few outdated regulations to meet quotas, likening it to a 'whack-a-mole' strategy.
Choi referenced the commitment to regulatory innovation expressed by Minister of SMEs and Startups Lee So-young upon taking office, expressing hope that this would lead to quicker resolutions of pressing issues.
He identified the shifting of regulatory burdens as a structural problem observed in the field. While large companies can withstand the adoption of international norms or ESG standards, the burden is often uniformly passed down to third to fifth-tier subcontractors, leading to disruptions in business if they fail to meet these standards.
In emerging industries, he pointed out that bureaucratic practices are stifling innovation by applying outdated criteria to new developments. He also labeled excessive interference and uniform enforcement by support agencies aimed at assisting small businesses as 'shadow regulations.'
Choi highlighted the issue of 'hidden regulations' that businesses are unaware of when starting or expanding operations. He argued, "If regulations are necessary, they should be transparently disclosed and explained in advance, serving as clear guidelines rather than hidden traps."
He identified public office culture as the biggest obstacle to regulatory innovation, citing factors such as the burden of audits, risk aversion, siloed departments, and a lack of willingness to resolve conflicts of interest. He explained that while proposals remain dormant in drawers, subcontractors go bankrupt and startups run out of capital. Choi emphasized, "As long as businesses are viewed as targets for regulation rather than partners, regulations will not be eased."
Choi provided examples of cases handled by the ombudsman, including regulations on the location of local industrial complexes, the dispatch of foreign workers, electric motorcycle charging regulations, and regulations for unmanned gyms operating at night.
Regarding industrial complex regulations, he noted, "The system still adheres to manufacturing standards from the 1970s and 1980s, strictly controlling the establishment of cafes and other businesses within aging industrial complexes." He criticized the prohibition on the flexible dispatch of foreign workers to different factories operated by the same employer, which he described as bureaucratic red tape.
He pointed out that electric motorcycles incur fines when charged at electric vehicle charging stations, stating, "This is a result of regulations that only considered cars during their creation." Concerning unmanned gyms operating at night, he remarked, "The requirement for a fitness instructor to be present for safety reasons has forced small business owners to abandon nighttime operations due to the associated labor costs."
Choi concluded, "Regulatory innovation is not something that can be resolved overnight; it is a painful process that requires social consensus. I will take the lead as a representative of the field against the practices of uniformly shifting regulatory burdens to the lowest levels of the food chain, hidden guidelines, and outdated administration."
* This article has been translated by AI.
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