Bureau and Corporate Funded Body
Press Briefing on “Government-funded Institution Innovation”
Date November 24, 2014 | Venue Seoul City Hall Briefing Room
It is a great pleasure to be here with such distinguished journalists and citizens. I have the great fortune of announcing that the third project of “Innovation Together” for the next 100 years of citizens and Seoul, “Citizens’ Best Friend” has been launched. There’s an old saying in some Native American cultures, “when we pray for rain, it always rains.” Its logic is very simple. It is because they continue to pray for rain until it rains. The Innovation of Seoul continues with citizens until the citizens are happy.
I have already announced the first and second projects. The first project of Innovation Together Cheongsachorong (red-and-blue lantern) was an innovation in the public offices of Seoul. At the time, I promised you to live up to my determination to have a long run with the basics of integrity. The second project, “Taking off Armor,” was Seoul’s promise to clear away and to reform a variety of hierarchical power dynamics.
Today, we launch the third project, “Citizens’ Best Friend.” The project has been planned with the firm determination to become citizens’ best friend through mutual innovation of government-funded institutions of Seoul along with other various innovations in the city. There are 18 institutions invested or funded by Seoul Metropolitan Government including five government-invested institutions and one government-funded investment. They have direct and massive effects in different areas such as urban planning, transportation, economy, welfare, and culture, and are related closely to citizens’ everyday life. I strongly believe that innovation of these institutions is vital to enriching citizens’ lives and these institutions share that belief and have actively participated in the project.
Looking back, we have some terrible memories in our minds, such as the crash of subway line no. 2, corruption scandals related to employment, and dept.-saddled local public enterprises. I could not help asking why. I realized there was a serious problem when these memories figured prominently in the minds of citizens even though the institutions are doing their best on the interface between the government and citizens’ lives.
I therefore came to my resolution to become a leader in innovation. This is the only way for the government to earn the citizens’ respect again. The government and the institutions have come a long way to open this way. We have put our head together to find a solution. We have reflected on public opinion. We have gone through countless consultation meetings with outside experts as well as with the directors of the institutions and executive directors, not to mention internal meetings. The most important thing was for us to listen to the actual voices of the staff in the affiliated institutions. We held meetings to hear their voices and listened attentively to the unions.
Let me tell you about the six strategies of the Citizens’ Best Friend project of the Seoul Metropolitan Government and government-invested and funded institutions, which has come all the way through. First, we will continue Seoul’s innovation for integrity with the so-called called Park Won Soon law with the affiliated institutions. Second, we will realize a solid and firm financial base. Third, we will secure citizens’ safety in their everyday life. Fourth, we will expand customized employment of competent human resources to build capabilities. Fifth, we will provide citizens with better service through cooperative governance. Sixth, we will conclude an agreement of innovation with citizens and execute it consistently.
Here are the details of the six innovation tasks. First, we will continue Seoul’s innovation for integrity with the affiliated institutions. We will make sure to register and monitor illegal requests to handle them. On the Eungdapso website, Illegal requests will be able to be reported and the Won Soon Hotline and CEO hotlines will be in operation as well.
It is also a problem when an illegal request is known about but not reported. That will also be subject to punishment. Furthermore, we will publish a handbook detailing the criteria of illegal requests, officially show appreciation to the ones who report these requests, and give preference to them for promotions.
Stretching a rule for a particular company will not be allowed either. Some companies could not even tender because prequalification is implemented according to internal procedures, which has caused scandals of qualifications as rules were stretched for certain corporations. In the future, we will implement an investigation system by a deliberation committee, of which the majority will be external experts. Moreover, we will establish a public bidding system where the entire process of deliberation is disclosed in order to eliminate even the smallest suspicion.
We will apply the one-strike out principle to employees and corporations involved in corruption in bidding. Rather than light penalties such as official reprimands, severe disciplinary actions such as expulsion and dismissal will be applied. The criteria of disciplinary punishment will be tightened.
In addition, a disciplinary penalty system will be introduced to charge the individuals involved up to five times as much as the money received. The list of corporations involved in irregularities will be shared by all institutions and citizens’ monitoring will be improved through measures such as an ombudsman system.
Corruption in employment will be strictly punished. Since requirements can be set in favor of particular individuals, an employment deliberation committee consisting of of external experts, will account for the majority of the participants in the whole process of employment.
Those who are employed through irregularities will be expelled as well as permanently disqualified from reapplication. The existing law requires the registration of properties only for full-time officials, but it will be expanded to public officials in special services such as contracts and human resources through suggestions to the national government.
Second, finances will be managed in a stable and sound manner. Based on the achievement a 7 trillion won debt reduction since my inauguration, the existing debt management for the city and government-invested institutions will be expanded to include government-funded institutions for the integrated management of finance and preemptive moves against financial crises.
In addition, crisis response systems such as a phased financial metrics evaluation, management consulting, and management improvement will be established and operated. Transparency in accounting will be assured and every detail related to management will be officially announced. There have been cases in the past where the same auditors are assigned every year as a practice. From now on, a deliberation committee for audit proposals, of which the majority is external specialists, will make sure the audit is conducted with transparency. The official website of Seoul will open a sharing section in order to host the management information of all the institutions. Finally, one or more briefing sessions for citizens every year will be mandated to provide a platform of sharing management information with citizens.
Citizens will participate in the budgetary process of the government-invested or funded institutions. The ongoing system for the citizens to participate in the budgetary process of Seoul will be extended to the institutions in order to realize citizen-friendly management of the budgetary process.
Additionally, a budget waste report center will be established for citizens to be able to check whenever they want and the current disclosure of executives’ business operating expenses will be expanded to all departments. The current disclosure of dates will be expanded to disclosure of time and location of execution to prevent a leakage of the budget.
Cooperation will dramatically enhance financial efficiency. Through cooperation between similar organizations will reduce costs and strengthen competitiveness through group purchases and joint R&D. Examples of potential organizational cooperation include Seoul Metro and Seoul Metropolitan Rapid Transit Corporation, SBA and Seoul Credit Guarantee Foundation, Sejong Art Center and Seoul Philharmonic Orchestra, and Seoul Welfare Foundation and Seoul Volunteer Center. In particular, due to the high cost of medical equipment, the financial efficiency that can result from joint utilization of medical equipment by affiliated hospitals will be enormous.
Additionally, we will support incentive operation expenses to form an independent foundation of the institutions. We have supported the Facilities Management Corporation with 1.6 billion won as incentive on a trial base. As a result, their revenues increased by 13 billion won. From 2015, we plan to apply this policy to all institutions and support them with incentives according to their performances. A number of good ideas to improve financial performance have been scrapped due to lack of resources. From now on, the incentive system will form an independent foundation as each institution conducts projects such as profit creation or service improvement at its own discretion. It will reduce the amount invested and funded by the government. In the long term, it is expected to significantly contribute to the financial stability of the city. Furthermore, it will ensure the creation of new revenue through projects such as developing station areas and exporting specialized technology and experiences.
Third, we will thoroughly secure citizens’ safety in their everyday life. Golden time, which is suitable for each type institution, will be implemented. On May 28th, there was a subway arson attack at Dogok Station on line no. 3. Without the rapid initial actions of passengers and crew, it would have developed into a fatal accident. That’s why we have set the goal of initial action within five minutes after the occurrence of an accident as a golden time as for the subway. SH Corporation has a lot of construction sites. Safety inspection is being conducted mainly by constructors and inspection teams, but from now on not only the public construction corporation but also citizens will participate in the process.
In addition, we will ensure safety from the perspective of citizens through safety-protecting activities with the participation of citizens, such as citizen monitoring, a safety report center, and a report reward system. For accidents caused by negligence, a response manual by type will be prepared. A Safety manual will be prepared for every type of fatal accident such as fire, derailment, crash, earthquake, explosion, and flood, and joint drills will be conducted with institutions related, and drills with citizens participating will be increased as well. We will make sure that upon the occurrence of an accident, cooperation of institutions as well as citizens at the site will minimize the potential damage to a large extent.
Fourth, we will hire and train more competent human resources from the private sector. The rate of specialized positions open to the private sector will be increased up to 10%. Currently, the insignificant rate does not reach even 1%, but it will be expanded gradually up to 10%. The rate of the disabled is only 3%, which is specified in law, but it will be increased up to 5% in accordance with a municipal ordinance. In addition, more high-school graduates, young workers, immigrants, and North Korean defectors will be hired depending on the conditions of the institution.
Highly qualified employees will be assigned as specialists. They will be working in particular areas such as management of disasters, accidents and safety, international negotiation and cooperation first and gradually into all areas to strengthen expertise of the institutions. Specialists will be paid incentives from 30,000–150,000 won according to his/her period of service and offered benefits such as promotions and overseas training.
Seoul will share its blueprints with CEOs and executives of each institution. It will be important to hold policy workshops with leaders of all the institutions attending to offer a platform for information exchange between the institutions. It will be combined with capability building sessions to promote leadership and to better understand various policies.
We will eradicate inhumane treatment in the workplace such as sexual harassment and verbal abuse. This announcement will express our determined will to end these practices. Education sessions to prevent sexual harassment will be increased from one session a year to two sessions. Assailants will be subject to severe disciplinary action.
Fifth, we will provide citizens with better services for cooperative governance. All kinds of services will be provided in a single place. This year, Seoul Credit Guarantee Foundation and SBA cooperated to select rising stars out of small and medium-sized businesses, venture businesses, social enterprises, and cooperatives and are supporting them with funds, management consulting, and marketing. This kind of cooperation between institutions will be encouraged to establish a practical one-roof integrated support service system.
We will establish governance with citizens and communities to expand the social contributions of the institutions. The institutions can connect a wide range of local resources such as citizens and communities. Shops that closed down will not be charged, spaces that are not used during weekends will be shared, and social contributions will be expanded through sisterhoods established with one or more social enterprise(s) or local business. We will make sure to help the institutions better understand communities through experience and the accumulated experience of their social contribution.
Most importantly, the Seoul government will never use its authority to boss around the affiliated institutions. In the past, many cases of high-handed actions by the government were reported. It built resentment for repeatedly demanding similar data, demanding materials on short notice, giving instructions in a one-way manner, and demanding excessive talent donation for performances. I have heard that consignment contracts between the city and the institutions shifted all the responsibilities of accidents to the institutions.
These resentments were all brought to light at meetings we held to hear what they had to say. These meetings will continue to be conducted regularly and a governance group consisting of citizens, experts, and the parties concerned will be established. The improvements will be made continuously and a simplified management evaluation index will reduce the burden of the institutions.
A Manual explaining how to eradicate high-handed actions will be prepared and distributed to create partnership. The city will be the institutions’ best friend first, allowing the city’s affiliated institutions to be citizens’ best friend. The institutions in turn will not act high-handedly towards citizens. To even out this distorted relationship, unfair conditions in contracts such as the ordering a party to modify the contract and dumping the cost onto the other party will be banned. Like the pleading committee of the Agro-Fisheries & Food Corporation and the out-reach communication committee of the Seoul Business Agency, a governance team will be organized with the other party, experts, and parties concerned, and a hotline to report high-handed actions to listen to citizens’ voices will be formed to apply them immediately.
A collaborative labor-management relation model will be adopted and executed.
Its key purpose will be to adopt a labor director system to guarantee participation in the board of directors and to establish and operate a labor-management committee for discussion on management of the corporation. This is expected to prevent conflict between labor and management. The execution will be planned, piloted and then expanded gradually.
Sixth, we will conclude an agreement of innovation with citizens and execute it consistently.
We will conclude an agreement to reform in a way that allows citizens to actually experience the difference according to the situation of the institution. The affiliated institution will operate the “Innovation TF” of which the majority is citizens to discover challenges and Seoul will operate an innovation advisory group consisting of experts to assist innovation of institutions. The challenges and solutions for the situations of the institutions will be concluded in agreements between citizens and institutions and reflected in CEO management evaluations.
Continuous innovation will be conducted through various channels of communication. Diverse communication channels such as regular meetings with directors of the institutions and working groups and communication group chat rooms will make communication real-time. A policy committee for government-invested institutions and an operation evaluation committee for government-funded institutions will be operated. We will always listen to citizens’ voices related to innovation of the institutions through Eungdapso and the hotlines of each institution.
We will raise the morale of the staff of the institutions. The employees are not the objects of innovation but the subjects. This is because regardless of the type of innovation, the success of innovation depends on their voluntary and active participation. It is crucial that they share the blueprint of the organization through innovation to realize genuine motivation. Assessing and rewarding the process or results of innovation on a regular basis will motivate them to continuously join the innovation voluntarily.
I have promised that Seoul and affiliated institutions will reform in order to be citizens’ best friend and have told you the six strategies and the details of the Citizens’ Best Friend project. We have a long way to go for innovation. Yet, like the people who prayed for rain until it rains, Seoul will make continuous efforts as well. Innovation Together for 100 years of the citizens and Seoul will not stop. Please do not forget today’s promise of Citizens’ Best Friend. We will see you again with the fourth project soon. Thank you for your concerns and cooperation. Thank you very much.