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  • Seoul Expands “Park Won Soon Act” to Include Investors and Funding Organizations

    SMG 1503
  • On November 24, 2014, the Seoul Metropolitan Government announced its first measure for organizational reform that includes 18 investors and funding organizations that provide public services to Seoul citizens.

    This is the third installment of the Park Won Soon Act. Previously, Mayor Park announced the enactment of two laws: the “Seoul Public Officials Reform” enacted in August 6, which punishes public officials who accept bribes or embezzle as little as KRW 1,000 of public funds, regardless of their status or position; and the “Strong A (Gap)-Weak B (Eul) Relationship Reform” (August 27), which bans the use of “A (Gap)-B (Eul) terms” in all agreements and contracts.

    The third organizational reform is made up of 22 projects in six areas: integrity, finance, safety, personnel, coexistence and governance, and signing of agreements.

    1. Integrity: “One-Strike-Out” for workers and companies involved in shady bids, maximum penalty of five times an accepted bride.

    First, regarding the integrity policy, the Seoul Metropolitan Government will fully abolish “stretching the rules” for particular companies.

    The “Tender Eligibility Evaluation System” is an institutional measure in which more than half of the evaluating committee members are composed of outside specialists for tenders. The Seoul Metropolitan Government aims to get rid of all suspicions by opening up the process and the results of tenders.

    The “One-Strike-Out System” is a strict punishment system whereby officials involved in shady business regarding bids are immediately discharged or dismissed, and the involved company is excluded from future tenders.

    The “Disciplinary Penalty System” requires a maximum penalty of five times the amount of an accepted bribe. Moreover, a blacklist of companies involved in shady tenders will be kept to expose all investors and funding organizations.

    The “Illegal Request Registration System” across all areas, including contacts and personnel, will also be implemented. This is a system that involves the online publication of every illegal request received by a public official. Public officials who do not publish their received illegal requests, or are even aware of such dealings, will be punished. On the other hand, officials who register such illegal dealings and requests will be awarded with a commendation and be given preference for promotion.

    2. Finance: Establish “Integrated Financial Management System” for investors and funding organizations, organizations’ management performances publicly announced.

    Based on the successful KRW 7 trillion debt reduction since the inauguration of Mayor Park, the Seoul Metropolitan Government has decided, in 2015, to establish the “Integrated Financial Management System” that includes not only existing investors but also funding organizations. Organizational management performance will be announced publicly.

    In October 2011, the fifth term of the mayor, elected by popular vote, began (KRW 19.99 trillion of debt) and a plan was instituted to reduce the government’s debt. As of the end of October 2014, a total of KRW 6.22 trillion has been reduced (KRW 13.77 trillion), and a total reduction of KRW 7 trillion does not seem unreasonable.

    The “Participatory Budgeting System” will be expanded to have citizens participate in the process of planning the budget for investors and funding organizations for local governments. Seoul citizens’ requests will be reflected in the projects in which they are interested.

    To encourage citizen participation in not only budgetary planning but also the implementation process, the Seoul Metropolitan Government started the “Budget Waste Report Center.” Currently, only the executives release a business’ operational expenses, but this will be applied to all departments as well. The specific time and place of implementation, in addition to the date, will be released as well.

    Moreover, fiscal efficiency will be dramatically enhanced through collaboration, and collaboration between similar organizations will be encouraged as part of realizing a sharing economy. For instance, Seoul Metro and Seoul Metropolitan Rapid Transit Corporation, and city-affiliated hospitals and Seoul Medical Center will reduce costs and make profits through group purchases and joint R&D.

    The Seoul Metropolitan Government will also provide “Performance Project Expenses” to ensure the implementation of items that can improve fiscal performances due to lack of funding. Already, a test funding of KRW 1.6 billion has been provided for the Seoul Metropolitan Facilities Management Corporation’s New Underground Shopping Center Construction Project and other projects this year, which led to an increase of KRW 13 billion in revenue. In 2015, this funding will be opened up to all organizations.

    Moreover, the Seoul Metropolitan Government will create additional profit models besides shipping fees, such as the development of subway station areas or the advancement of overseas railway projects to relieve citizens’ burden and establish fiscal stability.

    3. Safety: Introduction of a “Safety Goal System” for each organization and a response manual for disasters and accidents.

    The Seoul Metropolitan Government will adopt the “Safety Goal System” for each organization, according to their characteristics, in relation to the safety of Seoul citizens. As such, a manual will be composed that contains measures for each disaster and accident. In addition, the city government will expand citizen participation.

    The Safety Goal System, for instance, sets goals, such as “in cases of an accident, suppress within the first 5 minutes,” and records the details about these opinions.

    The response manual contains the most diverse types of disaster for each organization, including fire, derailment, crash, earthquake, explosion, and flooding. The city government plans to conduct regular participatory drills to focus on live environment training so that actions can be quickly taken, with the help of citizens, in cases of large-scale accidents.

    In addition, the city government has also encouraged organizations to adopt various policies, such as a Citizen Monitoring System, Safety Issue Report Center, and Report Reward System, to encourage the voluntary participation of citizens in ensuring the safety of all citizens.

    4. Recruitment: Expand the ratio of “open expert positions” to 10%, a large number of outside experts to participate in the recruitment process.

    The Seoul Metropolitan Government has come up with a way to hire and nurture outstanding personnel. The ratio of “open expert positions,” in which government officials and civilians compete for public posts, currently stands at around 1%, but this will be expanded to 10% in stages.

    The fairness of the recruitment system will also be enhanced through a “Recruitment Eligibility Evaluation System,” in which outside experts form the majority of the evaluation board for the hiring of “open expert positions” or “career service positions.” This move is expected to ensure the transparency of the employment process.

    The city government has also advised that there needs to be an increase in the employment of persons with disabilities, from the legal requirement of 3% to 5%, as stipulated by the municipal ordinance. Moreover, the government also recommended organizations to increase the number of positions for high school graduates, youths, multicultural workers, and North Korean defectors, depending on the circumstances.

    In addition, the “Expert Official System” of the Seoul Metropolitan Government will be benchmarked as a measure to strengthen employee expertise. The system will be introduced in specific areas, such as disaster safety management, international negotiations and collaborations, and then gradually applied to all areas.

    5. Coexistence and governance: Establish “One-Roof Integrated Support System” to provide citizens with city or organization resources in a timely manner.

    For coexistence and governance, the Seoul Metropolitan Government will enhance the quality of service provided to its citizens. One of the key measures to ensure this is the implementation of the “One-Roof Integrated Support System,” which provides citizens with the resources of the city or organizations in a timely manner. For instance, in 2014, Seoul Credit Guarantee Foundation and SBA collaborated in selecting future development companies from among SMEs, venture businesses, social enterprises, and cooperatives. Those who were selected were offered capital, management consultations, and marketing support.

    The city government will also establish governance that connects citizens, civic organizations, and related organizations with various local resources. For instance, non-operating shopping districts will be opened up for free and underused spaces will be shared on weekends, and in connection with more than one social enterprise or town enterprise, they can be used to contribute to the society.

    Along with the announcement of the reform measure, the Seoul Metropolitan Government emphasized the fact that it will not wield unfair power over affiliated organizations. Stamping out the repetitive requests of similar documents, one-sided orders, and other abuses and misuse of authority toward affiliated organizations are included in the “Strong A (Gap)-Weak B (Eul) Relationship Reform.” The city government also promised that investors and funding organizations will not misuse their authority against citizens, will get rid of the A (Gap)-B (Eul) terms from agreements and other documents, and will reflect the voices of the citizens by operating a report center where reports about the abuse of power by organizations can be filed.

    In addition, the “Participatory Labor Relations Model” will also be introduced and adopted. Through the new “Labor Director System,” laborers will be guaranteed positions on the board of directors, and the “Management Consultation Council” will be established by the labor unions and companies for discussions regarding the management of companies.

    6.Signing of agreements: Guarantee execution of reforms through signing agreements with Seoul citizens.

    The Seoul Metropolitan Government will sign a reform agreement with the citizens and continue to execute the reforms. Based on the plans for the reforms, organizations will come up with reform measure suitable for their circumstances and sign reform agreements with the citizens.

    In order to identify the practices that can be reformed in each organization, investors and funding organizations will establish a “Innovation TF,” and the Seoul Metropolitan Government will operate a “Innovation Advisory Panel” to offer support for the organizations. Moreover, the government will thoroughly manage the operation of organizations to ensure their reform visions are shared and thus provide a morale booster for employees. Sufficient incentives, such as commendations for outstanding organizations and employees, bonuses, and preference for promotion will also be offered.

    “The reform measures for investors and funding organizations to be instituted in this round were adopted to allow for the review and improvement of the unreasonable and irrational practices and systems across all sectors,” said Seoul Mayor Park Won Soon. “In line with our changing society and the world, Seoul’s investors and funding organizations will institute reforms and become public organizations that promote measures that our citizens can actually feel.”

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