Korea's Policies for Anti-Corruption & Integrity

1. Korea's Policies for Anti-Corruption & Integrity 2007. 8

2. Contents I Background Ⅱ Korea's Anti-Corruption Policies

3. Background I 1 Korea's population & economy 2 Evaluation of Korea's Integrity

4. 1.Korea's population & economy

5. 2.Evaluation of Korea's Integrity 1) Domestic Evaluation Korea's Integrity Perceptions Index

6. 2.Evaluation of Korea's Integrity 1) Domestic Evaluation Perception Changes by Corruption Type since the Inception of the Roh Mu-Hyun Administration

7. 2.Evaluation of Korea's Integrity 2) International Evaluation Korea’s constant improvement in the fight against corruption is recognized on the global stage • Corruption Perception Index (CPI) Trend (on a 10-point scale) ※ Source: Corruption Perception Index of Transparency International

8. 2.Evaluation of Korea's Integrity • Economist Intelligence Unit democracy index 2006 • According to the Bribing and Corruption Practices Index (BCPI), annually published • by the International Institute for Management Development (IMD), Korea's score rose • from 2.9 in 2004 to 4.4 in 2005.

9. Korea's Anti-Corruption Policies Ⅱ 1 Beginning Phase of Anti-Corruption Policies 2 Initial Phase of Anti-Corruption System Formation 3 Full-fledged Implementation of Anti-Corruption Systems 4 Korea's Anti-Corruption System 5 Tasks to Be Resolved and Policy Direction

10. 1. Beginning Phase of Anti-Corruption PoliciesFrom Government Establishment to Noh Tae-Woo administration (1948~1993) 1) Background • Korea was liberated from the Japanese colonial rule in 1945 and went • through the Korean War (1950~1953), resulting in a country divided into the • North and the South. The chaotic circumstances devastated industries and • depleted both resources and a skilled workforce, creating a vicious circle of • poverty. The Korean economy mostly depended on overseas aid throughout • the 1950s and into the early 1960s. • From the mid-1960s to late 1980s, the South Korean government aggressively • led economic development while bringing in foreign capital for full support. • Strategic funds, tax credits and other forms of preferential treatment were • provided to export-related industries and the heavy chemical industries.

11. 1. Beginning Phase of Anti-Corruption Policies From the Government Establishment to the Noh Tae-Woo administration (1948~1993) 2) Policy achievement • During the government-led economic development drive, anti-corruption efforts • focused only on prosecution and punishment rather than on reforming the • corruption-prone socio-political structure and systems. • Anti-corruption policies were mainly end-of-pipe measures with the Board of • Inspection and the Social Purification Committee playing an important role. • Punishment mainly focused on low-ranking officials rather than the powers- • that-be, helping to create a vicious circle of corruption and punishment without • fundamental reforms. Under these circumstances, the perpetrators of corruption • resorted to clandestine and crafty methods that allowed government officials to • simply do nothing. • Despite the government's anti-corruption drive, corruption became more • rampant while mistrust over the government intensified, largely because • most corruption cases concerned power abuse and collusion between • politics and business circles, particularly the large conglomerates.

12. 2. Initial Phase of Anti-Corruption System Formation The Administrations of Kim Yong-sam and Kim Dae-jung (1993~2002) 1) Background • From the early 1990s, Korea underwent rapid political democratization with the • transition from 30 years of military regimes to a civilian administration. • Korean companies failed to respond to the ongoing wave of the globalization in • the 1990s, including market opening. The Asian financial crisis spread to Korea • by late 1997, significantly impacting the Korean economy. • The South Korean government blamed the financial crisis on the resistance to • the transition to a full market economy and a social structure prone to corruption, • including, collusion between politicians and businessmen and ineffective • government regulations. • Recognizing this, the government launched an intensified reform campaign • administration-wide, including the establishment of an anti-corruption system.  

13. 2. Initial Phase of Anti-Corruption System FormationThe Administrations of Kim Yong-sam and Kim Dae-jung (1993~2002) 2) Policy achievement • During the Kim Yong-sam Administration (1993~1997), • - Introduced of the fundamental anti-corruption programs • - Established the Corruption Prevention Committee (an advisory body of the Board of • Audit and Inspection) and Administrative Reform Committee • During the Kim Dae-jung Administration (1998~2002), • - The Anti-Corruption Act and the Money and Laundering Prevention Act were enacted • - The Presidential Commission on Anti-Corruption and the Financial Intelligence Unit • were establishd • - Administrative regulation reforms were undertaken • - The System for Administrative Information Disclosure was adopted • Accounting standards became more transparent and sophisticated, while • corporate governance was improved as part of efforts to meet the international • standards of accounting and corporate responsibility.

14. 2. Initial Phase of Anti-Corruption System FormationThe Administrations of Kim Yong-sam and Kim Dae-jung (1993~2002) 2) Policy achievement • Previously, the government had acted alone in the anti-corruption efforts. Under • the civilian governments, however, civic groups such as the People’s Solidarity • for Participatory Democracy(1994), Korean Solidarity for Anti-Corruption(1995), • Center for Transparent Society(1996), Citizens’ Coalition for Better Government • (1997) and YMCA became broadly and proactively involved in the fight against • corruption. As a result, more public pressures was exerted on the elimination of • corruption and irregularities related to power abuse.  • However, these anti-corruption efforts were not sufficient. The legacies of • collusion between politicians and businessmen persisted; • excessive campaign funds were collected for a minority ruling party to gain ground. • Nepotism-related corruption occurred, too, involving the relatives of both Presidents.

15. 3. Full-fledged Implementation of Anti-Corruption SystemsThe Roh Moo-hyun Administration (2003~present) 1) Background • Building on strong support from the civil society, Roh Moo-hyun was • elected President, and his administration designated government reform • and a fight against corruption as major policy goals. • President Roh Moo-hyun declared that he would not seek political gain • from the misuse of the Prosecutors' Office, National Intelligence Service • and various parties previously regarded as powerful institutions. • This declaration highlighted a commitment to eradicating corruption. • President Roh has presided over the inter-Ministerial meeting on anti- • corruption and vigorously pursued anti-corruption policies.  • On the administrative front, existing anti-corruption systems are now • implemented more systematically, with KICAC playing a leading role. 

16. 3. Full-fledged Implementation of Anti-Corruption SystemsThe Roh Moo-hyun Administration (2003~present) 2) Anti-corruption Measures • Establishment the Inter-Ministerial Meeting on Anti-Corruption • Pursuit of reforms and anti-corruption measures in the influential government • organizations • Reform of the political sector • Introduction of online systems for transparent administrative process • Disclosure of the results of Integrity Survey of public institutions • Establishment of systems for protecting and rewarding whistle-blowers • Provision of recommendations • Introduction of Corruption Impact Assessment • Introduction of the Citizen Audit System and the Citizen's Recall System • Signing of the Korean Pact on Anti-Corruption and Transparency (K-Pact) by • the public, political, economic sectors and civil society

17. 4. Korea’s anti-corruption system 1) Anti-corruption bodies

18. 4. Korea’s anti-corruption system 2) Key function of KICAC • Formulate and coordinate the national anti-corruption policies • Make recommendations on eliminating corruption-causing factors in laws and • regulations that govern corruption-prone areas • Evaluate the progress of policy steps which public organizations have taken • to prevent corruption • Receive reports of corruption while protecting and rewarding whistleblowers • Promote international cooperation for corruption prevention with private and • global organizations • Ensure the implementation of the Code of Conduct for Public Organization • Employees

19. 4. Korea’s anti-corruption system 3) Major anti-corruption systems • Establishment and coordination of anti-corruption policies at the national • level • - Policies to enhance integrity and fight corruption are established and coordinated at the • national level. • - The president presides over the Inter-Ministerial Meeting on Anti-Corruption to help • eliminate a structure and systems conducive to corruption and to strengthen • cooperation among government organizations on anti-corruption efforts. • Corruption prevention • - Establishment of the Administrative Reform Committee • - Introduction of the System for Administrative Information Disclosure • - Improvement in systems related to corruption-prone areas • - Adoption of the Corruption Impact Assessment • - Operation of online systems for transparent administrative process • - Evaluation of the integrity at public organizations

20. 4. Korea’s anti-corruption system 3) Major anti-corruption systems • Investigation & punishment • - Establishment of the Corruption Report Center • - Introduction of the system for protecting and rewarding whistleblowers • - Operation of an internal audit committee within each ministry • Public ethics • - Implementation of the Code of Conduct for Public Officials • - Introduction of Confirmation Hearings on the appointment of high-ranking officials • - Registration and disclosure of public officials’ personal assets • - Employment ban on public officials associated with a corruption case • Cooperation between the private and public sectors • - K-Pract, the Citizen Audit System, the Citizen's Recall System and various anti- • corruption activities of civic groups

21. 5. Tasks to be resolved and Policy direction 1) Tasks to be resolved • When public ethics are lacking, cronyism and paternalism, regarded as part of • Korea's traditional customs, serve as corruption-causing factors. • Decision-making process are not transparent enough. For example, many • committees still depend on unfair policy-making processes, and retired public • officials make lobby on behalf of their organizations. • Some local politicians and business people share inappropriate ties that result • in corrupt practices.

22. 5. Tasks to be resolved and Policy direction 2) Policy direction Anti-corruption efforts will continue based on vigorous prosecution and punishment against irregularities and corruption, and on the system for protecting and rewarding whistleblowers. At the same time, the Code of Conduct will be strictly implemented to enhance ethics in the public sector with importance placed on transparency of decision-making processes and responsibility. Institutional improvements will be made to increase the transparency of corporate accounting, while further measures for corporate ethical management will be adopted.  

23. Annex • Inter-Ministerial Meeting on Anti-Corruption」(2004) • Code of Conduct for Public Officials (2003) • Confirmation hearings on appointments of senior officials (2003) • Enhanced system for an ethical and transparent management of businesses • Elimination of corruption concerning power abuse (2004) • Institutional Improvement for Corruption-prone Areas • System for protecting and rewarding whistleblowers(2005) • Horizontal partnership and the K-PACT (2005) • Integrity Survey of Public Organizations (2003) • Citizens Recall System (2007) • International Cooperation in Combating Corruption

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