Chairman Sohn Kyung-shik of the Korea Enterprises Federation (KEF) (Photo: CJ Group)

Chairman Sohn Kyung-shik of the Korea Enterprises Federation (KEF) said, “At the current crisis situation, not only the government and labor should extend a helping hand to companies so that they can take a deep breath.”

KEF Chairman Sohn made the remarks in a reply from the question “How Can Korea Overcome Japan’s Economic Retaliation?”

Even though he used soft words, his message was stronger. He made it clear that Korea cannot tide over the crisis unless regulatory steps trapping companies are removed dramatically.

“Not only the government but also companies want to localize raw materials and parts,” he said. There are many cases of Korean companies not trying to localizing their supply chain due to a myriad of layers of restrictions, Chairman Sohn said.

In the case of compounding crises coupled with the trade war between Korea and Japan, and the foreign exchange war between the United States and China, he said corporate survival is the foremost priority. He stressed the government’s role in eliminating stumbling blocks standing in the way of companies.

Chairman Sohn called for concentrating efforts to relax regulations related to the environment and safety. He was apparently referring to the Act on the Registration and Evaluation of Chemical Substances, the Act on the Management of Chemical Substances, and the Act on Occupational Safety and Health.

Raw materials and substance companies have to handle chemical substances, but related restrictions have been strengthened too much in the past few years, so they need to be relaxed in a reasonable fashion, he said.

Chairman Sohn demanded support from labor, saying that now is the time when labor circles have to look at realities seriously, and labor and management should join forces in overcoming the current crisis.

His remarks may be construed as criticism of some conglomerate trade unions, which make it a habit to prepare for strikes, ignoring the current crisis. The complaints and grievances Korean companies experience will be gathered and diverse voices of the industry will be handed over to the government, he said. In a related development, industry voices are getting louder as the Japanese government has expanded its export curbs to Korea.

Conglomerates like Samsung, Hyundai Motor, SK and LG share the view that Korean industries need to be protected in the wake of Japan’s economic sanctions. Cheong Wa Dae and government officials had convened meetings with businessmen to demand the localization of raw materials and parts.

Conglomerates thought they are on the same wavelength as the government in the need for building an industry ecosystem of raw materials and parts, but they complained about the government’s reluctance in taking drastic measures due to the deep-rooted anti-business sentiment.

Some government and ruling party officials lashed out at conglomerates for low the competitiveness of the Korean raw materials and parts industries. Economic and industry sources said large companies were partly responsible for failing to diversify procurement sources, but their allegation conglomerates did nothing was unacceptable.

Not a few companies complained that society tended to deal with conglomerates more harshly.

A ranking economic organization official said no one mentioned that Samsung Electronics has 100,000 employees in Korea and the company shoulders 11 trillion won in corporate tax. He said Korean society is preoccupied with finding fault with conglomerates rather than recognizing their merits.

Academic circles claimed that the ongoing Korean-Japanese trade rift should serve as an opportunity to boost Korean businessmen’s entrepreneurship and enhance the competitiveness of Korean industries.