Gov't to speed up deregulation for SMEs

By Yoon Ja-young

The government plans to overhaul the certification system to lessen the burden on small and medium enterprises.

Certification programs were introduced in 1961 to evaluate and certify that certain products or services reached applicable standards. But there have been complaints that the system only adds to the burden on small businesses.

SMEs making toilet paper, for instance, have been complaining that they are subject to layers of government regulation. For example, a manufacturer that already has certification for producing 50-meter rolls of toilet paper has to go through the same certification process to produce 70-meter rolls.

Safety certification on some home electronics also has been disputed. Manufacturers have wondered why they have to get safety certification when there is little possibility of a telephone or a fax machine causing a fire.

At a ministerial meeting on deregulation, presided over by President Park Geun-hye, the government said SMEs spend on average 30 million won a year on certification.

As it plans to scrap or simplify 149 certifications, the government expects around 230,000 SMEs will benefit, cutting 542 billion won in annual costs.

Food companies, for instance, are expected to benefit from simplified hazard analysis critical control points (HACCP) certification, as the HACCP certification for meat and HACCP certification for food will be integrated.

At the meeting, President Park said deregulation should continue.

“The irrational certification systems and technical regulations that are outdated and don’t suit global standards are hampering corporate activities and negatively affecting industrial competitiveness,” President Park said.

She said ministries should continue examining and overhauling regulatory barriers that hamper corporate innovation.

According to the Korea Federation of SMEs, the country’s SMEs have on average 10 certifications, up from 3.2 in 2006.

The Korea Development Institute estimated that the government’s overhaul of the certification system will cut 542 billion won in corporate costs, on top of boosting sales by 2.6 trillion won as SMEs can launch products in the market more quickly.

“The certification system was adopted to support businesses, but it became an economic burden to SMEs and a hurdle to their entry into the market,” said Lee Jeong-won, an official at the Office for Government Policy Coordination in charge of deregulation. “The deregulation plan is based on demands by businesses.”