A group of Saenuri lawmakers committed to economic democratization said Thursday that they will push to introduce class action and punitive compensation suits to crack down on large family-run conglomerates' abuse of economic power.
The economic democratization advocacy meeting made up of party lawmakers and senior members said there is a growing call to allow ordinary citizens to file class action suits to cope with losses they have suffered due to arbitrary and unlawful actions committed by big businesses also called chaebol.
At present, the country only permits such legal action to be taken against securities firms, but there have been persistent calls to include other industries that have direct impact on everyday life.
On the expansion of punitive compensation actions, Saenuri officials said this move could be used to penalize unfair practices across the board for actions taken by conglomerates that hurt the interest of subcontractors. Under existing rules this punitive compensation can be taken only if big companies violate subcontract rules or if they steal technology from small and medium enterprises (SMEs).
The move to consider such steps, which are opposed by the business community as a whole, comes as public sentiment has turned against conglomerates, who are seen as reaping the fruits of the country's economic growth at the expense of ordinary consumers and SMEs.
In addition, Saenuri, which has stepped up calls for economic democratization, said measures are being reviewed to permit ordinary consumers to directly file for a halt to unfair trade practices without requesting help from the Fair Trade Commission (FTC).
The advocacy meeting also said there are talks to revamp the FTC's leniency clause that permits a company that engaged in illegal price fitting to not pay any fines, if it is the first to report the crime to authorities.
Rep. Kim Sang-min said party members are also considering steps to limit voting rights of industrial conglomerates toward their financial affiliates. There are moves to lower the ownership limit of financial firms by the industrial chaebol from 9 percent at present to 4 percent and other restrictions on ownership.
Related to moves to push for greater economic democratization and tighter control on the chaebol, Park Geun-hye, the party's candidate for the upcoming presidential race, supported ongoing measures to keep manufacturing companies from exerting too much control over affiliated financial firms.
"This is the global trend and South Korea should follow in this direction," she said in a lunch meeting with reporters.
The five-term lawmaker and former party chairwoman, however, expressed the need to be cautious about pushing forward policies that can affect large businesses to the extent they hurt economic growth.
"I am aware of calls by some Saenuri members to ally with the opposition on this matter, but one must keep in mind the serious differences between the plans which make 'mixing' the two hard at present," she said. Park said that when approaching this issue there is a need to consider what is in the country's best interest.
Saenuri has claimed that the main opposition party's plan could lead to the weakening of the large conglomerates that can be bad for the country's international competitiveness. (Yonhap)