The Ministry of Trade, Industry and Energy pressed for strong disciplinary action against the Korea Chamber of Commerce and Industry over a press release earlier this year claiming that wealthy Koreans were leaving the country because of inheritance tax burdens — even after being advised that legal punishment would be difficult, according to records released on the 6th. Materials the ministry submitted to Rep. Choi Soo-jin of the People Power Party show that before notifying the chamber of its audit findings, the ministry received replies from multiple law firms saying that criminal prosecution or damage claims on charges such as defamation or obstruction of business would be hard to pursue. The ministry nonetheless delivered audit findings demanding strong disciplinary measures against those involved. The chamber ultimately dismissed or removed three senior executives, including its standing vice chairman.
The chamber was clearly at fault for issuing a flawed press release based on faulty statistics from an overseas consulting firm. It corrected the errors and issued an apology after President Lee Jae-myung publicly rebuked it for what he called "deliberate fake news," but its responsibility for circulating provocative information drawn from unverified figures is not small. Still, critics say it was excessive to demand disciplinary action against the chamber when every law firm consulted by the government had replied that legal measures would be difficult to take.
Business groups exist to analyze industrial policy from the perspective of companies and to convey the views of their industries. If executives can be dismissed over errors in a report on a policy issue, absent any intent to defame or disparage, who will be able to speak candidly? If the government says it wants to hear from companies on the ground while scrutinizing their arguments and even weighing criminal action, channels for dialogue will inevitably close. Indeed, policy recommendations and related materials from the chamber and other business groups, including the Federation of Korean Industries, have since fallen sharply.
Correcting false information is necessary, but government sanctions that go beyond the scope of responsibility risk discouraging private-sector criticism of policy. Pressure on a private organization that represents the business community can also weigh on corporate activity and, in turn, on the national economy. The government's job is to help companies devote their full energy to global industrial competition rather than watch for signals from those in power. Weeding out false information and holding parties firmly accountable matter, but the government's response must never go too far.
