Introduction to Anti-corruption Policy of Korea

Introduction to Anti-corruption Policy of Korea Public Officials Capacity Building Training Program for Government Innovation Seoul, December 5 , 2007 Republik Indonesia

D adang Solihin Delegation Head Public Officials Capacity Building Training Program for Government Innovation

Table of Contents I. Corruption in Korea and Previous Policies II. KICAC and Changes in Anti-corruption Strategy III. Achievements IV. Future Direction V. Recommendations

I. Corruption in Korea and Previous Policies 1. Corruption as a dark shadow of Korea's rapid growth (1) Rapid economic growth despite the ruins of the war Industrial and economic exhaustion by the Korean War (1950-1953)  Highly rapid economic growth (“Miracle on the Han River”) after 1960's  Korea is now the world’s 11 th largest economy

1. Corruption as a dark shadow of Korea's rapid growth (2) Severe side effects behind the rapid growth - Collusive links between business and politics • Illegal slush funds, special benefits for big businesses, unfair competition - Unclear and complicated regulations - Cultural corruption factors based on kinship and academic and regional ties I. Corruption in Korea and Previous Policies

2. Anti-corruption measures of past governments - Real Name Financial Transaction System (1993) - Registration and declaration of public officials' assets (1993) - Public Official Election Act (1994) - Administrative Procedures Act (1996) - Official Information Disclosure Act (1996) - Financial Transaction Reports Act (2001) - Anti-Corruption Act (2001) - Korea Independent Commission Against Corruption (2002) - Korea Financial Intelligence Unit (2002) I. Corruption in Korea and Previous Policies

3. Limits of previous anti-corruption policies Lack of holistic strategy - Fragmentary, inconsistent measures - Government-led drive - Confined to the public sector Reactive, punishment-oriented approach I. Corruption in Korea and Previous Policies

II. KICAC and Strategy Changes Establishment of KICAC - Launched in 2002 under the Anti-Corruption Act - Establish & coordinate national anti-corruption policies

II. KICAC and Strategy Changes CI of KICAC Standing for an open door out of which bright light streams. The five colors in the CI represent the attributes of integrity. Purity Blue Nobility Purple Passion Red Progress Green Truth Yellow

II. KICAC and Strategy Changes KICAC’s Organization (1) Chairman Secretariat Secretary General Standing Commissioner Six Non-standing Commissioners

II. KICAC and Strategy Changes KICAC’s Organization (2) Secretariat Policy Planning Office Public Relations & Cooperation Bureau Inspection Headquarters Legal Affairs Management Officer

II. KICAC and Strategy Changes KICAC’s Functions 1. Developing and coordinating national anti-corruption policies 3. Recommending institutional improvement measures for public agencies 4. Receiving reports of corruption & providing whistle-blowers protection and reward 5. Increasing anti-corruption awareness through education and promoting cooperation 2. Evaluating implementation of anti-corruption policies

II. KICAC and Strategy Changes Paradigm Shift in Anti-corruption Policies - Fragmentary, reactive  Systematic & proactive - Separated, individual  Comprehensive, collective - Detection by law enforcement agencies  Monitoring by citizens - Government-led  Public-private partnership Korean Pact on Anti-Corruption & Transparency

II. KICAC and Strategy Changes Major Anti-corruption Measures - Deliberation on anti-corruption policies & - Coordination of the activities of various anti- corruption organizations as a leading agency Developing and coordinating national anti corruption policies Ministerial Meeting on Anti-Corruption Formulating gov’t’s anti-corruption policies

II. KICAC and Strategy Changes Major Anti-corruption Measures Making policy recommendations for public institutions - Political funds, construction, taxation, etc. Recommendations related to corruption-prone areas Each public agency takes its institutional improvement measures

II. KICAC and Strategy Changes Major Anti-corruption Measures - - Evaluating implementation of anti-corruption policies Integrity Survey Annual survey of citizens who firsthand Bribery, public officials’ attitude toward corruption, etc. Encouraging public institutions to improve experienced public services their anti-corruption systems

II. KICAC and Strategy Changes Major Anti-corruption Measures - - Assessing corruption factors in legislation Analytical mechanism designed to identify & remove possible corruption factors from laws and regulations Corruption Impact Assessment

II. KICAC and Strategy Changes Major Anti-corruption Measures - - Handling of corruption reports 1 KICAC receives and verifies report of corruption. 2 KICAC refers it to investigative agency. 3 The agency conducts investigation. 4 The agency reports the results to KICAC. 5 KICAC notifies the informer of the results.

II. KICAC and Strategy Changes Major Anti-corruption Measures - - Protecting & rewarding whistle-blowers Employment guarantee Confidentiality Physical safety Financial rewards

II. KICAC and Strategy Changes Major Anti-corruption Measures - - - Code of Conduct for Public Organization Employees, post-employment restrictions, Blind Trust System - Integrity Survey and K-PACT benchmarked as best practices * Korea-Indonesia MOU, Korea-UNDP joint project - Enhancing accounting transparency and improving corporate governance Preventing conflict of interest International cooperation Promoting ethical management

II. KICAC and Strategy Changes Major Anti-corruption Measures - - Signed in 2005 by representatives from four major sectors of society (public, political, private & civil society ) Pledges to make voluntary and active efforts to fight corruption Bottom-up approach to fighting corruption public political private civil society Korean Pact on Anti-Corruption & Transparency

III. Achievements A culture of integrity disseminated to the society as a whole - Improvement of corruption-prone systems and regulations by voluntary initiatives of public-sector organizations - Steady increase in the levels of transparency of Korean society and significant decrease in bribery

III. Achievements Corruption Perceptions Index (CPI) 5.0 4.6 4.3 5.1 4.0 2000 2003 2004 2005 2006 5.1 2007

III. Achievements Integrity Index (KICAC) 2002 2003 2004 2005 2006 6.43 7.71 8.38 8.68 8.77 10

Ⅲ . Achievements Public Sector - Overall integrity of the pubic sector greatly increased; rates of bribery and entertainment offers dropped Private Sector - Raised public awareness of ethical management and corporate transparency - K-PACT disseminated to additional industries & regions Political Sector - Amended political laws: Election Act, Political Parties Act & Political Funds Act - Restrained the influence of law enforcement agencies

Ⅳ . Future Direction 1. Limits and Problems Failure to meet the needs of the public Need to enhance corporate transparency and accountability Discrepancy between new standards/ systems and old values/practices

Ⅳ . Future Direction 2. Transparency & National Development Transparency correlates with national competitiveness

Ⅳ . Future Direction 3. Future Plans To bring domestic institutions and practices into line with global standards To raise the levels of integrity of both the public & private sectors To step up oversight of local governments and public corporations To overcome cultural factors such as cronyism To upgrade the effectiveness of anti-corruption measures and systems

V. Recommendations Public support for anti-corruption initiatives High-level officials setting a good example Greater efforts to enhance transparency in the private sector Increased cooperation for the global fight against corruption Collaboration and check-and-balance among related agencies Implementation of policies relevant to specific conditions of each country

Dadang Solihin currently is Director for System and Reporting of Development Performance Evaluation -Bappenas. He holds MA degree (Economics), University of Colorado, USA. His previous post is Head, Center for Research Data and Information at DPD Secretariat General as well as Deputy Director for Information of Spatial Planning and Land Use Management at Indonesian National Development Planning Agency (Bappenas). Beside working as Assistant Professor at Graduate School of Asia-Pacific Studies, Waseda University, Tokyo, Japan, he also active as Associate Professor at University of Darma Persada, Jakarta, Indonesia. He got various training around the globe, included Public Officials Capacity Building Training Program for Government Innovation, Seoul –Korea (2007), Advanced International Training Programme of Information Technology Management, at Karlstad City, Sweden (2005); the Training Seminar on Land Use and Management, Taiwan (2004); Developing Multimedia Applications for Managers, Kuala Lumpur, Malaysia (2003); Applied Policy Development Training, Vancouver, Canada (2002); Local Government Administration Training Course, Hiroshima, Japan (2001); and Regional Development and Planning Training Course, Sapporo, Japan (1999). He published more than five books regarding local autonomous. You can reach Dadang Solihin by email at dadangsol@yahoo.com or by his mobile at +62812 932 2202 Dadang Solihin’s Profile

Introduction to Anti-corruption Policy of Korea

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