S.Korea business lobby group regrets past political role

The Federation of Korean Industries (FKI) on Thursday said it deeply regretted the political role it took in the previous governments and vowed to be reborn as a thinktank, a move it hopes will bring back Samsung, SK, Hyundai Motor and LG groups to its membership fold.

Established in 1961, FKI is one of the country’s major representative bodies for conglomerates, alongside the Korea Chamber of Commerce and Industry (KCCI).

But it is now dwarfed by the KCCI after Samsung, SK, Hyundai Motor and LG groups dropped out from FKI in 2017.

The top four conglomerates in South Korea turned their back on FKI after it was found to be involved in a political scandal that led to the impeachment of former President Park Geun-hye in 2017.

“We deeply regret the role and practices we took in the past,” FKI’s acting Chairman Kim Byong-joon said in a press conference.

“We neglected the historical change of trends and failed to keep up with the rapid changes in society.”

He referred to its collection of donations from Korean business groups to sponsor cultural and sports foundations led by former President Park Geun-hye’s secret advisor.

South Korea’s Constitutional Court removed Park from office in 2017 on charges of getting involved in the two foundations and four other charges.

The scandal tarnished FKI’s reputation and was cited as an example of cozy relationships between business and politics.

TRANSFORMATION INTO THINKTANK 

Now the FKI is determined to undergo deep reforms. As a first step, it will change its name by replacing the word “federation” with “association.” Its official English name was not yet released. 

Also, it will change its decision-making system to guard against political and administrative pressures so that it can better reflect the opinions of its member companies.

As part of such efforts, it will set up an ethical management committee and create its own code of ethics.

Kim noted that the business lobby group would rather focus on research to better serve its members and propose new policy to address their business needs, instead of taking a political stand.

“Research will be at the core of our activity,” he told reporters, adding that it will keep its members updated with global economic trends and the economic policies of leading countries.

It will absorb its subsidiary Korea Economic Research Institute.

To boost its presence in business circles, FKI will expand its pool to include high-tech and new enterprises beyond traditional industries.

Manufacturing companies represent 36.1% of the business association, followed by financial services providers with 13.8% and retail companies with 8.6%. 

FKI expects its commitment to deep reforms will draw back the country’s top four conglomerates as its members. They had earlier accounted for slightly over half the lobby group’s membership fees. 

Write to Hyung-Kyu Kim and Jae-Fu Kim at khk@hankyung.com

Yeonhee Kim edited this article.