The Korea Herald

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Chung lambastes large firms for boycotting forum on profit-sharing

By Korea Herald

Published : Jan. 17, 2012 - 16:13

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The chief of a panel on shared growth on Tuesday lashed out at large conglomerates for boycotting discussions on sharing profits with their smaller partner companies.

Former Prime Minister Chung Un-chan who heads the commission for shared growth said the business giants were “neglecting their social responsibility” as they refused to show up at the panel’s first meeting this year.

Of the 25 members of the commission, nine representing the large companies did not attend the meeting Tuesday.

“We have proposed profit-sharing to narrow the gap between large and small companies, and repeatedly stated that it was a matter of choice, not coercion. But the big companies are refusing to even review it,” Chung said during the meeting.

“The conglomerates’ boycott is a neglect of social responsibility.”

The Federation of Korean Industries, a business lobby representing the nation’s largest companies, refused to attend the panel’s regular meeting last month for the first time in protest of the idea that conglomerates should share profits beyond their targets with suppliers.

The FKI claimed that the panel was forcing profit-sharing. The commission consists of nine representatives of large and small companies each, four professors, two think tank heads and Chung, former president of Seoul National University.

“I’d like to ask large companies including the FKI how prepared they are to be a responsible leading group of our society,” Chung said.

“The attitude they showed so far was far from serious or productive.”

The Commission on Shared Growth for Large Corporations and Small and Medium Enterprises, launched a year ago, rates companies based on their efforts for mutual growth with partner firms and selects business areas that should be left for only small and medium-sized companies. President Lee Myung-bak named Chung as head of the panel.

The panel said Tuesday it decided to conclude next month whether to introduce profit-sharing.

About whether to designate desktop computers as one of the business items that large companies should not get involved in, the commission said it will make a decision after watching the market for a year due to disagreements.

The panel chose 81 items out of 234 requested last year as appropriate for small and medium-sized enterprises. They include LED lighting, kimchi, tofu and fish cakes.

Companies voluntarily withdrew from 119 of the requested areas and the commission turned down 31 including navigation systems, water purifiers, plastic windows and doors. It decided not to designate the other two.

“There is a strong voice for chaebol reform in society. (Big companies) should get rid of the delusion that they can evade responsibility by avoiding the problem,” Chung said.

By Kim So-hyun (sophie@heraldcorp.com)