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[Social Enterprise News in Korea]
(1) Government Announces Plan to Promote Social Enterprises
Source: Ministry of Employment and Labor
http://www.moel.go.kr/english/topic/employment_policy_view.jsp?&idx=790
In June 2011 the government held the 89th National Economic Measures Meeting-cum-11th National Employment Strategy Meeting presided over by the president. At the meeting, a plan to promote social enterprises was announced.
This time the focus is placed on enhancing the sustainability of social enterprises through the further improvement of the social enterprise support system and increasing nationwide interest and participation.
The concrete aims of the plan are as follows:
(1) To expand funding channels for social enterprises and create a social enterprise market using government-subsidized jobs programs; (2) To make social enterprises more transparent and accountable; and (3) To lay the foundation for enabling all government agencies and all sectors of society to play a leading role in finding and fostering social enterprises.
First, the government will pursue various institutional reforms to increase the sustainability of social enterprises.
Funding channels will be largely expanded to reduce social enterprises' difficulties in getting loans from financial institutions.The combined amount of micro credit bank loans and government SME policy loans to social enterprises will be increased from 12.5 billion won in 2010 to 20.0 billion won in 2011. A social enterprise investment fund will be set up in June, and ongoing special loan guarantees amounting to 35 billion won in total will become available to social enterprises.
Not-for-profit social enterprises will be classified as SMEs and thus be able to receive financial support (revision of the Framework Act on Small and Medium Enterprises).
Social enterprises will be given wider and preferential access to public institutions' procurement contracts and the government's social service contracts. When a local government screens bidders offering to supply goods, it should give 0.5 extra points to social enterprises.
The government will permit or promote the participation of social enterprises in 26 out of 74 government-subsidized programs, and change the existing designation system for social service providers into a registration system. By doing so, it will build up the stable profit-generating base for social enterprises and increase the efficiency of government-subsidized programs.
On top of this, the government will provide stronger managerial support to social enterprises. Local taxes on social enterprises will be reduced. And if a company provides support to a social enterprise established or financed directly by it, such act will be excluded from unfair support practices under the Fair Trade Act.
In addition, the government will provide accounting and business management infrastructure for social enterprises. Accounting and business management programs exclusive for social enterprises will be developed and disseminated, and professional education courses will be developed by target group, category and type of business.
Second, the government will make social enterprises more transparent and accountable in addition to expanding the support system.
The Social Enterprise Promotion Act will be amended to shorten the reporting cycle for social enterprises by asking them to submit their business reports twice a year instead of once a year, and thus strengthen monitoring of their social service and financial performance.
Social enterprises will be encouraged to voluntarily introduce the public disclosure system under which social enterprises should make public the results of their business and social services. And a fact-finding survey covering all social enterprises will be conducted in 2012.
Whether social enterprises satisfy their certification requirements will be periodically reviewed to ensure the faithful fulfillment of their social responsibilities.
Third, all government departments and sectors of society will make joint efforts to spread social enterprises.
The government will organize an event aimed at raising public awareness about social enterprises, to mark Social Enterprise Day on July 1, and will conduct the 'one-company one-social enterprise campaign'. The government will provide support at the central and local levels to spread social enterprises. As for central-level support, the government will give relevant government departments the authority to designate prospective social enterprises and recommend social enterprises for certification, thereby supporting their efforts to find and foster social enterprises. A unified system of fostering social enterprises will be created. To do so, enterprises involved in community development projects* which are similar to social services will be regarded as prospective social enterprises.
As for local-level support, the government will evaluate local governments' efforts to spread social enterprises, and allocate the related budget according to the results, thereby encouraging such efforts. Meanwhile, the organizational capacity of the Korea Social Enterprise Promotion Agency will be strengthened to provide systematic support for efforts to spread social enterprises.
Employment and Labor Minister Lee Chae-pil said, "The measures aim to increase the sustainability of social enterprises by strengthening their social responsibility as well as support for them. They also focus on getting both private and public sectors to take a leading role in finding and fostering social enterprises." He also said, "On the basis of these measures, MOEL will strive to ensure that all sectors of society cooperate in discovering and promoting sustainable social enterprises."
(2) Extra Point Will be Added to Social Enterprises when Bidding for Local Government Goods
Source: Yonhap News Agency
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President Lee presides over the National Economic Measures Meeting
(Seoul=Yonhap News Agency) KIM Byung-man Reporter = On June 9, 2011 President LEE Myung-bak presides over the National Economic Measures Meeting at Hanbit Arts in Seoul.
June 9, 2011 kimb01@yna.co.kr
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Loans of KRW 12.5 billion to KRW 20.0 billion, opportunities to participate in 26 government-subsidized programs
The Korean government’s combined amount of loans to social enterprises will be increased to KRW 20.0 billion and extra points will be added to social enterprises when bidding for local government goods. Social enterprises can also participate in 26 government-subsidized programs.
On June 9, 2011, the Korean government held the 89th National Economic Measures Meeting-cum- 11th National Employment Strategy Meeting, presided over by the president, and announced a plan to promote social enterprises. According to the plan, micro credit bank loans and the government's small and medium enterprises policy loans to social enterprises will be increased from KRW 12.5 in 2010 to KRW 20.0 billion in 2011 to lessen the social enterprises’ difficulty in getting loans from financial institutions.
The Social Enterprises Investment Fund will be formed within this month and will be invested in prominent social enterprises. Special guarantee up to KRW 35 billion will also be provided to social enterprises. As of June, the amount of the Social Enterprises Investment Fund formed by the Korean government and private companies has reached KRW 4.2 billion. The government will revise the Framework Act on Small and Medium Enterprises and not-for-profit social enterprises will be classified as SMEs and thus be able to receive financial support.
When a local government screens bidders offering to supply goods, it will give 0.5 extra points to social enterprises, and the Social Enterprise Promotion Act will be revised so that public institutions should submit their record of purchasing goods from social enterprises.
The government will permit or promote the participation of social enterprises in 26 out of 74 government-subsidized programs, such as elderly care services, and change the existing designation system for social service providers into a registration system.
Local taxes on social enterprises will be reduced. And if a company provides support to a social enterprise established or financed directly by it, such act will be excluded from unfair support practices under the Fair Trade Act.
In addition, the government will provide accounting and business management infrastructure for social enterprises. Accounting and business management programs exclusively for social enterprises will be developed and disseminated, and professional education courses will be developed by target group, category and type of business.
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President Lee presides over the National Economic Measures Meeting
(Seoul=Yonhap News Agency) KIM Byung-man Reporter = On June 9, 2011 President LEE Myung-bak presides over the National Economic Measures Meeting at Hanbit Arts in Seoul.
June 9, 2011 kimb01@yna.co.kr
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The government will make social enterprises more transparent and accountable in addition to expanding the support system. The Social Enterprise Promotion Act will be amended to require social enterprises to submit their business reports twice a year instead of once a year, and thus strengthen monitoring of their social service and financial performance.
Social enterprises will be encouraged to voluntarily introduce the public disclosure system under which social enterprises should make public the results of their business and social services. All government departments and sectors of society will make joint efforts to spread social enterprises.
The government will organize an event aimed at raising public awareness about social enterprises, to mark Social Enterprise Day on July 1, and will conduct the 'one-company one-social enterprise campaign'.
Within the year, the government will establish a social enterprise promotion council, jointly represented by the prime minister and a civilian, and will give relevant government departments the authority to designate prospective social enterprises and recommend social enterprises for certification.
Employment and Labor Minister LEE Chae-pil said, ”The measures aim to increase the sustainability of social enterprises by strengthening social enterprises’ support system and to increase the interest and participation of people nationwide.
Translated: by CHOI Eun-young, JANG Gyeong-ah
Edited: by Patrick Ferraro, Marie LEE
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