Small biz owners air grievances over stifling regulations

Small and medium-size business operators have high expectations of President-elect Park Geun-hye since she pledged Monday to remove obstacles to their businesses in a meeting of her presidential transition committee. The difference this time is that small business owners expect small but troublesome rules will get lifted.

Cho Yoo-hyeon, executive director of policy development division at the Korea Federation of Small and Medium Business, said, “Previous governments focused on alleviating major regulations affecting conglomerates while turning a blind eye to relatively minor rules that greatly affected small and medium companies.”

Kim Dong-seon, president of the Korea Small Business Institute, said, “The kind of regulations that hit small businesses hard are specific ones covering a variety of sectors such as the environment, sanitation, construction, labor and the like. But previous administrations lifted regulations to facilitate capital investment by conglomerates or foreign investment."

The federation will collect requests for deregulation from a small business perspective and submit the results to the transition committee next month.

○ Mandatory installation of sprinklers

A Dong-A Ilbo reporter visited small businesses as well as a small business ombudsman`s office to hear their stories of irritating regulations. The ombudsman`s office hears difficulties that small business operators, merchants and the self-employed have and recommends solutions to the problems to government agencies.

A textile company owner said, “We rented part of a neighborhood facility and tried to get permission to change the type of use allowed. But we were told to install firefighting facilities. We can install emergency exits, emergency lighting and fire extinguishers but not sprinklers. It’s too costly.”

Other textile industry operators said they have experienced the same problem. The owner of a foundry said, “People have this prejudice that foundries stink, so we are often not allowed to move into an industrial complex.”

A source from a clothing and sewing company said, “It’s vital for our industry that we get samples as soon as possible to show them to buyers. But it takes two days to go through customs, and this period really needs to be shortened.”

On government restrictions on energy use, a source at a plant using extruding machines said, “If we stop the machine at a certain time and turn it on later, it takes long to warm it up again, and defective rates also considerably increase.”

A health supplements source said, “We have to go to Seoul to get training at an institute, but this is just unrealistic to comply with. The government just doesn’t know the reality of the industry. It would be better if we can take the class on the Internet.”

Companies based in the provinces spoke of unique problems that central government officials do not understand. Small and medium companies in Cheorwon, a border region in Gangwon Province, have to negotiate with military authorities in administrative affairs, which causes additional difficulties in doing business.

A smaller business owner in Buyeo, South Chungcheong Province, said, “If cultural property is found in the process of construction, we are forced to stop work for an extended period of time. But that’s not the end of the problem. The company has to bear the excavation costs!”

A ferry-related company on Ulleung Island said, “Ferry schedules are frequently changed according to the weather, but each time we change the schedule, we need approval from a port administration.”

○ Standards too high to reach

Regulations that the government introduced to raise environmental and labor standards to the levels of advanced countries and ensure safety are unattainable for many small businesses.

A dry cleaners owner said, “It’s become mandatory for us to install recovery dryers that collect volatile organic compounds that occur in the dry cleaning process. But we just can’t afford it,” adding that those in the industry have asked the government to reconsider the matter. A flower shop owner said, “The rule that limits a gift for a government official for personal events to 30,000 won excludes a wreath from the list.” Plant staff in an agricultural industrial complex said they could not afford asbestos disposal costs, so they installed tin roofs instead. The beauty industry has long asked the government to let them use peeling machines and ultrasound equipment at skin or hair salons by amending medical law.

Rice processing companies said used water from washing rice is categorized as wastewater that requires a wastewater treatment facility, calling this unfair and asking for a lifting or revision of the rule. The sewing industry said it needs lower-paid workers but recipients of basic living subsidies often worry if having a job would end the government aid, asking for an exception to the rule to hire them.

Kim Gi-mun, head of the Korea Federation of Small and Medium Business, said, “If a Chinese food delivery man posts advertising stickers, this is a misdemeanor. If a gas delivery guy briefly parks a motorcycle in front of a restaurant, this violates traffic law. These types of problems should be treated differently as exceptions and overlooked to facilitate the people’s livelihood.”

Jung Yeong-tae, chairman of the National Commission for Corporate Partnership, said, “When it comes to reducing regulations related to small and medium companies, tenacious effort and resolution are needed because so many governmental bodies are needed to resolve just one problem. Constant field surveys are also required."

jjy2011@donga.com