The National Agricultural Cooperative Federation and the Ministry of Agriculture, Food and Rural Affairs, which manages and supervises NongHyup and livestock cooperatives, will revise the supervisory rules, titled "Rules on the supervision of cooperatives, etc., and federations under the Agricultural Cooperative Act," for the first time in 10 years. The plan is to expand the scope of oversight across personnel, finance, and other areas, and strengthen it into a comprehensive manual that specifies concrete supervisory methods.
According to the financial sector on the 31st, the Ministry of Agriculture, Food and Rural Affairs recently commissioned a study service to "improve the supervisory manual for the National Agricultural Cooperative Federation and NongHyup and livestock cooperatives." The supervisory rules were established in 2016 as a ministry notice and have not been revised to date. The ministry said, "Issues have been raised that the supervisory rules do not reflect recent changes in conditions," adding that it aims "to respond strictly to points raised by the National Assembly and the media regarding NongHyup and to prevent recurrences."
The ministry plans to expand the supervisory scope to finance—including planning and execution of funds—and the full range of personnel matters. Under the current rules, only five key considerations are specified for guidance and oversight: user-centric management principles, the obligation to promote sales of agricultural products, the obligation to educate members, a transparent decision-making structure, and disclosure of cooperative operations.
Reform measures promoted by the ruling and opposition parties, including strengthening internal controls, will also be reflected in the supervisory rules. The Ministry of Agriculture, Food and Rural Affairs and the Democratic Party of Korea on the 11th announced a reform plan to establish a NongHyup Audit Committee to integrate audit functions within the National Agricultural Cooperative Federation. The plan also includes blocking the National Agricultural Cooperative Federation chair from intervening in the management of holding companies and affiliates, and electing the chair by direct vote of 2.04 million members.
The ministry will specify concrete supervisory methods in the rules. The current rules are framed broadly—for example, "confirm whether the cooperative is fulfilling its obligation to promote sales of agricultural products"—and the aim is to enhance expertise by creating a manual that sets out how to verify compliance.
To that end, the ministry plans to reflect Japan's Ministry of Agriculture, Forestry and Fisheries' comprehensive NongHyup supervisory guidelines in a way suited to domestic NongHyup conditions. Japan's supervisory rules for cooperatives specify in detail what materials must be reviewed when supervising a cooperative.