Amid conflict in the small and medium-sized enterprise community over scrapping the rule that limits consecutive terms for the president of the Korea Federation of Small and Medium Enterprises , some are saying the selection method should be changed to a direct vote. They argue that shifting the current indirect system in a direction that can more broadly reflect the views of member organizations would increase transparency.
On the 16th, according to the SME community, the labor union of KBIZ (the union) opposed the "Partial Amendment to the Small and Medium Enterprise Cooperatives Act (the amendment)" that would delete the provision limiting consecutive terms for the president, while also reportedly agreeing that it is necessary to review whether to introduce a direct vote in the future.
A union official said, "This is not an action with any particular person in mind," but noted, "NongHyup, which has a similar organizational structure and public function, is also reviewing a direct vote, so it is necessary to begin related discussions to strengthen the organization's democratic operation and representativeness."
The president of KBIZ, which receives partial operating expense support from the government budget, is called the "SME president" and is the head of an economic group that represents 8.3 million small and medium-sized enterprises. The position carries vice prime minister-level protocol and often accompanies the president on overseas trips, underscoring its high stature as an economic organization. Although it is an unpaid honorary post, the amount paid as specific activity expenses exceeds 100 million won a year. The president also serves as chair of the board of Home & Shopping, in which KBIZ holds the largest equity stake, and receives 48 million won annually in compensation.
Since the Small and Medium Enterprise Cooperatives Act was enacted in 1961, the president has been selected by an indirect vote. Even now, about 500 chairs of industry-specific SME cooperatives elect the president of KBIZ through a vote.
Current KBIZ President Kim Gi-mun served as the 23rd and 24th president of KBIZ from 2007 to 2015 and has held the 26th and 27th presidencies from 2019 to the present. The term runs through Feb. next year.
Some shared a consensus that the method of selecting the KBIZ president should be changed given the symbolism and authority of the post, but there had been no opportunity to bring it into public discussion. That changed when Democratic Party of Korea lawmaker Jeong Jin-uk introduced an amendment in Dec. last year centered on abolishing the current Small and Medium Enterprise Cooperatives Act's provision limiting consecutive terms for executives.
The amendment changed the rule that the president of the Korea Federation of Small and Medium Enterprises "may serve only one consecutive term" to "may serve consecutive terms," eliminating the limit on the number of consecutive terms. It also revised the provision on terms for cooperative chairs from "may serve only two consecutive terms" to "matters related to consecutive terms shall be prescribed by the articles of association."
The union side said, "The amendment encourages the privatization of cooperatives and could undermine democratic management and public interest," adding, "Organizations established by law like KBIZ, including the Korea Chamber of Commerce and Industry (KCCI) and the Federation of Middle Market Enterprises of Korea (FOMEK), also have term and consecutive-term limits."
As opposition from the union and former presidents continued, the amendment failed to pass the National Assembly's bill review subcommittee. It is known that the government and lawmakers were divided during the review and could not reach a conclusion. The Ministry of SMEs and Startups presented the view that careful review is needed, effectively taking a stance against the amendment.
With the likelihood growing that the term-limit provision will remain as is, the discussion is shifting toward whether to adopt a direct vote. Recently, as the ruling party and government moved to change the election system to address issues such as money-for-votes in the National Agricultural Cooperative Federation, internal discussions on a direct vote have gained momentum within KBIZ.
Another union official said, "There is a perception that in the KBIZ presidential election, it is enough to win the so-called 'three-con' (ready-mix concrete, asphalt concrete, cement), reflecting how it operates in favor of entrenched interests."
The official added, "A key issue is whether to move to a direct vote in which all farmers vote, like NongHyup, and how to adjust the structure of industry-specific cooperatives and the question of member ratios," and noted, "It is clear that to foster a transparent election culture and policy-centered campaigning, the structure must change to reflect voices from the field."