With former Democratic Party of Korea lawmaker Hong Eui-rak appointed president of Korea Gas Corporation (KOGAS), the practice of naming politicians to lead state energy companies is repeating. Of the 27 energy and resources public enterprises under the Ministry of Trade, Industry and Resources, excluding one vacant post, the heads of 10 companies are filled by people who are not from the energy industry.
The energy industry has raised concerns about organizations being led by people with weak expertise, but some also said that, because many of the pending issues at state energy companies require cooperation not only from the government but also from the political sphere, tapping political figures can be an advantage.
According to the energy industry on the 28th, KOGAS held an extraordinary shareholders meeting on the 23rd and approved the agenda to appoint the former lawmaker Hong as the new president. After subsequent procedures, including a recommendation by the Minister of the Ministry of Trade, Industry and Resources and appointment by the president, the former lawmaker Hong will be named president. The term is three years.
It has become customary for people who are not industry experts to be appointed as heads of energy public enterprises, including KOGAS.
Among the energy and resources public enterprises under the Ministry of Trade, Industry and Resources, the heads of 10 entities, including Korea Electric Power Corporation (KEPCO), Korea District Heating Corporation (KDHC), Korea Mine Rehabilitation and Mineral Resources Corporation (KOMIR) and Korea Energy Agency (KEA), are not energy experts. Excluding vacancies, 38.5% of all heads are from politics or are former lawyers. Former bureaucrats from the Ministry of Trade, Industry and Resources and similar agencies were excluded from the tally.
There are particularly many former politicians. Kim Dong-cheol, president of Korea Electric Power Corporation (KEPCO), served as a lawmaker in the 18th to 20th National Assemblies. Choi Chun-sik, chair of the Korea Petroleum Quality & Distribution Authority (K-Petro), is a former 21st National Assembly lawmaker.
Kang Ki-yoon, president of Korea South-East Power Co. (KOEN), who submitted a resignation in February, was a lawmaker in the 19th and 21st National Assemblies. Lim Jong-seok, president of Korea Gas Technology Corporation (KOGAS-Tech), is a former human rights lawyer, and Hwang Young-sik, president of Korea Mine Rehabilitation and Mineral Resources Corporation (KOMIR), previously served as editor-in-chief of the Korea Ilbo.
As politicians repeatedly take the helm of energy public enterprises, the industry has consistently criticized the appointments as rewards for contributions to general or presidential elections or as placements for politicians who failed to win reelection. There are also concerns that the promotion opportunities of internal employees at public enterprises are effectively taken away, hurting morale.
Another issue is that some presidents who are former politicians submit resignations midterm as they prepare to run for office or return to politics.
In particular, for Korea Electric Power Corporation (KEPCO) and Korea Gas Corporation (KOGAS), many say former politicians are not well suited to resolve the biggest issues they face—deficits and accounts receivable. Electricity and gas rates need to be raised, but they are likely to hold back their voices in line with election situations, public opinion and the administration's price-stability stance.
Others say there are advantages when a politician leads. When there is resident opposition and social conflict over matters such as siting power plants or transmission towers, it is easier to draw political compromises.
An official at a state energy company said, "If the person is a former bureaucrat, there is an advantage of communicating well with the Ministry of Climate, Energy and Environment or the Ministry of Trade, Industry and Resources, and if from the National Assembly, with the Trade. Industry Energy. SMEs. and Startups Committee," adding, "External outreach by the head is becoming more important, and if the working-level staff supports with expertise, I think a president who is a former politician can also perform the job without major problems."
Kim Jin-su, a professor in the department of resources and environmental engineering at Hanyang University, said, "It would be better if the share of people with expertise in the energy field were higher," but added, "There are many policy challenges in Korea's energy sector now, so we also need people who want to solve them."