The Agriculture. Food. Rural Affairs. Oceans. and Fisheries Committee (the agriculture and fisheries committee) set a plan to pass the so-called "NongHyup reform bill" within the year. The core of the bill is to make NongHyup's internal structure more transparent and limit the consecutive terms of nonstanding cooperative heads. Both the ruling and opposition parties agree that the chronic ills of NongHyup must be fixed, leading to expectations that passage during the regular session will be smooth.
According to political circles on the 31st, the agriculture and fisheries committee selected as a key task for this year's regular session an amendment to the Agricultural Cooperative Act to improve the structure of the National Agricultural Cooperative Federation and limit the consecutive terms of nonstanding cooperative heads, and plans to push for passage within the year.
Yun Jun-byeong, a Democratic Party of Korea lawmaker and ruling-party secretary on the agriculture and fisheries committee, said in a call with ChosunBiz, "NongHyup should serve as the representative of farmers and of local cooperatives, but many parts are failing to do so," adding, "From that perspective, we will push so that improvements can be included through the NongHyup reform bill."
There are said to be few major disagreements between the parties over the need for NongHyup reform. The bill passed the agriculture and fisheries committee even in the 21st National Assembly, but it was scrapped after being held at the Legislation and Judiciary Committee when then National Agricultural Cooperative Federation Chairman Lee Seong-hee expressed an intention to seek another term, sparking controversy over a "self-extension law."
In particular, during this year's parliamentary audit, the misconduct and poor management practices of the National Agricultural Cooperative Federation and its subordinate cooperatives were brought to light in a focused way, spreading consensus that fundamental institutional reforms are needed.
At the audit, Chairman Kang Ho-dong faced criticism as circumstances were presented regarding allegations that he accepted goods worth around 100 million won during the 2023 election process and that he received 20 million won in Aug. 2022 when he was head of Yulgok NongHyup. In addition, at affiliate NH NongHyup Life, suspicion was raised that promotional items were ordered at high prices from a company run by an executive's relative and the difference was pocketed as a rebate. Cases of moral hazard also emerged, such as deficit-ridden cooperatives paying performance bonuses. The audit continued to criticize structural problems including vote-buying in chairman elections, parachute appointments, and a shortage of election management personnel.
According to the National Assembly bill information system, multiple amendments to the Agricultural Cooperative Act aimed at fixing NongHyup's structural problems have been introduced to the agriculture and fisheries committee.
Yun Jun-byeong's bill limits consecutive terms for nonstanding cooperative heads to a maximum of two and unifies the method of selecting cooperative heads to a direct vote by members. It also includes provisions requiring at least one compliance officer at each local NongHyup and mandating the preparation and disclosure of minutes in the process of recommending and selecting executives at the National Agricultural Cooperative Federation.
A bill by fellow party lawmaker Lim Mi-ae would shorten the cycle of external accounting audits from the current four years to every year. After criticism that local NongHyup are audited externally only once every four years, making it hard to compare financial statements and reducing audit effectiveness, the intent is to improve accounting transparency by requiring cooperatives above a certain size to undergo annual audits by an auditor designated by the Minister of Agriculture, Food and Rural Affairs.
A bill by People Power Party lawmaker Park Deok-heum strengthens the decision procedures and disclosure of records by the personnel recommendation committee. It stipulates that the committee elect the business chief executive officer, directors, and audit committee members with approval from at least two-thirds of all members, and that minutes recording deliberations and decisions be submitted upon request by the National Assembly. Although the National Agricultural Cooperative Federation chairman has no legal personnel authority, controversies over patronage and code-based appointments have persisted, and this is an improvement plan to prevent them.
The agriculture and fisheries committee plans to conduct a combined review of these amendments in a subcommittee starting next month and focus on passing them within the year.