The Democratic Party of Korea and the Ministry of Agriculture, Food and Rural Affairs said they recently announced a reform plan after a joint government special audit found that NongHyup's internal control mechanisms were not functioning properly. The core is to establish the NongHyup audit committee as a separate corporation and toughen penalties for the chronic problem of "cash-for-votes" elections.
The party and government held a "NongHyup reform plan party-government consultation" at the National Assembly on the morning of the 11th and announced an institutional improvement plan with these details. The consultation was a follow-up to the government's special audit conducted since January of the National Agricultural Cooperative Federation, its subsidiaries, and member cooperatives, which found as many as 100 items of concern.
Han Jeong-ae, Democratic Party of Korea policy committee chair, said, "According to the government's announcement, 100 audit findings were confirmed, including preferential loan contracts for senior NongHyup executives, illegal budget execution, and irregularities in hiring and personnel," and added, "It was found that the current federation head provided return gifts, funded by the NongHyup Foundation's project budget, to cooperative heads, members, and executives and employees who helped with the federation head election."
She continued, "The fact that more than 100 audit cases were uncovered across the entire organization, from the federation to frontline member cooperatives, in as short as one month means that corruption and irregularities are rampant within NongHyup, yet the so-called internal control mechanisms did not function properly," and noted, "President Lee Jae-myung also pointed out during last year's briefing by the agriculture ministry that NongHyup's corruption problem is serious."
The government's NongHyup reform plan includes: ▲ establishing the NongHyup audit committee as a separate corporation ▲ strengthening penalties related to cash-for-votes elections and creating incentives for voluntary reporting ▲ expanding member participation in the National Agricultural Cooperative Federation head elections. The NongHyup reform plan is expected to go through the National Assembly's legislative process.
Song Mi-ryung, Minister of Agriculture, Food and Rural Affairs, said, "The audit committee will enable integrated audits of the federation, holding company, subsidiaries, and local cooperatives, and by operating it as a separate corporation, we will enhance the independence and expertise of audits," and added, "We will expand fairness in personnel management and broaden the disclosure of key management matters to establish a system in which members and cooperative members can check and oversee the federation."