The Anti-Corruption Policy of Korea and

Efforts to Enhance Integrity

Korea, a country of integrity 2012

The Anti-Corruption Policy of Korea and Efforts to Enhance Integrity 2/3

Introduction
Economic Development and National Integrity of Korea
Korea has achieved unprecedented economic development in a short period of time to
become a member of the worlds top 20 economies1). Some instances of corruption and
irrational practices have, however, surfaced during its march of rapid economic growth
The level of integrity in Korea has of course made continuous headway, but it is still not
deemed satisfactory when put in contrast with other developed countries. Thus, the AntiCorruption and Civil Rights Commission (ACRC) as the Korean governments anti-corruption
body is making every effort to further improve national integrity in cooperation with related
bodies such as the Prosecutors Office and the National Police Agency.
1) The 15th largest economy based on GDP (at current prices) in 2010

ACRC, Koreas Anti-Corruption Body

Receiving nationwide support from civic groups and academia, the Anti-Corruption Act
was enacted in 2001, and the Korea Independent Commission Against Corruption (KICAC), a
government agency dedicated to anti-corruption, was established in 2002 based on the Act.
The KICAC focused on preventive measures, such as anti-corruption policy development,
improvement of legal and institutional frameworks, fact-finding examination into cases of
corruption, assessment of the integrity levels in public organizations, anti-corruption education
and promotional activities, and management of the codes of conduct for public officials. At
the same time, the Commission conducted various reactive measures such as receiving and
handling reports about corruption and protecting and compensating whistleblowers.
In 2005, the KICAC forged an agreement that the government in concert with political and
business circles and civil society would put forth a collective effort to establish a transparent
society. Such an agreement has been expanded with the launch of the Policy Council for
Transparent Society in 2009, which facilitates participation from all sectors of society so that it
can raise public awareness of anti-corruption issues and vitalize anti-corruption activities.

Launch of the Policy Council for Transparent Society in 2009

The Anti-Corruption Policy of Korea and Efforts to Enhance Integrity 4/5

Along with the launch of the new government in 2008, the tasks of handling complaints
and administrative appeals were integrated with the establishment of the ACRC2) which
joins together the functions of anti-corruption and the protection of peoples rights. In 2011,
institutional development progressed after integration as the Commission now monitors
not only corruption cases in the public sector, but also infringement upon the public interest
occurred in the private sector such as in the areas of health and the environment.
The ACRC consists of 15 Commissioners including the Chairperson. The National Assembly
and the Chief Justice of the Supreme Court each recommend three Commissioners to be
appointed3). The independence of the ACRC is guaranteed under Article 16 of the Act on
Anti-Corruption and the Establishment and Operation of the Anti-Corruption and Civil Rights
Commission so that anti-corruption and complaint handling tasks can be carried out by the
ACRC in a fair and independent manner.
2) E
 xamples of the proactive anti-corruption and inspection activities that were witnessed after the launch of the ACRC include:
the number of public organizations receiving integrity assessment (333 in 2007 684 in 2011, up 105%); number of corruption
reports received (2004-2007: 8,026, 2008-2011: 9,825, up 22.4%); number of reported violations of the codes of conduct (2004-2007:
301, 2008-2011: 2,577, up 7 fold)
3) T
 he current Commissioners are from various circles outside of administrative officers: legal (5), religion (2), academia (3) and
civil society (1).

Strengthened Functions of the ACRC and Its Relations with People and the Public Bodies

Enhancing Integrity in the

Public Sector

The Anti-Corruption Policy of Korea and Efforts to Enhance Integrity 6/7

The Korean Governments Efforts to Fight Corruption

In an attempt to enhance national integrity and realize fairness in society, the ACRC
cooperates with other related government bodies in order to thoroughly expose corruption
and severely punish those involved. At the same time, the Korean government constantly
modifies any law or system that might cause corruption and works to change the culture
which tolerates corruption. The following sections introduce the anti-corruption policies that
have recently been promoted by the Korean government to help improve national integrity.

Transparency Internationals Chair, Huguette Labelle Visits the

ACRC (November 21, 2011)

The ACRC Chairperson Expresses Willingness to Share Koreas

Anti-Corruption Efforts with UN Members (March 2, 2011)

Enhancing Integrity in the Public Sector

Reinforced Process of Exposure of and Punishment for Corrupt Officials
Given that it is difficult to monitor and uncover corruption within public organizations
from the outside, a whistleblowing report is an important factor in exposing corruption since
whistleblowers are well aware of corruption and misconduct within a given organization. Thus,
Korea has operated a world-class system for the protection of whistleblowers.
The ACRC, investigative agencies, or the head or an inspection officer of a public organization
receives a corruption report directly through a hot-line and provides counseling. In case a
report is deemed to be a corruption case enforcement measures are taken accordingly. The
mandatory corruption reporting system is in effect which requires public officials to report
any corrupt activity made by other officials and brings criminal charges to bear against those
involved in serious corruption such as bribery and misappropriation.
The maximum reward for whistleblowers has been increased from KRW 200 million to KRW
2 billion, and such a reward system is being regarded as an innovative measure to expose
corrupt public officials. In cases of bribery and misappropriation, public officials involved will
be expelled from the office (one-strike out4)), regardless of the amount, by means of a serious
disciplinary action. The expelled public officials will receive a criminal penalty, paying both a
fine and an additional penalty of up to five times the amount of money yielded by the corruption.
The prescription of punishment for serious public corruption, such as misappropriation,
embezzlement and bribery, was extended from three to five years, to reinforce the exposure
and punishment process brought to bear on corrupt officials.
4) The Seoul Metropolitan Government applied the one-strike out system to a total of 65 corrupt public officials who were
involved in the embezzlement of public money, bribery and receiving of entertainment from February 2009 to October 2011, even
if the corruption was a one-time event.

The Anti-Corruption Policy of Korea and Efforts to Enhance Integrity 8/9

Integrity A nt of Public Organizations and High-ranking Officials

A reactive, passive anti-corruption system focusing on exposure and punishment cannot
fully address the root causes of corruption. In a bid to overcome such limitations, the ACRC
has implemented several preventive measures, such assessments and education, to root out
corruption and minimize the costs of corruption.
The ACRC has conducted the Integrity Assessment of public organizations and their work in an
attempt to detect and improve any area vulnerable to corruption beforehand. All kinds of public
organizations to which the government injects a budget are subject to the assessment. In 2011,
public service users and policy customers of more than 700 public organizations participated in
the integrity assessment.
The annual administration of integrity assessments over the past ten years has contributed to
bringing about the remarkable achievement of increasing the Integrity Index of overall public
organizations from 6.43 in 2002 to 8.43 in 2011.
In particular, the ACRC introduced an integrity assessment of high-ranking officials in 2011,
reflecting a social consensus that their noblesse oblige is a requirement for making further
improvements in public sector integrity. A total of 156 public organizations conducted the
integrity assessment on their senior officials who numbered approximately 6,400 in total.

Mass Media Broadcast the Results of Integrity Assessment on the Korean Public Sector (2012)

Strengthened Integrity Education for Public Officials

The ACRC understands that not only laws, systems and improved transparency of the
overall process are required to enhance national integrity but there must also be a change
in the consciousness and behavior of public officials. Therefore, it has pioneered the way by
providing intensified education on integrity for public officials.
New high-ranking officials, in particular, are now obliged to receive education on integrity, and
in 2011 a total of 7,615 high-ranking officials completed a course in integrity education run by
the ACRC. From 2012, the educational course will be tailored to the public career lifecycle,
targeting the newly-employed, promoted or newly-appointed high-ranking officials.
Furthermore, the ACRC is pursuing the establishment of an anti-corruption academy in order
to meet the rapidly increasing demand for integrity education. Seizing on the opportunity, the
Commission is committed to playing a key role in spreading a culture of integrity throughout
society by diversifying and expanding

Improved Transparency in Public Finance Management

In 2011, a law dealing with budget formulation was amended to make the participation of
residents mandatory during the budget formulation process of all local governments. In the
past, over 100 local governments had implemented the so-called participatory budget system,
but the law now makes its exercise obligatory on the national scale.
Participation of residents is expected to prevent the loss of money for the budget caused by
lax management, help correct inefficiencies in local finance, and contribute to improving
transparency and fairness in the fiscal management of local governments.

The Anti-Corruption Policy of Korea and Efforts to Enhance Integrity 10/11

Efforts to Enact the Act on the Prevention of Illegal Solicitations and

Conflicts of Interest
Korea has put in place several laws and regulations to prevent conflicts of interest of
public officials, such as the Public Service Ethics Act, the Act on Anti-Corruption and the
Establishment and Operation of the Anti-corruption and Civil Rights Commission, the Code of
Conduct for Public Officials and the Criminal Act. However, it is true that the existing rules are
sporadic and lack effective instruments to deter prohibited actions. In some cases, old customs
rooted in cronyism and paternalism such as requesting special favors have hampered the
public officials efforts to perform their duties in a fair manner.
The ACRC is promoting the enactment of the Act on Illegal Solicitations and Conflicts of
Interest in an attempt to eradicate old customs such as the asking for special favors for
reasons of cronyism and paternalism, supplement the related laws currently available, and
manage the private interest of public officials in a comprehensive manner.
The Act is being planned to include regulations addressing new issues such as a ban on
acceptance of undue requests, the operation of a solicitation declaration system, prior
notification of the private interest of public officials, obligatory establishment of procedures
for avoiding conflicts of interest, restrictions on money and real estate transaction with dutyrelated persons, control over increasing property holdings using insider information, and
sanctions on violators.
The enactment of the Act is expected to cause a stir among those adeptly exploiting the
loopholes in the current law, particularly those who have considered giving and accepting
special requests as mere kindness. In addition, the new Act is deemed to be an effective
instrument to prevent the types of conflicts of interest that could possibly impede the fair work
process of public officials.

Open Forum to Discuss the Enactment of the Act on the Prevention of Illegal
Solicitations and Conflicts of Interest (February 21, 2012)

Improving Ethics in the

Private Sector

The Anti-Corruption Policy of Korea and Efforts to Enhance Integrity 12/13

Improving Ethics in the Private Sector

Implementation of the Act on the Protection of Public Interest Whistleblowers
The Act on the Protection of Public Interest Whistleblowers enacted in 2011 has created an
opportunity to go beyond the previous anti-corruption policies, which had focused on only the
public sector. The Act has established a system in which corruption and unfair practices in the
private sector are treated as infringing on the public interest and hence are subject to regulation.
The whistleblower law prescribes any practices that impede health and safety of citizens, the
environment, the interest of consumers and fair competition as violations of the public interest,
and protects those who reported such actions.
Anyone who gets wind of a company or a group that is threatening peoples health and the
environment can report such cases to the responsible administrative or investigative agencies as
well as the ACRC. The purview of the Act also includes bribes offered to foreign public officials.
The personal information of public interest whistleblowers is to be protected from disclosure
and report, and a penalty will be imposed on violators. A whistleblower is able to receive police
protection in the case that his or her life and body was or is feared to be severely harmed as a
result of whistleblowing. Moreover, it is prohibited to bring any disadvantageous measures to
bear against a whistleblower such as dismissal. When violated, a penalty will be imposed and
the ACRC will take steps to guarantee and restore the status of whistleblowers, as is done for
reporters of corruption.
The phase 3 report on implementing the OECD Anti-Bribery Convention in Korea (October
2011) said that Korea made notable progress on fighting foreign bribery with the enactment
of the Act on the Protection of Public Interest Whistleblowers that protects both public and
private sector employees who report foreign bribery.

Ad Poster of the Act on the Protection of Public Interest Whistleblowers and the Public Interest Whistleblowing (2011)

Prevention of Undue Influence Exercised by Former Public Officials

Retired public officials who enter law firms or private companies may act as a lobbyist by
using their human networks which they had established during the occupancy of their post.
For this reason, there had been a restriction on hiring retired public officials, but in 2011 a
reinforced regulation was introduced.
Retired officials is now obliged to have their new employment examined when they intend to
work in law firms and accounting firms over a certain size, in addition to private companies.
The period for career inspection has also been extended from three to five years in order to
prevent such expedient practice of so-called career laundering, which is committed for
public officials re-employment. Post-employment of retired public officials will be reviewed if
their job is connected to the duties that they took care of for five years prior to their retirement.
In addition, a new restriction system was adopted under which all retired public officials shall
not make any unfair requests to incumbents that might hinder fair practice, such as forcing
incumbents to violate laws or abuse their power.
Moreover, the Attorney-At-Law Act was revised in May 2011 to ban special treatment for
former public officials in legal circles. According to the revised Act, all lawyers who held public
office are restricted from taking a case involving the government organization where he or she
served as a judge or a prosecutor for one year after retirement.

The Anti-Corruption Policy of Korea and Efforts to Enhance Integrity 14/15

Stronger Penalty for Corrupt Entrepreneurs

As the foreign press has reported that Korea is reluctant to impose severe penalties on
conglomerates or chaebols, there has been a controversy over favors such as probation and
amnesty which have been extended despite their illegal practices.
Recently, however, tougher penalties were imposed on the illegality of corporations.
For example, the head of the Taekwang Group who was indicted for breach of trust and
embezzlement of KRW 140 billion was sentenced to four years and six months imprisonment
and a monetary penalty of KRW 2 billion, and major shareholders and executives of savings
banks who committed irregularities such as illegal loan and accounting fraud were given a
severe sentence of four to fourteen years in prison.
In addition, a reasonable use of special pardons for convicted businessmen is being discussed
in political circles so that people can have trust in the rule of law.

Listed Corporations Obliged to Adopt the IFRS and Hire Compliance Officers
In response to the recent global effort to adopt international accounting standards, listed
companies in Korea whose assets exceed KRW 2 trillion have been obliged to adopt the
International Financial Reporting Standards (IFRS) since 2011. Those whose assets are below
KRW 2 trillion will be required to do the same in 2013. The IFRS is expected to contribute to
enhancing credibility for corporate accounting information at home and abroad. Meanwhile,
financial regulatory authorities are promoting the adoption of a Registration System for
Auditors of Listed Corporations in which accounting firms over a certain size can conduct an
outside audit of listed financial companies. The system is aimed at strengthening protection for
investors by improving the quality of the auditors of listed and financial companies.
Furthermore, listed companies with assets of over KRW 500 billion will be obliged to hire
compliance officers from April 2012 so that legal experts are poised to diagnose legal risks in
decision-making processes and ensure the lawfulness of business practices.

The Anti-Corruption Policy of Korea and Efforts to Enhance Integrity 16/17

Mutual Cooperation amongst Small, Medium and Large Companies

The Fair Trade Commission announced in early March 2012 that it will operate a hot-line
that over 8,300 small and medium-sized enterprises can use to directly report any unfair
trade conducted by large companies. It also plans to strengthen investigations by virtue of its
authority into large companies formulating unfair subcontracts in the form of, for example,
price cutting, oral orders and the extortion of technology.
The Commission on Shared Growth for Large Corporations and Small and Medium
Enterprises, a private organization which aims to protect the business fields of smaller
enterprises from the indiscreet entry of large companies, is promoting a new system to select
businesses suitable for small and medium-sized enterprises, and make recommendations to
large companies.
In 2011, the number of companies signing onto the Agreement on Fair Trade and Shared
Growth exceeded 100 for the first time since its introduction in 2009, which shows that a winwin growth culture is spreading itself throughout the various industries.

Promoting Public-Private
Partnerships and Cooperation
with the International
Community

The Anti-Corruption Policy of Korea and Efforts to Enhance Integrity 18/19

Promoting Public-Private Partnerships and Cooperation with the

International Community
National integrity can be enhanced not only by the efforts of the government but also by the
participation of non-governmental sectors such as business and civil society. To this end, the
ACRC has supported voluntary anti-corruption projects organized by civil society groups. In
2011, it provided financial support for 6 civil society projects, including the Pact on Transparent
Society in Social and Welfare Sectors, and Integrity Pledge by Local Councilmen.
In addition, the ACRC continues to provide assistance for businesses in their activities to
promote ethical management. For example, the Commission holds a series of workshops
and training courses on business ethics for public organizations and private companies, and
distributes information on recent trends and exemplary cases of ethical business practices
both at home and abroad.
The Korean government is also actively participating in the global fight against corruption in
order to improve national integrity. In October 2011, Korea received a positive evaluation from
the OECD regarding its implementation of the OECD Anti-Bribery Convention. It completed
the implementation of the phase 2 recommendations made by the OECD Working Group on
Bribery by enacting the Act on the Protection of Public Interest Whistleblowers.
The ACRC is committed to striving further to meet global standards including the UN
Convention against Corruption and the OECD Anti-Bribery Convention, and keep moving
the G-20 Anti-Corruption Action Plan forward in cooperation with related authorities. The
Commission will also more actively participate in the anti-corruption educational efforts as a
party of the International Anti-Corruption Academy (IACA).

In 2011, the ACRC provided a series of training courses to help build anti-corruption capacities
of public officials from other countries. The Commission organized anti-corruption technical
assistance programs tailored to meet the demands of recipient countries including Indonesia,
Thailand, Vietnam and Uzbekistan. Through its intensive training programs, the ACRC
helped other countries adopt Koreas excellent anti-corruption policies, such as the Integrity
Assessment and the Corruption Impact Assessment.
The ACRC plans to expand technical assistance to Africa and the Middle East as well as to
upgrade its anti-corruption training program for public officials of developing countries.

Symposium on Strengthening Global Leadership & Cooperation

against Corruption(October 5~6, 2010)

Training Seminar for Anti-corruption Practitioners of Indonesia

(June 13-24, 2011)

Thailand-Korea Seminar on the Preventive Measures under

the UNCAC (May 23, 2011)

Anti-Corruption & Civil Rights Commission (ACRC)

Imgwang Bldg., 87, Tongil-ro, Seodaemun-gu, Seoul 120-705 Republic of Korea
Tel : +82-2-360-6570~8 Fax : +82-2-360-3528
Website : www. acrc.go.kr
E-mail : acrc@korea.kr