Republic of Korea

5.100

22.000

313.000

Republic of Korea

Key figures

Research overview

Responding to challenges and existing knowledge gaps facing the cooperative movement, this mapping research seeks to provide exhaustive information on cooperatives worldwide. This is achieved through a process jointly conducted by the ICA and its four regional offices – Cooperatives of the Americas, Cooperatives Europe, ICA Africa, and ICA Asia-Pacific – using a common methodology. Each office collected the input of ICA members present in the countries within its geographic area, by using the same questionnaire, and completing it with relevant national statistics, in order to obtain an accurate picture of the national situation. Mapping out cooperatives in each country provides a more precise picture of the cooperative context at national and regional levels, enhances the movement's visibility, networking, partnerships opportunities, as well as advocacy, and empowers cooperators by providing them tools for positive change.

This webpage presents a snapshot of the research results for Korea. For more information, you can download the full report and the highlights here.

History

The modern cooperative movement in Korea began with finance and agricultural cooperatives that were set up by the Japanese colonial authority. Post-independence, the cooperative movement in Korea was characterised by the growth of agricultural (agriculture, fisheries and forestry) and credit cooperatives. Cooperatives play a vital role in Korea as an important instrument to drive community-based initiatives to strengthen the rural and urban economy. 

Overview

ICA has seven members from Korea.



In Korea, the research questionnaire was distributed to and completed by 1 ICA member organisation in the country. The data collected was for the reference year 2016.


Summary

ICA members represent 5,100 active cooperatives in the country, with 313,00 members and 22,000 employees.

Cooperatives in Korea are present in diverse sectors including wholesale and retail, education, agriculture and forestry, manufacturing, arts and sports, health and society welfare, among others. 

Legal framework

 

The legal framework analysis aims to provide general knowledge of the national cooperative legislation and of its main characteristics and contents, with particular regard to those aspects of regulation regarding the identity of cooperatives and its distinction from other types of business organisations, notably the for-profit shareholder corporation.

It aims to evaluate whether the national legislation in place supports or hampers the development of cooperatives, and is therefore “cooperative friendly” or not, and the degree to which it may be considered so, also in comparison to the legislation in force in other countries of the ICA region, or at the supranational level.

In addition, the research aims to provide recommendations for eventual renewal of the legal frameworks in place in order to understand what changes in the current legislation would be necessary to improve its degree of “cooperative friendliness”, which is to say, to make the legislation more favourable to cooperatives, also in consideration of their specific identity. This webpage presents a snapshot of the legal framework analysis results for the Republic of Korea.

 

 

There are eight special laws and one general law – The Framework Act on Cooperatives. This research focuses on the Framework Act on Cooperatives, The Agricultural Cooperatives Act and the Consumers Cooperatives Act. The constitution of the Republic of Korea does not explicitly mention the term ‘cooperative’ but refers to organisations founded on the spirit of self-help.

 

Main Laws relevant to cooperatives in the Republic of Korea


Agricultural Cooperatives Act - Dedicated to Agricultural cooperatives and is under the supervision of the Ministry of Agriculture, Food and Rural Affairs.

Fisheries Cooperatives Act - Dedicated to Fisheries Cooperatives and is under the supervision of Ministry of Oceans and Fisheries

Tobacco Producers Cooperatives Act - Dedicated to Tobacco Producers Cooperatives and is under the supervision of the Ministry of Strategy and Finance

Forestry Cooperatives Act - Dedicated to Forestry Cooperatives and is under the supervision of Korea Forestry Service

Small and Medium Enterprise Cooperatives Act - Dedicated to Small and Medium Enterprise Cooperatives and is under the supervision of the Ministry of SMEs and Start-ups

Credit Unions Act - Dedicated to Credit Unions and is under the supervision of the Financial Supervisory Commission

Community Credit Cooperatives Act - Dedicated to Community Credit Cooperatives and is under the supervision of the Ministry of the Interior and Safety

Consumer Cooperatives Act - Dedicated to Consumer Cooperatives and is under the supervision of the Fair Trade Commission

Framework Act on Cooperatives - Dedicated to General and Social Cooperatives and is under the supervision of the Ministry of Strategy and Finance

 

The eight special cooperative laws partly reflect ICA cooperative principles, whereas the Framework Act reflects all seven principles, implicitly.


 

Cooperative friendliness

The cooperative legislation of the Republic of Korea is notably friendly to cooperatives. In particular, the Framework Act on cooperatives established in 2012 complements the existing eight special cooperative laws and contains many provisions supportive of cooperatives while respecting their autonomy.

 

Key recommendations for improvement

  • Model Bylaws should be made by a federation of cooperatives rather than by the competent authorities.
  • Unfair treatment to cooperatives under certain laws that prevents them from getting financial/non-financial support from government organizations should be amended.
  • In certain cases of taxation, social cooperatives are considered at par with corporations, despite being organized for public interests.

 

Conclusions

The establishment of the Framework Act was the breakthrough in the history of the cooperative movement of the Republic of Korea by setting the open environment for organizing cooperatives. However, the Framework Act only complements existing special cooperative laws rather than functioning as the common law for all types of cooperatives.

 

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