By Mark Buttweiler
Don't let another child die!
Source: News Tomato
The Sewol Ferry’s sinking on the 16th of April, 2014 resulted in 304 deaths (most of whom were high school students), and has led to loud public outcries and rallies for change. As of yet, however, there has been no long-lasting systematic changes implemented. Factors that led to the tragic sinking are numerous; the incompetency of the captain and the senior crew, an overloaded ship with unsecured cargo, and the sluggishness of response by the Park administration were all contributing factors. Even after factoring in all of these conditions, the magnitude of the tragedy is mind boggling. Recently, the Sewol Special Committee has accused the government and ruling party of shirking responsibility, which points to the much more nuanced truth of the tragic incident. The depth of the tragedy was a direct outcome of deregulation of the bureaucracies involved in the incident.
The sinking of the Sewol Ferry has led to a public push for reform in safety measures to ensure a more responsive government in the face of manmade and natural disasters. While the establishment of the National Safety Administration will improve safety standards in South Korea, without institutional changes the bureau will lose efficacy in future administrations due to the eventual replacement of experts with political appointees. The sunset review requirement implemented under the Kim Young Sam regime and key deregulatory pushes under Lee Myeong-bak have resulted in bureaus that are headed by political appointees.
Agency expertise has been sacrificed for common policy preferences. A reduction in the amount of discretion available to bureaucrats has resulted in a system that ignores safety standards under the guise of cutting red tape. Furthermore, this system creates perverse incentives through political ties between individuals in regulatory agencies and the institutions they are meant to regulate. A year has passed since the accident and there have not yet been systemic changes to ensure a similar incident does not take place.
I will show how deregulatory measures came into place, how constraints on the discretion of regulatory agents compounded the magnitude of the tragedy, how this led to inefficacy in responsiveness to the tragedy, and demonstrate the importance of revising the sunset review requirement for long-lasting regulatory measures to be effective.
From Park Chung Hee to Lee Myeong Bak
The drive toward deregulation began under South Korea’s Administrative Procedure Acts (APA).
Under the military regime of Park Chung Hee, economic development was buoyed by expert bureaucrats who were guaranteed their position provided they followed Park’s policy choices. (Baum, 42) With democratic transition, however, the bureaucracy was no longer solely responsive to the goals of the president; instead, their agendas were influenced by the legislature, judiciary, and the public. The first and second APAs’ goal was to increase transparency of the bureaucracies by requiring public notifications of agency activities as a means to monitor bureaucratic drift (the ability for bureaucrats to act in ways different from the policies desired by those who delegate bureaucratic powers). Kim Young Sam acted to reign in career bureaucrats through the third Korean Administrative Procedure Act by introducing policy that limited bureaucratic discretion and aiming to end policies that only favored big businesses.
This law also includes a five-year sunset review, which allows the president to control the executive branch; he or she can sign or veto a proposal that would renew regulation, which biases outcomes toward deregulatory policies (Baum, 51). The inclusion of the sunset review allowed President Lee Myeong Bak (2008-2013) to push for further deregulation of the bureaucracy, including the removal of red tape in the name of advancing economic development. The amount of discretion given to agents (bureaucrats) depends on the level of information and agenda control allowed by legislators; increases in agenda control and decline in information asymmetries wo’uld result in an increase of ex ante policy discretion since the National Assembly would be able to control bureaucratic drift through ongoing controls. (Epstein and O’Halloran, 708).
Deregulation, however, reduced the legislatures’ agenda control. To counter this loss in control, legislatures increasingly approved political favorites to high ministerial positions. While the president chooses candidates for ministers, the legislature is able to veto appointments. This leads the president to appointing bureaucrats based on political saliency rather than skill. Political appointees were much more likely to have policy preferences in line with the legislature, which prevented bureaucratic drift, but placing non-experts in key bureaucratic positions removed much needed bureaucratic discretion in the face of an emergency.
Effect of Deregulation and Political Appointees in the Sewol Incident:
Deregulation had direct consequences on the response to the Sewol Incident. Sacrifices in safety standards for the sake of business interests in the shipping industry were rampant. This was possible as regulation of the shipping industry is under the authority of the Korean Shipping Association, which is also a trading group. Examples of sacrifices in safety are manifold: most lifeboats were not operational, the vessel was illegally modified, the ship was overloaded, and the crew was not properly trained. The ship itself was only deemed to be seaworthy because of deregulatory policies under Lee Myeong Bak’s regime. Under President Lee’s business-friendly deregulatory policies, the life of a ferry was extended from 20 to 30 years, which extended the Sewol’s service period. While deregulatory measurements may have increased profits for the Korean Shipping Association, bureaus lacked professional agency to enforce the level of regulation needed to ensure public safety.
Political appointments in key positions of bureaucracies further eroded safety measures and worsened the effectiveness of the bureaus responsible for first response to the tragedy. The dearth of checks and balances between arms of the bureaucracy is especially alarming. Ten of the 12 chairmen of the Korea Shipping Association, responsible for passenger safety, and 8 of the 11 heads of the Korean Register of Shipping, which carries out ferry inspections, came from the Ministry of Security and Public Administration (MOSPA). (Park, 2014) These positions are high-paid, but require a high level of expertise that political appointees often do not possess. While corrupt ties between officials and the industries they are trying to regulate are surely to blame, these ties are a direct result from deregulatory measures leading to the preference of legislators for political appointments rather than experts.
The lack of expertise also crippled the first response. A central coordinator could have ensured a timely response, but coordination between the Korean Coast Guard, MOSPA, and the Ministry of Oceans and Fisheries was practically non-existent. Last year, Park created a Central Disaster and Safety Countermeasures Headquarters (CDSCH) under MOSPA to integrate a single disaster management system, but lack of expertise in the running of this organization was apparent. Rather than coordinating the efforts of the emergency response, the CDSCH solely counted the number of passengers rescued and these numbers were frequently inaccurate. Moreover, under the Lee Myung Bak administration, the emergency response system became divided. The Emergency Management Agency was in charge of natural disasters while the Ministry of Security and Administration was in charge of man-made disasters. The multiple agents were unable to effectively respond to the demands of their numerous principals; had a more effective and professional disaster management system been in place, the number of casualties would have been greatly reduced.
A National Safety Administration will be much more effective if it is ensured that agencies are headed by experts rather than political appointees. To do so, the current administration must promote transparency of bureaucratic functions and strengthen agenda control by the legislature. This will allow higher levels of discretion for bureaucrats in implementing policies in areas that the National Assembly does not have expertise. (Epstein, 701) An increase in regulatory oversight will act to counter the negative externalities of the deregulation that occurred under the previous administration’s policies.
I recommend a change in administrative law through three steps.
Promote interest group access to allow them to ‘regulate the regulators’
Reform administration law to create a formal mechanism that strengthens ex ante control of the bureaucracy
Broaden ongoing controls to regularly check agency actions.
The first Administration Procedure Act successfully promoted interest group access bureaucratic action. Further enfranchising this group should further enhance the management of bureaucratic drift. (Baum, 49). However, administration law needs to be tackled to reduce the number of political appointees. Epstein argues that when poor policy choices result in disastrous situations, such as the Sewol Ferry Incident, the National Assembly should be willing to delegate more power to executive agents with bureaucratic expertise. (Epstein et al, 710). By giving stronger ex ante and ongoing controls to the legislature, the National Assembly will be responsive to changes in administrative law that require the appointment of experts to top positions in bureaus and allow these bureaus higher levels of discretion.
However, all of these policies will be ineffective without revising the five-year sunset review requirement as it relates to safety regulations. Because reforms have to be reviewed by future administrations, any regulation can be easily vetoed by the incoming administration. (Baum, 51) Rather than maintaining a system that naturally favors deregulation over regulation, the sunset review requirement should be modified in a way that ensures regulatory reforms centered on safety standards become the status quo unless taken up by future legislatures.
The Sewol Incident is a tragic disaster that occurred due to excess deregulation and an increasingly incompetent bureaucracy. Policy implementations to reform administration law can ensure the appointment of experts in bureaus and avert further disasters.
Mark Buttweiler is the Content Director at the Journal for International Policy Solutions, which includes taking charge of JIPS’ new blog. From 2010 to 2011, he did research through the Fulbright Association in Bulgaria studying the Movement for Rights and Freedoms: a political party that represents ethnic minorities in Bulgaria. Following the fellowship, he moved to South Korea to teach English as a second language through the Seoul Metropolitan Office of Education. He is currently doing research on the determinant of Korea's Official Development Assistance on a research fellowship program in Seoul.