This Month of PSPD

January/February 2020

Inquiry of exercising and preparing active stockholder’s rights of National Pension according to stewardship code

In July 2018, as the Ministry of Health and Welfare adopted “Principles on Institutional Investor’s Fiduciary Duties”(Stewardship Code), it announced that by 2020 all preparation for active stockholder’s rights would be ready. However, the ministry has been maintaining a passive attitude toward the backlashes against the code from the business sector. The National Pension hasn’t responded even though HYOSUNG, DAELIM, and other groups have engaged in continuous embezzlement and breach of trust. On the contrary, it has been making worrisome decisions like transferring the voting rights to consigned operators that are not free from the influences of the major companies. 

With regard to this, the Center for Economic and Financial Justice has openly inquired about the Ministry of Health and Welfare, and the National Pension Service’s performance, preparations, and future plans for carrying out stockholder’s activities according to the stewardship. The center has also urged the institutions to ask for reforms related to problematic companies, to exercise the veto to problematic director candidate’s serve of consecutive terms, to recommend independent outside director candidates, and to proactively confront the voting rights’ commission. 

The pension funds of the U.S. that stand at the forefront of capitalism are actively implementing stewardship codes. While the business sector is resisting by pointing to this as “pension socialism,” this is ill-naturedness that wants investment but no interference. The voting rights of National Pension are protected by the Commercial Law. In operating the pension, which consists of people’s retirement savings, the business sector should not be the only influential parties among those involved. 

Since there is not enough time to prepare until the regular meeting of shareholders (March of this year) PSPD will also do our best for the Ministry of Health and Welfare and National Pension Service to focus on the establishment and implementation of the stewardship code.

Issue report: Apartments of Seoul - Increased Comprehensive Real Estate Holding Tax in contrast to 2018-2019 market price increase, only 0.8%

Is controversy against “immense” Comprehensive Real Estate Holding Tax reasonably backed? According to the analysis of 24,450 houses that exceed the price of 900 million won per household, the total real estate tax in 2019 increased by 820,000 won from the previous year. The average real estate tax for this year increased by 210,000 won.

While 60% of those objected to this tax is within the section where the tax ratio hasn’t increased through the amendment process of the tax law, the increased tax from these houses is only an average of 250,000 won. Comparing this to how much house prices have increased over a single year, this is absurdly low.

On the other hand, the 4,906 houses that have been traded between Jan and Sept of 2019, exceeding over 900 million won, showed a price increase of 14.35 million won compared to the previous year. The change in the amount of tax was about 670,000 won. The average change in the comprehensive real estate tax compared to the increase in the market price is only 0.8%. 

Even though the comprehensive real estate tax code have been strengthened in 2018, the tax burden is too low to suppress speculative demands for real estate. The Center for Tax Reform will continue to act to prevent real estate speculations and just taxation to unearned income.

Candlelight movement against U.S.’s unreasonable cost of U.S. military presence

https://www.flickr.com/gp/pspd1994/y959i9" style="background:rgb(255,255,255) 0px 0px;color:rgb(102,153,204);font-family:'나눔고딕', NanumGothic, ng;text-align:justify;" title="참여사회 2020년 1-2월 합본호 (통권 272호)" rel="nofollow">https://live.staticflickr.com/65535/49280481112_a4550b1793.jpg" style="vertical-align:middle;" width="500" />

Negotiations on the 11th Special Measures Agreement (SMA) are underway to determine the share of US Forces in Korea in 2020. As reported, the U.S. has demanded ROK pay $5 billion (6 trillion Korean won), which is six times the amount in 2019 (1.04 trillion won). According to the Status of Forces Agreement between ROK and the U.S., the US is responsible for stationary fees, while ROK is to only supply facilities and land. Going further, the U.S. is demanding the spectrum beyond what SMA framework covers: labor costs, logistics costs, and construction costs. 

It has been reported that Washington is asking Seoul to cover U.S. costs for personnel and their families, joint training sessions, equipment operations like THAAD, rotation of deployment, and exercises outside of ROK but related to the defense of the Korean peninsula. This is to pass on the costs of carrying out the global hegemonic strategy, including the costs of the India-Pacific strategy, to Korea. It is a threat to peace in East Asia beyond the Korean Peninsula.

The PSPD Center for peace and disarmament held a panel discussion at the National Assembly last November exploring the fundamental problems of the SMA and ways to deal with the 11th Agreement. In December, civil society organizations including PSPD held two candlelight movements at Gwanghwamun square to denounce the U.S. for imposing unfounded defense costs for the U.S. military presence in Korea.