Welcome to BASE21

Open Letter to International Organizations and World Press Organizations
Regarding the Current Media Situation in South Korea: A Call For Solidarity

April 23, 2001

WHO WE ARE

The People's Coalition for Media Reform (PCMR) is a solidarity coalition created for the purpose of reforming the media in Korea. PCMR is made up of 40 non-governmental civil organizations such as People's Solidarity for Participatory Democracy, Citizens' Coalition for Economic Justice, Korean Federation for Environmental Movement, Korean Women's Association United, Federation of Korean Trade Unions, Confederation of Korean Trade Unions, Journalists Association of Korea, and Korean Federation of Press Unions. Since the establishment in August 1998, PCMR has been engaged in many media reform activities. Most recently, we have petitioned the National Assembly for a new law on newspaper reform. We have also been active in petitioning for a formation of a permanent committee within the Assembly for comprehensive media development policies.

WHY FOCUS ON NEWSPAPER REFORM

While our goal is media reform, we focus our attention on the newspaper industry because of the particular nature of the Korean newspaper industry. Korean newspapers have long enjoyed special privileges. For example, in the past, under the authoritarian governments, newspaper companies in Korea have been exempted from government investigations on corporate tax payment, in return for their service as the government's mouthpiece . Such collision between the press and government, or the "institutionalization of the media," has long been criticized by the citizens. More recently, under democratic governments, newspaper companies have emerged as power institutions in their own right, not hesitating to actively engage in activities to "make a president" by supporting a particular candidate during a Presidential election.

Because they had never been audited for tax payment, the management practices of the newspaper companies in Korea are still in veil, and there are strong suspicions of tax evasion in their business dealings with distributors and advertisers. There are also suspicions of inheritance tax evasions as most newspaper owners transfer their equity shares of the company to their offspring. These newspapers all argue that corporate transparency is necessary for the economic development of the nation, but they do not reveal any of their own management practices. They criticize in print the 'imperial management practices of chaebol, while in practice they continue, for three generations, their "imperial inheritance management" themselves. These "imperial" owners of major newspaper companies not only own and manage their newspapers, but they also control the editorial rights, using the power of the press for their personal profits and gains.

Recently, as the market competition grew more intense, the companies have been giving away expensive free gifts to consumers for promotional purposes, distributing volumes of free copies, and forcing individual subscriptions, ultimately wreaking havoc with market order. Moreover, the newspapers would carry negative articles on companies not advertising in their papers. Or, they would write an article on a company, similar to an "informercial" in purpose, and run it on their paper without a prior consent and demand for an advertisement fee from the company. These are grossly unfair trade activities taking places in Korea, not found in any other country in the world. Where else but in South Korea would "kick boards," the popular skate boards with handles priced at 100,000 won for retail,-- or approximately US$90--be given away and families receive unwanted and un-requested papers for weeks, even months, on end? Where else but in South Korea would companies be forced to advertise or be demanded to pay for an advertisement they did not subscribe to in advance? In the Korean newspaper industry, the income ratio between advertising and sales is 8:2, meaning that the companies are heavily dependent on advertisement for income. Furthermore, most of the advertisements are subscribed by large conglomerates. It is not surprising then that newspapers devote much of their editorial energy in defending these conglomerates.

TAX AUDITS ON MEDIA COMPANIES

To address these egregious problems in the Korean newspaper industry, PCMR demanded that the government conduct tax audits on newspaper companies and establish relevant regulations for fair trade. We demanded for the tax audit, because the special exemption privileges granted to the newspaper companies are a legacy from the past when the press and the dictatorial governments colluded. It has been pointed out that if the government were to continue to grant such privileges, it could only mean that it too wishes to collude with the press. Such collusion must not occur again, and the press must be reborn and return to what it should be: an independent and autonomous voice, monitoring environment and constructively criticizing wrongful uses of publicly endowed power.

In South Korea, companies with assets worth more than 10 billion won --approximately US$ 8 million-- are subject to tax audits every five years. However, for mass media companies it has been seven years since the last tax audit was conducted. It took place under the Kim Youngsam administration in 1994. However, the Kim Youngsam government did not unveil the result of the audit and was criticized for using the process for an ulterior purpose of controlling the media. President Kim Youngsam had made an announcement at the time that evidences of corruption were found as a result of the audit and that the amounts of tax evasion by the newspaper companies were too vast to fully recover. He had stated that the government had reduced the amount of taxes to be collected from such companies.

In light of what occurred in the past, we demand that the Kim Daejung government release the findings of the current tax audit once it is completed. The normalization of the newspaper market must be based on the findings of such investigations, and the government must implement policies to monitor the transparent management of media companies.

Another important task for the newspaper reform is the normalization of the distorted market. In Korea, the newspaper market is not governed by market economy principles. As mentioned before, the high-priced freebies, indiscriminate distribution of free newspapers, and forced advertisements or advertising without a prior consent continue to distort the market, and such activities are taking place unchecked. In response, we have continually demanded that the Fair Trade Commission investigate these and other unfair practices and take appropriate measures to either amend existing laws or pass new legislation based on the findings of the investigation. We have also emphasized the necessity of reviving the "newspaper directives," or official standards for the industry's marketing and business practices, which had been abolished in 1999 as a part of the present government's overall deregulation measures. The purpose of the newspaper directives is to specify standards of general guidelines for fair trade activities. For example, the directive would ban the offering of free gifts and set the number of free copies to be delivered per household.

TAX AUDITS 2001

This year, the government has launched an investigation on newspaper and broadcasting companies, probing into their tax records, trade practices, and internal transactions. In addition, the Fair Trade Commission announced that newly revised newspaper directives would come into effect in May 2001. The opposition party and major newspaper companies have vehemently criticized these measures, stating that they constitute a full-scale media oppression. However, we believe the reaction of the opposition party is a politically motivated offensive attack, while the claims of media oppression by newspaper companies constitute a defensive attack to hide their transgressions. The newspaper companies do not have publicly justifiable reasons to oppose the tax audits and thus have adopted in this case the opposition party line as their own ammunition to attack the government policy. They use the same ammunition, i.e. the claim of media oppression, to attack the revival of the newspaper directives as well as the investigation into unfair trade practices.

WHY WE SUPPORT THE TAX AUDIT 2001

These newspapers, the top three in the industry, holding more than 70% of the market share, also have massive capital power as their weapon. Where else in the world does such a small number of newspapers hold so great a share in the market as in Korea? The presence of the top three newspapers in the market is pervasive, and their influence in shaping public opinion cannot be ignored; if the three newspapers defended fascism, the public could very well follow. In fact, these newspapers represent the interests of the established class. Yet, they oppose the Fair Trade Commission's effort to establish fair trade practices, claiming that the Commission's measures decrease their influence as an independent and critical voice. What they are opposing to, in fact, is the normalization of the newspaper market; the prevention of oligarchy; and the promotion of diversity of ideas and opinions in our society, the true responsibility of the press in any society.

TYRANNY OF THE BIG THREE:
WE NEED YOUR SUPPORT

In their opposition to the normalization of the market, currently being pursued by the government, the three giant newspapers are also attacking us, the People's Coalition for Media Reform. If the three newspapers had their way, they would have the public believe that PCMR is pro-government and therefore pro-media oppression. This could not be further from the truth. As stated previously, PCMR is a non-governmental coalition consisting of civil organizations, professional media organizations and groups, and media scholars. Our goal is media reform. We criticize government's lame media policies. We are working so that laws and institutions which would bring media reform will take roots in our society. We urgently need the support of international agencies and media organizations working for press freedom, to fight against the giant media companies distorting our mission to the public and to continue to work on the media reform.

May it be repeated that PCMR is not an organization supporting media oppression. In fact, I myself, currently the PCMR General Secretary, was incarcerated for six months in 1986 under the Chun Doo-whan regime for publicly exposing the "Press Guidelines," the government's secret press control document that had been sent to all newspapers and news agencies in the wake of Kwangju People's Uprising at the beginning of the regime and which the newspapers faithfully followed. The daily "Guidelines" contained specific instructions on the content, the size, and layout of articles to be printed. I was a reporter at the time of the arrest and a victim of media oppression by the government. Now, it is ironic that the press, rather than fighting for more media freedom, is itself becoming the object of a reform. I was once fighting for the freedom of the press, but I have changed my course to fight for the reform of the press, because it is now the media's turn to change.

PCMR is working to correct the collusion of the media with the power establishments and to correct the tyranny of the giant media companies reigning over the will of the people. We demand that the media break off relations with political and economic establishments to become independent and autonomous institutions and return to its original duty of monitoring the environment and constructively criticizing institutions of power. The government should withdraw the privilege of the tax audit exemptions given to the media. It should cut off at its roots the collusion with the media by normalizing the newspaper market. The press should be independent from the government and be able to freely criticize it should it abuse or misuse its power. The press should also be able to freely criticize any wrongdoing by chaebol by removing itself from their influence through normalization of market functions in the circulation and advertisement practices.

Kim Ju-eun, General Secretary

People's Coalition for Media Reform
Korea Press Center #1807. 25 Taepong-ro 1-ga, Jung-gu, Seoul, Korea. 100-745
Tel. 82-2-732-7077 | Fax. 82-2-732-7076
E-mail: pcmr@pcmr.or.kr | Web-Site: http://www.pcmr.or.kr/
Copyright(C)2000 People's Coalition for Media Reform.