Ombudsman for Vietnam
By Jeffrey I. Kim
I was recently invited to give akeynote speech on "the Korean Foreign Investment Ombudsman System" atan international conference in Vietnam. These days Vietnam is often cited as arising star in East Asia with its remarkable economic progress. Now theVietnamese economy is about to launch another take-off with an additionalgrowth engine mounted. The Vietnamese new growth engine refers to theKorea-Vietnam FTA signed by the two trade ministers in May. As a result,Vietnam's trade and investment will sharply increase and the economic tiesbetween the two countries will be much stronger. As of the end of 2014, Koreais Vietnam's fourth-largest export partner after the U.S., Japan, and China,while Vietnam's second-largest import partner after China.
Vietnam's FDI is as impressive as its exports. As of 2014, the export share ofVietnam's GDP is about 80 percent and the FDI share of its exports is 68percent. Among the countries which made investments in Vietnam, Korea ranks atthe top with $7.3 billion. Vietnam publicly acknowledges the importance of FDIin promoting exports and GDP growth. With this premise in mind, the Vietnamesescholars and policymakers are very anxious to learn about the successfulperformance of the Korean Foreign Investment Ombudsman System.
"Ombudsman" may sound a bit strange. It is an indigenous Swedishterm. The word, "ombud" means a representative who is authorized toact for someone else. In 1809, Sweden instituted a "parliamentaryombudsman" to safeguard the rights of citizens. It was a supervisoryagency independent of the executive branch. A similar system existed in theancient Roman period. "Tribunes of the people" were instituted in 494B.C. to protect the interests of the plebeians against the actions of theSenate and the magistrates.
Interestingly, Korea also had an ombudsman system during the Chosun Kingdom of1392-1910. The ombudsman system then was very unique. The ombudsman was called"amhaeng-eosa" (secret royal inspector). He was directly appointed bythe king. When he traveled to local provinces to monitor government officials,he disguised himself to look like a commoner. The appointment and activities ofthe ombudsmen were kept strictly secret throughout the mission.
In today's world, however, ombudsman can be more broadly defined. The ombudsmanrefers to a person who has the right to investigate the public or private complaintsand to mediate fair settlements. The official ombudsman is appointed by thegovernment, parliament or the president. The unofficial ombudsman may beappointed by universities, newspaper outlets, NGOs or professional regulatoryorganizations.
The Foreign Investment Ombudsman System in Korea was instituted in October 1999in order to resolve grievances of foreign investors and foreign-investedcompanies, and was established on the basis of Article 15-2 of the ForeignInvestment Promotion Act. The Foreign Investment Ombudsman is appointed by thePresident.
At the present time, about 4,000 foreign-invested companies are being takencare of by 50 staff members who stand by in the ombudsman's office. Under theleadership of the foreign investment ombudsman, there are threesub-organizations: (1) The administrative supporting office, (2) The investmentconsulting center where 30 officials from central and local governments provideconsultation service and (3) The grievance-resolving body where professionalspecialists keep close contact and share business information with the foreigninvestors.
The foreign investment ombudsman and his grievance resolution body collect andanalyze information concerning the problems that the foreign investorsexperience, and request the relevant government agencies to take the correctivemeasures for foreign investors. According to Korea's Foreign InvestmentPromotion Act, the heads of the administrative agencies shall notify theforeign investment ombudsman of the results of handling the grievances inwriting within seven days.
Korea's foreign investment ombudsman system has been operating effectively andbuilt up a high reputation among foreign investors doing business within, aswell as outside, Korea. With this reputation, many countries that wish topromote FDI try to benchmark the Korean foreign investment ombudsman system.Vietnam is not alone. Many other countries in East Asia and in Latin Americawish to learn how the foreign investment ombudsman system is operated in Korea.
Jeffrey I. Kim is the foreign investment ombudsman, a presidentiallyappointed troubleshooter for investors and entrepreneurs from overseas. He canbe reached through email@example.com.