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3.4.2 Other Laws Related to Social Enterprises in the Republic of Korea

The social economy movement in South Korea predates the year 2000. In addition to the Social
Enterprise Promotion Act (SEPA), there are other related laws that are broadly considered part of
the country’s social enterprise framework, including the following:

1) The National Basic Living Standards Act (1999)
The economic crisis of 1997 resulted in high unemployment and widespread hardship among

workers. In response, a nationwide movement was launched encouraging Korean citizens to
donate their personal gold holdings, leading to the collection of approximately 270 tons of gold,
valued at around 3 billion USD, to help repay national debt. The South Korean government
allocated about 90 million USD, or approximately 3% of the total, to establish a fund for worker
welfare. In 1999, the National Assembly approved the National Basic Living Standards Act, which
led to the establishment of self-reliance centers for low-income individuals across the country.

These centers aimed to help vulnerable groups achieve self-reliance by offering educational
programs, vocational training, and skill development opportunities. The number of self-reliance
centers expanded rapidly, reaching a peak of 1,760 centers by 2016. However, by 2022, this
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number had declined to approximately 970 centers. This reduction was attributed to changes
in socioeconomic conditions, urban population growth, improved access to goods and services,
and overall economic development and rising living standards, which lessened the public’s need
for community-based self-reliance services.

2) The Framework Act on Cooperatives, 2011
Cooperatives have played a crucial role in South Korea’s economy, both in urban and rural

communities. Their establishment dates back to the period under Japanese rule. The early
cooperatives included agricultural cooperatives, fisheries cooperatives, and forestry cooperatives.
At present, South Korea has nine pieces of legislation governing the formation of cooperatives,
covering various sectors and falling under the oversight of different ministries and regulatory
bodies. These include: the Agricultural Cooperatives Act of 1957 (overseen by the Ministry of
Agriculture, Food and Rural Affairs), the Fisheries Cooperatives Act of 1962 (Ministry of Oceans
and Fisheries), the Tobacco Producers Cooperatives Act of 1963 (Ministry of Strategy and Finance),
the Small and Medium Enterprise Cooperatives Act of 1961 (Ministry of SMEs and Start-ups), the
Credit Unions Act of 1972 (Financial Supervisory Commission), the Forestry Cooperatives Act of

1980 (Korea Forestry Service), the Community Credit Cooperatives Act of 1982 (Ministry of the

83 Minsun Ji, How Policy is Building a Social Economy in South Korea, Nonprofit Quarterly, Source:
https://nonprofitquarterly.org/how-policy-is-building-a-social-economy-in-south-korea/, March 29, 2023.
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