South Korea

Researcher4654: Enforcement Decree of the National Property Act stipulates that every governmental agencies, including MND, should report on its current state of property and utilisation plan to its managing office, Ministry of Strategy and Finance (Article 14). The MSF may conduct audit and inspection on its asset management (Article 15). The agencies that manage defence assets, defence Installation Agency for example, release the list of the assets to be disposed soon every year. The MND also publishes its asset disposal result in its annual Defence Statistic Report.

Researcher4654: Enforcement Decree of the National Property Act stipulates that the Ministry of Strategy and Finance, completely different government office from the MND, may conduct audit and inspection (Article 15) and MND has to report the status of idle properties to MSF annually (Article 21). However, the result of its audit and inspection are not always publicly available.

According to the 2013 Defence Statistic Annual Report of the Ministry of Defence, details related to asset disposal are itemised in the annual report. Since the agreement on the relocation of the U.S. military headquarters in Yongsan of 2015 (or 2019) the Defence Installation Agency, which was established in 2004, deals with asset disposals relating to transfer of the Yongsan Garrison as a &quoute;grand national project&quoute;. Sources included indicate that the public investigate the process of asset disposals via official documents and government web pages.

Researcher4654: Unlike most of the defence budget, the scale of the intelligence service budget has never been disclosed by the government. Experts speculate hththe intelligence budget exceeds at least 1 trillion KRW (Kwon, 2013).

The military and the NIS have their own secret budget, namely 'special activity expense,' which amounts to 620 billion KRW (military: 160b / NIS: 450b) in total.

According to the National Intelligence Act (Enforcement Date 22. Nov, 2011.) (Act No.11104, 22. Nov, 2011., Partial Amendment), when the National Intelligence Service requests the budget of expenditures, the request shall be made in total under the section and item of the NIS's Expenditure and the Information Expenses, and the details of the calculation of the budget and the documents attached to the budget bill as prescribed in Article 34 of the State Finance Act does not have to be submitted.

In addition, the portions of the NIS's budget which cannot be calculated or anticipated in advance may be appropriated into the budget for another institution in total. The detailed materials necessary for the substantial examination of all the NIS's budget must be submitted to the Information Committee of the National Assembly.

The deliberation on the NIS's budget by the Information Committee of the National Assembly shall be confidential and its members shall not disclose or reveal the details of the budget. This means that even though the Special Committee on Budget Account in National Assembly scrutinises the defence budget as well as additional spending, there is no exact record of the percentage of special/secret items.

One possible assumption, according to one member of the National Assembly, Moon Byeong-ho, who is involved in the Special Committee on Budget & Accounts, the National Intelligence Service’s total expenditure from 2008 to 2012 was approximately 2 trillion won. However, the evidence to support his analysis is limited because the possible budget is contained in military expenditure. Also, during a review of annual figures, no percentage could be seen.

Researcher4654: The National Intelligence Service is independent pursuant to Article 40 of the State Finance Act. The detailed materials necessary for the substantial examination of the NIS's budget are submitted to the Intelligence Committee of the National Assembly.

However, the deliberation on the NIS's budget by the Intelligence Committee of the National Assembly is confidential and their members are not able to disclose or reveal the details of the budget. When required to submit information, make a reply or give testimony by the Information Committee of the National Assembly or under the Act on Testimony, Appraisal, etc., the Director may refuse to do so, by citing matters related to state secrets. State secrets might cover the military, diplomatic or issues on North Korea about which public disclosure might cause serious harm to national security by explaining the reasons for such refusal. In this case, the Intelligence Committee, etc. of the National Assembly may request the Prime Minister's explanation. Unless the Prime Minister's explanation is submitted within seven days after such a request, submission of such reference data, reply, or testimony should not be refused.

It has been repeatedly pointed out that the NIS's budget briefing towards the Intelligence Committee is too brief and lacks detail in terms of how it's used. Aids to the lawmakers are not allowed to participate to the budget briefing and lawmakers can't write down any information that was given in the briefing (Kwon, 2015).

Researcher4654: Overall, the annual budget and accounts of the Ministry of Defence are subject to oversight. The specific dates and outcome related to military issues are published in the Ministry of Defence White Paper, the National Defence Committee’s Website, the National Assembly of the Republic of Korea, and the Special Committee on Budget and Accounts. The National Assembly also has the opportunity to debate the audit and accounts.

However, according to the National Intelligence Act (Enforcement Date 22. Nov, 2011.) (Act No.11104, 22. Nov, 2011., Partial Amendment), the term &quoute;state secrets&quoute; in the Act is limited to the facts, goods, or information, the access to which is permitted to a limited scope of persons, which shall not be disclosed to any other country or organisation and which is classified as state secrets, in order to avoid any serious disadvantage to national safety.

As a result, NIS bears no obligation to disclose its expenditure in detail, no more than its amount in total, when it comes to its 'special activity expense,' which is suggested to take up up to half the service's total budget. Taxpayers' money spent on &quoute;special activity expense&quoute; requires no documented evidence. Thus, it cannot be, as a rule, subject to audit or inspection of any other governmental agency (Kwon, 2015).

Researcher4654: Article 45 of the National Finance Act stipulates that governmental agencies have to spend in accordance with the provisions of the budget bill There are reserve budget managed by the MSF (Article 51) in case of unexpected/excessive expenditure and revised supplementary budget in case of state emergency (Article 89), however, both budgetary items require strict documentary evidence and National Assembly's approval.

Secret budgets are no exception but, as with Question 26, details of them are not provided in budget bill.

Researcher4654: As with the Question 26 and 27, all military expenditures, including reserve budget and revised supplement budget, have to be on record.

Researcher4654: According to Chapter 3, “Procedures for Disclosing Information” in the Official Information Disclosure Act, all information that is held and managed by public institutions should be disclosed to the public. However the information falling under each of the special conditions such as security issues may not be disclosed to the public.

For example, the information related to national security is defined as

1) Information that is classified as a matter that needs to be kept secret or closed under orders given under this and other Acts (limited to the rules of the National Assembly, the rules of the Supreme Court, the rules of the Constitutional Court, the rules of the National Election Commission, the Presidential Decree and municipal or local ordinances);

2) Information pertaining to matters such as national security, the national defence, unification, diplomatic relations, etc., which, if disclosed, could seriously undermine national interests;

3) Information which if disclosed, could seriously undermine the protection of the people's lives, physical safety and properties.

Mechanisms for classifying military secrets are based on the “Military Secret Protection Act”, which is to contribute to national security by protecting secrets in military affairs.

It was repeatedly pointed out that classification of information is often arbitrary in practice. The MND refused to disclose a certain information on ROK Army's NCO training programme following a media request, citing possible security threats, while an ROK Army PR officer is reported to have said that there's no military secret in the programme (Jung, 2015).

Researcher4654: Although the military receives some revenue from the operation of leisure/convenience facilities in military bases, it has never been reported to have ownership of commercial businesses.

Researcher4654: There are no known military-owned businesses in South Korea.

Researcher4654: Article 16 of the Decree on Military Service strictly regulates servicemen's commercial activity and Article 56 of the Military Personnel Management Act provides the legal basis for punishment when servicemen violate this regulation. Recently there was a reported case in which a junior military judicial officer made profit from selling iPhone apps while in the service. There are, however, no reported cases of senior officers holding unauthorised private enterprise.

Researcher4654: As Peer Reviewer 2 makes clear, since October 2014, the Korean government, military and prosecution have taken a strong public stand against widespread corruption within the defence industry. This follows the “ROKS Tongyeong scandal”, in which two former military members of the DAPA were involved in allegations of procurement irregularities in 2009.

The Korean press has put great emphasis on the issue of corruption within the defence industry, stressing President Park's critique of the arms procurement agency as well as the political commitment to strengthen the state’s efforts against such corruption. In particular, the press has also reported heavily the government’s intention to improve cooperation between the civil and military prosecutor’s offices in order to deal with irregularities and malpractice within the defence industry. The issue is largely perceived by the public to be the result of collusive relationships between retired soldiers working in the defence industry and soldiers on active service assigned to the procurement agency.

As a result, the first Anti-Corruption Bill passed in March 2015. The law demands that influential public figures such as government officials, lawmakers, reporters and teachers who take bribes of over US$900 be jailed for up to three years or fined up to five times the bribe's value. In reality the law will go into effect after a one-and-a-half-year grace period. Public officials will also face punishment if their spouses receive and fail to report gifts.

This has been coupled with some strong statements from within the defence leadership. The new head of the South Korean Navy for example has pledged regain public confidence and take the lead in anti-corruption campaigns. However this follows the departure of his predecessor who was implicated in the corrupt activity, and there is at least some evidence that the strong message from the top is not always reflected by similar commitments from other senior ministry staff (see final source).

Researcher4654: It is easy to find evidence of dismissals in relation to military involvement in bribery and corruption. Prosecutions have been less evident. The nature of Korean military hierarchy has tended to encourage the resolution of such issues within their own judicial territory. But there are signs of change. The first prosecution case relating to senior positions in the military over allegations of bribery and corruption emerged in 2014. This particular case was processed within the establishment of the joint investigation team to show its powerful implementation. And more recently, South Korean prosecutors have announced the indictment of dozens of people, including two former navy chiefs of staff, over an investigation into alleged corruption associated with numerous defence procurement projects. Sixty-three people faced charges of accepting bribes, fabricating official documents or leaking military secrets. The accused included ten current or former military generals, a former vice minister, businessmen and brokers - all relating to procurement issues. The former Navy Chief was acquitted in October.

Public announcements covering on any trials and legal procedures have rarely come directly from the military authorities, but are revealed through media given the high level of interest in military issues in South Korean society. And because of the military's secluded character, it is unlikely that effective and fair measures have been applied to every case of bribery and corruption

Researcher4654: Whistleblowing is legally protected. It is even encouraged by President Park Geun-hye as a part of the recent military reformation campaigns. According to the ACRC, they &quoute;take measures to guarantee their continued employment&quoute; when whistleblowers are experiencing &quoute;any disadvantage or discrimination in their working conditions due to the reporting of corruption&quoute; (ACRC, September 30, 2011). The protection of ACRC applies to the entire system of South Korea in accordance with the national anti-corruption policies.

However, such protection is not always guaranteed in practice, especially within the Korean military system. The Korean military is hierarchical system built on a culture of strong bonds and a sense of loyalty. For this reason, whistleblowing can be viewed as an act of treachery rather than the one of conscience. In this light, it is hard to believe that “rewarding whistleblowers to encourage reports of hazing in the ranks” (Opinion, 2014) will bring a positive outcome.

In December 2014, a serving colonel filed a petition with the National Human Rights Commission for human rights violations after receiving vindictive punishments from the military following a series of whistleblowing (Park, 2014). The military have tried to provide multiple channels to protect whistleblowers, but the channels have proved ineffective. In fact, there is evidence the military have even used this as a means of tracking down those whistleblowers instead (Yonhap News, 2014). Since numerous corruption cases have been detected within the defence industry, the Ministry of National Defence is now carrying out a special training programme that involves protection for whistleblowers (MBC News, 2014).

Researcher4654: The current government has made clear that it will pay particular attention not only to officials involved in procurement in the Ministry of National Defence but also personnel of organisations affiliated with the defence industry. This is all contained in the Presidential decree, “Act on Members of the Ministry of National Defence and Organisations Affiliated” issued in 2015. On this basis, there are specific rules surrounding such positions and legal criteria for the selection or appointment of officials.

More specifically, since DAPA's commitment to transparency in its defence acquisition programme, the legislative structure states a wide range of requirements in detail. Especially for higher roles, it indicates mandatory requirements from academic qualifications to field work experience (Enforcement Decree of the Defence Acquisition Program Act).

The recent tendency to focus attention on personnel involved in procurement and acquisition is due to the revelation of defence industry corruption scandals. Such scandals are evidence, however, that there has been a lack of effective oversight of personnel in sensitive positions in the past. (The Korea Herald, 2014).

The government is demonstrating efforts to enforce new policies by launching a joint investigation team and putting in place transparency criteria, such as the Ombudsman system (Article 6 in DAPA, 2013), for choosing defence contractors and in the DAPA.

Researcher4654: The 2014 Defence White Paper states the number of total troops including Army, Navy, and Air Force every two years. Archives are also available through the on-line service of the Ministry of Defence.

However, the exact number of civilian and military personnel is not given due to external security threats. According to the “Act on Establishment of Infrastructure for Informatisation of National Defence and Management of International Resources for National Defence”, the Government should share or jointly utilise information resources related to national crises and national security. Nevertheless such sharing or joint utilisation may be restricted for national security reasons. Despite such ambiguous regulation, some institutions under the Ministry of Defence are open about the number of civilians.

Researcher4654: South Koreans are able to access the relevant database, which clearly shows the pay rates of all ranks of the military and allowances for civilians who also work in the defence industry via the on-line service of the Ministry of National defence in 2015.

Researcher4654: According to the 2015 Defence Statistic Annual Report of the Ministry of Defence, the details of personnel expenditures are specified in the annual report. The system of payment demonstrates a well-established and time-proven structure. South Koreans are able to access the relevant database, which clearly shows the fact that personnel regularly receive their pay on time and in the correct amounts the pay rates via the on-line service of the Ministry of National Defence in 2015. There are also no evidence that these systems are not working in practice.

Researcher4654: Article 18 to 21 of the Military Personnel Management Act define the job description of major positions in the military, including Joint Chief of Staff, and the process required for these positions. The recommended candidates are selected by senior officers pursuant to the Article 13 of the Enforcement Decree of the Military Personnel Management Act. Commentators and experts often point out that the recommendation process lacks independence to some degree, which has led to the Army dominating key positions (Yoo, 2015).

Researcher4654: Although the Military Personnel Management Act and its enforcement decree defined the formal process of promotion in detail (see sources), there is widespread criticism that the system is beset with nepotism. During the 2014 National Assembly audit and inspection, it was revealed that 80 per cent of those who have been promoted to General were Korean Army Academy graduates (Hwang, 2014). A CSO group criticised the government for promoting an officer who had been charged for sexual harassment to Brigadier General last year (Chae, 2014).

Researcher4654: Military service is one of the most serious topics of discussion among the public. In almost every election year, candidates' military service records are brought up by journalists. Avoiding conscription through bribery was common until 2000 but there is no known report of conscription officers charged with bribery since 2000. Now majority of the conscription avoidance cases consist of faked specific disease (Kim, 2014). Though there is no specific rules relating to bribery for avoiding conscription, South Korean criminal law has articles (Article 129, 130, 133) which capture both.

Researcher4654: As with the Question 43, bribery in conscription in general may be punished by the criminal law and the Decree on Military Service stipulates that all servicemen should not receive gifts or bribes whether directly or not (Article 11). However, senior officers in each services' personnel department are able to influence changes of postings and there was a case exposed this year (see sources).

Researcher4654: There is no evidence suggesting the existence of &quoute;ghost soldiers” in the Korean military system.

There are transparent procedures in the enlistment process that, alongside payment systems, would make this unlikely. The Minister of Public Administration and Security notify the Commissioner of the Military Manpower Administration of the electronic data of resident registrations, which is necessary to survey persons to be enlisted for the first citizen service. The Commissioner of the Military Manpower Administration also requests the Minister of the National Court Administration to provide additional computerised data to survey persons who are not recorded in the resident registration system.

Researcher4654: The salary of servicemen is defined by the Military Personnel Remuneration Act in detail, including family allowance and housing allowance, so is strictly separated from chains of command.

Researcher4654: According to the Statutes of the Republic of Korea, there is a Code of Conduct in every sector, and for civilian personnel and public officials. Such codes are specifically designed to promote “clean-handedness [공직자의 청렴성]” (p. 30, ACRC, 2015). The military has its own additional code of conduct within the military law, separate from other sectors. Other branches of the Ministry of National Defence also have their own codes, for example, DAPA, which deals with procurement.

In fact, ACRC's enforcement of Code of Conduct applies to all public officials who work under the government of South Korea. This includes &quoute;a public official who acts in his/her private capacity or an organisation whose business is related to a public official's duties [...]&quoute; (Article 2-1, ACRC, 2010). In sum, the code is dealt with in the same way for military officials, civilian personnel and defence ministry officials.

Throughout Article 12, 14 and 15, ACRC (2015) specifically points out that public officials cannot accept money, real estate, gifts or anything equivalent of over 50,000 KRW, in any form of bribe or loan. In light to this, Article 18 mandates heads of agencies to train their agents in accordance to the Code of Conduct. Moreover the result of training must be documented and assessed by the agency heads.

The first Anti-Corruption Bill passed on March 4th, 2015. The new law demands that influential public figures such as government officials, lawmakers, reporters and teachers who take bribes of over US$900 can be jailed for up to three years or fined up to five times the bribe's value. It also stipulates that public officials will face punishment if their spouses receive and fail to report gifts. This new Bill has the potential to play a major role in preventing corruption in the defence industry as well as government institutions.

In terms of conduct standards relating to post-retirement separation and conflicts of interest, a 2015 joint investigation into defence corruption found that &quoute;collusion between former and incumbent officials&quoute; was one of the reasons behind widespread corruption. The score has been selected on the basis that improvement is required in these two areas.

Researcher4654: Breaches of the Code of Conduct, the Decree on Military Service in this case, are addressed, as is evidence from a recent report that the cases of disciplinary action in the Army are increasing every year (Kim, 2015).

There may also be a shift in terms of prosecutions following the campaign initiated in late 2014 to root out what has been described as widespread corruption within the defence industry. South Korean prosecutors have announced the indictment of dozens of people, including two former navy chiefs of staff, over an investigation into alleged corruption associated with numerous defence procurement projects, with sixty-three people facing charges of accepting bribes, fabricating official documents or leaking military secrets. The accused include ten current or former military generals, a former vice minister, businessmen and brokers. Results of prosecutions are often revealed by media reports.

Researcher4654: The MND releases its plan for anti-corruption cyber training course every year. Its subjects are military/civilian personnel working for MND, the services, and related agencies, which run to about 20,000 this year. The Army also conducts anti-corruption training for commanders at all levels, plus officers attached to purchase and contracting departments, twice a year. Commanding officers in the ROK Navy and Air Force are also required to take anti-corruption training amounting to five hours per year. Some military apparatus including the Military Manpower Administration and the Defence Installation Agency have been awarded best anti-corruption institution prizes several times. Corruption is also covered in pre-deployment training (see question 55).

Researcher4654: There is no definitive policy on publicly announcing prosecutions. However, outcomes have always been reported to the public, mostly by the press (Interviewee 1), even though there is scepticism about whether the prosecutions are effective or not. For example, there was a Navy military judicial officer, who was dismissed from his position in 2009 after military prosecutors found out he leaked investigative secrets, who then returned to his position after five years (Yuri Park, 2014). The judicial officer in question was also recognised by the court as having forced a military prosecutor to acquit a corruption suspect. DAPA have performed well in recent military corruption cases providing constant updates on their investigation through media, though there is no declared policy which requires them to reveal outcomes of every prosecution.

The South Korean government, military and prosecution recently declared the beginning of “an all-out effort to root out widespread corruption within the defence industry” (J. Jun, 2014). In most military cases in the past, the prosecutions are concluded through resignation (Nam-il Kim, 2012), dismissal (Yuri Park, 2014) of seniors, or just giving suggestions (Newsis, 2014). However, recently many officials have been arrested and prosecuted for corruptions (Yonhap News, 2015a, 2015b). South Korean prosecutors have also recently announced the indictment of dozens of people, including two former navy chiefs of staff, over an investigation into alleged corruption associated with numerous defence procurement projects, with sixty-three people facing charges of accepting bribes, fabricating official documents or leaking military secrets. The accused include ten current or former military generals, a former vice minister, businessmen and brokers.

Researcher4654: In relation to facilitation payments (also known as “grease payments”), Korea currently has a facilitation payments exception within its legislative framework. Article 3.1 of the Act on Combating Corruption of Foreign Public Official (FBPA) severely sanctions any “promising, giving or offering bribes to a foreign public official in relation to his/her official business in order to obtain improper advantage in the conduct of international business transactions”; Article 3.2 of the above-quoted FBPA also provides a defence that allows the payment of “small pecuniary or other advantage […]to a foreign public official engaged in ordinary and routine work, in order to facilitate the legitimate performance of the official's business”.

Despite Korean Government reassurance that “the defence for small facilitation payments is very narrow, and there is no confusion regarding its application” - as stressed by the OECD in its 2011 Phase 3 Report on Implementing the OECD Anti-Bribery Convention in Korea - the explicit defence of this practice – as provided by Article 3.2 of the FBPA - did not discourage facilitation payments.

This ambiguity surrounding facilitation payments has been clearly stressed by the above quoted 2011 Phase 3 Report on Implementing the OECD Anti-Bribery, which recommends Korea continue to “periodically review its policies and approach on small facilitation payments” as well as to “encourage companies to prohibit or discourage the use of small facilitation payments in internal company controls, ethics and compliance programmes or measures”.

The question of facilitation payments has also been underlined by the international press, which still considered Korea as one of the few wealthy nations that still allows this legal exception to bribery bans. The presence of a facilitation payments exception – indeed – which potentially allows the payments of “small pecuniary or other advantage […]to a foreign public official” does not facilitate the current efforts of the Korean authorities to seriously curb facilitation payments.

Researcher4654: In their replies to a member of the National Assembly, all the services admitted that they didn't have military doctrine addressing corruption issues for peace and conflict. However, the services intend to revise their military doctrines this year and say corruption issues will be reflected. Senior governmental officials including President Park and the Minister of National Defence have referred to corruption issues as a critical risk to national security, though not specifically on operations. (Shin and Jung 2015).

Researcher4654: As detailed in Question 49, the Army conducts anti-corruption training for commanders at all levels, plus officers attached to purchase and contracting departments, twice a year. Commanding officers in the ROK Navy and Air Force are also required to take anti-corruption training amounting to five hours per year. However there is nothing specific that can be pointed to in terms of training relevant to deployed operations.

Researcher4654: The MND's instruction on self-audit and inspection sets in Article 8 and 18, 19, 20, both regular and irregular monitoring of its subordinate agencies' activity. Article 37 stipulates that the chief inspector should report the result to the final approving authority. Article 42 stipulates that the result should be made public via webpage in a summarised form. MND regularly publishes the results of its internal monitoring on its website in a summarised form.

That said, it is unclear whether corruption monitors are deployed. Score changed to 1.

Researcher4654: Although there is not an explicit reference to addressing corruption risks in peacekeeping operations, Article 4 of United Nations Peacekeeping Operations Participation Act clearly requires “the contingent and personnel participating in peacekeeping operations shall observe international laws and faithfully perform their duties within the authority and guidelines granted and provided by the United Nations.”

Corruption risks in contracting whilst on deployed operations or peacekeeping missions is not addressed specifically, but each of the services also provide guidelines and staff training on addressing corruption risks in general. The ROK Army released the Anti-corruption Code of Conduct this year, which contains case studies on corruption issues in military service. ROK Navy conducts anti-corruption training for troops being deployed overseas which addresses wide-ranging issues including the concept of corruption, disciplinary actions and criminal liability for corruption, and case studies. The ROK Air Force conducts pre-deployment training for troops, including two hours on anti-corruption.

Researcher4654: While the usage of Private Military Contractors has been a topic of serious debates around the world, there is no reported case in which the South Korean military employed PMCs. Due to regional security environment, all security-related issues are strictly controlled by the government. There are several South Korean PMCs in operation but their field of activity has been limited to escorting private organisations so far (D. Lee, 2012 and C. Baek, 2011).

Researcher4654: Article 4 of the Defence Acquisition Programme Act states that &quoute;except for cases expressly provided for in other Acts regarding defence acquisition programs, the provisions of this Act shall apply.&quoute; There are no therefore no obvious items exempt. The act also contains clauses specific to corruption. Article 6 stipulates that officials and defence contractors should submit the pledge of integrity to the Minister of National Defence and the DAPA director, including the &quoute;prohibition of demands for, promises of, giving
and receiving of valuables, entertainment... other matters prescribed by Presidential Decree to enhance the transparency and fairness of defence acquisition programs&quoute;. Article 59 stipulates that those who break the pledge may be punished by a ban from bidding up to two years.

Researcher4654: The Defence Acquisition Programme Act sets out the acquisition process in some detail. It stipulates that the Minister of National Defence should present a medium-term plan for approval by the President for improvements in defence capability and the process by which the plan is drawn up, by the Administrator of the Defence Acquisition Program Administration, including the role of the Defence Acquisition Program Promotion Committee. Article 5 of the act states that the &quoute;in promoting defence acquisition programs, the Minister of National Defence and the Administrator of the Defence Acquisition Program Administration shall disclose information on procedures and details of decision making. In this case, the Official Information Disclosure Act shall apply to the information disclosure.&quoute;

While major decision making is disclosed in public by press release, disclosure often lacks detail. The Defence Mid-term Plan is not published publicly, though it is distributed to defence contractors and its main contents are, although briefly, released in public. However, when it comes to the bidding stage, information on all defence procurement, big or small, is listed on DAPA's Defence e-Procurement System though only defence contractor can access to all the information it provides. MND also announces its asset disposal plan, mostly by bidding, on its website.

Researcher4654: MND, DAPA, and the BAI have specific audit departments for defence procurement oversight in theory. However, in light of the massive bribery case, which involved the ex-Navy Chief, the effectiveness of their oversight has again been strongly brought into question.

A joint investigation team in November 2014 was established to look into deep-rooted corruption in the defence sector and by July 2015 had discovered 980.9 billion won in illicit deals, with the Navy accounting for the majority with 840.2 billion won, followed by the Air Force with 134.4 billion won, the Army with 4.5 billion won and DAPA with 1.8 billion won. worth of irregularities.

A senior prosecutor in the case explicitly pointed to the lack of an effective supervising system on defence procurement projects as the cause. The prosecution singled out &quoute;a slack monitoring system in the procurement process; a blind spot in military investigations; and collusion between former and incumbent officials thanks to an exclusive and obedience-based culture in the military.&quoute; (JoongAng Ilbo editorial, 2015). The government investigation team have also criticised the Defence Security Command (DSC) and the Defence Agency for Technology and Quality (DATQ) for not being vigilant enough in carrying out their responsibilities - for example, the Board of Audit found evidence that the state-run military research institute was conducting false examinations of military equipment.

The results of oversight activity are also seldom transparent.

Researcher4654: Article 7 of the Act on Contract requires open, competitive bidding when the government seeks to sign a contract and Article 33 of the Enforcement Ordinance of the act requires the government to publish its bidding plan on an electronic procurement system. DAPA has been publishing its procurement plan and the tender results in public on its Defence Electric Procurement System and each procurement is verified by its internal audit office.

Article 13 of Defence Acquisition Programme Act stipulates that the Minister of National Defence and the Minister of DAPA should devise a mid-term defence plan including defence purchases. Though the Defence Mid-term Plan is not published publicly, it is distributed to defence contractors and its main contents are, although briefly, released in public.

Researcher4654: Subsection (2) of Article 5 of the Defence Acquisition Programme Act requires contractors to sign a &quoute;contract of integrity,&quoute; in which a contractor agrees to terminate or cancel the contract if the contractor acts in a corrupt way.

Subsection (3) of the article prescribes that contract administration officer should cancel or terminate the contract if the contractor fails to demonstrate integrity.

Article 27 of the Act on Contract which involves the state prohibits contract administration officer from signing a contract with contractors with corrupt histories for up to two years. Though several defence contractors do practice their own compliance programmes, it is not a prerequisite for doing business with the state in the defence sector.

Researcher4654: The defence white paper, which is published in every two years, presents South Korea's national security strategy and policies including its defence procurement plan. The white paper is open to the public and anyone can download it as an electronic document on the MND website. In the 2014 White Paper, MND stated that it is going to establish Kill Chain and Korea Air and Missile Defence (KAMD) to counter North Korean WMD threats.

There had been some opportunistic purchases in the past, in the name of &quoute;items urgently required&quoute; in the recent decade. In the 2010 Bombardment of Yeonpyeong, most of the anti-artillery radars, which were introduced without due process, as &quoute;items urgently required,&quoute; malfunctioned (Kim, 2014) and MND faced serious criticism. There was no known &quoute;items urgently required&quoute; purchases in 2014 and 2015.

There is though insufficient evidence of detailed public government audits to be able to award a higher score.

Researcher4654: Article 15 of the Defence Acquisition Programme Act obligates the Chairman of the Joint Chief of Staff to decide the required items for defence improvement programme objectively and reasonably. Article 22 of the Enforcement Decree of the Defence Acquisition Programme Act requires a request of procurement, which consists of its necessity, operational concept, time of operation, required quantity, required operational capability, etc., in order to purchase weapon systems, etc.

There have been some opportunistic purchases in the past, i.e. &quoute;items urgently required&quoute; in the recent decade. In the 2010 Bombardment of Yeonpyeong, most of the anti-artillery radars, which were introduced without due process, as &quoute;items urgently required,&quoute; malfunctioned (Kim, 2014) and the MND faced serious criticism.

Researcher4654: Article 7 of the Act on Contract prescribes open tender as a primary procurement method. Subsection (2) and (3), which describe domestic/international purchase processes, of the Article 25 of the Enforcement Decree of the Defence Acquisition Programme Act also mention open tender in the processes.

However, according to the DAPA's reply to a member of the National Assembly, 19 trillion won (KRW) out of the total 22 trillion won of DAPA defence acquisition contracts last yearwere spent on single-sourced contracts.

Researcher4654: Article 5 of the DAPA Regulation &quoute;Criteria of Eligibility Evaluation of Item,&quoute; which can be accessed in public, enumerates which elements should be considered when evaluating bids: bidding price and estimated ability to fulfil the delivery. Article 6 of the Defence Acquisition Programme Act stipulates that tender board members also should make the pledge of integrity.

The internal audit office of DAPA and BAI conduct audit tender board decisions, however the frequency is unknown to the public and the results are not always published. The independence of BAI is also frequently questioned: in 2013, the chairperson of BAI once indicated in his farewell speech that he was under political pressure during his tenure as chair.

Researcher4654: Subsection (7) of Article 7 of the Enforcement Decree of the Act on Contract which involves the state stipulates that bidder who sought collusion may be banned from contract with the state for up to two years. Subsection (4) of Article 4 of the Enforcement Decree of the Defence Acquisition Programme Act described matters to be included in the integrity pledge and contains a &quoute;prohibition of unjust conduct that obstructs free competition in bidding, such as revealing bid prices in advance and collusion for a successful bid by a specific person&quoute;.

However, companies punished for collusion can participate in bidding again by changing the name of the company's owner (Jung and Park, 2014) and the punished company could also seek to lift the ban by filing for an injunction (Ha, 2015). So while may be actively discouraged, there is evidence that sanctions are often not robustly applied when collusion is evident.

Researcher4654: DAPA has been training its staff at the Defence Programme Education Centre since 2010 but the centre has only four faculties and most of the educational sessions are only three to five days long (Lee, 2015). Military officers currently comprise 51 per cent of total DAPA staff though the government proposed last April to reduce the proportion of military officers at DAPA to around 30 per cent (Cho, 2015, Kim, 2015), after repeated corruption cases, especially the Tongyoung scandal (Lee and Kim, 2014); in a sense this is a recognition that existing personnel may not be sufficiently able to ensure that defence contractors meet their obligations. There are also concerns over whether civilian staff have the professionalism which is required to manage defence acquisition processes (Cho, 2015). DAPA plans to expand its Defence Programme Education Centre to foster civilian defence acquisition professionals (Lee, 2015).

But there have also been issues with personnel beyond DAPA which are nonetheless involved in procurement - for example the recent conviction of an colonel who received bribes in exchange for helping former an dactive duty officers find employment in defence companies. The colonel had been in charge of evaluating weapons at the Army Headquarters made by the company.

In addition there may be issues with undue influence from higher grades .For example, a senior South Korean Navy official responsible for the Navy's budget and acquisition was recently charged with pressing his subordinates in 2012 to doctor a report on the operational capability of the AgustaWestland AW159 Wildcat, a multi-mission maritime helicopter. It participated in South Korea's naval chopper purchase program, worth about 1.3 trillion won (US$ 1.1 billion).

Researcher4654: Article 6 of the Public Interest Informer Protection Act defines several methods for complaining perceived malpractice. It may be to a representative of the department/agency in question or audit/investigation arms or the Anti-corruption & Civil Rights Commission. The act also defines protections for informers, in Chapter 3 of the act, including physical protection and prevention of discrimination against informer.

However, it was widely reported that government's informer protection is seriously flawed. The commission only accepted a fourth of protection requests (Hwang, 2014) and over 140 government agencies and public institutions even outsourced informer protection (Sung, 2015). Thus, companies rarely use these formal mechanisms as they see it as dangerous to complain.

Within DAPA, there is also the ombudsman system. The Defence Acquisition Program Act sets out the function: “the Commissioner of the DAPA is entrusted to establish and operate the ombudsman system, in a way that enhances transparency and fairness, for the purpose of surveying civil petitions/appeals and thereafter taking proper steps such as due diligence, inspection and other appropriate rectification in the course of its intrinsic commitment to the defence acquisition programs.” The idea is that the ombudsman will independently investigate petitions raised on behalf of people, and recommend action by the Commissioner of the DAPA, though they have no powers of enforcement. Ombudsman reports are available on the DAPA website.

Researcher4654: Article 27 of the Act on Contract which involves the state clarifies that the government should ban an &quoute;improper company&quoute; from bidding for up to two years or impose a fine. Also the article 48 of the Defence Acquisition Programme Act stipulates that the authority can cancel the designation of a company as a defence contractor, which is necessary for company to produce and sell defence related products. While it isn't mentioned in the two acts above, heavy fines and imprisonment may be applicable pursuant to the criminal law.

Though such sanctions are regularly applied in practice, there is criticism that sanctions are often too weak. For example, while the DAPA could have barred the contractors who turned out to have manipulated test reports from bidding for a certain period, DAPA limited itself to imposing fines (Park, 2014).

Researcher4654: While there is a general integrity pact and ombudsman system, the Defence Acquisition Programme Act contains no specific articles on corruption risk in the negotiation of offset contracts. A recent case illustrates the lack of due-diligence. To elaborate, it is reported that the government pushed ahead plans to choose the F-35A -- even though they already knew that the four core technology transfers, contained in the offset, were denied by the US government. DAPA later explained that the four technology transfer items were not listed as official conditions but something that were put in &quoute;on condition that the US government allowed&quoute; after being under heavy fire from the public. Regardless, the incident underlines a lack of due diligence on behalf of the government in the negotiation of offset contracts.

Researcher4654: Article 5 of the Defence Acquisition Programme Act states that the Minister of National Defence and the Minister of DAPA should release information related to decisions on defence programmes in public. DAPA has been releasing its current status of offset trade programme on its website, however the released data only contains the list of the programmes, the type of programmes, the supplying companies, and the name of the officials in charge.

Researcher4654: DAPA's Offset Trade Guidelines have detailed descriptions on offset trade process and appraisal standards for offset contracts.

Though the guidelines prescribe some degree of competition regulation in theory, experts agree that the level of competition in practice is significantly lower than that of the main contract. Since the country relies heavily its national security on the United States, the bids from the U.S. defence industry have a significant advantage over other countries' (see Question 76) and this is reflected also in offset contracts.

When the country acquired additional F-15Ks from the U.S. in 2008, both countries agreed to finish 28 offset trades until 2010 but it was reported that only two offset trades were fulfilled as of 2011 (N. Kim, 2011).

Researcher4654: There is no mention of agents and intermediaries in the Defence Acquisition Programme Act and its enforcement decree. Only the DAPA's Instruction on Defence Acquisition Programme Management mentions &quoute;trade agent.&quoute; Since 2010, DAPA amended its instruction to limit the use of agent in the programmes in which the scale exceeds two million USD. However, experts estimate that in reality programmes which used agents amount to one trillion KRW per annum (Jun and Lee, 2013). Still there is no clear policy on the use of agents and intermediaries.

Researcher4654: Article 38 of the Defence Acquisition Programme Act stipulates that the government may support defence contractor financially when necessary by offering long-term low interest loan. Though DAPA has made part of its contract information public, details of the financing package are not available in public. Furthermore, there is no way publicly available to find out whether a financing package exists at all in a certain contract.

Researcher4654: Article 6 of the Defence Acquisition Programme Act requires a pledge of integrity from defence contractors and the Attached Form No. 2 &quoute;Pledge of Integrity (for Defence Contractor and Research Institutions, etc.)&quoute; of the Enforcement Regulation of the Defence Acquisition Programme Act sets out exactly what the contractor has to pledge. Whilst Article 5 of the pledge says &quoute;(Main contractor) should not accept bribery or do injustice to sub-contractor in regard to defence acquisition programme,&quoute; the pledge mentions nothing about anti-corruption programmes for its subsidiaries and sub-contractors.

In this April, a lawmaker submitted an amendment to the Defence Acquisition Programme Act which will include sub-contractors in those who are required to make the pledge of integrity (Park, 2015).

Researcher4654: Many defence experts agree that &quoute;most of the high performance, cutting-edge defence acquisitions in South Korea are driven by political influence of the United States&quoute; (Interviewee 1) because &quoute;the country relies on a strong security alliance [between South Korea and the U.S.]&quoute; (Interviewee 2). It is also known that &quoute;countries other than the U.S. are still reluctant to enter the South Korean defence industry market due to the U.S.'s political influence [over the country].&quoute; (Interviewee 3).

The recent case of South Korea's new jet fighter acquisition programme shows that the U.S. influence over major defence acquisition decision is still strong. DAPA at first selected F-15SE over Eurofighter Typhoon and F-35A for its low price. However, U.S. Secretary of Defence Chuck Hagel reportedly (J. Kim and U. Jung, 2013) asked ROK Defence Minister Kim Kwan-jin to reconsider the decision in Brunei, 25 August 2013. Later, the Defence Acquisition Programme Committee, chaired by Minister Kim, revoked the decision and F-35A was chosen.