South Korea Passes the Framework Act on Social and Solidarity Economy!

 On August 20, South Korea's National Assembly finally passed the Framework Act on the Social and Solidarity Economy. This milestone comes 13 years after practitioners in the field first called for comprehensive legislation. Colleagues across the social impact sector shared congratulations and applause. Given the long journey to this point, the prevailing sentiment is that field perspectives must continue to guide the ongoing implementation and refinement of the law.

 

This article outlines the core provisions of the newly enacted Framework Act and explores what it means for the ecosystem.

 

Defining Social and Solidarity Economy🍪

 

The Framework Act defines the Social and Solidarity Economy (SSE) as follows:

"Economic activities conducted based on mutual aid, cooperation, and solidarity to achieve shared community benefits and deliver social values."

 

One of the most significant aspects of the Framework Act is that it bridges previously fragmented government jurisdictions and separate legal frameworks—including the Social Enterprise Promotion Act (Social Enterprises), the Framework Act on Cooperatives (Cooperatives), the Village Enterprise Promotion and Support Act (Village Enterprises), the National Basic Living Security Act (Self-Sufficiency Enterprises), and the Special Act on the Promotion of Venture Businesses (Social Ventures).

 

Under the Act, SSE organizations pursue the shared interest of community members and the realization of social value. They are required to maintain democratic, transparent, and open governance structures while ensuring diverse stakeholder participation. Furthermore, they are directed to reinvest proceeds into organizational development, local communities, and social impact, contributing to local community recovery and circular local economic development based on mutual assistance and cooperation.

 

Advancing the Social and Solidarity Economy Through the Framework Act🍬

 

The Framework Act contains several foundational policy measures designed to advance the social and solidarity economy:

 

Five-Year Basic Plan: The Minister of the Interior and Safety, in consultation with heads of relevant central administrative bodies and local governments, must establish and implement a Basic Plan for Social and Solidarity Economy Development every five years.

 

Social Solidarity Finance: The state is mandated to pursue institutional improvements to secure financial resources and build a foundation for social solidarity finance, which is expected to support long-term ecosystem expansion.

 

Market Access and Public Procurement: National and local governments must promote the purchase of goods and services produced by SSE enterprises and provide necessary support to expand their market access. To foster cooperation and solidarity among SSE organizations, governments may offer administrative and financial support for: 1) building networks among SSE organizations, 2) facilitating cross-organizational exchange and cooperation, 3) joint R&D and shared brand development, and 4) establishing regional SSE clusters and market channels.

 

Designation of Social and Solidarity Economy Day: To promote public understanding and participation, an official Social and Solidarity Economy Day and an accompanying SSE Week may be designated by presidential decree.

 

International Cooperation: National and local governments are legally grounded to pursue collaborative initiatives and exchange programs with international organizations, foreign governments, and institutions.

 

Personal Reflection🍰

 

Covering the legislative journey of this Framework Act over the years, I frequently wondered when this foundational milestone would finally be reached. From my perspective in the field, because the social economy operates in the crucial space bridging the public and private sectors, comprehensive legal backing was essential to provide long-term institutional stability.

 

When the news of its passage broke, I found myself applauding with relief. My immediate thought was that we finally have a legislative 'umbrella'—a legal shield ensuring that changemakers can continue their work steadily, regardless of political shifts.

 

With the passage of the Framework Act on the Social and Solidarity Economy, South Korea has established a long-awaited institutional foundation. I hope this landmark legislation serves as vital catalytic support to expand the ecosystem and propel it forward. It is truly a day to celebrate.

 

Sources:

National Assembly of South Korea, Bill Information System (Original Text of the Framework Act on the Social and Solidarity Economy)

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