Study on the legal concept of public enterprises
Authors:   Korean Administrative Law Association, LEE Kwangyoun 
Published: October 2023

In the 2021 research service report “Estimation of the GDP share of public institutions” issued by the National Assembly Budget Office, there are many differences in the definition of public institutions and the availability of basic statistical data, so the “definition of public institutions” hinders the creation of statistical data. indicating that it is happening. If the creation of statistics, which is extremely important in modern society, is hindered by legal definition, it can be said that the responsibility of legal scholars has played a significant role. Although the legal concept of public enterprise has improved a lot in recent years, the influence of the anachronistic Otto Mayer’s concept is still ubiquitous. In the European Union, where most of the civil law countries are located, the Commission noted in 1980, precisely this criterion, qualifying as public any undertaking over which the public authorities may exercise directly or indirectly a dominant influence on the property, the financial participation or the rules they impose. Otto Mayer used the word “établissement public” interchangeably with the word public enterprise(“entreprise publique”), referring to a public enterprise as “the sum total of material or human means for the purpose of continuously serving a specified public interest in the hands of a public administration.”
In France, it was the Blanco decision in 1873 that public service was declared as criterion to the “Droit Administratif” in the administrative litigation, and public service was divided into administrative public service and commercial and industrial public service. Since it was the 1921, West African Commercial Society decision, the commercial and industrial public service activities was excluded from the subject of administrative action and became the subject of civil suit. Otto Mayer understood public service as public service, which is the public administration activity that is subject to administrative suit in its entirety, that is, the public enterprise he expressed.(“entreprise publique”). Until World War I, public corporations as corporations that we understand today had been laissez-faire based on the concept of “the night watch state (Etat gendarme),” and due to the general mobilization nature of World War I, the state did not intervene extensively in the economy. At the beginning, due to the nationalization of private companies to wage war, public corporations began to become popular, and after the end of World War I, the West African commercial society judgment in 1921 made the activities of public corporations the subject of civil law suits. So, today’s organic concept of a public enterprise and Otto Mayer's concept of an operative nature must be disconnected. The word “public enterprise patent” used by Otto Meyer also refers to today's public service patents of an administrative nature, such as patents on eminent domain, which is a completely different concept from today's public corporations consisting of commercial and industrial corporations and joint stock companies under commercial law. Therefore, it should no longer be used.
The Act on the Operation of Public Institutions is not an Basic Law. It is a plan to classify public corporations and quasi-governmental organizations based on the proportion of their own revenues out of total revenues, rather than classifying public corporations and quasi-governmental organizations based on their respective legal characteristics. As a convenient idea only for financial control by the Ministry of Finance, it is necessary to seek a control method corresponding to the classification according to the legal nature. The Local Public Enterprise Act confuses public corporations in the functional and organizational senses from their definition. Administrative law evolves in line with political and socioeconomic changes.