About three years have passed since the government launched a campaign to promote mutual prosperity between big companies and their smaller partners. Yet the deeply entrenched practice of large corporations bullying their suppliers still remains firmly in place.

This is well illustrated by recent surveys. In a survey of CEOs of small firms, many respondents cited unfair demands for price reductions from their principal contractors as the biggest obstacle to mutual growth.

Another major obstacle was the practice of big businesses placing orders verbally ― an act designed to shirk responsibility when they inflict losses on their suppliers by reducing the size of orders or delaying the delivery date.

In another survey, 34 percent of medium-sized companies said they had to reduce the prices of their products this year due to pressure from their powerful business partners.

A report by the Korea Federation of Small and Medium Business has found that in recent years, SMEs have been unable to raise their product prices in tandem with the increases in production costs.

According to the report, their unit product cost, when seen against the 2011 benchmark of 100, rose to 106.6 in 2012 and 108.3 in 2013. But the unit price of their products and services edged up to 100.2 in 2012 and 100.6 in 2013, compared with the 2011 benchmark.

To find out how SMEs are bullied by big businesses, the Ministry of Trade, Industry and Energy recently launched a large-scale fact-finding survey. It plans to canvass 6,430 SMEs that do business with 74 conglomerates and 59 public corporations.

Yet it is not easy to get a full picture of the situation. As President Park Geun-hye noted during a recent briefing by the Fair Trade Commission, SMEs are reluctant to report excessive price-cut demands and other unreasonable practices of their principal contractors because they fear their business relationship might be severed.

The National Assembly has recently passed a bill aimed at curbing big companies that put the squeeze on their suppliers. If an SME suffers losses due to unilateral price cuts or unreasonable return of goods by a principal contractor, the legislation, which takes effect in November, entitles the SME to punitive damages up to three times the losses it sustained.

The revised law on subcontracting also authorizes SME cooperatives to negotiate with principal contractors on pricing on behalf of their member companies.

Yet SMEs are not quite sure that these and other measures designed to pressure big businesses to change their attitude towards their suppliers will have the intended effect.

These steps, if implemented as planned, would contribute to improving the business environment for SMEs. At the same time, concerted efforts need to be made by the government as well as the public to push big companies toward creating a business ecosystem friendly to SMEs.