By Lee Kyung-min
Shipbuilding, construction, machinery and parts manufacturing companies are deeply concerned about a new law set to take effect next week that will hold the heads of big businesses accountable for fatal industrial accidents, according to industry officials Thursday.
Under the law, CEOs of large companies will be subject to a minimum prison term of one year or a fine of up to 1 billion won ($843,000) if fatal industrial accidents, including the deaths of workers, occur at smaller partner firms.
The CEOs fear they may be held liable for on-site accidents involving small partner firm workers, regardless of immunity from supervision responsibilities, as granted under the contract between two firms to protect business secrets or due to the highly skilled nature of the work.
"Corporate activities will be wildly undermined, I'm afraid," an official at a large shipbuilding firm said on condition of anonymity. "I think I speak for everyone in the key manufacturing industries. The public sentiment is more likely than not to demand severe punishment of larger firms in a country where large conglomerates have long been demonized and faulted more often than smaller firms."
He said the shipbuilding industry is not treating any accidents lightly, but a minimum one-year prison term is too overwhelming a penalty.
These concerns have been amplified in part by the recent groundswell of public fury over the death of and critical injuries suffered by construction workers at an apartment complex construction site in Gwangju supervised by Hyundai Development Company (HDC).
Despite the resignation of HDC chairman Chung Mong-gyu, many are calling for stern punishment of those responsible for the fatal disaster. The land minister said the government can go as far as canceling the builder's construction license, given the severity of the accident.
Choe Soo-young, a researcher at the Construction Economy Research Institute of Korea (CERIK), said the new law clearly differs from a similar one in the U.K. that served as a reference.
The U.K. bill enacted in 2007, according to the institute, is primarily about whether accidents resulted from institutional failure including a lack of appropriate organizational, structural governance, unlike Korea's law which focuses primarily on individual negligence.
"Article 18 of the U.K. law stipulates that individual members of the organization are not held liable for the death of victims, for example, a clear difference in approach in how the two countries treat people responsible," Choe said.
He added that there was no significant correlation between the U.K. law and the decrease in the number of deaths at work sites.
The number of deaths per 100,000 people in the construction industry in the U.K. declined 3.3 percent to 1.6 in 2017 from 2.04 in 2008. The year-on-year figure is hardly a substantial improvement from an average 2.6 percent decline from 1998 to 2007, before the law was enacted.
The government should place greater emphasis on clarifying law provisions, instead of strengthening punitive measures, Seoul National University economist Lee In-ho said.
The current law lacks clarity on who is responsible for accident prevention. It is unclear if it is the central government, the heads of municipal governments, the heads of state-run organizations, or business owners under contract with small partner firms, he said.
"Other countries that introduced similar systems before Korea did not make individual punishment a prerequisite for effective law enforcement. An additional clear legal framework is needed to bolster corporate investment in safety enhancement, accompanied by safety protocols followed strictly by on-site workers," Lee said.