[Exclusive] Bill Proposed for 10% Fine on 'Crime Corporations' Revenue... Lee Nak-yeon Supports Serious Accident Punishment Act

Democratic Party Lawmaker Park Jae-ho Proposes "Corporate Illegal Acts"... Also Punitive Damages

[Asia Economy Reporter Park Cheol-eung] Park Jae-ho, a member of the Democratic Party of Korea, has proposed a punishment bill that imposes a fine of 10% of sales on companies that commit crimes causing harm to life, body, or property. Considering that Lee Nak-yeon, the leader of the Democratic Party, has also expressed support for a similar Serious Accident Corporate Punishment Act proposed by members of the Justice Party and the Democratic Party, it seems likely that the bill will be discussed in this month's regular National Assembly session. Opposition and controversy are expected from the business community, which is concerned about excessive corporate burdens.

According to the National Assembly on the 4th, Representative Park submitted the "Act on the Punishment of Corporate Crimes, etc." as a bill the day before. Nine Democratic Party lawmakers, including Choi In-ho, recently appointed as chief spokesperson and a close aide to Leader Lee, Jeon Jae-soo, senior deputy floor leader, Kim Doo-kwan, considered a "potential presidential candidate," and Hong Sung-guk, a representative economic expert, also signed the bill.

Park explained the background of the proposal, saying, "Damage to others' life, body, and property caused by acts of companies or corporate decision-makers is increasing," and "Even when there are structural and organizational illegal acts by companies, only some related responsible persons are punished, and companies continue to repeatedly commit illegal acts."

The core of the bill is to hold companies legally responsible through direct fines, confiscation and recovery, and compensation for damages. The bill was also promoted in the 20th National Assembly but was discarded and has now been reintroduced. If a CEO or director commits a corporate crime, the company may be fined up to 10% of its annual sales, and any money or benefits obtained through the crime will be confiscated.

Additionally, if a corporate crime is committed intentionally or tolerated, punitive damages of up to three times the amount of damage can be imposed. The bill also includes provisions to restrict participation in public project bids conducted by the state, local governments, and public institutions for up to five years.

However, a National Assembly expert expressed concerns about the excessive level of fines and the expanded scope of corporate crimes under this bill. Moon Han Lee, a legal expert of the National Assembly Judiciary Committee, pointed out in a review report last year, "While the bill aims to strengthen corporate social responsibility and protect the life, body, and property of the public, and its legislative intent is understandable considering the significant influence of companies on citizens' lives in modern society, the scope of companies and corporate crimes is excessively broad and needs adjustment, and the fines stipulated in the bill may be excessive and violate the principle of prohibition of excess."

He added, "In addition to fines, imposing punitive damages, orders to disclose corporate crime facts, and restrictions on participation in public bids simultaneously may place excessively harsh responsibilities on companies that have committed corporate crimes, so careful consideration is necessary." In fact, if a specific company is fined 10% of its sales several times for related charges, it could lead to the survival issues of the company itself.

Meanwhile, on the 1st, Leader Lee met with Sim Sang-jung, leader of the Justice Party, who urged the passage of the Serious Accident Corporate Punishment Act, and expressed support. At the time, Lee said, "I support it. I hope it will be discussed in the standing committee and contribute greatly to moving toward a safer society."

This bill was originally introduced in June by Kang Eun-mi of the Justice Party, with seven Democratic Party lawmakers, including Kim Jong-min, senior supreme council member, co-sponsoring it. The bill regards serious accidents as corporate crimes and holds business owners, management officials, and companies criminally liable and responsible for punitive damages.

This content was produced with the assistance of AI translation services.