"Serious Accident Punishment Act Inevitably Causes SME Recession"

Industry Complaints Surge Amid Legislative Acceleration by the Yeo Party

The small and medium-sized business sector is raising criticism that if the bill, which is likely to involve excessive regulation, is not withdrawn, a business downturn will be inevitable.

[Asia Economy Reporter Kim Heeyoon] On the 13th, Lee Nak-yeon, leader of the Democratic Party of Korea, hinted at the legislative passage of the Serious Accidents Punishment Act within the year during a press conference. Meanwhile, the small and medium-sized enterprises (SME) sector is criticizing that if the law, which has many possibilities of overregulation, is not withdrawn, a business downturn is inevitable.

The SME sector expressed concerns that with the ruling party declaring the enactment of the Serious Accidents Act within the year, the quadruple sanctions of fines, administrative penalties, executive punishments, and punitive damages will strangle small and medium-sized enterprises.

Recently, the Korea Federation of SMEs along with 16 SME organizations issued an appeal urging reconsideration of the enactment of the Serious Accidents Punishment Act. This is because the level of punishment for business owners in the event of industrial accidents is being strengthened to an unprecedented level worldwide. The main points include imposing more than two years imprisonment or fines exceeding 500 million KRW (proposed by Democratic Party lawmaker Park Jumin), more than three years imprisonment or fines exceeding 50 million KRW (proposed by Justice Party lawmaker Kang Eunmi), and more than five years imprisonment or fines up to 100 million KRW (proposed by People Power Party lawmaker Im Ija) when a worker dies at the site, which they argue is excessive.

The Punishment Act for Accidents holds business owners responsible for the results regardless of the cause of the accident and also imposes accident liability of subcontractors on the primary contractor’s business owner, drawing criticism from experts as a revival of the 'Yeonja system' (collective punishment).

Kim Ki-moon, chairman of the Korea Federation of SMEs, appealed, "The procedure for companies to handle and compensate when an accident occurs is also very important. Even if the business owner is detained, large corporations can have professional managers handle the process, but most SMEs inevitably face closure, so legislation considering the reality of SMEs is necessary."

Jung Jin-woo, professor of Safety Engineering at Seoul National University of Science and Technology, pointed out, "With fines, criminal punishment of business owners, administrative sanctions, and punitive damages, if a serious accident occurs in an SME, companies will go bankrupt due to a barrage of sanctions. The currently discussed Serious Accidents Act is solely aimed at punishment, so while strengthening compliance conditions, administrative system improvements for industrial accident prevention should precede. The current bill, which shifts all responsibility to companies, is a bad law that no country in the world can comply with."

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