[Q&A] What Are the Issues with the Serious Accident Punishment Act? ... Business Community Says "Excessive Punishment and Resembling Collective Punishment"

[Asia Economy Reporter Su-yeon Woo] As discussions on the enactment of the Serious Accident Punishment Act (hereinafter referred to as the Serious Accident Act) gain momentum in the National Assembly, the business community is once again on high alert without a moment to breathe. Recently, a series of bills tightening regulations on companies, such as the 'Three Corporate Regulation Laws' and the 'Three Labor Union Laws,' have passed the plenary session, and now with the ruling and opposition parties joining forces to accelerate the enactment of the Serious Accident Act, the business community is making desperate appeals from the brink.

On the 16th, 30 economic organizations and industry associations, including the Korea Employers Federation, the Korea Chamber of Commerce and Industry, the Federation of Korean Industries, and the Korea Federation of Small and Medium Business, issued a statement opposing the enactment of the Serious Accident Act and urged the suspension of legislative efforts. The business community’s position, pointing out the limitations and problems of the Serious Accident Act, is summarized in a Q&A format.

- What kind of bill is the Serious Accident Act?

▲ It is a bill that imposes substantial penalties on 'management responsible persons (corporations, business owners, primary contractors, etc.)' when serious accidents such as fatal accidents occur in companies. It includes provisions for imprisonment with labor for a minimum of 2 to 5 years or fines of at least 50 million KRW, and fines up to 1 billion KRW.

- What is the difference between the current Industrial Safety and Health Act (ISHA) and the Serious Accident Act?

▲ The ISHA applies corporations as subjects obligated to comply with regulations and punishes business owners only when they violate safety and health regulations. In contrast, the Serious Accident Act holds business owners legally responsible separately from corporations. However, the scope of legal compliance is abstract and vague at the level of 'hazard and risk prevention,' which raises concerns among many businesspeople. Also, while the ISHA does not set a minimum penalty for imprisonment or fines for fatal accidents involving business owners, the Serious Accident Act establishes minimum penalties (imprisonment of 2 to 5 years or more, fines of 50 million to 500 million KRW or more), increasing the severity of punishment. The maximum fine is also raised from under 100 million KRW under the ISHA to under 1 billion KRW under the Serious Accident Act.

Regarding penalties for corporations, the ISHA imposes fines up to 1 billion KRW, but the Serious Accident Act raises this to between 1 billion and 3 billion KRW, and in cases of aggravated punishment, fines can be imposed up to 10% of sales. Additionally, if punitive damages (3 to 5 times) are imposed along with fines, small and medium-sized enterprises may face the risk of bankruptcy.

Kim Yong-geun, Vice Chairman of the Korea Employers Federation, along with key representatives from major economic organizations, held a joint press conference on the "Legislation of the Serious Accidents Punishment Act" on the 16th at the Press Center in Jung-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

- What problems does the business community see in the Serious Accident Act?

▲ First, it violates basic principles and doctrines of the Constitution and criminal law. If the law presumes responsibility for fatal accidents, managers could be severely punished even for accidents caused by factors beyond their control. This violates the criminal law principle of 'responsibility.' It means that managers can be punished unconditionally for accidents outside their responsibility and management.

Also, from the perspective of primary contractors, even if the workplace and business owner differ, they must bear joint responsibility for serious accidents simply because of the subcontracting relationship. This is akin to a collective responsibility system. Furthermore, the scope of responsibility imposed on business owners or primary contractors is very vague, at the level of 'hazard and risk prevention' and 'obligations for safety and health management.' The vagueness and broadness of the regulations imply that anyone can be punished if someone wishes. Moreover, serious accidents rarely occur intentionally on site. They are usually caused by negligence, and imposing imprisonment of two years or more and punitive damages on negligent offenders is considered excessive punishment. This violates the constitutional principle of 'prohibition of excessive punishment.'

- How do advanced countries overseas respond?

▲ In the UK, a labor-advanced country, after enacting the Health and Safety Act in the 1970s, the safety management policy shifted from uniform regulation to a corporate autonomous responsibility management approach. Administrative authorities focus their efforts on inspecting safety systems rather than detecting legal violations or prosecution, and only impose appropriate responsibility based on accident outcomes. Also, the Corporate Manslaughter and Corporate Homicide Act introduced in 2007 was enacted after 13 years of in-depth social and political discussions within the UK. To raise corporate awareness, fines on corporations were significantly increased, and personal responsibility of business owners was not imposed.

- How should we respond to serious accidents at the legislative and policy level?

▲ South Korea should also shift the industrial safety policy focus from the current 'post-penalty' to 'prevention.' To effectively reduce fatal accidents at workplaces, efforts are needed to change the paradigm to prevention-centered, like advanced countries. Currently, the penalty level for fatal industrial accidents under the Korean ISHA is already among the highest in the world (corporate fines up to 1 billion KRW, 50% increased sentence for fatalities), but as of last year, the number of fatal industrial accident deaths per 10,000 workers was 46, much higher than major countries (USA 37, Japan 16, Germany 15, UK 4). To achieve a real reduction in fatal accidents, industrial accident prevention policies based on expertise and the characteristics of industrial sites must be strengthened.

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