The Serious Accident Punishment Act Finally Passed... Business Community Says "We've Been Complaining, It's Just Devastating" (Comprehensive)

Economy Sector: "Passed Exactly as We Feared"
"Discussions to Minimize Side Effects Must Begin Immediately"

[Asia Economy Reporter Kiho Sung] The Serious Accidents Punishment Act (Serious Accidents Act) passed the National Assembly plenary session on the 8th. Accordingly, from next year, if a serious industrial accident resulting in a worker's death occurs, management who fail to properly fulfill their safety obligations may face imprisonment of one year or more. However, since the law contains unprecedented punitive provisions worldwide, considerable difficulties are expected in its application at the field level even after enforcement.

On the same day, the ruling and opposition parties held a plenary session in the afternoon and passed the related law with 164 votes in favor, 44 against, and 58 abstentions out of 266 total members.

Following the bill's passage, the business community immediately expressed strong regret. The Korea Employers Federation stated in a press release, "From the business community's perspective, it is simply devastating that an unconstitutional law imposing the world's harshest punishments, such as imprisonment of one year or more even when management and prime contractors have fulfilled their duties as good managers according to their roles and management scope, has been enacted."

The Federation added, "The Serious Accidents Punishment Act passed the National Assembly plenary session without reflecting the core demands of the business community. If the world's highest level of labor, safety, and environmental regulations, which our country's industrial level and structure cannot handle, are imposed, our industries and companies will inevitably lose competitiveness in the global market," emphasizing, "Ultimately, this will lead to weakening the real economy base, including employment and investment."

They continued, "We urge the government and the National Assembly to promote amendments to make the law constitutional and rational through in-depth discussions before the enforcement of the Serious Accidents Punishment Act, based on the principle of 'strengthening accident prevention policies first, then strengthening punishment' and examples from advanced competitive countries."

The Federation of Korean Industries also expressed serious concerns about potential side effects in a commentary, stating, "Simultaneous punishment of prime and subcontractors and the increase in punishment severity may violate constitutional principles of self-responsibility and prohibition of excess, and may cause side effects such as deterioration of management due to reduced orders for small and medium enterprises, job losses due to automation replacing subcontracting, and damage to corporate competitiveness due to contraction of flexible external workforce operations like outsourcing."

The Federation of Korean Industries added, "It is regrettable that the law places full responsibility and punishment solely on companies and management without sufficient consideration of the causes of serious accidents and preventive measures, especially since the strengthened Industrial Safety and Health Act has been in effect for only about a year," and requested, "We hope the National Assembly and government will immediately begin discussions to minimize side effects following the passage of the Serious Accidents Act."

The business community had long requested at least raising the minimum punishment for business owners, but this was ultimately rejected. Requests to specify the obligations that business owners must observe were also ignored. Although the law's enforcement is imminent, many provisions remain ambiguous.

The most controversial issue is the scope of punishment. The ruling and opposition parties agreed to change the responsible persons for serious industrial accidents from "CEO and directors" to "CEO or persons in charge of safety and health duties." This leaves room for interpretation as it is unclear who is responsible in which situations.

For example, in the case of Company A, there is a director in charge of safety, but this director only manages safety at some regional business sites. If a safety accident occurs at a local factory of Company A, the question arises whether the safety director responsible only for some regional sites should be held accountable for this location as well. If the Industrial Safety and Health Act (ISHA), which defines the person responsible for safety at the workplace as the factory manager, and the Serious Accidents Act are applied simultaneously, the safety director and factory manager could be punished under ISHA, and the business owner under the Serious Accidents Act in the event of a safety accident.

Another issue is whether causality between violation of obligations and serious accidents can be clearly proven when applying the Serious Accidents Act. For punishment, it must be judged that there is fault beyond mere obligation violation. However, clear obligations have not yet been established.

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