"Concerns Over Industrial Site Confusion Due to Serious Accident Act... Obligations and Scope Must Be Clear"

Seminar on the 27th... "Serious Accident Punishment Law Focuses on Punishment"
"CEO Immunity Claims Are Only Theoretically Possible"

[Image source=Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] The Federation of Korean Industries (FKI) emphasized the need to clearly define the obligations and scope of compliance so that companies can adhere to the Serious Accidents Punishment Act, scheduled to take effect in January next year, warning that CEOs could be exposed to excessive penalties, causing management disruptions and potential chaos in industrial sites.

On the 27th, the FKI held a seminar titled "Analysis of Legislative Impact and Response to the Serious Accidents Punishment Act" at the FKI Conference Center. The Serious Accidents Punishment Act strengthens penalties for companies and management when industrial accidents, such as worker fatalities, occur. Despite strong opposition in various quarters, the bill was passed by the National Assembly on the 8th and will be fully enforced starting January next year.

Kwon Tae-shin, FKI's Executive Vice Chairman, pointed out, "Although the enactment of the Serious Accidents Punishment Act significantly strengthens corporate penalties, the safety and health obligations stipulated by the law are unclear, as are the scope of management responsibility, the responsibilities of primary contractors, and the extent of penalties. If the law is implemented as is, severe confusion could arise in industrial sites due to restrictions on workforce management weakening corporate competitiveness, deteriorating performance from reduced orders, and the risk of business closure caused by CEO penalties."

The business community has expressed concerns over the strengthened responsibilities imposed on business owners and management officials. At the seminar, Kim Yong-moon, a lawyer at the law firm Kwangjang who analyzed the key points of the Serious Accidents Punishment Act, said, "The Serious Accidents Punishment Act focuses heavily on penalties. Companies must respond to enhanced punishments for business owners and management officials, corporate fines, and punitive damages, which are stricter than those under the Industrial Safety and Health Act." Kim added, "There is a claim that appointing a safety and health officer could exempt the CEO or overall responsible person from liability, but this is only theoretically possible. Considering the purpose and intent of the Serious Accidents Punishment Act and the CEO's obligations under the Industrial Safety and Health Act, the CEO as the overall responsible person must directly comply with the obligations stipulated by the law."

Additionally, Kim analyzed that when the Serious Accidents Punishment Act was enacted, labor-related laws were not revised accordingly, so currently, the investigative authority under the Serious Accidents Punishment Act is the police, not labor inspectors. Furthermore, since the provisions of the Serious Accidents Punishment Act, the Industrial Safety and Health Act, and the Criminal Act differ, there is a possibility of aggravated punishment due to concurrent violations of the three laws. Regarding the scope of penalties for serious civic accidents caused by products, he stated, "According to the legal provisions, producers, distributors, and sellers of raw materials or products can all be penalized. For example, if a citizen is injured due to a defect in a car brake, both the car manufacturer and the brake manufacturer could be punished depending on the actual negligence."

At the seminar, Bae Dong-hee, a labor attorney at the law firm Sejong who presented on "Corporate Response Measures to the Serious Accidents Punishment Act," emphasized, "The Serious Accidents Punishment Act delegates key provisions to enforcement ordinances, so it is necessary to review these ordinances later. Practically, it is important to manage various 'safety and health-related materials' regulated under the existing Industrial Safety and Health Act." He also added, "Companies need to reorganize their current safety and health management systems and organizations, and it is necessary to reinforce personnel and budgets in related departments."

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