The Serious Accident Punishment Act Tightening Regulations on Small and Medium Manufacturing and Distribution Companies

Covering Virtually All Economic Activities
Enforcement Decree Expected in the Second Half of This Year
Situation Makes It Difficult to Prepare in Advance

On the afternoon of the 8th, the Serious Accidents Punishment Act was passed at the plenary session held at the National Assembly in Yeouido, Seoul, with 266 members present, 164 in favor, 44 against, and 58 abstentions. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Choi Dae-yeol] The Serious Accidents Punishment Act (Serious Accidents Punishment Act), which is set to be enforced in one year, is being criticized for potentially tightening regulations not only on small and medium-sized manufacturing sectors but also on frontline retail and distribution businesses.

At first glance, it is easy to think that industrial accidents only occur at construction and maintenance sites or large-scale factories, but since it covers everything from the process of making raw materials and manufactured goods to safety measures in management and distribution, it actually spans the entire economic activity. There are concerns that it will be difficult to prepare in advance as the detailed enforcement decree specifying how far and how to prepare preventive measures is likely to be released only in the second half of this year.

According to the full text of the Serious Accidents Punishment Act promulgated by the government on the 26th, if one or more people die or a certain scale of injuries occur due to defects in specific raw materials or manufactured goods, it is considered a ‘serious citizen accident.’ Like industrial accidents, if proper preventive and management measures are not prepared in advance, management officials such as CEOs will be punished. The relevant clause states "defects in design, manufacture, or management of raw materials or manufactured goods in production, manufacturing, sales, or distribution (Article 9)," so under the current regulations, responsibility can be imposed not only on small and medium-sized manufacturers but also on intermediate logistics stages and sales entities.

Some provisions related to serious citizen disasters among the Serious Accidents Punishment Act promulgated on the 26th

Attorney Kim Dong-wook from Sejong said at a briefing hosted by the Korea Chamber of Commerce and Industry the day before, "In the case of industrial accidents, it is expected that companies can prepare in advance considering existing laws such as the Industrial Safety and Health Act, but the definitions of raw materials or sales and distribution are unclear in the citizen accident-related provisions, and there is a possibility of violating the principle of responsibility," adding, "It was stipulated that specific details be included in the enforcement decree, but at present, it is hard to gauge."

The concept of serious citizen accidents was reflected in the law with incidents such as the humidifier disinfectant case and the Sewol ferry sinking, which are still under legal dispute, in mind. While companies are expected to be able to respond to industrial accidents by considering existing laws such as the Industrial Safety and Health Act or the Building Act, there was little discussion about citizen accidents during the legislative process in the National Assembly.

Attorney Kim Dong-wook of the law firm Sejong is explaining the recently enacted Serious Accidents Punishment Act and other related laws at a seminar on labor relations law response measures hosted by the Korea Chamber of Commerce and Industry on the 26th.

Attorney Kim said, "It is expected that specific details will be refined by referring to the relevant laws of each responsible ministry, such as the Chemical Substances Control Act, the Product Liability Act, and the Passenger Transport Service Act, but this will also be a challenging task for each public official," adding, "If the enforcement decree is not properly prepared, even grassroots basic industries could be shaken."

Despite being a law expected to affect the entire economic activity, it was hastily prepared without sufficient public consultation until it was passed in the National Assembly earlier this year, and voices calling for its revision are already emerging.

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