Emphasizing 'Safety Management System' for Yeosu Industrial Complex Companies... A Gauge for CEO Punishment under the Serious Accident Punishment Act

Must Establish Revolutionary Measures Compared to Before January 27 Enforcement Date, Including Placement of Two or More Workers at Workplaces and Construction of Disaster Occurrence Scenarios

On the 11th, officials are seen inspecting the explosion site at Yeocheon NCC Plant 3 within Yeosu National Industrial Complex, Hwachi-dong, Yeosu-si, Jeollanam-do. (Image source=Yonhap News)

[Asia Economy Reporter Moon Chae-seok] After a worker died in a heat exchanger explosion accident at Yeocheon NCC Plant 3 within the Yeosu National Industrial Complex in Jeollanam-do, companies located in the Yeosu Industrial Complex unanimously stated, "We have properly established the safety and health management system across the entire company." This is because it is a key issue that serves as the standard for criminal punishment of the CEO in investigations of serious accidents.

According to the government and industry, under the Serious Accidents Punishment Act, if one or more deaths occur after a serious accident, or if two or more injured persons require treatment for more than six months due to the same repeated accident, the CEO can be criminally punished. However, if measures such as "establishing and implementing a safety and health management system including necessary personnel and budget for accident prevention" and "establishing and implementing measures to prevent recurrence in case of an accident," as stipulated in Article 4, Paragraph 1 of the law, have been taken, the CEO is exempt from punishment.

Deployment of at least two safety personnel per workplace is 'mandatory'

On the afternoon of the 11th, Choi Geum-am (right) and Kim Jae-yul, co-CEOs, bowed their heads after issuing a public apology regarding the explosion accident that caused casualties at Yeocheon NCC Plant 3 within Yeosu National Industrial Complex, Hwachi-dong, Yeosu-si, Jeollanam-do. (Photo by Yonhap News)

The most important factor to avoid CEO punishment is how properly efforts have been made to eradicate repeated accidents. The Ministry of Employment and Labor stated in the "Serious Accidents Punishment Act Q&A" published last month, "Neglecting or condoning repeated worker mistakes or safety rule violations can be considered a defect in risk management and the establishment and implementation of the safety and health management system," and "For identified hazardous and dangerous tasks, measures must be devised and implemented to ensure work is performed according to legal safety rules and standard operating procedures." Furthermore, it recommended ▲deploying at least two dedicated safety personnel per workplace ▲encouraging the establishment of a dedicated safety and health organization at headquarters even if there are multiple workplaces ▲forming separate dedicated organizations besides safety managers at each workplace when workplaces are dispersed ▲conducting hazard and risk factor inspections at least once every six months if there are multiple workplaces ▲allocating and executing additional budgets necessary for accident prevention beyond construction site industrial safety and health management costs. If it is revealed during the investigation that the CEO violated these obligations, they can be immediately subject to criminal punishment.

The risk factors the CEO must manage include hazardous machinery, equipment, facilities, chemical substances, physical factors (such as noise), and biological factors (such as infectious diseases). If the CEO has identified how these factors occur in the field's tasks and has established a "groundbreaking" management system compared to before the law's enforcement date of the 27th of last month, they will be exempt from punishment. For example, ▲physically removing hazards by changing structures so that work in confined spaces is unnecessary ▲replacing hazardous substances like methanol with less hazardous ones like ethanol ▲isolating hazards and workers through protective devices and ventilation systems ▲changing work methods by revising work procedures and introducing work permit systems, properly performing 'elimination,' 'substitution,' and 'engineering and administrative controls.' From this perspective, in the case of Yeocheon NCC, where a fatal industrial accident occurred on the 11th due to a heat exchanger explosion, if investigators judge that no appropriate safety and health management system improvements were made compared to before the law's enforcement, the CEO could face immediate punishment.

'Accident occurrence scenarios' and more must be prepared

Kwon Ki-seop, Director of the Occupational Safety and Health Headquarters at the Ministry of Employment and Labor. (Photo by Yonhap News)

Whether the "7 core elements for establishing and implementing a safety and health management system" and the "implementation methods for each core element" are in place is also an important investigation target. The seven principles are ▲management leadership ▲worker participation ▲hazard identification ▲hazard elimination, substitution, and control ▲emergency action plan establishment ▲ensuring safety and health during contracting, outsourcing, and consignment ▲evaluation and improvement. Examples of implementation strategies provided by the government include ▲disclosure of information related to overall safety and health management ▲establishing participation procedures for all members ▲creating a culture of free opinion sharing.

According to these standards, the CEO has the obligation to assign safety and health personnel, facilities, and equipment, as well as encourage participation among all primary and subcontracted workers nationwide. Violating this obligation makes the CEO subject to criminal punishment. Comprehensive risk factor identification and company-wide education, preparation of detailed accident occurrence scenarios, and evaluation systems for achieving safety and health goals must also be established. If these principles are not shared company-wide even after the law's enforcement, the CEO is likely to face punishment. This is because the Ministry of Employment and Labor has decided to employ "scientific investigation" during investigations of companies with serious accidents. This means that during headquarters raids and seizures, it will be easy to determine whether such system establishment efforts were made.

Additionally, CEOs must not forget to annually prepare a safety and health plan, obtain board approval, and implement it. This is due to the 2020 amendment to the Industrial Safety and Health Act. Management policies, organizational structure, personnel and roles, budget and facility status, previous year's performance, and next year's activity plans must be shared with the board.

Confusion over budgets and personnel by industry and scale persists

On the 26th of last month, about 20 officials from the Justice Party and the Pohang branch of the Metal Workers' Union of the Korean Confederation of Trade Unions (KCTU) held a press conference in front of POSCO headquarters in Pohang, Gyeongsangbuk-do, condemning POSCO in relation to industrial accident fatalities. (Image source=Yonhap News)

Complaints that regulations are ambiguous and confusing still exist. This is because the law does not specify budgets and personnel regulations by company industry or scale. For example, there are no specific regulations such as a minimum annual safety and health budget or the number of full-time safety and health management personnel required for companies with 300 or more regular workers or less, or for industries with frequent industrial accident deaths like construction and manufacturing.

Seven ministries including the Prime Minister's Office, Ministry of Employment and Labor, Ministry of Land, Infrastructure and Transport, and Ministry of Justice, which participated in drafting the enforcement decree, have consistently stated, "If uniform budget and personnel guidelines are presented, it would effectively act as positive regulation, placing excessive pressure on companies." Positive regulation refers to a system where regulations apply to all areas except those explicitly excluded by the authorities. In response to this government stance, the business community has criticized, "The ambiguous regulations increase uncertainty such as CEO punishment," while labor groups have simultaneously criticized, "The regulations are weak."

There are core standards. The most important is whether a system is in place to ensure that the "three major safety measures"?fall prevention, entrapment prevention, and personal protective equipment use?are properly functioning at all primary and subcontracted sites nationwide. The legislative purpose itself is to drastically reduce the approximately 800 annual industrial accident deaths by more than half and to eradicate frequent industrial accidents such as "falls in construction" and "entrapment in manufacturing."

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