Ministry of Land, Infrastructure and Transport Requests Seoul City to Suspend HDC Hyundai Development Company’s Operations for at Least One Year

[Image source=Yonhap News]

[Asia Economy Reporter Ryu Tae-min] The Ministry of Land, Infrastructure and Transport has requested Seoul City to cancel the construction business registration of HDC Hyundai Development Company. This is to hold them accountable for the collapse accident that occurred at the Hwajeong I-Park new construction site in Seo-gu, Gwangju, on January 11.

On the 28th, the Ministry held a briefing at the Government Sejong Complex and announced the "HDC Hyundai Development Company Apartment Collapse Accident Sanction Plan and Measures to Eradicate Poor Construction." According to the investigation results announced on the 14th by the Ministry’s "Hyundai Development Company Apartment New Construction Collapse Accident Investigation Committee," the accident was identified as a man-made disaster caused by comprehensive management failures including construction and supervision.

The Ministry stated that it judged the need to apply sanctions under the Construction Industry Basic Act to the prime contractor, Hyundai Development Company, and requested Seoul City to impose either cancellation of registration or a one-year business suspension. Article 83 of the Construction Industry Basic Act stipulates that if poor construction due to intent or negligence causes significant damage to major structural parts of a facility and creates a public hazard, a business suspension of up to one year or cancellation of registration may be imposed. Seoul City has already announced that it will promptly take administrative action within six months upon receiving the Ministry’s request, so the actual sanction is expected to be imposed by September at the latest.

The Ministry also requested the Gwangju Seo-gu Office, the competent authority, to impose the same sanctions on the subcontractor, Gahyeon Construction Industry. Regarding the supervision company, Architectural Office Gwangjang, the Ministry requested Gyeonggi Province to impose a one-year business suspension under the Construction Technology Promotion Act.

Additionally, the Ministry plans to coordinate with related agencies to file criminal charges with the police against the construction companies (prime contractor Hyundai Development Company, subcontractor Gahyeon Construction Industry) and the supervisor (Architectural Office Gwangjang) under the Construction Technology Promotion Act and the Building Act. The Ministry said, "Considering the seriousness of this accident and public concern comprehensively, we requested the competent authorities?Seoul City (prime contractor) and Gwangju Seo-gu Office (subcontractor)?to impose the strictest sanctions even when applying these regulations."

On the same day, the Ministry also announced measures to eradicate poor construction. For companies causing fatal accidents due to poor construction, a "one-strike-out and two-strike-out" system will be applied. If three or more civilians or five or more workers die due to significant facility damage, the construction company’s registration will be canceled and new registration will be restricted for five years (one strike out). Companies caught twice for poor construction within five years will have their registration canceled and new registration restricted for three years (two strikes out).

Furthermore, in cases of fatal accidents caused by poor construction, punitive damages will be applied to expand compensation liability up to three times the existing maximum. In addition, poor construction companies will be restricted from participating in public construction projects and will face disadvantages in public support such as public land supply and housing and urban fund assistance.

The Ministry is also pushing to amend the Enforcement Decree of the Construction Industry Basic Act to allow the Ministry, rather than local governments, to take discretionary action in serious poor construction accidents involving significant casualties where an accident investigation committee is operating, as in this case. Discretionary action will be limited to accidents with three or more deaths, ten or more injuries, or collapses or overturns requiring reconstruction.

Kwon Hyuk-jin, Director of the Construction Policy Bureau at the Ministry, said, "We will focus all our efforts on strengthening construction safety so that innocent citizens and workers will never again be tragically sacrificed at construction sites, and so that the public no longer feels anxiety about construction sites."

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