HDC Hyundai Development Company Faces Biggest Crisis Since Establishment... Industry Also 'Bewildered'

Jung Mong-gyu, chairman of HDC Group, who has faced public criticism for a series of major collapse accidents in Gwangju, is making a public apology and announcing his position regarding his future at the Yongsan headquarters of HDC Hyundai Development Company in Seoul on the 17th, concerning the collapse accident of the outer wall of Hwajeong I-Park in Seo-gu, Gwangju. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Kangwook Cho] HDC Hyundai Development Company (HDC Hyundai Development) is facing the biggest crisis since its founding. This is because the Ministry of Land, Infrastructure and Transport requested Seoul City to impose the strictest legal sanctions on HDC Hyundai Development, which caused a collapse accident at the Hwajeong I-Park new construction site in Seo-gu, Gwangju, last January.

On the 28th, the Ministry of Land stated that considering the cause and scale of damage of this accident, the most severe sanctions should be applied to the prime contractor Hyundai Development, and requested Seoul City to impose either deregistration or a one-year business suspension.

Article 83 of the Framework Act on the Construction Industry stipulates that if a facility is poorly constructed intentionally or negligently causing significant structural damage that endangers the public, a business suspension of up to one year or deregistration may be imposed. In fact, the highest level of sanction under current law is 'deregistration or one-year business suspension.' This is interpreted as the Ministry of Land effectively demanding deregistration considering the gravity of the case.

Attention is focused on whether Seoul City will accept the Ministry of Land's request and decide on deregistration. Until now, deregistration of a construction company has occurred only once, during the collapse of the Seongsu Bridge in 1994 involving Dong-A Construction Industry. If Hyundai Development is deregistered, it will be the first case in 25 years since the government revoked Dong-A Construction Industry's license in 1997. Regarding this, Hyundai Development stated, "As we are the party being punished, we have nothing special to say," withholding further comment.

Moreover, the construction industry is increasingly uneasy as the Ministry of Land plans to introduce a 'one-strike, two-strike out' system that deregisters companies causing fatal accidents above a certain threshold due to poor construction. There are concerns that this is a "measure that does not consider reality."

A representative from Construction Company A said, "With the Serious Accident Punishment Act currently in effect, if the punishment level for poor construction also becomes unprecedentedly severe, the burden on the construction industry will inevitably increase," adding, "The social impact on employees as well as local subcontractors will be considerable."

Separately from the Serious Accident Punishment Act implemented earlier this year, the Ministry of Land is also promoting the enactment of a Construction Safety Special Act that allows criminal punishment of clients, designers, constructors, and supervisors if a fatal accident occurs at a construction site.

Introducing a new 'one-strike, two-strike out' system that deregisters companies causing fatal accidents due to poor construction adds another layer of regulation that could hinder the growth of the construction industry itself, following the Serious Accident Punishment Act, Industrial Safety and Health Act, Construction Technology Promotion Act, Framework Act on the Construction Industry, and Criminal Act.

A representative from Construction Company B said, "No matter how much a construction company invests in safety and focuses on site management, it is realistically impossible to prevent 100% of accidents," pointing out, "What is important is to thoroughly examine the efforts made by the client when an accident occurs, but systems like one-strike, two-strike out focus only on punitive measures rather than the efforts of construction companies."

A representative from Construction Company C also expressed concern, saying, "If the mindset of site workers does not follow, it is useless," and questioned, "Is it assumed that punishing only construction companies can completely prevent workers' mistakes?"

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