[Invest&Law] Serious Accidents Punishment Act Sways Amid Acquittals and Sentence Reductions, Heightened Focus on Proving 'Owner Link'

Courts Reluctant to Recognize Criminal Liability

Sampyo Quarry Collapse: Chairman Acquitted

Park Soonkwan, Aricell CEO, Sentence Significantly Reduced on Appeal

Key Issue: How Management's Specific Exercise of Authority or Instructions

Were Connected to the Accident

Court decisions in serious accident punishment law cases are showing a trend of not easily recognizing the criminal liability of corporate management, especially owners. The courts are holding that it is not enough to be the top decision-maker; prosecutors must prove how the specific exercise of authority or instructions by the management were concretely connected to the accident. As a series of acquittals and reductions in sentences have been handed down, legal experts note that, “For the Serious Accidents Punishment Act to actually lead to the punishment of owners, the high barrier of proving a concrete link must be overcome.”

According to the legal community on May 6, Judge Lee Young-eun of the Uijeongbu District Court’s Criminal Division 3 delivered a not guilty verdict this February for Chairman Jeong Dowon of Sampyo Industries, who had been indicted for violating the Serious Accidents Punishment Act in connection with the collapse at the Sampyo quarry. The incident, which occurred just two days after the law went into effect, was called the first case under the new law. Prosecutors argued that Chairman Jeong condoned and instructed the use of the dangerous “undercutting” excavation method to increase aggregate production, but the court found that there was insufficient physical evidence to prove this.

At the time, Sampyo Industries had a separate CEO who managed a dedicated safety and health organization and its budget. The court determined that there was no evidence showing that Chairman Jeong had intervened to such an extent that it was impossible for the CEO to fulfill his legal obligations under the Serious Accidents Punishment Act. Furthermore, the specific work methods that caused the accident were considered to be under the authority of the site manager or CEO, and it was difficult to conclude that Chairman Jeong made direct decisions regarding these matters.

An attorney specializing in serious accident cases at a major law firm commented, “Originally, the Serious Accidents Punishment Act was enacted because only plant managers at the site level were being punished, while the Seoul headquarters CEO (at the business-unit level) neglected safety investments. This ruling clarified that the law’s objective of punishing owners is difficult to achieve without a concrete link.” The attorney added, “The prosecution essentially indicted the group’s top executive for a field accident, but failed to bridge the legal gap between field operations and the owner’s decision-making.”

In the Aricell fire incident, where 23 people died, CEO Park Soonkwan had his sentence drastically reduced to four years in the appellate trial last month. This was because the court applied a strict interpretation of the relevant laws. The court found that, regarding the obligation to install emergency exits, the Industrial Safety and Health Standards stipulate only that “buildings with hazardous materials work areas” must have emergency exits, and do not explicitly require them for “floors without work areas.” The court also pointed out that there is no clear legal definition or specific installation standard for “emergency passageways.” This was interpreted as reaffirming the principle of “nullum crimen sine lege”—that criminal punishment cannot be based on obligations not explicitly stipulated by law.

Currently, prosecutors have appealed both the Sampyo Industries and Aricell cases. The final guidelines for how far the liability of chaebol heads or de facto business owners should extend are expected to be determined by the higher courts.

Kim Jihee, attorney at Barun Law LLC, said, “The Serious Accidents Punishment Act has certainly achieved results in instilling a real sense of responsibility and awareness about safety in CEOs,” but also noted, “There are clear legal and practical limitations to responding to deficiencies in safety measures solely through criminal punishment.” Kim added, “It is necessary to consider practical alternatives, such as strengthening civil liability, to encourage companies to voluntarily increase investment in safety.”

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