Businesses are nervous as a new health and safety law comes into effect on Thursday.
They remain silent, wary of public outrage after the fatal accident in Hwajeong-dong, Gwangju, that left five workers missing and one killed.
An executive at a construction company headquartered in Seoul is increasingly angered by the tightened security law. His company updated the safety instructions in line with government-issued guidelines, but the new rules left more questions than answers.
When the company hires a flagman for a road construction project, the cost of labor is included in the safety management budget. On the other hand, if the company contracts with another company to inspect a manhole for the same road project, the labor cost is not included in the total construction cost.
Any worker paid by a company is said to be protected under the new law regardless of employment status, but the case becomes complicated when labor costs aren’t factored directly into the contractor’s construction costs.
“It’s unclear who should be held accountable for safety management in such cases,” Kim said, “so people worry that we might suddenly take all the blame.”
The Major Accident Punishment Act, enacted last year, makes business owners or directors liable if safety measures are inadequate.
Company bosses face a minimum of one year in prison or a fine of up to 1 billion won. For companies, the fine could be as high as 5 billion won.
The harshness of the penalties is unsettling for businesses, as a single accident can shut down the business entirely.
“Big companies will manage somehow, but small and medium-sized companies will probably have no choice but to go out of business,” said a manufacturing industry insider. “Some say they would rather close the company than be arrested in the shop.”
Large companies are also feeling the heat.
Daewoo Shipbuilding Marine and Engineering held a seminar on the Enhanced Safety Law last month, which was also attended by its partner companies.
New Chief Security Officers (CSO) or CEOs are appointed in construction companies where workplace accidents are more common and large shareholders have more influence over management decisions.
Samsung C&T appointed its first CSO with management authority equivalent to an executive vice president, while GS Engineering & Construction appointed the new CSO at the senior leadership level.
Some medium-sized companies are also looking for professional management to replace management with large shareholders.
“Construction companies avoid responsibility even before the law comes into force,” said ruling Democratic Party lawmaker Jang Kyung-tae, criticizing the CEOs of Hanlim Construction, Yojin Construction & Engineering and Hanshin Engineering Construction for failing to implement their CEO positions had resigned.
Hiring professionals with experience in security management is also one of the priorities.
GS E&C and Ssangyong Engineering & Construction recently advertised vacancies for on-site safety managers.
A growing number of companies are encouraging workers to shut down operations in the event of emergencies.
“Enterprises used to avoid work stoppages due to lost production,” said Jeon Seung-tae, head of the Korea Enterprises Federation’s occupational safety department, “but now the situation is completely different.”
“We had no fatal accidents for ten years until two cases occurred last year,” said an anonymous worker at a home automation company. “I just wish we weren’t the first to be punished.”
The public sector is also getting nervous.
“It will be a difficult situation to at least say whether a public entity is the first to be penalized by the law,” said a government official who asked not to be identified.
The public sector is where it all began. The death of 24-year-old contract employee Kim Yong-gyun, who worked at a Korea Western Power thermal power plant in Taean County, South Chungcheong, sparked public support for tighter security measures.
According to a report by the Department for Employment and Labor published on Jan. 11, the number of deaths in projects run or managed by public bodies totaled 244 from 2016 to last year.
Korea Electric Power Corporation, Korea Rural Community Corporation, Korea Expressway Corporation, Korea Railroad, and Korea Land and Housing Corporation were the institutions with the highest number of workplace accidents.
The government, led by the Department of Land, Infrastructure and Transport and the Department of Employment and Labour, has held weekly meetings on industrial accidents since the second half of last year.
Public institutions are also struggling to fill the security management positions that are suddenly in high demand.
An unidentified state-owned company set up a new safety management department, but struggled to assemble a team of about 30 people.
The Korea University of Technology & Education under the Ministry of Employment and Labor plans to launch an occupational safety management business course in March.
Experts are skeptical as to whether the public sector can afford the additional investments in security management.
“The important thing is that a company will only be penalized if the accident happened due to a lack of a safety management system,” said Kwon Hyuk, a professor at Pusan National University Law School.
Kwon said the government should indicate that CEOs will not be held accountable if proper security measures have been put in place beforehand.
“For the law to work properly, the government should ease corporate concerns by sending a clear message that active investment in security measures will prevent CEOs from being penalized.”
BY BAEK IL-HYUN, KIM GI-CHAN [[email protected]]