Casualties actually increased... Is the Serious Accident Punishment Act useless? [Special Report]

"When the Serious Accident Punishment Act was introduced three years ago, construction companies tried to stop it, saying there were problems, but it was no use. They ignored the side effects and implemented it recklessly, which led to this. It was a predictable result." (A construction company official)

This year marks the third year of enforcement of the Serious Accident Punishment Act, introduced in 2022. As the name suggests, the purpose is to prevent major disasters, but the diagnosis is that it is not actually effective. It was revealed that casualties at construction sites across the country actually increased. The focus should be on disaster prevention, but as laws are enacted focusing on strong punishment, there are concerns that their effectiveness has decreased.

Was the Serious Accident Act effective?

Deaths at top 20 construction companies actually increase

According to data received from the Ministry of Land, Infrastructure and Transport by Park Yong-gap, a member of the Democratic Party of Korea, the number of workers who died at construction sites at construction companies ranked in the top 20 in construction ability evaluation last year was 35, a 25% increase from 2023 (28 people). There is no significant difference compared to 2022 (33 people), the first year of enforcement of the Severe Accident Punishment Act. This is a compilation of the number of deaths registered in the government's Construction Comprehensive Information Network (CSI). By law, construction companies must immediately report any accident to CSI.

Even if we include the injured, the results are no different. Last year, the total number of deaths and injuries that occurred at the sites of the top 20 construction companies was 1,868, an increase of 12.1% compared to 2022 (1,666 people), the first year of enforcement of the Serious Accident Punishment Act. This means that industrial accidents have not significantly decreased even after the implementation of the Serious Accident Punishment Act.

The atmosphere is similar not only to the construction industry but also to other industries. According to the Ministry of Employment and Labor's Major Disaster Notification e, the cumulative number of deaths at manufacturing sites in the first to third quarters of last year was 134, an 8.9% increase compared to the same period last year (123 people). The transportation, warehouse, and communications industries also saw a 58% increase in deaths from 12 to 19 during the same period.

The Serious Accident Punishment Act is a law that imposes a prison sentence of more than one year or a fine of up to 1 billion won if more than one person dies or more than 10 people are injured at a company's workplace. It was mainly implemented in large workplaces, but since January of last year, it has been expanded to include workplaces with 5 to 50 full-time employees.

Let’s look at the background of the introduction of the Serious Accident Punishment Act.

This does not mean that there have been no safety-related domestic regulations so far. Even before the introduction of the Serious Accident Act, laws for worker safety clearly existed. Before the enactment of the Serious Accident Act, the laws applicable when accidents occurred in the workplace were mainly the Occupational Safety and Health Act and the Criminal Act. The Occupational Safety and Health Act is a bill that punishes top managers at sites who violate safety and health measures. In the criminal law, occupational manslaughter provisions apply when death, injury, or disease occurs due to a violation of the duty of care at work. Applicable persons are those who directly caused the accident. Both the Occupational Safety and Health Act and the Criminal Act focus only on field issues.

However, the Serious Accident Act has a different nature. Rather than focusing on the field, we focus on checking how much business owners and managers care about safety. The Serious Accident Act focuses on whether individual business owners and business managers have complied with their obligations to ensure safety and health. If the business owner does not properly implement the measures prescribed by law, he or she will be subject to punishment. This means that industrial accidents are viewed as a problem for the entire company rather than a simple on-site problem.

The Serious Accident Act was introduced because, as the number of industrial accidents has increased rapidly in recent years, it is difficult to solve the fundamental problem by punishing only those in charge. The argument that the Occupational Safety and Health Act, which stipulates safety and health measure obligations only at the workplace, has its limitations has gained strength. There were strong calls for more structural solutions, such as company-wide investment to ensure safety and health and establishment of a safety and health management system. Thanks to this social atmosphere, the argument that corporate managers who provided the fundamental cause of the accident should be held responsible has gained strength. The purpose is to achieve the so-called ‘prevention effect through punishment.’

Why can’t the Serious Accident Act prevent accidents?

Why is the number of fatal accidents at industrial sites not decreasing even though the ambitious Serious Accident Punishment Act has been established? The legal and business circles largely raise four causes.

Cause 1Institutional limitations of the Serious Accident Act

Only management is regulated... Can’t catch ‘human error’

The biggest factor is the institutional limitations of the Serious Accident Act itself.

At the time of its introduction, it was considered an ‘all-purpose bill’ that would dramatically reduce industrial accidents, but the reality is different. Strictly speaking, the Serious Accident Act is not a system that strengthens safety measures on site. As mentioned earlier, the bill that deals with field safety is the Occupational Safety and Health Act. The Serious Accident Act focuses on regulating management to fulfill safety and health obligations rather than on-site conditions. If management does not establish appropriate safety measures, they will be punished for violating the Serious Accident Act. On the other hand, if safety measures have been established in accordance with the guidelines provided by the Serious Accident Act, the CEO can avoid punishment.

Here, the limitations of the Serious Accident Act are revealed. No matter how perfect corporate managers create systems, they cannot control each and every field. Typically, 80% of industrial accidents are caused by minor mistakes made by site managers or workers, so-called ‘human error’. Deviations, such as accidentally breaking safety regulations or using tricks to get things done quickly, often lead to accidents.

The death of an H Solutek employee in April 2022 is a case where worker deviation led to an accident. At that time, while inspecting the outdoor unit of the air conditioner, he fell and died. Although it was a serious accident, H Solutek and its CEO were not indicted. This is because the accident occurred when the worker worked alone without prior approval from the person in charge, without using an aerial work vehicle, and without wearing protective gear.

The company faithfully fulfilled its safety and health management obligations as specified by the Serious Accident Act. It was concluded that despite company-wide efforts, accidents due to minor deviations of employees could not be prevented. Judicial authorities judged that it would be difficult to recognize the employer's charges as the accident resulted in the death of a worker outside of the procedures set by the management.

It is difficult to prevent damage caused by unexpected accidents using the Serious Accident Act alone. This is because the focus is only on checking the safety management system in the management system rather than taking actual safety measures. A representative example is the death of a worker at P Industrial Company in 2022. Worker A and foreign worker B were part of a subcontractor and were in charge of molding ‘bearing seals’ using a compression molding machine at P Industrial Company’s 4th factory. For convenience of work, Mr. B used hand tools to seat the metal ring and rubber ring, contrary to their original purpose.

Meanwhile, in February 2022, the hand tool was crushed under the pressure of the compression molding machine, bounced off, and hit Mr. A's head, and Mr. A died from traumatic cerebral hemorrhage. At the time, the court stated the reason for the acquittal, saying, “A causal relationship must be recognized between the results of a serious disaster, but it was not possible to foresee a case where a hand tool would get stuck and bounce off.” This was because management could not prevent unexpected accidents.

An anonymous legal official explained, "Among the serious accidents, there are quite a few accidents that occurred due to the fault of the deceased. Also, in workplaces where there is a lot of dangerous work, there are quite a few unexpected accidents. It is unfortunate, but the Serious Accident Act cannot prevent such accidents."

Cause 2Changed industrial scene

Foreign workers are increasing and aging is deepening

Changes in the industrial field are also behind the halving of the effect of the Serious Accident Act. Construction and manufacturing sites, where industrial accidents occur frequently, are jobs that young Koreans avoid. All domestic workers have left, and the empty positions are being filled by foreign workers.

It is difficult to control foreign personnel on site. Because I am not good at Korean, I have difficulty communicating and it is difficult to understand safety control rules written in Korean. The environment is such that it is difficult for field managers to properly train as in the past. Recently, even field managers often hire foreigners.

An official in the construction industry said, "Foreign languages ​​are used more frequently than Korean at construction sites. Site managers have difficulty managing them due to issues such as language barriers and cultural differences. The reality is that no matter how excellent a safety management system is established, it is difficult to apply it to the site."

Industrial accidents among foreign workers are increasing every year. According to data received by People Power Party lawmaker Kim Wi-sang from the Korea Workers' Compensation and Welfare Service, the total number of industrial accident deaths for which industrial accident approval was completed by the third quarter of 2024 was 617, of which 80 were foreigners. Accidental industrial accidents refer to industrial accidents that occur as a result of an on-site accident, not a disease. The proportion of foreigners among industrial accident deaths steadily increased from 9.7% in 2022 to 10.4% in 2023 and 12.9% in 2024 (January to September).

As of May 2024, the number of foreign workers in Korea is 1.01 million, which is only 3.5% of the total number of employed people in Korea (28.576 million). Considering this, the probability of foreigners dying in an accident while working is much higher than that of Koreans. In the case of the fire disaster at the Aricell factory in Hwaseong, Gyeonggi-do, where 23 people died last year, 18 people were foreign workers. The number of applications for industrial accidents by foreign workers increased by 6.5% from the previous year to 10,161, exceeding 10,000 for the first time.

The aging of field workers is also considered a factor that makes it difficult to prevent accidents. Due to young workers' avoidance of industrial sites, the construction and manufacturing industry is experiencing a serious aging of workers. Elderly people with reduced physical abilities have difficulty coping with sudden accidents and have a high probability of death in the event of an accident. According to a survey by the Ministry of Employment and Labor, the proportion of people aged 50 or older among accident deaths subject to disaster investigation on a cumulative basis in the third quarter of 2024 reached 71.1%.

Cause 3Famous office for small and medium-sized businesses

The burden of establishing a safety and health system increases

One of the loopholes in the Serious Accident Act is that it is a virtually ‘ineffective’ system for small and medium-sized businesses. Most small and medium-sized companies lack the manpower and budget to establish a safety and health management system, and are unable to establish even the minimum safety guidelines set by law. According to a survey of 702 small and medium-sized enterprises with less than 50 employees last year by the Korea Chamber of Commerce and Industry, about half of the responding companies (47%) responded that they had not actually established a safety and health management system to prepare for the Serious Accident Act.

The biggest reasons why small and medium-sized enterprises cannot even respond are ‘lack of manpower’ and ‘cost burden’. The Serious Accident Act mandates the appointment of a safety and health manager and the provision of disaster prevention facilities. It is virtually impossible to establish a safety management system for small and medium-sized businesses that lack the manpower and budget to run the business.

An official in the construction industry raised his voice, saying, “Small and medium-sized construction companies are construction companies, not safety companies. It is difficult to recruit the design, public affairs, and civil engineering personnel required for the site, and it is virtually impossible to hire additional safety personnel.”

An official from company C, a pump manufacturer, said, “Large companies can invest as much money as necessary to establish a safety and health management system, but small and medium-sized companies do not have the budget to do so, and the youngest person at the production site is in his 50s.”

The government introduced a ‘joint safety manager system’ for small and medium-sized enterprises with insufficient budget and manpower, but the response on the ground was only lukewarm. The joint safety manager operates by jointly establishing a safety and health management system for each region and industry, and the government supports a portion of the operating costs. However, the field seems to be ignoring this due to the burden of ransom on safety managers.

According to data submitted by People Power Party lawmaker Woo Jae-jun from the Ministry of Employment and Labor, the employment rate for the joint safety manager support project as of August last year was only 50.8%. An official from a small business complained of frustration, saying, “We applied for government support to respond to the Serious Accident Act, but the experts only pointed out the actual situation and went away.” He added, “I don’t know how to improve facilities and appoint personnel, which cost tens of millions of won.”

Cause 4Rubber band type that comes and goes

Judgments are mixed due to lack of own sentencing standards

Sentencing standards that go back and forth also lead to distrust in the field toward the Serious Accident Act. Although three years have passed since the law went into effect, there is no independent sentencing standard. Moreover, rather than being heard by a collegial panel of several judges, the case is heard by a single judge. Because there is a large difference in sentences between judges, the rulings on similar cases are mixed.

Jo Seong-geun, a lawyer specializing in serious accidents at Daeryun Law Firm, explained, “The Serious Accident Act has no specific sentencing standards, and it is difficult to find related lower court precedents.” He added, “It is difficult for even lawyers to predict the sentence, so we have no choice but to ask ourselves, ‘We must somehow avoid being caught under the Serious Accident Act.’”

Ambiguous sentencing standards are the biggest concern for companies. An official from a small and medium-sized manufacturing company said, “Because the Serious Accident Act itself is complex and unclear, it is difficult for small and medium-sized businesses to understand the level of preparation they should take and under what circumstances they will be punished, even if they read the guidelines and receive related consulting.” An official from a food manufacturing company who requested anonymity said, “We don’t know when or how an accident will occur, but it is excessive to punish him with imprisonment for more than a year just because he is in charge of the business. In the case of small and medium-sized companies, if the CEO is arrested, the company will close and workers will become unemployed.”

“The reality is that it is difficult to predict to what extent small and medium-sized businesses must fulfill their obligations under the Serious Accident Act due to unclear wording. The unclear expressions must be made concrete and accurate guidelines presented,” said an official from the Korea Federation of SMEs and Startups in a similar context.

(Continued from original article)

Kim Gyeong-min, Maekyung Economy reporter (kmkim@mk.co.kr)

Reporter Ban Jin-wook, Maekyung Economy (halfnuk@mk.co.kr)

Cho Dong-hyun, Maekyung Economy reporter (cho.donghyun@mk.co.kr)

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The number of casualties actually increased... Is the Serious Accident Punishment Act useless? [Special Report] (Shortcut)