The new law that holds chiefs responsible for accidents has become the biggest fear

SPC Group Chairman Heo Young-in (far left) apologizes for the recent death of a worker during a press conference at the company’s headquarters in Yangjae, southern Seoul, on 21 october. (SPC Group)

Bowed heads, mumbled excuses and camera flashlights.

The public apology issued last week by the head of South Korean food and beverage giant SPC was every businessman’s worst nightmare.

Chairman Hur Young-in of the food and bakery giant has apologized for the death of a 23-year-old worker who was crushed by a sauce mixer at a SPC-affiliated factory during a shift of night.

The president is not only facing public humiliation and a nationwide boycott of his company’s products, he is also facing legal action from the family of the deceased employee for violating the Anti-Corruption Act. serious accidents, a new law that came into force in January and has become a source of fear for businesses ever since.

If found guilty under SAPA, he could face more than a year in prison or a fine of up to 1 billion won. Legal experts say the law could put CEOs behind bars for up to 30 years.

SAPA aims to prevent serious accidents at work by imposing heavy criminal and administrative liability on companies and their managers.

But some legal experts have pointed out that the law lacks specifics to establish the link between workplace accidents and CEO liability.

“The law needs to be clear on how the CEO’s failure or refusal to follow safety codes was one of the main causes of the workplace disaster,” Prof Kwon O-Sung said. of Sungshin Women’s University during a recent press conference at the National Assembly last month.

“The gross negligence of the CEO must also be taken into consideration. The law must remain, but it must be changed.

The data shows that Korea actually needs to improve its workplace safety measures.

A total of 432 people died in Korea from work-related accidents in the first eight months of the year, according to the Ministry of Labor and Employment. The figure is only nine people less than for the same period last year.

Separate data released by the Ministry of Lands, Infrastructure and Transport on Wednesday showed that a total of 61 people died on construction sites from July to September this year.

In terms of the number of work-related deaths per worker, Korea improved last year to 0.43 per 10,000 workers from 0.52 in 2017. But that’s far more than the Organization’s average. cooperation and development of 0.29 for 2021. Germany’s figure was 0.15, while Japan reported 0.13 last year.

The Korean government will announce a five-year roadmap to reduce work-related fatalities and injuries below the OECD average. At the same time, he is looking for ways to “lighten” the law, under the instructions of President Yoon Suk-yeol.

Yoon called it “excessive penalty regulations that stifle business activity.” The law was proposed by the left-leaning Minor Justice Party and backed by the then-ruling Democratic Party in January 2021, before Yoon came to power.

But the unions want to keep the law unchanged, saying there have been no real changes yet and no one has been punished.

“Business leaders say preventative measures come before punishment and call for relief from SAPA. But they don’t actually do anything to improve the law or the system,” said a spokesperson for the Korean Confederation of Trade Unions.

Foreign companies, for their part, say SAPA could become a major obstacle to Korea’s ambitions to become a global economic and financial center, adding to already strict regulations.

“This is a very important moment for Korea in the sense that we need more foreign investment and further enhanced national competitiveness, and the application of SAPA will certainly be a considerable burden for foreign-invested enterprises. “, said James Kim, President and CEO of AMCHAM. .

“In Korea, regardless of their nationality, CEOs are forced to take personal responsibility for issues that they cannot even control. There needs to be clearer regulations in place to avoid unfair penalties for CEOs, for cases where there is no clear evidence that a serious accident has occurred due to intentional or malicious breach by The direction.”

“But, at the same time, American companies should also ensure that they follow all relevant South Korean policies. I also think that these companies have an obligation to have experienced CEOs who can manage the complexity of operating in a country of this size.

With the law still debatable, Lee Byung-tae, a business professor at the Korea Advanced Institute of Science and Technology, said such security laws need to get to the heart of the problem. It aims to bring about systematic overhaul rather than simply punishing CEOs, he said.

“There is something called the Peltzman effect. The law should provide incentives that could lead to changes in their behaviors rather than focusing on punishment,” Lee explained.

“It’s when security measures are put in place that the perception of risk decreases, leading people to make riskier decisions. Safety laws don’t always guarantee safety and punishing CEOs in this way could have side effects.”

By Jung Min-kyung ([email protected])

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