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Posco E&C faces potential loss of construction license after workplace fatalities

Published: 06 Aug. 2025, 18:36 Updated: 06 Aug. 2025, 19:38

Posco E&C's headquarters in Songdo, Incheon is seen on Aug. 6. [NEWS1]

Posco E&C is facing an unprecedented reckoning after President Lee Jae Myung on Wednesday ordered officials to examine all legal options against the company, including revoking its construction license and barring it from public bids, following a string of deadly workplace accidents.

The company has reported five fatal accidents so far this year.

Bans on public bidding over safety lapses are not unusual. After the collapse of an underground parking garage at a GS Engineering & Construction site in Incheon’s Geomdan neighborhood in April 2023, the company was hit with an eight-month business suspension. The Korea Land & Housing Corporation (LH) also barred GS E&C from public bids for a year.

Over the last decade, LH has banned 123 construction companies from bidding on its projects.

But revoking a construction license over a worker’s death would break new ground.

The only case of a revoked license dates back to the aftermath of the collapse of Seongsu Bridge in 1994. But Dong-A Construction’s license was cancelled due to faulty construction, not fatalities.

Even after the 2022 collapse of the Hwajeong I’Park apartment complex in Gwangju, which killed six people, HDC Hyundai Development Company only received a one-year business suspension from the Seoul Metropolitan Government in May this year, despite calls for harsher penalties.

A construction license may be revoked if a builder “causes significant structural damage to a major part of a facility through intentional or negligent poor construction, resulting in danger to the public,” according to Article 83 of the Framework Act on the Construction Industry.

“The law and its enforcement decree do not include any clause that allows for forced cancellation of a license due to a single worker’s death,” said a construction industry official, who requested anonymity. “That may be why the president ordered a legal review rather than immediate action.”

Another industry insider, however, suggested that “there is room for interpretation, and the term ‘danger to the public’ could be extended to include risks to the lives and safety of on-site workers.”

“Given the president’s strong stance, this could either follow past precedents or establish a new, more severe example,” said Lee Eun-hyung, a research fellow at the Korea Institute for Construction Policy. “Even if no actual action is taken, it will likely serve as a wake-up call for the industry.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY KIM TAE-YUN [[email protected]]