Gov't mulls up to 10 billion won fines for serious industrial accidents

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Gov't mulls up to 10 billion won fines for serious industrial accidents

Published: 12 Aug. 2025, 12:40 Updated: 12 Aug. 2025, 20:19

Audio report: written by reporters, read by AI

Safety helmets and gloves are laid out at a construction site. [NEWS1]

The government and ruling party are pushing a plan to impose extremely high fines on companies responsible for serious industrial accidents, following President Lee Jae Myung’s declaration of a “war on serious accidents” and his call for strong measures such as punitive damages.

Other measures under review by multiple ministries include tighter restrictions on public tenders, stricter suspension-of-business criteria and loan disadvantages for companies that experience such accidents. The aim is to combine the criminal penalties of the Serious Accidents Punishment Act with administrative, civil and financial sanctions to curb workplace fatalities.

"We are considering stronger economic sanctions, such as heavier fines and penalties," said an official from the Ministry of Employment and Labor on Aug. 10. "Despite the implementation of the Serious Accidents Punishment Act, there has only been one case that has resulted in an actual prison sentence. Criminal cases take a long time to investigate and adjudicate, which has led to discussions on introducing faster administrative measures."

An official from the National Assembly’s Environment and Labor Committee noted that it is reviewing revisions to the Occupational Safety and Health Act, "given that the president raised the issue directly."

The punitive damages clause is already in the Serious Accidents Punishment Act, allowing courts to order companies to pay up to five times the amount of actual damages to victims. However, it has not yet been applied in a ruling. If the high-penalty system under discussion is added to the Occupational Safety and Health Act, the government could impose substantial financial liability without waiting for a court verdict.

Jeong Hee-min, CEO of Posco E&C, makes a public apology on July 29 at the company's Incheon headquarters after a string of worker injuries and deaths that took place earlier this year. [YONHAP]

Currently, the act allows fines of up to 1 billion won ($720,000) for violating subcontracting bans on specific kinds of specialized work. Industry observers expect discussion to center on proposals such as a 10 billion won cap for accidents that kill three or more workers simultaneously or within a year, or a fine of up to 3 percent of annual revenue, modeled after the Construction Safety Special Act and the Fair Trade Act. A minimum penalty threshold is also likely to be introduced.

Other possible measures include lowering the suspension-of-work trigger from two deaths at the same time to one, or revising the “simultaneous” condition. Financial regulators are also considering whether to reflect the occurrence of serious accidents in corporate loan evaluations, which could reduce loan limits or raise interest rates.

The National Policy Planning Committee is set to announce industrial accident eradication as the top employment and labor policy goal under the theme “A country where workers are healthy and safe.” Planned initiatives include: making it mandatory to budget for safety management in subcontracted construction projects; introducing a phased corporate safety and health disclosure system; adding penalties for workplaces that fail to conduct risk assessments; and improving workers’ rights to halt unsafe work and demand corrective action.

Business groups warn that layering new administrative regulations on top of existing criminal liability will overburden small and medium-sized companies.

Workers labor at an apartment construction site in Seoul on Aug. 11. [YONHAP]

"Economic sanctions were originally proposed as an alternative to criminal liability for individuals when the law was enacted," said an insider from the business industry. "Imposing both could only force companies to focus solely on avoiding penalties."

According to industry data, 70 percent of the 44 severe accident cases ruled on as of May involved small businesses, compared to 23 percent for midsize companies and 5 percent for large firms.

"Paperwork requirements account for what feels like about half the actual on-site workload," said a representative of a mid-sized construction company. "Stricter laws are increasing formalities rather than improving safety."

Experts argue that the law must be realistic to be effective: Set detailed rules where necessary, but loosen them to suit the different requirements of the scene.

"Standards should be tailored by industry and size, and applied flexibly for it to work properly," said Ham Byeong-ho, a professor at Korea National University of Transportation’s Graduate School of Chemical Material Sciences. "Requiring detailed risk assessments for entrapment hazards at sites where falls are the only real danger could just be inefficient."

"Prevention and support, rather than punishment, should be the long-term focus to truly decrease the occurrence of workplace accidents at small and mid-sized companies," said Yoon Dong-yeol, a business professor at Konkuk University. "Tax credits for safety facility investments and differentiated support for dispatching specialists based on industry size should also follow."

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom staff.
BY KIM YEON-JOO,YANG SU-MIN [[email protected]]