National Assembly passes a bill on the punishment of serious accidents at the plenary session of the National Assembly on January 8, 2021. Korea Times file

By Kim Hyun-bin

Businesses are fearful of the introduction of the "Serious Accident Punishment Act" that is set to take effect, next year, as criminal charges could be slapped on company heads for mishaps that occur during the manufacturing process.

The Ministry of Environment released a commentary saying that even if the item in production is not harmful to the human body, it will be subject to the Serious Accident Punishment Act if the employer does not comply with safety and health obligations. The Act is set to be enforced on the 27th of January.

This Act means that accidents which take place during the production of generally safe consumer goods, such as automobiles and drinking water, businesses will be liable for punishment in the event of workplace accidents. In this regard, some criticize that the target of securing health and safety stipulated in the Serious Accident Punishment Act and the Enforcement Decree is excessively broad.

The central point of the argument is that durable goods and consumer goods and products that do not pose risks in and of themselves will also be subject to the Act.

Business lobby groups such as the Korea Enterprises Federation (KEF), the Korea Chamber of Commerce and Industry (KCCI), and the Korea Federation of SMEs, are expressing their concerns about the Serious Accident Punishment Act.

"The severity of sentences under the Serious Accident Punishment Act is not yet clear, so it is natural for a company to be scared if there is a chance that I will be affected. To have a possibility of going to prison is a completely different story," the KCCI chief Chey Tae-won said, recently. The KCCI is the country's most-influential business lobby, defending the best interests of large-sized conglomerates.

A survey result also found that Korea is the country with the highest incidence of punishments related to occupational safety. As a result of a recent investigation of 12 countries in various regions, including Europe, Asia and North America.

"Only Korea has become a country that has enacted a law that criminally punishes individual CEOs and assigns certain managers the duty to secure safety and health," the KEF said.

The situation for SMEs is even worse. In fact, more than half of small and medium-sized enterprises (SMEs) are of the view that it is impossible to fulfill the obligations of the act.

In a recent survey conducted by the Korea Federation of SMEs of 322 small and medium-sized manufacturing companies with 50 or more employees, 53.7 percent answered that it was "impossible" to comply with the mandatory requirements. In particular, 60.7 percent of companies with 50 to 99 employees answered that it was impossible.

This situation is the reason there is no successor of GM Korea President Kaher Kazem, who was appointed in September of 2017, as GM headquarters executives refused to work in Korea saying, "If I go to Korea, I will become a criminal immediately."

President Kazem was indicted by the prosecution in July of last year on charges of "illegal dispatch." The issue of the illegal dispatch of GM Korea started even before he took office in Korea and has been a controversial issue for the past nine years, but Kazem's position is also at risk of facing criminal liability, according to the "duty punishment rule" that punishes both the corporation and the CEO at the same time.