CEOs can be jailed for fatal accidents; more anti-business bills in the making
The National Assembly passed a bill on punishment for serious industrial accidents Friday despite strong protests from business circles. Under the new law, business owners and chief executives can face at least one year in jail or a fine of up to 100 million won ($91,500) for workplace deaths.
Companies are in danger of being subject to harsh punishment. The law obliges them to take necessary measures to prevent accidents. But it defines their obligations broadly, so there is room for arbitrary interpretation. It will be practically impossible to prove they fulfilled their obligations. Once workplace deaths or other serious mishaps happen, it is almost certain that they will be jailed or fined.
Some small and midsized companies operate dozens of business establishments. Construction companies have work underway at numerous sites. Workplaces are too numerous for business owners or chief executives to manage. Few of the companies will remain unharmed if business owners or chief executives are jailed whenever serious accidents happen at a site among their many workplaces.
Business lobbies appealed to lawmakers to put the bill on hold, arguing it would impose an excessive punishment on top of existing penalties prescribed in the Occupational Safety and Health Act. But their appeal was not accepted.
The new law exempts business owners with fewer than five employees from punishment and gives a three-year grace period to those employing fewer than 50 workers. This reduces the effectiveness of the law and goes against equity.
Chiefs of central government agencies and heads of provincial governments have been exempted from punishment, too. It is hard to understand why public servants deserve this exemption.
No one will oppose calls for workplace safety. But a harsh punishment of the top management does not necessarily guarantee the prevention of industrial accidents. Rather, it may be counterproductive. Large companies will likely reduce domestic subcontracts and increase overseas outsourcing. Foreign companies may relinquish operations in Korea.
The government and the ruling party vow to help businesses whenever the opportunity arises. But in light of their erstwhile policies and approach to legislation, it seems they are just paying lip service. The business community has already been dispirited by tightened anti-business and anti-market regulations since the Moon Jae-in administration launched.
Businesses were almost stifled by the passage of three regulatory bills late last year -- amendments to the commercial law, the fair trade law and enactment of the financial group supervision law. To make matters worse, the law on corporate punishment for severe accidents will demotivate them further.
In a special parliamentary session next month, the ruling party plans to push through a controversial amendment to the distribution industry act to force shopping complexes to close two Sundays a month in a bid to help traditional markets and neighborhood shops. It also plans to enact a class action law and expand punitive damages. According to the Korea Enterprises Federation, more than 200 bills increase the burden on businesses. This is a result of the ruling party giving in to stubborn demands from labor and civic groups.
Moon did not attend the New Year greeting ceremony for businesspeople for the fourth consecutive year since he took office in 2017. This shows an aspect of his unfriendliness with business circles. The ceremony is the largest annual event hosted by the Korea Chamber of Commerce and Industry for its 180,000 members. Previous presidents had attended it all but three times since it was first held in 1962.
The Korean economy has managed to hold out amid the coronavirus pandemic largely thanks to companies putting up a good performance on the exports front. And yet the ruling party sides with labor circles and treats businesspeople as potential criminals. This will prompt them to consider pulling their businesses out of Korea. If it discards such views and motivates them, it will see more Korean companies perform remarkably in the global market.
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