Hanwha Ocean has found itself in an awkward situation after the death of a supervisor from Brazilian shipowner Petrobras, who fell at the company's business sites in Geoje, South Gyeongsang, recently. While the likelihood of applying the Serious Accidents Punishment Act is not expected to be high, delivery delays are anticipated due to work stoppages, and the outcome of the fact-finding investigation could affect future projects in Brazil. Petrobras is Brazil's state-run oil producer.
The Ministry of Employment and Labor is investigating the fatal accident that occurred at a Hanwha Ocean business site on the 3rd. The supervisor fell into the sea from an offshore plant being built by Hanwha Ocean. Industry sources say it will be difficult to apply the Serious Accidents Punishment Act because the shipowner is a foreign subsidiary and the person issuing work orders also belongs to an overseas entity. However, depending on the results of the investigation, those involved could face charges of professional negligence causing death.
Jeon Hye-seon, a labor attorney at Open Labor Law Firm, said, "Because Petrobras is an overseas entity, it will likely be difficult to apply the Serious Accidents Punishment Act. If an employee of a foreign company came to Korea on business and had an accident, the management officials who issued the work orders would also be overseas, so domestic law could not be applied."
However, concerns have been raised that this accident could affect Hanwha Ocean's ongoing local projects in Brazil. Hanwha Ocean is expanding its local operations in line with Brazil's shipbuilding reconstruction plan. Brazil's Ministry of Ports and Aviation announced it will provide 5.5 trillion won to expand shipyards and build port infrastructure, and Petrobras plans to increase its fleet by 25 ships by 2035.
Hanwha Ocean is pursuing partnerships with local firms to secure a local production base to bid on future offshore development projects in Brazil. This is to meet requirements such as mandatory use of local parts.
Hanwha Ocean plans to deliver the offshore plant it is currently building by next Sept., but the death has made delivery delays likely. The offshore plant was won in 2021 in a consortium with Italy's Saipem. Hanwha Ocean is responsible for the lower part of the structure and some upper structures, while Saipem handles the rest. The contract value is $2.3 billion (about 3.2 trillion won), with Hanwha Ocean accounting for $1 billion and Saipem $1.3 billion.
The accident occurred during a load test of the completed structure when equipment that could not bear the weight tilted, and responsibility could vary depending on the cause of the equipment's failure during the load test.
A shipbuilding industry official said, "Penalties for delayed delivery or problems with future orders could arise, but it depends on how Hanwha Ocean negotiates with the shipowner." Typically, if ship delivery is delayed, a penalty of about 0.1% of the ship price per day of delay must be paid, so prolonged accident investigations increase the burden.
Hanwha Ocean halted work after the accident and is conducting an investigation. The day after the accident, CEO Kim Hee-chul issued an apology letter promising support for the bereaved families, determination of the cause of the accident and measures to prevent recurrence. A Hanwha Ocean official said, "We are awaiting the investigation results," and added, "We will do our best to manage the aftermath of the accident and ensure the project is delivered normally so that there is no impact on the business."