Since Oct., domestically listed companies must disclose on the same day they report to the Ministry of Employment and Labor (MOEL) when a fatality occurs due to a serious industrial accident. The measure was introduced after President Lee Jae-myung said in Jul., following the death of a worker in his 60s in a serious industrial accident at a POSCO E&C construction site, that "if fatal accidents from industrial accidents occur habitually, the company should disclose multiple times and make the stock price crash."
However, looking at the same-day stock prices of corporations that disclosed serious industrial accidents over the past month and a half, half actually rose. It is hard to say the policy effect the government expected is materializing. Experts said investors do not yet appear to be considering the occurrence of serious industrial accidents as an investment risk factor.
As of the 7th, there have been 16 reports of serious industrial accidents posted on the Financial Supervisory Service's Data Analysis, Retrieval and Transfer System (DART). Starting in Oct. with Samsung C&T and Pusan Cast Iron, disclosures in Nov. came from Daewoo E&C, POSCO DX, POSCO Holdings, HJ Shipbuilding & Construction, DL E&C, DL, Hanchang Paper, TAEYOUNG E&C, TY Holdings, Dongbu Corporation, and in Dec. from Hankuk Paper, Haesung Industrial, Namkwang Engineering & Construction, and Kia. That is an average of three disclosures per week.
Looking at stock moves on the disclosure day, eight corporations ended higher. Samsung C&T rose more than 11% on the day of its disclosure. Next in order of largest gains were HJ Shipbuilding & Construction, TAEYOUNG E&C, Kia, TY Holdings, Hanchang Paper, Dongbu Corporation, and Hankuk Paper. In contrast, six corporations fell. POSCO DX dropped more than 6%, and Daewoo E&C, DL, POSCO Holdings, Namkwang Engineering & Construction, and DL E&C also declined. Haesung Industrial finished trading at a level similar to the previous day. Pusan Cast Iron was under a trading halt after the Korea Exchange (KRX) decided earlier to delist the company.
These corporations' stock prices showed a strong tendency to move in line with the market that day. Of the 16 corporations, nine moved in the same direction as the KOSPI and KOSDAQ that day. Among the remaining four whose stock moves diverged from the indexes, Dongbu Corporation and Hankuk Paper rose even though the indexes fell.
Lee Sun-yeob, head of AFW Partners, said, "Investors do not seem to recognize the occurrence of serious industrial accidents as a major risk factor for corporations." He added, "Serious industrial accidents may partly damage corporate profits, but not enough to change their direction."
The government says it needs to watch a bit longer as the rollout is in its early stage. A "tougher" disclosure regime is also in the works. The Ministry of Employment and Labor (MOEL) allocated 1 billion won to introduce a "safety and health disclosure system" in next year's budget. The plan is to build a separate disclosure platform from the Financial Supervisory Service (FSS) and, as early as Apr. 2027, require regular and ad hoc publication not only of the status of industrial accidents at business sites with 500 or more employees but also safety investment plans, recurrence prevention measures, and safety management systems.