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, there should be multiple disclosures to make the stock price plunge."
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 still do not 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 with Samsung C&T and Pusan Cast Iron in Oct., disclosures followed in Nov. by Daewoo E&C, POSCO DX, POSCO Holdings, HJ Shipbuilding & Construction, DL E&C, DL, Hanchang Paper, TAEYOUNG E&C, TY Holdings, and Dongbu Corporation, and in Dec. by Hankuk Paper, Haesung Industrial, Namkwang Engineering & Construction, and Kia. That is an average of three disclosures per week.
Looking at the stock moves on the day of disclosure, eight corporations ended higher. Samsung C&T rose more than 11% on the day of 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 halted after the Korea Exchange (KRX) moved earlier to delist it.
These corporations' stock prices tended to move in tandem with the market index that day. For nine of the 16 corporations, their stock moves matched the KOSPI and KOSDAQ on the day. Of the remaining five whose directions diverged from the indexes, Dongbu Corporation and Hankuk Paper rose even though the indexes fell.
Lee Seon-yeob, head of AFW Partners, said, "Investors do not seem to perceive the occurrence of serious industrial accidents as a major risk factor for corporations." He added, "Serious industrial accidents may partly damage corporate earnings, but not enough to change their direction."
The government says it needs more time to assess the measure since it is still in the early stage. A "stronger" disclosure regime is also in the works. The Ministry of Employment and Labor (MOEL) has allocated 1 billion won in next year's budget to introduce a "safety and health disclosure system." Separate from the FSS, it plans to build an independent disclosure platform to require regular and ad-hoc publication, as early as Apr. 2027, not only of industrial accident occurrences at business sites with 500 or more employees but also of safety investment plans, recurrence prevention measures, and safety management systems.