On the 6th, President Lee Jae-myung ordered the government departments to prepare disciplinary measures, including the revocation of licenses, for POSCO E&C, where serious industrial accidents have repeatedly occurred. With POSCO E&C expected to face severe penalties, the construction industry is expressing concerns that the construction sector will inevitably become even more stagnant while strengthening safety management.
On this day, President Lee directed that all legally feasible measures, including the cancellation of construction licenses and prohibition from public bids, be identified and reported regarding POSCO E&C, where serious industrial accidents have repeatedly occurred.
On the 4th, at a highway extension construction site being carried out by POSCO E&C, a foreign national worker fell unconscious due to an accident presumed to be caused by electrocution. This accident occurred just six days after President Lee criticized POSCO E&C during a Cabinet meeting on the 29th of last month, asking, "Is this not a murder with malice aforethought?" after the fourth worker fatality of the year.
The Ministry of Land, Infrastructure and Transport has begun an internal review of the cancellation of construction licenses (registration revocation) and prohibition from public bids in conjunction with relevant ministries, including the Ministry of Employment and Labor and the Ministry of Economy and Finance. Following a series of accidents at construction sites managed by POSCO E&C, the Ministry of Labor has launched an investigation into violations of the Industrial Safety and Health Act and the Serious Accident Punishment Act.
The Ministry of Land, Infrastructure and Transport is examining the possibility of revoking POSCO E&C's registration under the Basic Construction Industry Act. According to this act, if the Minister of Land, Infrastructure and Transport finds that a construction company has failed to meet license standards, engaged in misconduct, or violated other regulations, the minister may revoke the construction company's license or order a business suspension for up to one year.
So far, the only case of a construction license being revoked due to an accident happened to Dong-A Construction Industry. Dong-A Construction Industry had its license revoked in 1997 following the collapse of the Seongsu Bridge in 1994.
If POSCO E&C is registered for revocation, it would become the second construction company to have its license revoked in 28 years, following Dong-A Construction Industry. If the license is revoked, not only will new projects be impossible, but even if the license is reacquired, the bidding history will reset, making it difficult to win government projects.
An official from the Ministry of Land, Infrastructure and Transport noted, "We are looking into disciplinary measures, including the possibility of revoking the license under the Basic Construction Industry Act," adding that, "The law has changed completely since the revocation of Dong-A Construction Industry's license, so we are currently conducting a legal review."
There is also a possibility that POSCO E&C will receive a business suspension decision instead of registration revocation. If the business suspension decision is finalized, the company will be prohibited from entering into contracts and participating in bids related to new projects, including private and government contracts. However, if POSCO E&C files for cancellation of the administrative measure with the court, it can continue its operations until a final ruling is issued.
The construction industry is in a state of high tension due to these government moves. A representative from a construction company stated, "The occurrence of safety accidents at construction sites is not just a problem for POSCO E&C," noting further that, "While we are strengthening safety management, there is no guarantee that accidents will not occur, and the entire company is under tension." He further expressed concern that, "If strong sanctions such as license revocation are implemented, the construction industry will fall into stagnation."
Construction companies are closely monitoring the disciplinary results for POSCO E&C and have started to strengthen safety management. The Korea Construction Association (Construction Federation) launched a dedicated task force (TF) with the vice chairs of 17 affiliated organizations and research institutions, including the Korea Construction Industry Research Institute and the Korea Construction Policy Institute, and held an emergency meeting to eradicate serious accidents at construction sites.