This article was published on the ChosunBiz RM Report site at 9:41 a.m. on Aug. 12, 2025.
The government is expected to announce a comprehensive workplace safety plan aimed at strengthening sanctions against corporations involved in serious accidents by the end of this month, as reported on the 12th. Measures such as the introduction of penalty surcharges, restrictions on public bidding, and lending limitations are under discussion. Industry insiders say, "This could be seen as a trio of measures that could impose a 'financial blow' on corporations that caused serious accidents."
◇ Just like the Fair Trade Commission hitting hundreds of billions to trillions… reviewing the introduction of penalty surcharges
The government is currently reviewing plans to introduce a 'penalty surcharge' for violations of the Occupational Safety and Health Act. The current Act mainly stipulates clauses that impose 'fines' for failing to comply with safety and health obligations. For example, a business owner who fails to report, or falsely reports, a serious accident will be fined up to 30 million won.
Fines and penalty surcharges are similar in that they are monetary penalties for violating obligations under administrative law. However, fines are punitive measures for order violations, whereas penalty surcharges aim to recover economic benefits obtained through illegal activities.
In particular, penalty surcharges have a 'punitive nature'. Minister of Employment and Labor Kim Young-hoon mentioned, "We will consider introducing punitive damages in the event of industrial accident fatalities," which aligns with this context. In fact, there have been cases where penalty surcharges of hundreds of billions to trillions of won were imposed, with violations of the Fair Trade Act being a prime example. Recently, the three major telecommunications companies, KT, SK Telecom, and LG Uplus, were penalized with a total of 96.3 billion won in penalty surcharges for colluding in violation of the Fair Trade Act. In contrast, the fines stipulated in the current Occupational Safety and Health Act only range from as low as 50,000 won to as high as 50 million won.
An official from the Ministry of Employment and Labor said, "This means enhancing economic sanctions through the introduction of penalty surcharges or an overall increase in fines." However, the government has not yet specified which actions such penalty surcharges will apply to or at what level the amounts will be set.
◇ Restricting public bidding and easy business suspension… "Decreased revenue and expense burden"
The criteria for requesting 'restrictions on public bidding' and 'business suspension' in case of industrial accidents will also be relaxed. Under the current Occupational Safety and Health Act, if an industrial accident occurs where 'two or more workers die at the same time' due to failure to take safety and health measures, the Minister of Employment and Labor can request such measures to the heads of relevant organizations and the Public Procurement Service.
The government believes that the condition of 'two or more deaths at the same time' is overly strict. An official from the Ministry of Employment and Labor noted, "We are reviewing various ways to relax the relevant requirements, including excluding 'simultaneously.'"
Both restrictions on public bidding and business suspensions can directly lead to reduced revenue or expense burdens for corporations. In particular, construction companies in Korea tend to rely heavily on public orders for their contracts.
◇ Restrictions on loans and guarantees due to company credit ratings are also tightened for companies that experience industrial accidents.
Plans to tighten loans for corporations that cause industrial accidents are also under consideration. Banks currently consider not only financial factors but also non-financial factors like ESG (Environmental, Social, and Governance) when assessing corporate credit ratings. If an industrial accident or serious accident occurs, it is intended that the ESG score will be lowered, leading to disadvantages in loans and guarantees. It is reported that not only general banks but also policy finance institutions are considering imposing penalties on corporations with serious accidents, while applying lower loan interest rates for those increasing safety investments.
President Lee Jae-myung emphasized the need to eradicate industrial accidents, while the relevant ministries, including the Ministry of Employment and Labor, are preparing a comprehensive workplace safety plan. During a Cabinet meeting on July 29, he stated, "We need to ensure that much larger expenditures can occur than companies saving expenses by not taking safety measures," and instructed, "Make sure to institutionalize this." Right after returning from summer vacation on August 9, he also said, "Going forward, all incidents of industrial accident fatalities should be reported directly to the president as quickly as possible."