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Construction site. [Photo courtesy of Yonhap News] |
[Alpha Biz= Kim Jisun] The construction industry is facing mounting pressure as the government rolls out stricter “Comprehensive Labor Safety Measures” targeting serious industrial accidents. Companies warn that even a single fatal accident could now push many firms to the brink of bankruptcy.
On the 15th, the government announced that under the new policy, companies will face penalties amounting to 5% of annual operating profit—or a minimum fine of KRW 3 billion, even for loss-making firms—if three or more fatalities occur in a year.
In addition, the Ministry of Employment and Labor will now have the authority to request the cancellation of a construction company’s business license if serious accidents are found to occur repeatedly. Furthermore, if a company receives two suspensions within three years and another incident occurs, it will be barred from undertaking new projects, contracts, or subcontracting activities.
With President Lee Jae-myung’s corporate safety policies becoming a reality, construction firms are voicing concern. Many argue that the penalties are disproportionate to their financial capacity. According to the Korea Construction Association, of 17,188 general contractors nationwide last year, 16,708—or 97.2%—reported annual operating profits below KRW 3 billion. In other words, most companies would see their entire annual profit wiped out by a single fine.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
