Around 2020, a series of worker fatalities occurred consecutively at the Ulsan Shipyard of HD Hyundai Heavy Industries (formerly Hyundai Heavy Industries). In response to these accidents, the person in charge of safety management at Hyundai Heavy Industries was sentenced to a suspended prison term. Since the accidents happened before the implementation of the Serious Accident Punishment Act, the management of Hyundai Heavy Industries was not included in the list of punishment targets.
According to South Korean media reports, the Second Division of the Supreme Court of South Korea has recently made a ruling, upholding the original verdict that Hyundai Heavy Industries’ shipbuilding department representative A, who was prosecuted for violating the Occupational Safety and Health Act and causing death by professional negligence, was sentenced to 8 months in prison and 2 years of probation, and that the special ship department representative B was sentenced to 6 months in prison and 1 year of probation. The court also upheld the original ruling imposing a fine of 50 million won (approximately US$36,100) on Hyundai Heavy Industries as a legal entity.
According to reports, the second-instance court held that there were no problems with the first-instance conviction and sentencing, and rejected the appeal; Hyundai Heavy Industries continued to appeal to the Supreme Court of South Korea, and the Supreme Court ultimately ruled that “the original trial (second instance)’s upholding of the first-instance judgment did not violate the rule of experience or contain legal misunderstandings” and upheld the original judgment.
This case involves accidents that occurred around 2020. At that time, Hyundai Heavy Industries’ Ulsan shipyard had three fatal accidents involving workers within nine months, one involving a general contractor employee and two involving subcontractor workers:
The first fatality was a fall. A Hyundai Heavy Industries outsourced worker lost his footing and fell to his death while assembling scaffolding on a 24-meter-high LNG storage tank. There was no fall protection net installed in the area at the time of the accident.
Two months after the first accident, a full-time employee of Hyundai Heavy Industries was caught in a hatch door while performing hatch calibration work and died nine days later due to brain crush injuries. At the time of the accident, Hyundai Heavy Industries had neither compiled a hatch calibration work plan nor conducted a corresponding risk assessment.
About a month after the second accident, a subcontracted worker at Hyundai Heavy Industries died from argon gas asphyxiation while performing welding work on the deck area. At the time of the incident, the involved pipeline was not marked with a “No Entry” sign, and there were no supervisors present at the site.
Due to frequent accidents, South Korean prosecutors have filed charges against Mr. A, representative of the shipbuilding division of Hyundai Heavy Industries, the general contractor, and Mr. B, representative of the special ship division, for violating the Occupational Safety and Health Act and for negligent homicide.
The first-instance court found all facts in the complaint established. The court held the general contractor liable for the deaths of the two subcontracted workers. A argued that, according to the Occupational Safety and Health Act, fall protection nets were not required during scaffolding assembly work, and that the subcontractor had never requested their installation, thus excluding liability. However, the court did not accept this claim.
The court said: “Although the Occupational Safety and Health Act does not specify the general contractor’s obligation to take safety measures for scaffolding assembly, the general contractor should have assumed the obligation to take safety measures when workers were working in an area with a risk of falling, which constituted an illegal act and should be convicted.”
The court found A responsible for the death of a subcontracted worker who suffocated from argon gas. A argued that the worker was working in an open space, so the general contractor did not violate its safety measures obligations under the Occupational Safety and Health Act, but this argument was also rejected by the court.
The court held that: “The worker’s work was not carried out in an open space, but in a confined space. The worker could have foreseen that argon gas might enter the pipeline, but he did not take appropriate measures, which constituted negligence.”
The court found that Mr. B was responsible for the death of the regular employee who was crushed to death. Hyundai Heavy Industries argued that it had “completed the preparation of a door calibration work plan and risk assessment by establishing standard operating procedures and a maintenance manual,” but the court did not accept this argument.
The court stated: “The mere preparation of a Standard Operating Instructions and Maintenance Manual does not guarantee the completion of the calibration work plan and risk assessment. Mr. B, acting under the duty of care stipulated in the Occupational Safety and Health Act, failed to implement necessary measures, such as training and protective measures, to address the risk of pinching, resulting in the death of the general contractor’s employee.”
At the same time, the claim that “B should not be held responsible for the accident caused by a colleague’s gross negligence” was also rejected by the court. The court pointed out: “Even if the colleague was grossly negligent, B failed to fulfill his obligations to prepare a work plan, which led to the accident, so this claim cannot be upheld. If substantive safety measures had been taken, the employee’s death could have been avoided.”
However, the court imposed a suspended sentence, considering that the general contractor had taken measures to prevent the accident from happening again after the accident and that the family of the deceased did not request punishment.
In addition, since the three fatal accidents mentioned above occurred before the implementation of the Major Accident Punishment Law, Hyundai Heavy Industries’ management was not punished. However, some argue that if the Major Accident Punishment Law had been applied, they might have been found not guilty.
A South Korean industry insider said, “Judging from the judgments made after the implementation of the Major Accident Penalty Act, large general contractors can avoid penalties as long as they fulfill their documentation obligations. If this incident had occurred after the implementation of the law, they might have been found not guilty. Although the revision of the Occupational Safety and Health Act and the implementation of the Major Accident Penalty Act have increased penalties for general contractors, in reality, it is extremely rare for large general contractors to be prosecuted and punished. Laws that emphasize penalties alone cannot solve the safety issues between general contractors and subcontractors.”
Some in the South Korean industry have pointed out that in order to resolve safety issues involving general contractors, “the scope of safety measures required of general contractors and subcontractors must be clearly defined in order to truly prevent accidents from occurring. The law must not only strengthen penalties, but also clearly define the scope of responsibility of general contractors and subcontractors in order to effectively implement preventive measures.”