In this newsletter, we provide a summary and the implications of four cases in which Kim & Chang was involved, among the 13 cases (as of April 30, 2024) where the Prosecutors’ Office (the “PO”) decided not to indict suspects for violations of the Serious Accidents Punishment Act (the “SAPA”).

Over two years have passed since the SAPA went into effect.[1] As of April 30, 2024, more than 500 cases had been investigated for alleged violations of the SAPA. While the PO indicted Responsible Management Personnel (“RMPs”) in 47 cases, it decided not to indict RMPs in 13 cases, five of which were decided in 2024. Considering that there are still many cases under investigation for potential violations of the SAPA, it would be helpful to review these cases in order to understand better how to establish and enhance the safety and health management system in accordance with the SAPA.

This case involved a gas explosion and a fire at a petrochemical plant, resulting in the passing of a worker and causing injuries to others. In this case, the key issues were (i) whether the Chief Safety Officer (the “CSO”) could be deemed as the RMP, and (ii) whether the failure to comply with the procedures for identifying and improving harmful and/or dangerous factors at the site could be deemed a violation of the SAPA.

The PO acknowledged that (i) the representative director delegated the overall and final decision-making authority regarding the company’s safety and health organization, personnel, budget, among others, to the CSO, and that (ii) the representative director did not exercise the final decision-making authority in matters related to safety and health, such as giving instructions or engaging in the company’s safety and health matters. In addition, with respect to the obligation to prepare procedures for identifying and improving harmful and/or dangerous factors under the SAPA and the Enforcement Decree thereof, the PO determined that there were existing procedures for “risk assessment” and “safety work approval” (the PO found it difficult to conclude that a failure to comply with these existing procedures at the site constituted a violation of said obligation.) Accordingly, the PO concluded that there was no violation of the obligation to prepare such procedures under the SAPA.

This case is significant in that it was the first case in which the law enforcement agency recognized a CSO as the RMP and confirmed that a CSO can be deemed as the RMP if it could be proven that he/she had been practically delegated and exercised the overall and final decision-making authority regarding safety and health. In addition, because the “obligation to prepare procedures” under the SAPA and the “obligation to comply with such procedures” at the site should be distinguished from each other, this case shows that if the RMP faithfully performs his/her obligations to prepare procedures under the SAPA, it cannot be concluded that he/she breached his/her obligations under the SAPA.

In this case, during the inspection of a truck at a car manufacturer’s plant, the truck’s cap fell, resulting in a worker’s passing. The issues in this case were (i) whether the RMP fulfilled his/her obligations under the SAPA, and (ii) whether the worker performed the work in an ordinary manner.

The PO acknowledged that the accident was attributable to the worker’s unusual work method. The PO also determined that it would be difficult to conclude that (i) the RMP was required to establish procedures to identify and improve harmful and/or dangerous factors in relation to unusual work activities, and (ii) the RMP willfully violated such duty (if any duty were found to exist). Accordingly, the PO concluded that there was no violation of the SAPA.

This case is meaningful because it revealed the difficulty of determining the RMP’s intent to violate the duty under the SAPA when an industrial accident occurs as a result of a worker’s unusual behavior. This case is similar to court precedents and other instances where the law enforcement agencies did not indict individuals responsible for accidents caused by unconventional work methods because it was deemed challenging to conclude that company owners intended to violate the Occupational Safety and Health Act.

This case involved a worker who passed away while repairing a steelmaker’s crane. The issue in this case was whether the company’s RMP properly established risk assessment procedures (i.e., procedures for identifying and improving harmful and/or dangerous factors stipulated under the SAPA and the Enforcement Decree of the SAPA).

The PO found that (i) the company’s risk assessment procedures were consistent with the “Guidelines on Workplace Risk Assessment” issued by the Ministry of Employment and Labor, (ii) the company conducted regular and non-periodic risk assessments in the presence of workers, and (iii) risk assessment procedures were in place to assess the risks involved with the company’s subcontractors. Therefore, the PO determined that there was no violation of the SAPA.

This case is important because it provided clarification on the level at which risk assessment procedures must be established at in order not to be found in violation of the SAPA with respect to the obligation to prepare procedures for identifying and improving harmful and/or dangerous factors (the obligation that has become the most contested issue in SAPA violation cases).

This case involved an explosion of a heat exchanger at a petrochemical plant during airtight testing after cleaning the heat exchanger, which resulted in the death of several workers and injury of others. The accident occurred immediately after the enforcement of the SAPA and the main issue was whether the company’s RMP properly fulfilled the obligation to ensure safety and health under the SAPA.

The PO found that (i) the goals and management policies for safety and health established by the company’s RMP were abstract and general, and thus could not be deemed to be in line with the intent of the SAPA, but (ii) other obligations to ensure safety and health had been fulfilled, and (iii) it would be difficult to find any causal relationship between the violation of the obligation to establish safety and health goals (as well as management policies) and the accident. As a result, the PO determined that there was no violation of the SAPA.

In this case, one of the key issues in question was that the cause of the accident was somewhat unclear. In particular, technical and sophisticated analysis, as well as proof of defects in some components of the heat exchanger that caused the explosion (and the reason for such defects in the components), were crucial. A root cause analysis also served as a key basis for the decision in this case.

This case provides a general guidance on the necessary level of compliance with the safety and health obligation under the SAPA to ensure that the RMP is not deemed in violation of the SAPA. Furthermore, this case is noteworthy because it considered the possibility of proving causation between a breach of the obligation and the occurrence of an accident. In other words, the PO reviewed, in detail, the elements that must be satisfied to find a violation under the SAPA.

The criteria and grounds for the no-indictment decisions in the aforementioned cases may serve as reference when determining the appropriateness of the established safety and health management system and whether a company fulfilled its obligation to ensure safety and health. Furthermore, as the SAPA requires continuous safety and health management and improvement through periodic inspections (rather than one-off fulfillment), it is advisable for companies to refer to the mentioned cases, improve/supplement necessary matters and minimize future business uncertainty that may arise under the SAPA. It should be noted that in the discussed cases, the PO did not review whether semi-annual inspections had been conducted (one of the obligations to ensure safety and health), given that the accidents occurred within six months of the effective date of the SAPA.

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Footnotes

[1] Effective date: January 27, 2022