3 Years of the Serious Accidents Punishment Act
"Can It End the Outsourcing of Death?" The Construction Safety Special Act Unveiled

[비즈한국] Today, a worker who went to a construction site did not return home. The construction industry remains the sector with the highest number of fatal accidents in Korea. To prevent tragic accidents where workers lose their lives due to failure to meet safety or health obligations, our society enacted the Act on Punishment for Serious Accidents (Serious Accidents Punishment Act), which went into full effect in January 2022. However, the number of workers who lose their lives at construction sites every year still remains in the triple digits. What efforts should our society make to reduce fatalities at construction sites?

"Responsibility Commensurate with Authority": Construction Safety Special Act Proposed

According to the National Assembly, Representative Moon Jin-seok and 10 other members of the Democratic Party of Korea proposed the Construction Safety Special Act on the 27th of last month. The bill defines the requirements that various entities involved in construction—such as project owners, designers, contractors, and supervisors—must follow to ensure a safe construction site. The purpose is to create a safe working environment by assigning responsibilities to construction participants that are commensurate with their authority. Previously, the responsibility for accidents at construction sites tended to be concentrated on entities with relatively less authority, such as subcontractors or construction workers.

Representative Moon Jin-seok stated, "The Construction Safety Special Act is a law that defines the duties and responsibilities of each entity involved in the construction industry, and it is structured to hold entities with greater authority accountable accordingly. While the Serious Accidents Punishment Act enhances safety by strengthening penalties, the Construction Safety Special Act improves safety on-site by clarifying the responsibilities of each entity. The bill also clarifies responsibilities so that the construction industry does not face unreasonable punishment for accidents caused by irrational construction periods and cost setting by the project owner or a worker’s failure to follow instructions."

Introducing Project Owner Responsibility to Guarantee Proper Construction Costs and Periods

A notable point is the imposition of responsibility on the project owner. Under the bill, construction project owners must provide appropriate time and costs so that designers, contractors, and supervisors can perform their work with safety as a priority. For construction projects of a certain size, such as buildings with a total floor area of 300㎡ or more, the project owner is required to undergo review or inspection by an agency to ensure the construction period and costs are appropriate. Although the construction period and costs determined at the project inception phase have been identified as factors determining a contractor's safety management capacity, there has been no specific law defining the responsibility of the project owner.

Kang Han-soo, Secretary-General of the Korean Construction Workers' Union (KCTU), assessed, "Responsibility for project owners was missing from current laws that define industrial safety responsibilities, such as the Occupational Safety and Health Act or the Serious Accidents Punishment Act. Even if a contractor wants to manage safety well, if the construction period is too short or costs are set too low at the inception phase, they are forced to rush the work while cutting costs. It creates a structure where safety accidents are inevitable before the construction even begins. The core of this law is to create the prerequisite for safe construction by defining the project owner's responsibility."

Clarifying Construction Companies' Safety Obligations… Backlash Against 3% Revenue Penalty

Responsibilities for construction companies have also been clarified. The proposed Construction Safety Special Act stipulates that the contractor who signs the contract directly with the project owner is responsible for on-site safety management. It assigns the duty to directly install safety facilities used by multiple types of workers, and if two or more contractors are working at the same site simultaneously, they must coordinate before work begins to ensure tasks do not interfere with each other. The number one cause of fatal accidents at construction sites is falls, often occurring because safety facilities like guardrails or fall-prevention nets were not installed properly.

In particular, strong administrative sanctions will be imposed on construction entities that cause fatal accidents due to failure to meet safety management obligations. According to this bill, construction businesses, construction engineering businesses, and architects who lead to a death through negligence of safety management duties may be subject to △a business suspension of up to 1 year or △a penalty of up to 3% of their annual revenue. Furthermore, if a death occurs due to a project owner, designer, contractor, or supervisor neglecting their safety duties, they could face criminal penalties of up to 7 years in prison or a fine of up to 100 million won.

The safety management duties for which construction companies can be subject to business suspension or penalties upon violation include: △reviewing whether design documents, including construction periods, costs, temporary structures, and safety facilities, are appropriately prepared for safety, △directly installing safety facilities such as guardrails and fall-prevention nets, △ensuring that subcontractors comply with the contractor's instructions for accident prevention, and △immediately complying if a supervisor orders a halt to construction. These are requirements that construction companies must strictly follow to ensure site safety.

The construction industry is pushing back, calling these measures excessive. An official from the Construction Association of Korea pointed out, "What the construction industry is most concerned about is the penalty of up to 3% of total revenue. Currently, the construction industry's operating profit margin is in the low 3% range; a single accident could wipe out an entire year's profit. Existing penalties under the Framework Act on the Construction Industry or the Act on Contracts to Which the State Is a Party are based on the contract amount, not total revenue. There is also concern about double punishment, as other laws like the Serious Accidents Punishment Act and the Occupational Safety and Health Act already have penalty provisions related to construction accidents."

Representative Moon Jin-seok replied, "The point mostly raised by the media and the industry is the provision to impose a penalty of up to 3% of revenue. This clause only activates when the 'most basic' requirements for protecting worker safety are ignored. Since immediately after the bill's proposal, we have been listening broadly to the opinions of the industry, and when we enter full-scale discussions later, we will organize the positions of stakeholders for each provision and coordinate the detailed contents in that process."