Negligence of Responsible Management Party led to industrial accident: court
On Nov. 3, 2023, the Changwon District Court rendered a decision in the first indictment case for a violation of the Serious Accidents Punishment Act (SAPA), sentencing the representative director (defendant) of an electronics manufacturer to one year of imprisonment and three years of suspension where workers suffered injuries from toxic hepatitis from inhaling the hazardous substance trichloromethane (Changwon District Court Decision 2022GoDan1429).
This case is also the first to be decided by the court regarding “serious industrial accidents due to occupational diseases.”
The court decision provides detailed standards on the procedures to identify and remedy hazards and risk factors, and the evaluation criteria for the person responsible for the safety and health management. In addition, the electronics manufacturer filed a motion to request for review the constitutionality of Article 6(2) and Article 4(1)1 of the SAPA contending that the statutes go against the principles of legality, proportionality, and equality.
The Changwon District Court, however, dismissed such motion (Changwon District Court Decision 2022ChoGi1795). The dismissal is noteworthy as it is the first court ruling regarding the constitutionality of the SAPA.
The electronics manufacturer purchases trichloromethane-containing detergent, a toxic chemical substance, from another chemical manufacturer. The defendant serves as the representative director of the electronics manufacturer and another company (Company C) and manages both companies from the same place. The defendant, without installing any local ventilation equipment in the workplace, instructed the workers of the electronics manufacturer and Company C to degrease compartment products with the detergent.
As a result, 10 employees of the electronics manufacturer and six employees of Company C inhaled trichloromethane and suffered serious industrial injuries leading to toxic hepatitis that requires treatment for over two months.
Alleged violation of SAPA on safety and health system
The prosecutor filed an indictment against the defendant with a violation of the SAPA (industrial accident by negligence) on grounds that the defendant as the Responsible Management Party (RMP) failed to establish safety and health management system considering the nature of workplace which caused toxic hepatitis to the victims, specifically citing the failure to establish: (1) the Hazards/Risks Identification and Remedy Procedures; and (2) the Evaluation Criteria for the Safety and Health Responsible Person.
Furthermore, the defendant, who is also the Safety and Health Responsible Person, was indicted for violation of its “duty regarding health measures” under the Korean Occupational Safety and Health Act (OSHA), including failing to either install equipment to seal the source of emission of the detergent with toxic substance or install local ventilation equipment when handling such detergent with toxic substance and failing to provide workers with the name and information on the physical and chemical natures of the toxic substances.
Additionally, the indictment included charges under the Chemical Substances Control Act, the Clean Air Conservation Act, the Malodor Prevention Act, and the Water Environment Conservation Act.
In line with the precedents, the Trial Court concurred with the prosecutor’s identification of the defendant as the RMP under the SAPA. The court found a causal relationship between the RMP’s violation of SAPA’s safety and health obligations and the failure to comply with specific safety and health measures required by the OSHA and that this negligence led to a serious industrial accident. The summary of the Trial Court’s decision is as follows:
The Court Decision provided detailed standards on the Hazards/Risks Identification and Remedy Procedures and on the Evaluation Criteria for the Safety and Health Responsible Person, both of which are common issues brought up by the investigative agencies.
Hazards/Risks Identification and Remedy Procedures
The Electronics Manufacturer claimed to have established the Hazards/Risks Identification and Remedy Procedures considering the characteristics of the workplace. However, the Trial Court ruled that the RMP should, in addition to establishing systematic procedural measures, establish internal regulations to ensure that periodic inspection and verification procedures are effectively operational at each workplace.
This reflects the court’s intention to further strengthen the safety and health obligations under SAPA, emphasizing the requirement to explicitly incorporate periodic inspection and verification procedures into internal regulations.
Furthermore, the Trial Court specified that the ‘identification’ process for hazards and risk factors should include a ‘mechanism allowing anyone to freely discover and report workplace hazards’ and a ‘procedure involving the consultation of workers engaged in harmful and hazardous tasks.’ Similarly, recent amendments to the Guidelines on Workplace Hazard Assessment (enforced on May 22, 2023) also specified the requirement to involve employees engaged in specific tasks when conducting hazard assessments.
Additionally, the court ruled that the ‘remedy’ process for hazards and risk factors involves systematically categorizing and managing identified hazards and risk factors and removing, replacing, or controlling each hazards and risk factor. In order to satisfy the ‘obligation pursuant to Article 4 Subparagraph 3 of the Enforcement Decree’ with the establishment of the Hazards/Risks Identification and Remedy Procedures, such procedures should reflect the unique nature of the workplace so that any hazards and risk factors in such workplace can be identified, assessed, managed, and remedied.
On the basis of the abovementioned legal principles, the Trial Court concluded that procedures for identifying and improving hazardous or risk factors were not established since:
(1) the Electronics Manufacturer ’s ‘safety and health management rules’ and ‘risk assessment manual’ merely contained general matters specified in the industrial safety laws, without consideration of unique nature of its own workplace
(2) when a toxic substance of methylene chloride was used as a detergent, an local ventilation equipment was not installed in the workplace and the risk assessment report did not mention any of it
(3) the ESH work manual was merely a measure for its main contractor to inspect and assess the Electronics Manufacturer.
Evaluation criteria for the Safety and Health Responsible Person
The Electronics Manufacturer claimed to have established the evaluation criteria to assess whether the Safety and Health Responsible Person faithfully performs his/her duties.
However, the Trial Court decided that the evaluation criteria should (i) include to evaluate performance and faithfulness in fulfilling obligations pursuant to the OSHA and (ii) be specific and detailed enough for effective assessment.
Thus, the Trial Court determined that the evaluation criteria for the Safety and Health Responsible Person was not established on the grounds that: the ‘HR Assessment Plan and Results’ of the Electronics Manufacturer was merely a general human resources evaluation report for managerial staff, and ‘contactless questionnaire for person in charge of health management’ was just a routine human resources evaluation form where the evaluated employees directly input their performance and achievements.
Causation and violation of obligations
The Electronics Manufacturer argued that there is no causal relationship between the violation of obligations under the SAPA and the Accident, since the non-compliance was not severe and the Accident occurred due to falsely prepared material safety data sheets (MSDS).
However, the Trial Court concluded that if the representative director of the Electronics Manufacturer had properly fulfilled its obligation to establish a safety and health management system, local ventilation equipment and other such installations would likely have been implemented at the workplace using controlled toxic substances. The Trial Court clearly stated that while the absence of local ventilation equipment was not the sole cause of the accident, it had a substantial impact on the occurrence of the Accident.
Consequently, the Trial Court concluded that there was a significant causal relationship between the non-fulfillment of obligations by the representative director of the Electronics Manufacturer and the Accident.
Consistent with the precedents, the Trial Court reviewed and determined a causation based on the following analysis: first, whether there is violation of safety and health obligations pursuant to the SAPA; second, whether there is violation of specific obligations to take safety and health measures pursuant to the OSHA; and finally, if there exists a violation under the SAPA and the OSHA, determine that there is a causal relationship between such violation and the accident, without providing specific grounds.
Implication of SAPA in decision
In light of the court decision, the workplaces subject to the SAPA are advised to reevaluate the extent of their safety and health management systems and ensure that the obligation to secure safety and health is managed and fulfilled in a more practical and detailed manner.
In particular, it is necessary to establish internal regulations to periodically inspect and confirm whether the Hazards/Risks Identification and Remedy Procedures are operating effectively at each workplace.
Moreover, the process of ‘identifying’ hazards and risk factors requires a ‘mechanism allowing anyone to freely discover and report workplace hazards.’ Therefore, it is essential to establish procedures that involve employees engaged in specific tasks when conducting hazard assessments, enabling their active participation and the gathering of their insights. Hazards and risk factors that have been identified through this process should then be remedied.
Furthermore, the evaluation criteria for the Safety and Health Responsible Person should include such person’s performance and faithfulness in fulfilling obligations pursuant to the OSHA, and the evaluation criteria should be specific and detailed (Article 4 Subparagraph 5 of the Enforcement Decree).
Mark M. Cho is a senior foreign attorney, Jiyoung Sohn is a senior foreign attorney, and Jinwook Song is a partner at Bae Kim & Lee in Seoul.
