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Will Sampyo become first to get punished under new industry safety law?

By Kim Da-sol

Published : Feb. 3, 2022 - 15:49

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A Sampyo logo is seen near the company’s remicon factory in Seoul on Thursday. (Yonhap) A Sampyo logo is seen near the company’s remicon factory in Seoul on Thursday. (Yonhap)
Following a deadly landslide accident on Saturday, the industry is keenly focused on whether Sampyo Industry will become the first company to get punished under the new industry safety law that came into effect last week. 

The accident occurred at Sampyo’s quarry in Yangju, Gyeonggi Province, on the first day of the Lunar New Year holiday. All three missing workers who were making holes for demolition work were discovered dead this week. 

Sampyo is the local manufacturer of construction materials such as remicon. It currently runs some 16 remicon factories and six stone mountains nationwide.

Labor Ministry officials and police investigators raided the Yangju office of Sampyo Industry earlier this week. It views the accident as a “serious safety accident” under the new industry safety law. 

Under the Serious Accident Punishment Act, business owners or executives at companies with more than 50 employees could face a criminal penalty of a minimum one-year prison term or fines of up to 1 billion won ($835,000) for fatal industrial accidents under circumstances where safety measures are deemed insufficient.

Whether Sampyo will become the first company to be indicted under the new law is expected to depend on the company’s establishment of safety risk evaluation and preparation for its safety manual, respectively.

According to the enforcement ordinance, the company should check the risk factors at worksites at least once every quarter. 

But the latest investigation found that there was no protection net installed at the worksite where the accident took place. Whether Sampyo’s CEO or executives were aware of this will be the main issue for indictment. 

Sampyo’s indictment under the new law is highly likely, considering that two fatal accidents took place in June and September last year at its Pocheon worksite and Seongsu factory. 

The Korean Confederation of Trade Unions named Sampyo as the worst company last year for causing fatal safety accidents at worksites for three consecutive years since 2019. 

But some suggest that without clear evidence, it will be difficult for the government to push ahead with asking business owners to take responsibility. 

“Since the law was established to target companies that caused safety accidents through poor safety guidance and practices, not by mistake, it will not be easy to receive a nod from the court without concrete evidence,” said a lawyer who works at the country’s major law firm.

Separate from whether the CEO will be held accountable or not, market insiders said that the ministry’s application of the new industry safety law to the latest accident will lay the groundwork and become an important guideline for other companies. 

Sampyo Group, founded in 1966, is currently headed by Chung Do-won, the youngest son of founder Chung In-wook. Chung Do-won holds 81.9 percent of shares in the group’s holding company Samypo, while his son Sampyo Cement President Chung Dae-hyun holds 14.08 percent as the second largest shareholder. 

Chung Do-won’s eldest daughter is married to Hyundai Motor Group Chairman Chung Euisun. Following market suspicions that Sampyo Group has fattened its wealth through business with Hyundai Motor Group, the country’s Fair Trade Commission launched an investigation last year but recognized the two groups as two separate business entities.