On June 27, 2022, the Changwon District Prosecutors’ Office (the “CDPO”) issued a press release, announcing its first indictment as well as first non-indictment under the Serious Accidents Punishment Act (the “SAPA”) for two separate cases that share a similar set of factual circumstances. 


Background
 

Two companies – referred to as “Company A” and “Company B” – had been using a cleaning product purchased from Company C, which contained a hazardous substance (i.e., trichloromethane).  After 16 Company A employees and 13 Company B employees showed symptoms of acute poisoning after being exposed to the hazardous substance – which constitutes a “serious accident” under the SAPA – both Company A and Company B were investigated for violation of the SAPA.
 

Rationale for CDPO’s Non-Indictment Decision
 

While the CDPO decided to indict Company A and its representative director (an arrest warrant was sought but denied), the CDPO did not indict Company B and its representative director.  The press release highlighted the following points:
 

• Whereas the representative director of Company A – who is deemed to be the “responsible management personnel” of Company A – was found to have failed to comply with the obligation to secure the safety and health of the workers because he did not establish a safety and health management system, Company B’s representative director (who is the “responsible management personnel” of Company B) was found to have fulfilled his SAPA duties because he established a safety and health management system in accordance with the prescribed procedures and substantive requirements set forth in the SAPA. 

• By deciding not to bring an indictment against a company that has complied with the duty to establish the safety and health management system, the CDPO the implementation of criminal justice in a manner that is both reasonable and predictable.

Key Takeaways
 

• Establishment of a safety and health management system as a key risk management measure

Depending on whether a safety and health management system has been appropriately established under the SAPA, an entirely different outcome may arise in two otherwise similar SAPA cases.  Therefore, taking full measures to establish and operate a safety and health management system will be highly significant in terms of not only preventing accidents but also minimizing potential risks under the SAPA.  The obligation to secure the safety and health of workers under the SAPA, which is imposed on the responsible management personnel, includes, among others, (i) establishment of safety and health management policies and goals, (ii) allocation of appropriate organization, personnel, and budget for safety and health matters, (iii) creation of procedures to identify and inspect hazard/risk factors on a regular basis, and (iv) continuous management of such factors by reflecting workers’ opinions.
 

• Emphasis on continued compliance monitoring and improvement

The establishment of the safety and health management system under the SAPA should not be a one-time event.  Rather, it should be an ongoing effort subject to continuous maintenance and improvement with periodic monitoring.  Therefore, it is necessary to periodically check whether or not a company’s safety and health management system meets the requirements under the SAPA and – where improvements are needed – take appropriate remediation measures to mitigate against potential SAPA risks that can impact the company’s business.