JULY COVERAGE SCHEDULE
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- Eric Jaremalm, CEO of Midsummer: "The virgin market for industrial thin-film solar roofs"
- Yeonkyu Chung, CEO of Grib: "Effective Policy Support Measures for SMEs Under the Severe Accident Punishment Act"
By Yeonkyu Chung, CEO of Grib
The government enacted the Serious Accident Punishment Act in January 2022 for companies with 50 or more employees, under the judgment that the safety of workers could no longer be neglected. While the introduction of this law has led to a reduction in safety accidents at many industrial sites, there are still many cases where workers are seriously injured or lose their lives. These accidents cause great grief and trauma to families.
The Ministry of Employment and Labor (Korea Occupational Safety and Health Agency) and related supervisory agencies are currently focusing on strengthening the penalties for companies when safety accidents occur. However, there is a lack of administrative capacity for proactive safety measures, management, and inspection, which limits their ability to manage and supervise all sites effectively.
Starting in January 2024, the National Assembly and the government decided to expand the application of the Serious Accident Punishment Act to companies with five or more employees, despite strong opposition from small business owners and the business community. In the post-coronavirus era, micro, small, and medium-sized enterprises (SMEs) are facing a difficult economic environment characterized by high interest rates, high exchange rates, and soaring prices. Nevertheless, the labor community and the National Assembly have decided to strengthen the basic obligations of companies for industrial safety, under the judgment that human life is more important than anything else.
Of course, nothing is more precious than human life. However, amid the difficulties of the current economic environment, about 8 million small business owners and SMEs are often unable to afford the introduction of equipment or systems for additional investment and safety measures for workers' safety. Most prefer to utilize their limited funds to increase sales and profits, rather than invest in safety measures. In other words, given the minimal probability of a fire or safety accident, small and medium-sized business owners find it challenging to allocate funds to prepare for such unlikely events. Therefore, they express frustration with the perceived impracticality of the accident punishment law for workplaces with five or more employees, as decided by the government and the National Assembly.
SMEs account for more than 80 percent of the Korean labor market. It is no exaggeration to say that a significant proportion of these workers are in the safety blind spot. Nevertheless, the government and the National Assembly only impose obligations on SMEs in this safety blind spot, without providing active and concrete support measures.
The core purpose of the Fatal Accidents Act is to prevent fatal accidents by identifying safety hazards at industrial sites in advance (through safety diagnosis). Efforts should be made to reduce or minimize accidents by installing safety devices and enhancing training on hazardous factors.
Regarding this, we would like to propose some realistic policy support and improvement measures:
Expand policy funding and other support budgets: While large companies can afford to invest in dedicated organizations, experts, and systems for safety measures, this is not the case for small and micro businesses, especially those with fewer than 10 employees in the manufacturing sector. The government and local authorities should provide support or incentives through policy funds or support budgets to help small and micro businesses adopt safety systems.
Currently, there is support for smart shops and digital transformation of small businesses, but this mainly focuses on equipment that enhances sales or reduces labor costs. There is room for improvement to include budgeting or support for safety prevention systems.
Phased introduction of safety management systems: While it is challenging to fully equip all industrial sites with safety equipment, a phased approach should be taken. This could start with high-risk areas such as chemical laboratories, places handling dangerous chemicals, kitchens in group cafeterias, and facilities managing volatile products or harmful gases. The next step would involve installing various sensors on equipment and facilities prone to major accidents, like cranes, heavy machinery, cutting machines, and forklifts, to provide warnings or automatic shutdowns in dangerous situations.
Introduce AI-based video surveillance systems: Small and medium-sized factories and buildings currently monitored by CCTV cannot be watched 24/7. Especially at night, events such as fires, falls, break-ins, and loitering often go unnoticed. AI-based video surveillance systems should be introduced to automatically notify special situations when human monitoring is not possible.
While the initial cost of implementing AI technology may be high, widespread adoption could make it affordable for many small and medium-sized manufacturers.
Introduce voucher programs, tax incentives, and premium discounts: Financial constraints are a major problem for SMEs, even when they recognize the need for safety systems. Governments and municipalities should allocate funds to support local businesses. Voucher programs can be an alternative if direct funding is unavailable. Policy options such as corporate tax discounts, value-added tax rebates, local tax exemptions, and mandatory premium discounts for fire insurance companies for adopting safety prevention systems can be considered.
For instance, in South Korea, insurance companies offer discounts for installing dash cameras in vehicles. Similarly, fire insurance companies could provide discounts to businesses that install safety prevention systems, as seen with the kitchen fire prevention system provided by Grib, which has been installed in more than 500 group restaurant kitchens.
Legal measures to protect human life and safety are now mandatory for businesses with five or more employees. Beyond the debate, it is crucial to gather wisdom to ensure that this system is well established in industrial fields and society. We hope that all companies, large and small, will recognize that while managing and growing the business is important, the safety of workers and their families is paramount. Let this be an opportunity to promote qualitative growth and establish good practices worldwide.
