Minister Noh Hyung-wook: "HDC Hyundai Development Company Must Receive the Strongest Penalty"

Gwangju Collapse Accident: Hyundai Development Company Faces Strict Measures
Possible Business Suspension or License Revocation Under Relevant Laws

Minister of Land, Infrastructure and Transport, Noh Hyung-wook, is receiving a report from Gwangju Mayor Lee Yong-seop at the site of a newly constructed apartment collapse in Hwajeong-dong, Seo-gu, Gwangju, on the morning of the 12th.
[Image source=Yonhap News]

Minister of Land, Infrastructure and Transport Noh Hyun-wook expressed his stance that HDC Hyundai Development Company, which caused the collapse accident at Hwajeong I-Park in Seo-gu, Gwangju, "should be given the strongest penalty." According to the investigation results, there is an analysis that Hyundai Development Company could face a one-year business suspension or even the highest penalty of deregistration.

On the 17th, at a press briefing with reporters from the Ministry of Land, Infrastructure and Transport, Minister Noh said, "We need to properly confirm the facts based on the investigation and impose appropriate punishment," adding, "Since this accident happened not once but twice repeatedly, I think the strongest penalty (disadvantage) under all laws and regulations operated by the government should be given."

Hyundai Development Company caused a large-scale casualty accident during the demolition process of the Gwangju Hakdong redevelopment area in June last year, and seven months later, on the 11th of this month, the outer wall of the Hwajeong I-Park apartment collapsed. As a result of this accident, one person has died and five are missing to date. Chung Mong-gyu, chairman of HDC Hyundai Development Company, took responsibility for the accident and stepped down from the front line of management on the same day, but public opinion has worsened significantly amid growing suspicions of poor construction.

Since the Serious Accident Punishment Act had not yet been enforced at the time, it is impossible to apply this law to Hyundai Development Company regarding this accident. However, as Minister Noh mentioned the "strongest penalty" on this day, if poor construction by Hyundai Development Company is confirmed later, the highest level of punishment currently applicable is expected to be imposed.

Minister Noh explained, "According to Article 82 of the Construction Industry Act, if five or more deaths occur due to poor construction caused by intentional or negligent acts, business suspension for up to one year can be imposed," adding, "However, according to Article 83, if serious damage causes public danger, deregistration of the business operator is also possible."

If the government's investigation reveals clear evidence of poor construction by Hyundai Development Company or if the missing workers are all found deceased, resulting in increased damage, the company could face a business suspension of up to one year. In this case, Hyundai Development Company would be prohibited from all business activities, including bidding for public projects and new private construction contracts.

If it is concluded under the Construction Industry Act that "serious damage to major structural parts of a facility caused public harm," voluntary deregistration is also possible. If deregistration is imposed, all construction capability records held by the company will be lost. While ongoing projects can be completed, subsequent projects will be impossible, effectively leading to the company's exit from the industry.

According to this regulation, Samhwa Construction Industry, which caused the collapse of the Seongsu Bridge, was deregistered. The construction company responsible for the collapse of the Sampoong Department Store dissolved voluntarily before any penalty was imposed, so deregistration did not occur.

Minister Noh emphasized that the government is doing its best to manage the accident. He said, "We are installing an additional large crane that acts as a support for the collapsed apartment building and are in the process of removing the cranes that were previously installed," adding, "We are conducting searches while ensuring the safety of on-site personnel. Although it takes time, the search for the five workers is our top priority."

Minister Noh also expressed regret that the three construction safety laws prepared after Hyundai Development Company's Gwangju Hakdong accident in June last year have not passed the National Assembly. Currently, the Building Management Act related to demolition has been passed, but the amendment to the Construction Industry Basic Act concerning illegal subcontracting and the Construction Safety Special Act related to safety remain pending.

Minister Noh explained, "While the Serious Accident Punishment Act specifies safety risks and regulations for simple and typical work environments, the Construction Safety Special Act specifies safety regulations subdivided according to the complex construction site procedures by work type," adding, "If the Construction Safety Special Act had passed, construction companies would have considered stricter safety measures in accordance with the law."