Assistant Prosecutor Song Jiyong Presents at Hankyung Research Seminar
Practical Confusion Arises from Not Distinguishing Between Contractors and Construction Project Owners
[Asia Economy Reporter Han Yeju] A claim has been raised that the concept of 'construction project owner' should also be recognized under the Serious Accidents Punishment Act to exclude the risk of investigation at an early stage.
Song Jiyong, Chief Prosecutor of the Criminal Division at Seoul High Prosecutors' Office, stated this on the 13th during an internal seminar at the Korea Economic Research Institute (KERI) in his presentation titled "The Significance and Criteria for Distinguishing Between Principal Contractors and Construction Project Owners under the Serious Accidents Punishment Act."
Under the Occupational Safety and Health Act, definitions for principal contractors and construction project owners are provided, and respective safety and health obligations are stipulated accordingly. Chief Prosecutor Song pointed out that the Serious Accidents Punishment Act, which can be seen as a special law to the Occupational Safety and Health Act, does not distinguish between principal contractors and construction project owners, causing significant practical confusion and placing a heavy burden on the Ministry of Employment and Labor's investigations into violations of the Serious Accidents Punishment Act.
Regarding the Serious Accidents Punishment Act, the Ministry of Employment and Labor interprets that even if one is a construction project owner, if they did not exercise substantial control, operation, or management over the relevant construction work, they are not held responsible for the safety and health assurance obligations under the Act.
The Supreme Prosecutors' Office also interprets that it is difficult to uniformly determine the application or exemption of safety and health obligations under the Serious Accidents Punishment Act solely based on the status of being a construction project owner. Instead, the application of the Act should be judged based on whether substantial control or management authority over the workplace was exercised.
Chief Prosecutor Song criticized that academic discussions on the criteria for distinction under the Occupational Safety and Health Act are still insufficient, and that there are many issues with lower court rulings and the Ministry of Employment and Labor’s criteria, calling for discussions to establish new standards.
The Ulsan District Court’s first-instance panel has previously ruled that whether one held a 'position' overseeing and managing the construction project is important in defining a construction project owner under the Occupational Safety and Health Act. Regarding this, Chief Prosecutor Song said, "If only the mere status is judged without considering whether the overall management of the actual construction was conducted, there is a risk that simply holding the position would not immediately qualify one as a principal contractor, thus strengthening liability." He added, "It is necessary to comprehensively consider not only the position but also whether the project owner actually led and managed the construction to distinguish between principal contractors and construction project owners."
Regarding the Ministry of Employment and Labor’s interpretation criteria, Chief Prosecutor Song stated, "The criteria lack specificity from the perspective of the general public and are not easy to interpret. Moreover, there appears to be no organic connection among the presented criteria, making accurate guidance difficult. The criteria also stand on the viewpoint of infinitely expanding the employer’s responsibility, which does not comply with the principle of clarity under the principle of legality."
Accordingly, he proposed the following criteria for distinguishing between principal contractors and construction project owners: In cases where the construction is indispensable to performing the main purpose of the project, and where expertise in budget, manpower, and technical aspects is possessed but subcontracting is done for reasons such as cost reduction or risk avoidance, the entity should be excluded from the concept of project owner. When the project owner exercises substantial influence over the design, budget allocation, determination of construction methods, and management of the construction process, and has actual authority to manage hazardous and dangerous factors in the work, and the related subcontractors cannot arbitrarily remove such hazards, the entity should, in principle, be judged as a principal contractor. If these conditions are not met, it is reasonable to consider the entity as a construction project owner.
Chief Prosecutor Song explained, "Distinguishing between principal contractors and construction project owners not only faithfully serves the legislative purpose of preventing the outsourcing of risks but also ensures that the person who actually controls and manages hazardous and dangerous factors during the construction process can take effective measures to eliminate those hazards and guarantee workers’ safety."
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