[The Editors' Verdict] 3% Sales Penalty for Fatal Accidents and the Three Strikes Rule

President Lee Jaemyung's approval rating for his administration has surpassed 60% just over a month after taking office. Despite starting without a transition committee, he has rapidly tackled high-level appointments, made his diplomatic debut, held press conferences, and visited numerous sites to communicate with the public. The past 30 days have been, quite literally, a race against time. The approval rating, which has continued to rise for four consecutive weeks since his inauguration, reflects the public's evaluation of him. As a result, every word President Lee utters now serves as a powerful driving force for state affairs. During a Cabinet meeting on July 5, President Lee stated, "(South Korea) has the highest rate of industrial accidents and the highest fatality rate in the world," and emphasized, "To prevent industrial accidents, not only the Ministry of Labor but all relevant ministries must take action." Just two days later, on July 7 in Incheon, an accident occurred in which two workers were asphyxiated while working in a road manhole, resulting in one death and the other in critical condition. President Lee ordered, "Devise extraordinary measures to put an end to deaths in the workplace."

No one would question the policy goal of industrial safety and the prevention of serious accidents. However, there are multiple ways to achieve that goal, and some of them understandably raise concerns. A prime example is the "Special Act on Construction Safety," which stipulates imposing a penalty of up to 3% of sales revenue in the event of a fatal accident at a construction site. The ruling party introduced this bill on June 27, with a clear and legitimate intention: to prevent ongoing serious accidents and to strengthen corporate responsibility for safety management. However, there have been numerous cases where the legitimacy of a policy has resulted in unfair or even absurd consequences.

A construction site of an apartment in Daegu Metropolitan City. Construction has been temporarily halted due to the heatwave.

California in the United States introduced the "three strikes law" in 1994. Under this law, a person convicted of a crime for the third time faces severe punishment regardless of the scale of the crime. The intention was to protect law-abiding citizens from crime as crime rates increased. However, the side effects were significant. There were cases where individuals received 25-year sentences for minor offenses. Petty thieves flooded prisons, causing correctional costs to skyrocket. An even more serious issue was the safety of police officers. Criminals with two prior convictions resisted arrest with extreme measures to avoid a third strike. Research found that the probability of police officers being killed increased by 44%.

There is also the so-called "cobra effect." During British colonial rule in India, the venomous cobra was rampant, leading to numerous deaths. The British authorities devised a solution: a bounty for every cobra killed. At first, it seemed the cobra population was decreasing, but it did not take long to realize something had gone terribly wrong. People began breeding cobras to claim the reward. When the authorities belatedly ended the policy, breeders released their now-worthless cobras into the wild. As a result, the cobra population became much larger than before, and the authorities faced a prolonged headache.

While it is imperative to prevent serious industrial accidents, making "a penalty of 3% of corporate sales" the solution is a different matter entirely. Companies and industry sites are openly expressing concerns about this bill. The severity of the punishment is extremely high, and there are criticisms of overlapping regulations. The construction industry is also struggling. The average operating margin of the top 10 construction companies is below 3%. There are even claims that small and medium-sized enterprises, forced to pay a penalty of 3% of their sales, will go bankrupt. There are concerns that the recent series of tragic accidents, combined with the government and ruling party's high approval ratings, could create a synergistic effect. In ordinary times, there would have been a brake to control the pace, but now it seems only the accelerator is being pressed. If these concerns become reality, there is a high possibility that it will leave behind the stigma of the so-called "K-cobra effect."