Another collapsed Hyundai Industrial Development, punishment scenario ‘three’

▲ Hwajeong Hyundai I-Park Building 201, where the exterior wall of the apartment building collapsed on the 11th.

What kind of punishment will HDC Hyundai Development Company, the contractor that caused the collapse of the outer wall of an apartment building in Hwajeong-dong, Gwangju, be punished? As a major disaster occurred again just seven months after the collapse of the demolished building in Hak-dong, Gwangju in June of last year, there is a consensus in the legal community that the level of punishment for Hyundai Industrial Development, the principal contractor, should be raised.

As the situation of shortened construction period, poor concrete, and expedient subcontracting is revealed one after another, the prospect is strong that it will be difficult to avoid legal responsibility. If faulty construction is revealed in the future investigation, it is expected that charges such as violation of the Industrial Safety and Health Act, violation of the Framework Act on the Construction Industry, and negligent manslaughter will be applied to Hyundai Industrial Development. On the 12th, one day after the accident, the Gwangju Regional Employment and Labor Administration booked the site manager of Hyundai Industrial Development and the site manager of a concrete frame company on charges of violating the Industrial Safety and Health Act.

Issue ① Subcontracting all victims of the accident, watch out for violations of safety measures

The six workers who were buried in the building in an accident that occurred on the 11th were all subcontractors, including those in charge of window construction and facilities. One of them was found dead on the first basement floor on the 14th. In this regard, an official from the Ministry of Labor said, “We will thoroughly investigate allegations of violations of the Occupational Safety and Health Act and take strict action.”

If it is revealed that Hyundai Development Company has not taken all necessary measures to prevent accidents for subcontractors, it will be difficult to avoid the application of the Occupational Safety and Health Act, which stipulates ‘safety and health measures for contractors’. According to Article 63 of the Occupational Safety and Health Act, a contractor (Hyundai Industrial Development) must take necessary safety and health measures to prevent industrial accidents when a contractor (subcontractor) worker works at the contractor’s workplace. Article 64 of the same Act stipulates that workplace safety and health should be inspected.

If the principal agency fails to fulfill these obligations and causes the death of a worker, under Article 167 of the same Act, he or she shall be punished by imprisonment for not more than 7 years or by a fine of not more than 100 million won. Since one person died in an apartment in Hwajeong-dong, Gwangju, the person in charge of safety at Hyundai Industrial Development is highly likely to be subject to this regulation. Lawyer Park Da-hye (KCTU Court) said, “The full revision of the Industrial Safety and Health Act, which came into effect on January 17, 2020, explicitly stipulates the contractor’s responsibility in the event of a worker’s death. You also need to check whether you have violated the law. It is possible to punish not only the person responsible for the safety of Hyundai Industrial Development, but also the superiors under the current law.”

On the 11th, Mr. A, the head of the Hyundai Industrial Development site, was additionally charged with violating the Occupational Safety and Health Act in relation to last year’s ‘Hakdong Collapse Accident’. The prosecution found that Mr. A had neglected the safety inspection of the workplace, such as not writing a work plan and not installing a railing in a place where there was a risk of falling.

▲ 'Hwajeong Hyundai I-Park Building 201 Concrete pouring log' released by the Gwangju Jeonnam Headquarters of the Construction Union on the 16th <Construction Union>” src=””/><figcaption>▲ ‘Hwajeong Hyundai I-Park Building 201 Concrete pouring log’ released by the Gwangju Jeonnam Headquarters of the Construction Union on the 16th <Construction Union></figcaption></figure>
<p><b>Issue ② Fine of not more than 10 million won if ‘instructions to shorten the period’ are revealed</b></p>
<p>There are also analyzes that poor curing of the concrete was the cause of the large-scale disaster.  According to the ‘Hwajeong Hyundai I-Park Building 201 Concrete Pouring Log’ released by the Gwangju Jeonnam Headquarters of the construction union on the 16th, the pouring period for floors on the 35th to 38th floors constructed in winter was 6 to 10 days.  This is contrary to the explanation of Hyundai Development Company that it has undergone a sufficient curing period for 12 to 18 days.  The accident occurred while pouring concrete on the 39th floor.</p>
<p>A site official also reportedly stated, “Even in sub-zero weather, the construction company ordered a shortening of the construction period.”  Therefore, the interpretation that the lower floors would collapse one after another as the lower floors could not support the weight of the gang form (large steel formwork) is gaining strength because the concrete strength test was not sufficiently conducted.  Ahn Hyeong-jun, a professor of architectural engineering at Konkuk University, said, “Usually, the floors are raised after checking the compressive strength for about a week. We will have to see if there are any problems with the design and supervision,” he said.</p>
<p>If the circumstances in which Hyundai Development Company shortened the construction period without sufficient safety diagnosis are revealed, punishment may be imposed.  Article 69 of the Occupational Safety and Health Act stipulates that a construction contractor shall not shorten the construction period calculated according to design drawings, etc.  In addition, in order to reduce construction costs, risky construction methods must not be used, or construction methods must not be changed without justifiable reasons.  A contractor who violates this shall be punished by a fine of not more than 10 million won.</p>
<p><b>Issue ③ Circumstances of illegal subcontracting, application of the Framework Act on the Construction Industry</b></p>
<p>Illegal subcontracting is also a concern.  The Gwangju Police Agency’s investigation headquarters is looking into whether subcontracting works by capturing the work situation of 8 employees of concrete pump car company B, not company A, a construction company that signed a contract with Hyundai Development Company.  Company B has signed a lease contract to lend a pump car for transporting concrete to Company A, so in principle, Company A does the pouring.</p>
<p>However, allegations are raised that the company B’s employees were in charge of all concrete pouring and ‘proxy construction’.  The view is that the ‘primary subcontracting → subcontracting’ structure prevalent in the construction industry was also revealed in this accident.  In the case of the collapse of a building that was demolished in Hakdong last year, illegal subcontracting has already been confirmed.  As a result, the demolition cost was reduced from KRW 5 billion to KRW 1.1 billion and again to KRW 900 million.</p>
<p>If illegal subcontracting is found in the Hwajeong-dong collapse in Gwangju, there is a high possibility that Hyundai Development Company will be punished.  According to Article 29 (1) of the Framework Act on the Construction Industry, no construction business entity may subcontract all of the contracted construction work or most of the major parts prescribed by Presidential Decree to another construction business entity.  The larger the construction scale, the greater the need to ensure proper construction and safety.  However, in accordance with the Enforcement Decree, an exception is made when subcontracting is divided into two or more persons.  If the investigation reveals that Hyundai Development Company entrusted a major apartment building project to one company and drove the work, this provision will be applied.</p>
<p>Violation of this rule is punishable by imprisonment for not more than 3 years or a fine not exceeding 30 million won.  In the case of Hwajeong-dong apartment construction, it is difficult to avoid punishment if illegal subcontracting is found to be true.  However, the level of punishment does not appear to be high.  In the Hakdong accident, a total of 25 people were arrested for breach of contract selection and contract, but only one person in charge of Hyundai Development Company was prosecuted.</p>
<p>Jeon Jae-hee, head of the construction union’s bridge department, said, “Pump car makers are in a form that cannot use manpower, but they have been subcontracted and poured.” It is urgent to enact the Special Act on Construction Safety to be granted,” he pointed out.</p>
<p>Meanwhile, the Ministry of Employment and Labor started special supervision of 12 Hyundai Industrial Development construction sites from the 17th to prevent the recurrence of a major accident similar to this one.  Check whether the construction plan is complied with and the strength after concrete pouring.  This supervision will only be carried out on large-scale sites, but the remaining Hyundai Industrial Development construction sites will also be inspected for safety measures through patrol inspections, and defective sites will be supervised at all times.</p>
<p>Vice Minister of Labor Park Hwa-jin held an inspection meeting with related organizations in the afternoon to check the search activity plan and tower crane dismantling plan.</p>
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▲ Construction union
▲ Construction union

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