2 Years Already Scary, Permanent Revocation? Targeting Construction Companies by President Lee

[Financial News] As a series of fatal accidents have recently occurred at construction sites, the government hinted at strong sanctions against serious accidents. In addition to a bill that imposes fines of up to 3% of sales in the event of a worker's death, the government plans to strengthen economic disadvantages such as bidding restrictions at sites where fatal accidents occur.
According to the government on the 14th, President Lee Jae-myung instructed the preparation of measures at a cabinet meeting on the 12th, saying, "Strong sanctions are needed to fundamentally prevent repeated industrial accidents." Specifically, he mentioned △permanent revocation of public bidding qualifications △financial sanctions △drastic reward measures for reporting safety-deficient sites.
Currently, construction companies that have caused industrial accidents are penalized in public construction bids. The comprehensive evaluation bidding system, a representative method of winning public construction bids, includes a 'social responsibility' item related to construction safety. Also, under current standards, companies that have caused accidents resulting in the death of two or more people are restricted from participating in public construction bids for two years.
The government is considering ways to further increase the level of actual reflection of social responsibility and raise the participation restriction requirements. However, there are concerns that even higher-level measures may be introduced as President Lee directly mentioned permanent qualification revocation.
Public bids are mostly concentrated on medium-sized construction companies, accounting for about 30% of the total. An industry insider criticized, "Saying to permanently revoke public bidding qualifications is like telling medium-sized construction companies or small construction companies in the region to die."
Financial sanctions are also expected to affect medium and small construction companies, which have relatively less capacity to raise their own funds. If loan limit restrictions, loan interest rate hikes, and credit review strengthening are imposed, it will impact construction bid orders.
Another industry insider said, "In the case of the real estate PF market, finance takes up a large part, and if sanctions are imposed, construction project orders will also be restricted."
Meanwhile, the Ministry of Employment and Labor plans to announce a 'Comprehensive Labor Safety Plan' in September. The plan focuses on significantly strengthening economic disadvantages. In addition, the ruling party and the government are pushing for a bill that imposes a business suspension of up to one year or fines of up to 3% of sales if a fatal accident occurs due to a violation of safety management obligations.

act@fnnews.com Choi Ah-young Reporter