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Labor ministry begins probe into S-Oil refinery explosion This marks first severe disaster at company with foreign CEO since new law came into force

Translated by Ryu Ho-joung 공개 2022-05-24 08:05:06

이 기사는 2022년 05월 24일 08:02 더벨 유료페이지에 표출된 기사입니다.

The South Korean labor ministry has started investigation into an explosion at S-Oil’s refinery plant in Ulsan, the first severe disaster that occurred at a company with a foreign chief executive officer since the country’s strengthened industrial safety act came into effect earlier this year.

The explosion, which occurred on May 19, killed one person and injured nine others, of which four are in serious condition, the company said. The fire occurred during maintenance of the company’s alkylation processing line. The exact cause of the explosion has yet to be determined.

S-Oil CEO Hussain Al-Qahtani visited the Ulsan plant on the following day and apologized to the public. “We will fully cooperate with related authorities in handling the incident and finding its root cause,” said Al-Qahtani in a press conference on May 20.

The Severe Disasters Punishment Act, which went into force in January, imposes criminal penalties of at least one year of imprisonment or up to 1 billion won (approximately $787,960) in fine on a company’s owner or head if a severe disaster occurs at the company due to violations of the country’s health and safety regulations.

Prosecutors’ indictment will follow if primary investigation, conducted by the labor ministry, finds violations of relevant laws. The question is who is held responsible under the new law. Legal experts said they do not have sufficient judicial precedents yet because the law came into effect just four months ago.

The law defines a company’s head as a person who represents the entire business and has authority and responsibility for business supervision, or a person who is in charge of safety and health of the company. The former could be a CEO, while the latter could be a chief safety officer.

However, having a CSO doesn’t mean a CEO is free from all responsibilities. If authorities’ investigation reveals the CEO played a role in implementation of the company’s health and safety protocols, the CEO could still be held legally responsible. The problem is ambiguity in the standard.

“In case the CSO has full powers over hiring, budgeting and execution regarding implementation of the company’s compliance with health and safety regulations, the CSO could be held legally responsible if any violations of those rules are found,” said Lee Beom-sang, partner at Seoul-based law firm Dong In Law LLC.

“But apart from that case, it’s difficult to say at the moment how much authority the CSO should have to make him or her be held legally responsible.”

S-Oil appointed Lee Min-ho, the company’s executive vice president, as its CSO earlier this year, a move seen as part of its efforts to prepare for the new law. “The CSO has full powers over health and safety matters,” the refiner said.

If what S-Oil said is true, and the government’s investigation finds violations of health and safety rules, chances are high the CSO will be indicted. However, whether the company really gave full powers to its CSO remains uncertain until the investigation is finished, legal experts said.

Even a CEO who is not South Korean can be punished under the new law based on the territorial principle. It is likely Aramco, the parent company of S-Oil, and four directors representing the Saudi Arabian oil giant on S-Oil’s board won’t be legally affected. (Reporting by Wie-su Kim)
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