CEO Acquitted: Key Takeaways from the Landmark Verdict on South Korea’s Major Industrial Accident Law

In the first case under the Serious Accidents Punishment Act, Sampyo Group Chairman Jeong Do-won was acquitted in the trial related to a fatal quarry accident in Yangju, Gyeonggi Province. The court clarified that the legal “management responsible person” is the individual who implements and oversees safety and health measures, not necessarily the company’s CEO.

On February 10, Judge Lee Young-eun of the Uijeongbu District Court found Chairman Jeong and former Sampyo Industrial CEO Lee Jong-sin not guilty of violating the Serious Accidents Punishment Act.

The trial’s key issue was whether the group chairman, rather than a subsidiary’s CEO, could be considered the “management responsible person” as defined by law.

The court explained, “The ‘management responsible person’ under the Act primarily refers to the representative director with authority and responsibility to oversee the business. To consider someone else (like the group chairman) as the responsible person, it must be proven that the representative director exists but cannot fulfill the Act’s obligations due to the other individual’s substantial authority and responsibility.”

Prosecutors presented evidence showing Sampyo Group members referring to Chairman Jeong as “TM” (Top Management), reporting to him, and receiving his instructions.

However, the court ruled that while Jeong conducted meetings and received reports, this alone didn’t prove he held a position of obligation under the Act. The court also determined that CEO Lee Jong-sin was not significantly hindered in fulfilling his duties.

Consequently, Chairman Jeong was found not guilty under the Serious Accidents Punishment Act. CEO Lee was also acquitted of violating the Occupational Safety and Health Act, as the court found insufficient evidence that he knew work was being done without proper safety measures.

While prosecutors haven’t decided on an appeal yet, legal experts anticipate they will. To secure a conviction on appeal, they’ll need to present new arguments or evidence establishing Jeong as the “management responsible person.”

If prosecutors can’t overturn the lower court’s reasoning that the “management responsible person” is the representative director, it could result in no one being held accountable in this landmark case, without even examining Jeong’s potential negligence.

Jeong and others have been on trial for allegedly failing to comply with safety obligations following a January 29, 2022 incident where three workers died after being buried under debris at Sampyo Industrial’s Yangju site.