South Korean President Lee Jae-myung on Tuesday ordered officials to consider the harshest legal actions against POSCO Engineering & Construction (POSCO E&C) following a series of fatal workplace accidents. The measures under review include revoking the company’s construction license and banning it from public contracts.
The directive has sent shockwaves through South Korea’s construction sector, with industry leaders bracing for potential precedent-setting penalties.
The Ministry of Land, Infrastructure and Transport, Ministry of Employment and Labor, and Ministry of Economy and Finance have begun internal reviews on whether POSCO E&C’s operating license can be revoked and its eligibility for public tenders suspended. While final authority rests with local governments, national ministries can request license cancellation in cases deemed particularly severe.
License revocation is the most severe penalty under South Korea’s construction law and has only been enforced once — in 1994, when Dong-Ah Construction’s license was pulled following the Seongsu Bridge collapse.
If revoked, POSCO E&C would be barred from securing new projects, and regaining a license would not guarantee future government contracts due to a lack of recent bidding history.
Currently, public tender bans only apply to violations of the Occupational Safety and Health Act. However, the Public Procurement Service is reviewing whether to extend such bans to include violations of the Serious Accidents Punishment Act. If implemented, companies could face contract termination or be blacklisted from public tenders for up to two years.
The heightened scrutiny has prompted swift action from the industry. The Construction Association of Korea on Monday convened an emergency meeting with 17 affiliate organizations and think tanks to launch a task force aimed at preventing future industrial accidents.
Meanwhile, POSCO E&C accepted the resignation of CEO Jung Hee-min and appointed Executive Vice President Song Chi-young — head of POSCO Holdings’ Safety Inspection Task Force — as the new chief executive.
