How S. Korea has a low industrial accident rate, alongside the highest death rate

Posted on : 2016-06-27 17:53 KST Modified on : 2019-10-19 20:29 KST
Companies regularly cover up mishaps, and fearing blacklist, workers are reluctant to report them
A shipbuilding yard in Geoje
A shipbuilding yard in Geoje

In July 2014, a man surnamed Kim, 35, an employee for a subcontractor of Hyundai Heavy Industries, suffered an electric shock while taking apart a transformer under the assumption that the circuit breaker had been flipped.

But instead of calling an ambulance, the company took Kim to the hospital in a company car. Kim’s managers urged him to get treated through the National Health Insurance Service instead of filing an industrial accident report and promised to compensate him separately. Kim had to tell the doctor that he had been injured at home.

“If the company doesn’t report the industrial accident, I have to visit the Korea Workers’ Compensation and Welfare Service and report it myself. But if I do that, my name goes on the record and I won’t be able to work [there or] at any other shipyards,” Kim said. Kim was talking about the industrial accident blacklist.

Germany, which is a manufacturing hub like South Korea, had an industrial accident rate of 2.65% in 2011. The rate in South Korea during the same year was 0.65%. This would suggest that the work environment in South Korea is safer than in Germany.

 in May
in May

The rate of death in industrial accidents in Germany was 1.7 out of 100,000 people; in South Korea, the rate was 7.9 out of 100,000. This implies that the percentage of South Koreans who get sick or hurt on the job is one-fourth that of Germans, while the percentage of South Koreans who die on the job is more than four times that of Germans.

Compared with the OECD average, the industrial accident rate in South Korea as of 2013 was 0.59%, which is far below the OECD average (2.7%), while the work-related fatality rate was 6.8 out of 100,000, by far the highest in the OECD.

This does not mean, of course, that South Korean workers are dying mysteriously without being injured or getting sick. The explanation to this paradox is that South Korean industrial accidents are being covered up. That is to say, industrial accidents are not being called industrial accidents until death makes them impossible to conceal.

The Ministry of Employment and Labor recently announced that it would revise the Occupational Safety and Health Act to make company owners who deliberately cover up industrial accidents liable not only for a fine but also for criminal prosecution (with a prison sentence of up to one year).

But labor activists and experts say that a tougher stance on crime is probably not enough to uproot the pervasive practice of not reporting industrial accidents. 

 South Gyeongsang Province
South Gyeongsang Province
High industrial accident rate, an even higher accident cover-up rate

When former lawmaker Eun Soo-mi of the Minjoo Party of Korea analyzed the records of health insurance reporting by employees at in-house subcontractors between 2011 and 2013, she estimated that South Korea’s actual industrial accident rate is an average of 23 times higher than the official rate.

Eun reached this rate by adding the number of hospital visits during these three years made by 388,475 subcontractor employees (the total from the three years) who were treated for “S-T injuries” and billed the National Health Insurance Service at least 500,000 won (US$421).

“S-T injury” is one of South Korea’s standard codes for diseases and cause of death that is defined as the head, neck, chest, belly, back, shoulders or eyes being injured or poisoned by outside factors. Experts regard most S-T injuries suffered by employed individuals as being work-related injuries.

The high hush-up rate for industrial accidents results from a combination of several institutional loopholes and the problematic relationship between prime contractors and subcontractors.

One problem is the irrational way that industrial accident insurance payouts are calculated. South Korea calculates payouts according to individual performance, which means that industries and companies with more industrial accidents have to pay higher payouts. Companies with fewer accidents receive a discount on their premiums.

“The National Health Insurance Service does not make people who are more likely to contract a disease pay higher premiums. That‘s because it’s a form of social insurance, and the whole point of social insurance is for the community to shoulder social risks,” said Lim Jun, a professor of preventative medicine at Gachon University of Medicine and Science.

“Industrial accident insurance is also a type of social insurance. The individual premium system violates social insurance’s principle of solidarity and its universal values,” Lim said.

Another factor is the government’s practice of giving higher points to companies with lower industrial accident rates during the “prequalification” assessment of companies that mean to make a bid for large construction projects. This practice has backfired by incentivizing companies who are vying for highly competitive government contracts to cover up industrial accidents.

The situation is even more severe at subcontractors. According to a fact-finding report about occupations that are at risk for industrial accidents that was released in Dec. 2014 by South Korea‘s National Human Rights Commission, industrial accident reports were only filed for 36 of 343 (10.5%) of people who were injured on the job while working for subcontractors in the areas of shipbuilding, steel, construction and plants. In addition, 122 of these injured workers (35.6%) had to cover their own medical costs or were unable to get treatment at all. The remaining 185 (53.9%) received treatment through the National Health Insurance Service and had their bills covered by the prime contractor or subcontractor.

The most common reason (39.6%) these workers gave for not reporting the industrial accident was concern about being treated worse by the prime contractor or subcontractor. Other respondents said that the prime contractor or subcontractor did not let them file an industrial accident report (29.4%) or that the process for filing an industrial accident report was too complicated (9.5%).

“An industrial accident can motivate the Ministry of Employment and Labor to initiate special supervision, so prime contractors are very cautious about any hitches that come up during the construction period. When an industrial accident occurs at a subcontractor, they receive a black mark; if accidents reoccur, the subcontractor loses its contract,” said Park Jong-sik, a researcher at the Institute for Social Development and Policy Research at Yonsei University.

This is why subcontractor employees who get in an accident sometimes don’t get treated in time because the company didn’t call an ambulance. This is also why subcontractors keep taking injured employees to doctors who have made an illicit agreement to file the incident with the National Health Insurance Service instead of reporting it as an industrial accident. 

Increasing prosecutions won’t cut it by itself

In order to stop companies from covering up industrial accidents, the industrial accident insurance system may need to be tweaked so that workers can receive benefits immediately without going through an additional process.

Currently, workers must receive approval from their company to submit an industrial accident report to the Korea Workers’ Compensation and Welfare Service. Even after this, they don’t receive insurance benefits until the government categorizes the incident as an industrial accident.

“We need to set up a system where when the worker comes in for treatment the doctor can decide whether to file with the Korea Workers’ Compensation and Welfare Service or the National Health Insurance Service according to the industrial accident categorization standards and then file the report and bill the government on the spot,” Lim Jun said.

Similar suggestions are being made about the system used to calculate industrial accident payouts. “We haven’t shown that the system is effective; if anything, it is being identified as the cause of industrial accident cover-ups. In the short term, industrial accidents at subcontractors should be included with the prime contractor when calculating insurance payouts, and in the long term we should consider a wholesale revision of the system,” said Cho Gi-hong, chief of industrial health at the Federation of Korean Trade Unions.

“The practical way to stop companies from covering up industrial accidents is for workers to get involved. No matter how powerful, no law or government regulator can beat workers who are keeping an eye on things day in and day out,” said Choi Myeong-seon, chief of the bureau of labor safety and health for the Korean Confederation of Trade Unions.

In Germany, a labor council representing all workers at prime contractors and subcontractors shares the authority to decide policy for protecting workers’ health, which includes preventing industrial accidents.

“If the Ministry of Employment and Labor just increases the legal consequences as it means to do with the revised law, it will not be very effective and if anything will only give companies more incentive to cover up accidents. The government needs to change its policy goal from decreasing the industrial accident rate to unearthing and compensating more industrial accidents,” said Park Jong-sik.

By Jeong Eun-joo, staff reporter

Please direct questions or comments to [english@hani.co.kr]

 

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