"Major Industrial Accidents Overshadowed by Housing Supply"... Construction CEOs Largely Avoid National Audit Summons

Construction CEOs Unlikely to Face Mass Summons This Year
Focus Shifts to Housing Supply Performance in Bipartisan Audit
Hyundai Engineering & Construction and SK Ecoplant Face Possible Summons

With the upcoming National Assembly audit next month, construction companies that experienced a string of CEO summonses last year due to a series of major industrial accidents are now breathing a sigh of relief. This year, the National Assembly audit is expected to focus mainly on evaluating the government's housing supply policies, pushing the issue of major industrial accidents lower on the agenda. However, some construction companies facing scrutiny for substandard construction are preparing for the possibility of their CEOs being summoned as witnesses, mobilizing their government relations teams in a defensive effort.

According to the National Assembly on September 23, the Land, Infrastructure and Transport Committee is scheduled to begin the audit on the Ministry of Land, Infrastructure and Transport on October 7, and will continue through the 23rd, covering 31 agencies under the ministry’s oversight. With the audit schedule confirmed, the list of those who will be called as witnesses and references is also expected to be finalized soon.

The construction industry atmosphere this year is notably more relaxed compared to last year. This is because, with the National Assembly audit focusing on verifying the effectiveness and achievements of the government’s housing supply policy, it is unlikely that CEOs will be summoned in large numbers as before. Previously, the government set a target of commencing construction of 1.53 million housing units in the Seoul metropolitan area by 2030 through the January 29 and August 13 measures. The construction period for public housing sites is to be halved. Lawmakers from both the ruling and opposition parties are now scrutinizing whether these supply plans are being carried out as planned and examining the effectiveness of public rental housing led by Korea Land & Housing Corporation (LH).

A political source said, “Unlike last year, the housing supply issue has become the most pressing topic, so neither ruling nor opposition parties are showing much interest in major industrial accidents this year. Furthermore, the opposition is urging increased housing supply through private redevelopment projects, which makes it difficult for lawmakers to summon and criticize construction company CEOs.” A construction company official also commented, “Unlike last year, when CEOs were widely summoned, this year’s audit will likely focus on the housing supply performance of LH and the Ministry of Land, Infrastructure and Transport, so we feel more at ease.”

Last year, President Lee Jaemyung declared a war on industrial accidents, bringing intense scrutiny to the construction sector, which accounts for half of all industrial accident fatalities. This was triggered by a series of major accidents such as the ground collapse in Myeongil-dong, Seoul, and the retaining wall collapse at the Gajang Intersection in Osan, Gyeonggi Province. At that time, seven out of the top 10 large construction companies—excluding Samsung C&T, SK Ecoplant, and GS E&C—had their CEOs summoned as witnesses. After some changes in the list, six CEOs attended the audit. In the case of POSCO E&C, which had four fatal industrial accidents that year, President Song Chiyoung attended the audit and bowed in acknowledgment of his responsibility.

By contrast, it is widely expected that only a few construction companies will have their CEOs summoned for this year’s audit. Hyundai Engineering & Construction, which failed to install rebar during the construction of Samsung Station on the metropolitan express railway (GTX)-A line, and SK Ecoplant, which recently experienced the collapse of an apartment’s exterior terrace, are considered the most likely companies to be called in.

During last year’s construction of the GTX-A Samsung Station complex transfer center, Hyundai Engineering & Construction omitted about 178 tons of main rebar due to misinterpretation of the design drawings. This has inevitably led to project delays, and it is estimated that the Ministry of Land, Infrastructure and Transport will have to pay approximately 40 billion won in additional operational support to the private operator, SG Rail. Since the Ministry has already announced plans to claim damages from the Seoul city government, inquiries regarding Hyundai Engineering & Construction’s responsibility for substandard construction are expected to be raised in this year’s audit as well.

In the case of SK Ecoplant, the terrace of the exterior wall at the Incheon Songdo Luxe Ocean SK View apartment collapsed just one year and six months after completion. To determine the cause, a joint accident investigation committee formed by Incheon City and the Ministry of Land, Infrastructure and Transport is now underway. In addition, last July, a fatal industrial accident occurred at Pyeongtaek~Osong Section 2 of the double-track railroad project, in which a migrant worker from a partner company lost his life.

The construction companies being considered for summons are making concerted efforts to defend themselves by reaching out to lawmakers’ offices ahead of the audit. A political insider stated, “Government affairs teams from companies with a high risk of summons are vigorously contacting legislative offices. Their goal is likely to prevent their CEOs from being called to testify at all costs. However, although housing supply is this year’s primary agenda, companies involved in major cases of substandard construction will find it difficult to avoid CEO summons.”

This content was produced with the assistance of AI translation services.