Since January 2022, Korea’s Serious Accidents Punishment Act (“SAPA”) has made senior executives personally and criminally liable when a worker dies or is seriously injured because safety systems were inadequate. The Act now covers almost every business in Korea with five or more workers, including Korean subsidiaries and branches of foreign companies. Foreign-invested companies often assume that a strong global safety policy is enough. Under SAPA it usually is not, and the person most exposed is typically the Korean representative director.
1. SAPA at a Glance
Which businesses are covered
SAPA’s industrial accident provisions apply to businesses with five or more workers. Coverage was extended to businesses with 5 to 49 workers in January 2024. A Korean subsidiary, a Korean branch, and in some cases a liaison office with local staff can all fall within the Act.
What counts as a “serious industrial accident”
- One or more deaths
- Two or more workers injured in the same accident, each needing six months or more of treatment, within one year
- Three or more workers suffering the same listed occupational disease from the same hazard within one year
Serious civil accidents
SAPA also covers serious civil accidents, caused by defects in products, raw materials, or public facilities. This is relevant to foreign manufacturers and importers whose products reach Korean consumers. This article focuses on industrial accidents.
How SAPA differs from the Occupational Safety and Health Act
Korea’s Occupational Safety and Health Act imposes duties at the workplace level, usually on site managers. SAPA targets the top of the organization: the executive who controls the company’s safety systems, budget, and organization.
2. Who Is the “Responsible Executive”?
SAPA imposes its duties on the “responsible executive”. This is defined as the person who represents the business and has overall authority and responsibility for it, or a person who is in an equivalent position and in charge of safety and health.
The Korean representative director
For a Korean subsidiary, the representative director is the default responsible executive. This is true whether the representative director is Korean or a foreign national.
Appointing a Chief Safety Officer does not shift liability automatically
Many companies appoint a Chief Safety Officer (CSO) in the hope of moving SAPA liability away from the CEO. The Ministry of Employment and Labor and the courts generally look at who actually holds authority over safety decisions and budgets. A CSO without real independent authority and budget does not relieve the CEO. Even a properly empowered CSO may share liability with the CEO rather than replace them.
Executives above the Korean CEO
Korean prosecutors have shown they will look beyond the formal representative director. In a widely reported case, prosecutors charged a group chairman, not the subsidiary’s CEO, as the responsible executive on the basis that he held the real decision-making power.
For foreign-invested companies, this raises a real question. If key safety decisions, budgets, and headcount are approved by regional or global headquarters, investigators may ask whether a headquarters executive is the true responsible executive. In practice the Korean CEO remains the primary target. But the more authority sits outside Korea, the harder it becomes for the Korean CEO to show they had the means to comply. The record may also draw in headquarters personnel.
Korean branches of foreign companies
For a Korean branch, the Korean representative registered for the branch is the likely responsible executive. The same analysis about real authority applies.
Key takeaway: SAPA follows real authority, not job titles. The company’s internal approval structure should match who will be held accountable in Korea.
3. What the Responsible Executive Must Do
SAPA requires the responsible executive to establish and implement a safety and health management system. The Enforcement Decree specifies the core elements:
- Safety and health goals and management policy, set out in writing
- A dedicated safety organization, required for larger businesses (generally those with 500 or more workers, and certain construction businesses)
- Hazard identification and risk assessment, with procedures for improvement and checks at least every six months
- Adequate budget for safety equipment, personnel, and hazard improvement
- Authority and budget for site safety managers, with evaluation of their performance
- Qualified safety and health personnel, assigned as required by law
- Worker consultation on safety matters
- Emergency response manuals and drills
- Standards for selecting and managing contractors, covering their safety capability
The responsible executive must also:
- put in place measures to prevent recurrence after an accident
- carry out government corrective orders
- check at least every six months that safety obligations under other laws are being met, and that required safety training is being provided
Contractors and subcontractors
These duties extend to workers of contractors and subcontractors where the business controls or manages the facility, equipment, or place where they work. Outsourcing work does not outsource SAPA liability.
Key takeaway: SAPA asks the same question at every step: can you prove it? Investigators will ask for documents showing that each element existed and was actually carried out.
4. Penalties for Individuals and Companies
Responsible executive (individual)
- Death: imprisonment of at least one year, or a fine of up to KRW 1 billion, or both
- Serious injury or occupational disease: imprisonment of up to seven years, or a fine of up to KRW 100 million
- Repeat offense within five years: penalties increased by up to 50%
- After a serious accident, the responsible executive must also complete mandatory safety training.
Company
- Death: a fine of up to KRW 5 billion
- Serious injury or occupational disease: a fine of up to KRW 1 billion
Civil liability
The company and the responsible executive can face punitive damages of up to five times the actual loss.
Enforcement trends
Most convictions so far have resulted in suspended prison sentences, but courts have also imposed actual prison terms on CEOs. Several convictions have been upheld by the Supreme Court. During an investigation, a foreign national CEO may also face a departure ban that prevents them from leaving Korea.
5. Particular Risks for Foreign-Invested Companies
Global policies without Korean implementation
A global health and safety manual written in English, with no Korea-specific risk assessments, records in Korean, or evidence of local implementation, is weak evidence in a SAPA investigation.
Budget and approval structures
If the Korean CEO cannot approve safety spending without sign-off from regional or global headquarters, it becomes harder to show that the CEO met the duty to provide an adequate budget. It also invites questions about headquarters’ role.
Turnover of expatriate CEOs
Frequent rotation of foreign representative directors can leave gaps in the six-monthly checks and in documentation. Each incoming CEO inherits SAPA exposure from the first day.
Office-based businesses are not exempt
Sales, finance, and IT subsidiaries with mostly office workers face lower risk, not no risk. They are still covered once they reach five workers. Exposure grows quickly when they operate warehouses, logistics centers, labs, or retail stores, or use contractors on site.
Product safety
Foreign companies that manufacture or import products for Korean consumers, such as cosmetics, food, chemicals, or consumer goods, should also review their exposure under SAPA’s serious civil accident provisions.
6. Practical Compliance Checklist
- Clarify who the responsible executive is, and record their authority over safety decisions and budget in board resolutions and internal approval rules.
- Localize the safety system: carry out Korean risk assessments, keep Korean-language manuals, and keep records in Korea.
- Ring-fence the safety budget, so the Korean CEO can approve safety spending without delay.
- Hold the six-monthly reviews of the safety system and of legal compliance, and document them.
- Manage contractors: set safety criteria for selecting them, check their performance, and coordinate safety on shared sites.
- Prepare an accident response plan: who reports to the authorities, who secures evidence, and when counsel is called in.
- Brief each new representative director on SAPA when they take office, including expatriates arriving from headquarters.
- Review D&O insurance. Fines and criminal liability are generally not insurable, but defense costs may be.
7. Conclusion
SAPA applies fully to foreign-invested companies in Korea, and the Korean representative director is the person most directly exposed, whatever their nationality. Global safety policies, a CSO, or headquarters oversight do not shift that exposure automatically. What protects the CEO, and the company, is a safety system that exists in Korea, is actually carried out, and is documented to show that it was.
For foreign companies whose authority and budgets sit outside Korea, the governance structure itself should be reviewed. The time to build that record is before an accident, not after.