The Korea Fair Trade Commission has begun a review of four construction companies, including POSCO E&C, for allegedly unfairly shifting industrial safety costs and responsibilities to subcontractors.
The Korea Fair Trade Commission (KFTC) has initiated an investigation into four construction firms, including POSCO E&C, KR Industrial, Dasan Engineering, and NC Construction, for allegedly violating subcontracting laws by improperly transferring industrial safety costs and responsibilities to subcontractors. This decision comes as the KFTC's secretariat submitted a report outlining potential sanctions to the commission, which includes opinions for corrective orders and fines against these companies.
Investigation findings indicate that POSCO E&C implemented clauses in subcontracts that unfairly placed the liability for safety incidents, such as accidents related to not wearing safety gear, solely on subcontractors. Other companies involved, Dasan Engineering, NC Construction, and KR Industrial, also included clauses that shifted the entire cost burden of accidents to subcontractors, violating principles of responsibility typical for main contractors. The KFTC sees these agreements as posing risks of transferring financial and operational responsibilities for safety management away from the primary contractors.
Additionally, the KFTC has noted instances where POSCO E&C participated in competitive bidding with notably low contract prices that were below market rates without justifiable reasons, indicating further violations of subcontracting regulations. Other identified infractions include the late issuance of required documents and improper delegations of liability associated with customer complaints, all of which contribute to serious legal implications for these companies if found in violation of the law.
