Samsung C&T Disaster: Construction Risk Exposed

Samsung C&T, which is evaluated as having the best construction capacity in Korea, had its safety and health management shaken due to a fatal accident at the work site. The risk of a major disaster was triggered when a worker belonging to a subcontractor died at a construction site where Samsung C&T was working in Pangyo, Gyeonggi-do.

According to the construction industry on the 30th, an accident occurred where a worker in his 60s, Mr. A, died after being hit by an excavator on the morning of the 29th at the new PSM Tower construction site in Pangyo New Town, Seongnam, Gyeonggi Province, which was being built by Samsung C&T. The fire department was dispatched after receiving a report that an accident had occurred during underground leveling work, but by the time the emergency services arrived, the worker was confirmed to be already dead.

According to the police, the accident occurred when a driver in his 50s who was driving an excavator at a construction site failed to spot Mr. A while driving. It was reported that preliminary work to erect a steel frame after digging was in progress at the site at the time. It was discovered that the excavator driver and the deceased, Mr. A, were workers from different subcontractors.

The PSM Tower, where the fatal accident occurred, is one of the software promotion facilities promoted by the NCsoft consortium. It has 14 floors above ground and 9 floors underground (total floor area of ​​330,574㎡) and is scheduled for completion next year. NCSoft, Samsung C&T, Korea Local Administrative Mutual Aid Association, and Mirae Asset Global Investments participated in the consortium, and PSM Tower was scheduled to be used as a rental office in the future.

Immediately after the accident, the Ministry of Employment and Labor began an investigation into the specific circumstances of the accident and whether or not there was a serious accident violation against those involved at the scene. This accident is noteworthy because it occurred at a Samsung C&T construction site, which is considered to have the highest level of construction capabilities. Samsung C&T’s comprehensive construction capability evaluation this year is 34.7219 trillion won, and it continues to maintain first place, beating second place Hyundai Engineering & Construction (17.2485 trillion won).

Samsung C&T also faced a major disaster this year, joining the same ranks as construction companies that suffered from previous on-site accidents. Starting with a series of fatal accidents at the Hyundai Engineering construction site early this year, additional site disasters at POSCO E&C prompted President Lee Jae-myung to issue a direct warning in July, and site accidents continued at DL Construction, GS Construction, Daewoo Construction, and Lotte Construction.

In fact, this is not the first worker death accident at a Samsung C&T construction site this year. Last June, a worker belonging to a subcontractor fell to his death while working on piping installation at a Samsung Electronics semiconductor construction site in Pyeongtaek, Gyeonggi-do. In relation to this, Samsung C&T’s safety shortcomings, including the on-site manager being booked as part of an investigation into charges of neglecting safety measures, came to the fore.

The risk of serious disasters is becoming more prominent as disasters due to safety accidents in the field are repeated. According to the sustainability report, Samsung C&T achieved zero accidents in 2023, but three fatal accidents occurred last year. Two were counted at domestic workplaces and one was overseas. This year, too, there was a setback in restoring trust in safety.

After becoming aware of this accident, Samsung C&T announced on the Korea Exchange that a serious disaster had occurred that afternoon. Previously, the Financial Services Commission revised the Korea Exchange’s disclosure regulations to include mandatory disclosure on the same day that a listed company reports a major disaster to the government, which went into effect on the 20th of this month. This is the first time that a major disaster has been announced since the regulations were implemented.

In addition, Oh Se-cheol, CEO of Samsung C&T’s construction division, personally apologized. CEO Oh Se-cheol said in his apology, “There was an unfortunate accident in which a worker died while working at the construction site of the Pangyo office building in Seongnam-si, Gyeonggi-do, which was under construction. We pray for the soul of the deceased and offer our deepest condolences and sincere apology to the bereaved family.”

Samsung C&T plans to cooperate with the police and Ministry of Employment and Labor investigations and establish safety management as a top priority through company-wide on-site inspections. CEO Oh Se-cheol explained, “Immediately after the accident, we reported it to the relevant authorities and are faithfully working on the investigation. We also stopped work at the accident site and all construction sites nationwide and began conducting special safety training and emergency safety inspections.”

At the same time, he promised to focus on preparing measures to prevent recurrence. CEO Oh said, “Even though we have done our best in safety management with safety as the first management principle, we will reflect on our shortcomings in not being able to eradicate accidents, and we will work with field workers and partner companies to find the root cause of accidents and quickly prepare measures to prevent recurrences.”

The aftermath of a major disaster may have negative effects on Samsung C&T’s stock price, which is currently in an upward trend. Previously, Samsung C&T recorded an operating profit of KRW 993.4 billion in its third quarter results announced the day before the accident, a 34.9% increase compared to the same period last year (KRW 736 billion). The reported price was KRW 232,500, but today it is showing a significant decline of 2% in early trading.