Norwegian press reported
‘Hyundai Heavy Industry worker’s fatality’…”Shocking information”
In April 2015, a Norwegian reporter who is working for magazine agazine Teknisk Ukeblad> sent us an email. He said he would like to cover the case of Hyundai Heavy Industry (refer to as HHI below) subsidiary worker’s fatality. The ‘Network for HHI subcontractor’s occupational fatality and injury’ organized in May 2014 had issued press releases to foreign medias. The press releases include the occupational fatality data and all relevant information and questionnaire of occupational injuries in HHI to foreign investors and clients.
At the time of receiving the email, HHI just finished ‘Goliath’ offshore project which was contracted with the Norwegian company for the first cylindrical FPSO in the world. It appeared that the Norwegian reporter could not believe how many Korean workers were killed while the ship was being built, which was ordered from his country. Immediately, 3 articles were written through close communication with him and they were disclosed to the public around the time HHI built-‘Goliath’ arrived in Norway.
7 subcontractors died on HHI site in the first half of 2014. The public criticized but HHI did not seem to care. Ships are still being built in Ulsan where HHI is and workers are being exposed to danger.
South Korea has one of the highest occupational fatality rate in the world. Simply put, 12 workers die in South Korea when 1 worker dies in the U.K. Even though various factors can make this difference, the one clear thing is that more Koreans die working and more often. Korea’s occupational fatality is dominant among other OECD countries. Therefore, it is thought that dying ‘on the job’ is natural in South Korea but it is viewed differently by other countries.
When one of the researchers from Solidarity for Worker’s Health visited Sweden, he asked a question regarding Korea’s high occupational fatality rate and how it can be reduced and the Swedish researcher responded;
“Why do people die on the job?”
This means that worker’s safety follows the country’s safety protocols rather than the company’s.
Do they know workers are killed?
Most HHI’s investors and clients ordering ships are located overseas, mostly in Europe. Do they know that their ships are being built over the workers’ sacrifice?
In June 2014, the ‘Network for HHI subcontractor’s occupational fatality and injury (refer to as Network below)’ sent the first letter to Bank Investment Management in Norway and Netherlands. They conveyed the list of killed workers from 2004 to 2013 and the structural problem. They also described the danger 40,000 subcontracting workers are exposed to. The irresponsible subsidiary company, parent company HHI inducing it, and the existence of supply teams who are in the most danger were spoken as well. Then, they urged a responsible investment. Norges Bank Investment Management, Norway and ABP Netherlands are HHI’s investors.
Following this, the Asia headquarter of Dutch pension fund (APG) reached out to us. On 4th July, a business continuity and governance structure specialist from Asian headquarter visited Ulsan and met with subcontracting workers and he promised he would seek a structural resolution through the board.
We received a reply from 2 organizations in August and September 2014. Especially in the letter from ABP, there was a sentence; “For ABP, this is shocking information that raises a lot of questions that have to be answered by the company”.
Such action might have been shocking for individuals from a country where they wear a space suit looking PPE even for concrete road paving to hear that workers die from fall, suffocating and crushing. They responded that this news would be seriously discussed and they would look into other shipyards that may have same issues.
NBIM, Norway Bank Investment Management also sent us a similar intent of reply. Norges Bank is investing in more than 8,000 companies and owns a global fund portfolio. Their management mandate specifically requires them to use the OECD Principles of Corporate Governance, the UN Global Compact and the OECD Guidelines for Multinational Enterprises at the basis of their active ownership efforts so they will discuss HHI’s occupational fatality in this principle, they said.
NBIM sent us another letter as below in March 2015 afterwards;
“ Generally, we consider companies should ensure that their business practices adhere to internationally recognized standards and conventions where applicable. Based on this, in March this year we wrote a letter to HHI’s board related to the alleged issues on the company’s approach to HMS issues. We are also monitoring the wider situation with regards to the complaints directed at the company”.
NBIM appreciated that we informed them of the issue.
International corporates thoroughly adhering to human rights guidelines
Such a strong reaction above was due to the ‘3 principles’. One of them is OECD Guidelines for Multinational Enterprises. Originally, the Declaration and the Guidelines were adopted by OECD in 1976 and updated in 2011 for a fifth time. This guideline is seen as the standard of the activities OECD countries apply to multinational enterprises.
According to this guideline, multinational enterprises based on OECD countries should have ? 1. Regardless places 2. The duty to protect human rights within the framework of internationally recognized human rights 3. Within the context of their own activities, avoid causing or contributing to adverse human rights impacts and address such impacts when they occur 4. Have a policy commitment to respect human rights 5.Carry out human rights due diligence to prevent or mitigate adverse human rights 6. Provide for or co-operate through legitimate processes in the remediation of adverse human rights impacts. In terms of aspect that this guideline has been developed by an authorized international organization, it is defined as a standard which has international universality.
The other one is UN Global Compact. It was officially launched in 2000 and encourages businesses worldwide to contribute in problem-solving for issues following globalization by adopting sustainable and socially responsible policies, and to align business with 10 principles on human rights, labor, environment and anti-corruption. UN Global Compact is a relationship, not a regulation to force or mediate company’s operations or activities so it does not carry legal binding forces but in 2015, 8,368 companies from more than 161 countries are participating in. This is the way UN and companies directly promise to comply with human rights.
Lastly, ‘OECD Principles of Corporate Governance’ a kind of guideline, developed in 1999 by the ministerial meeting and revised in 2002 and it includes context in principle such as the rights and duties of shareholders and board, integrity of stakeholders, disclosure etc.
This document itself does not carry any legal binding power but this is being broadly adopted as a highly respected guideline by various policy makers, investors and companies.
When viewed in these 3 principles, HHI’s occupational fatalities are surely problematic to those investors. This is because neglect of the fatality on worksite is obvious neglect of their social responsibility against the principles. It must be uncomfortable to see their invested company’s such problematic action as an investor.
HHI “I don’t know”, a consistent answer to the issue
As described, foreign companies see the structure has a serious problem but HHI, actually is consistently turning a blind eye. On 29th September 2014, the Network sent a questionnaire to HHI regarding ‘Occupational accident status for HHI subcontractors’ and ‘Occupational safety’. It was right after another subcontractor’s fatality in August and 3 worker’s suffocation occupational injury at Hyundai Mipo Dockyard, an affiliate of HHI in June.
The questionnaire consisted of 7 clauses;
1. The role and outcome of Occupational Health and Safety Committee
2. The specific details of 300 billion won investment announced in ‘Comprehensive renovation measures for Safe administration’
3. The details of ‘HHI total assessment result’ measured by Korea Occupational Safety and Health Agency and the next step plan
4. The status for imputation of occupational hazard and accidents, conceal and discrimination of subcontractors’ occupational accident
5. Regular report and disclosure of occupational accident related policies and outcomes
6. The recent progress of follow ups for the subcontractor’s fatality in August and 3 worker’s suffocation occupational injury at Hyundai Mipo Dockyard in June
7. Additional indicators of ‘human rights’, ‘labor’ and ‘society’ in CSR report
We have advised them a deadline, 20th October to reply but HHI is not responding at all till now.
2 more workers were killed during November and December and another 2 were killed and one in coma this year. Would it be a co-occupational injury? HHI subcontractors are still being killed at this time and HHI is running subcontracting companies out of business as a part of restructuring from early this year.
The subcontractor’s labor union is only a tenuous group which needs a huge courage to knock an HHI’s door.
There is news that Mr. Jung, the major shareholder of HHI is running for FIFA presidency during this time blacklisted workers due to company shut-down, joining the subcontractors’ labor union to hold an all-night demonstration at the HHI main gate over 100 days.
How long Should Korean subcontracting workers continue to work in such a hazardous environment? It appears that this will be continued for a while. We have sent the same letter we sent to Norway and Netherland to Korean National Pension Service (NPS) as NPS is also a stockholder of HHI. I would like to end this article with the reply from NPS;
“It is not clear the direct relation between the raised issue and our NPS’s stable return on investment. Moreover, NPS’s exclusive benefits in such as 5%, 10% appraised value, short-term difference return can be deprived and operations can be directly restricted in the case NPS interferes the matter of company’s own administration as it can be considered as administration participation according to Capital Market Act.
Currently, there are various opinions suggested from several stakeholders for NPS’s responsible investment and the discussion for range and boundary of responsible investment has not been agreed yet in the fund operation committee, the top decision maker.
Thus, within the current fund operation regulation system, NPS is difficult to meet your request”.
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Front page http://laborhealth.or.kr/41059 Preface of Table of Contents 1. Fall to sea! Why didn’t they call 119 ? click 2. “Wish I could remove the word of ‘suicide’ covered with my husband” click 3. 13 deaths within a year at the ‘death factory’… what happened? click 4. [Infographic] People in the ‘hell ship’, how were they killed? click 5. ‘Shipyard ghost story’, the same death in 2014 as 1994 again? click 6. Head opened, leg broken.. No Worker’s Compensation! click 7. Blowing the whistle “How did I blackmail them?” click 8. ‘Smashing’ subcontracting companies, ‘choking’ workers click 9. “Occupational injury?” You didn’t call 119, did you? click 10. “Nobody stops running on a single log bridge” click 11. “What is should be like… what it really is like” click 12. ‘Old’ blacklist, still valid? click 13. “Jeong Mong-joon is coming to HHI to collect bills” click 14. Pyramid contract ‘Mul-yang team’, causes death click 15. Norwegian Press reported ‘Hyundai Heavy Industry Worker’s fatality’… “Shocking information” click |
