Labor Ministry Ends Coupang Probe with No Major Charges

Coupang headquarters in Songpa-gu, Seoul. (Yonhap) The Ministry of Employment and Labor has released the results of its planned inspection and investigation conducted for about 9 months to uncover Coupang’s alleged systematic concealment of industrial accidents and blacklist suspicions. The case of the late Jang Deok-jun was decided to be forwarded with an opinion of non-indictment, and the core labor allegations raised at the National Assembly hearing were also concluded as ‘no violation’. Unlike the competent minister who publicly declared a zero-tolerance principle at the beginning of the year, criminal punishment for the core allegations did not take place. The inspection results were centered on administrative fines and judicial processing for violations of safety measures. The Ministry of Employment and Labor announced on Oct. 22 the planned inspection results for Coupang, Coupang Fulfillment Services (CFS), and Coupang Logistics Service (CLS), as well as the investigation results of the complaint regarding the concealment of industrial accidents in Jang’s case. The Ministry of Employment and Labor confirmed the fact of inappropriate instructions by Kim Bom-suk, Chairman of the Board of Directors of Coupang Inc., who was the CEO of Coupang at the time. Chairman Kim sent messages through the internal messenger in October 2020 to the effect of “Make sure there is no record left that he worked hard” and “They are part-time workers”. Company officials analyzed closed-circuit television (CCTV) to classify the deceased’s movements, such as drinking water and going to the restroom, and organized the times. During the Korea Workers’ Compensation and Welfare Service’s investigation for survivors’ benefits, they first submitted CCTV footage where the deceased did not appear, and then submitted the video showing the deceased during the second submission. It was also revealed that an official stated the work environment differently from the video. However, the Ministry of Employment and Labor decided to forward the case to the prosecution office with an opinion of non-indictment. The explanation is that for the crime of concealing industrial accidents under the Occupational Safety and Health Act to be established, there must be a failure to report the occurrence of an industrial accident and an active act to prevent it from being known to the outside, but at the time, a report on the occurrence of a serious accident was made and no acts of obstruction in the approval process were confirmed. The fact that the statute of limitations (5 years) based on October 2020, when Jang died, had already expired in October last year was also cited as a basis for non-indictment. The complaints were received respectively in December last year and in January this year, which is after the expiration of the statute of limitations. Oh Young-min, Director-General of the Occupational Safety and Health Bureau at the Ministry of Employment and Labor, answered the question, ‘Could it be seen as a concealment of industrial accidents if the statute of limitations had not passed?’ during the briefing on Oct. 22 by stating, “It is not easy to apply the crime of concealing industrial accidents under the Occupational Safety and Health Act.” The labor allegations that emerged at the hearing also did not lead to punishment. The ‘Performance Improvement Program (PIP)’, pointed out as a program to oust low performers, only resulted in the imposition of an administrative fine of 700,000 won (aboiut $500) due to the failure to state it in the rules of employment, as no actual dismissal cases were confirmed. Regarding the ‘blacklist’ suspicion of referencing a list of retirees for hiring, the creation of the list was acknowledged, but it was deemed not to constitute interference with employment as it was not shared externally. The suspicion of illegal dispatch between affiliates was also not acknowledged. The suspicion of systematic concealment of industrial accidents also could not be uncovered. The number of workers who died at the three Coupang companies from January 2022 to November last year was 23. On the other hand, there were only 3 applications for survivors’ benefits for cerebrovascular and cardiovascular diseases from 2022 to October last year, raising suspicions of concealment through settlement. The search and seizure warrant requested by the Ministry of Employment and Labor to secure the settlement agreements was dismissed by the court. In the planned inspection, a total of 206 violations were detected combining the occupational safety and labor standards fields. The Ministry of Employment and Labor decided to judicially process 61 of these cases and impose a total of about 1.96 billion won in administrative fines on 145 cases. By affiliate, Coupang Fulfillment Services had the most at about 1.29 billion won. For 2 cases where applications for industrial accident medical care were withdrawn through the payment of settlement money or interviews, the ministry recognized them as crimes and launched a separate investigation. Such a disposition contrasts sharply with the hardline stance the Ministry of Employment and Labor put forward at the beginning of the year. Minister of Employment and Labor Kim Young-hoon said in January, “I had doubts whether it was at a stage where it could be fixed and used.” The Ministry of Employment and Labor formed a task force headed by the vice minister and stated that it would “take action without tolerance” if violations were confirmed. However, the conclusion after the massive investigation that continued for 9 months was different. Director-General Oh said at the briefing on Oct. 22, “The legal sentiment of the general public and what is viewed as the crime of concealment under the Occupational Safety and Health Act are different,” adding, “I will answer to the extent that what was done at the time was inappropriate.” Coupang stated through a position statement on this day, “We once again convey our deep condolences to the bereaved family,” and “We will actively take measures for matters requiring improvement, and faithfully explain the necessary issues.” Regarding Chairman Kim’s instructions, however, it stated, “It is a one-sided claim by a former executive who was dismissed for misconduct and lost in a lawsuit, and it is regrettable that it was announced as if the inappropriate instructions were confirmed as fact even though they were not verified as fact in the related investigation.” It added, “We will devote continuous investments and efforts to create a safe and healthy work environment.” The former executive mentioned by Coupang is A, who served as the Chief Privacy Officer (CPO). A filed a lawsuit for invalidation of dismissal against Coupang but ultimately lost in the Supreme Court. He reported suspicions of illegal activities within the company to the media right after the Coupang personal information leak incident last year. Coupang refuted at the time that A was making distorted claims while harboring dissatisfaction with his dismissal. Coupang’s explanation is that A was dismissed for employee abuse and retaliatory acts against reporters, and in this process, he demanded 16 billion won in settlement money from the company. The Ministry of Employment and Labor maintains the position that it directly secured related data and confirmed the fact of the instructions through statements from those involved.