HL Mando Accident Exposes Governance Failures, Safety Lapses

A fatal accident at auto parts manufacturer HL Mando's Pyeongtaek plant has exposed deep-seated issues in the company's governance and safety protocols. A 28-year-old subcontractor worker, Kim Seung-mo, died on March 22 after being caught in machinery during a maintenance check. The accident occurred because a senior manager initiated a test run without confirming if anyone was inside the equipment.

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The fatal accident at HL Mando's Pyeongtaek plant, where a subcontractor worker died, shows that industrial safety failure can be a failure of corporate governance.

Further investigation revealed a lack of basic safety measures. Two subcontractors were working in close proximity, yet no work supervisor was assigned, and no safety meeting was held before the task. Critically, the machine involved lacked a safety interlock system, a device designed to prevent operation when someone is inside. The union discovered that about 100 of the plant's 248 similar machines are older models without this crucial safety feature, a problem that also contributed to a similar accident in 2016.

The company's governance structure is also under scrutiny. HL Mando recently received administrative guidance for excluding its CEO from the employer's seat on the labor-management council. Furthermore, the company failed to hold its second-quarter industrial safety and health committee meeting, leading to a complaint filed with the labor ministry. This suggests that the company's legal safety participation bodies are not functioning effectively, raising questions about whether workplace risks are being communicated to top management and if safety systems are operating as intended.

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If the legal labor-participation bodies were not functioning, we cannot help but ask whether the risks in the field were properly communicated to top management and whether the safety system played its role.

A more fundamental concern is the dual role of one executive serving as both Chief Labor Officer (CLO) and Chief Safety Officer (CSO). Critics argue this structure dilutes accountability. The law requires a robust management system with authority over personnel, budget, and equipment improvement, not just a title. Concentrating safety responsibilities on a single vice president, while leaving final decision-making power with the CEO, can turn the CSO position into a shield rather than a genuine safety enhancement. A recent court ruling, which acquitted a CEO in a case where safety responsibilities were fully delegated to the CSO, further complicates this issue, prompting calls for stricter scrutiny of the CSO system's effectiveness.

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If the Chief Safety Officer also exercises the authority of the Chief Labor Officer, involving themselves in accident investigations, data access, interviews with related parties, and responses to the labor union in the Safety and Health Committee, conflicts of interest arise where the investigation target and investigation/response authority are not separated.

The article concludes by emphasizing the ultimate responsibility of the board of directors and audit committee. Citing a Supreme Court ruling on bid-rigging, it argues that all directors, including outside members, have a duty to oversee internal control systems. In HL Mando's case, where the CEO also chairs the board, the article questions the board's ability to conduct an independent investigation and assign responsibility. It calls for the board to demand the immediate exclusion of the involved executive from accident investigations and to establish an independent investigation system involving external experts and the labor union. The company must also publicly disclose budgets and timelines for safety improvements and re-evaluate the combined CLO/CSO role to ensure the safety organization reports directly to the board, independent of production and labor interests.

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If the board of directors, which is supposed to supervise the management's execution of duties, is held by the person responsible for executing those duties, we must answer whether an independent investigation and determination of responsibility for this accident by the board is possible.