Prosecutors are investigating two shipping trade organizations
responsible for vessel safety checks and for certifying ships that
operate in domestic waters.
Two officials at the Korea Shipping Association (KSA) have been
arrested on charges of obstructing justice for destroying documents
related to a probe into lobbying government officials. A third
official was arrested for alleged influence peddling and
embezzlement. Prosecutors are also investigating Korean Register
(KR), which tests and certifies ships.
Trade groups wield enormous power in South Korea's shipping industry — and in other sectors, too — as lobby groups and as business
interests that can outsource inspection contracts to smaller
companies, said an official at a shipbuilding company.
"Korean Register has so many officials who come from the Maritime
Ministry," said the official, who is based in the port city of Mokpo
and who did not want to be named due to the issue's sensitivity and
the ongoing criminal investigations.
"There are many interests that co-exist and business has been done
to protect each other for so many years, you have to wonder if
something like inspections can be done right."
The KSA is responsible for routine shipping inspections, such as the
loading of cargo and safety gear intended for use by passengers. The
body, which is paid for by passenger and cargo ship operators, also
represents shipping companies.
Prosecutors investigating the ferry crew members — 15 of whom are
charged with negligence related to the April 16 sinking of the
6,800-tonne Sewol — said they had testified to having received no
formal training on emergency evacuation.
Since the KSA was founded, 10 of its 12 chairmen were former
officials at the Maritime Ministry, as were eight of the dozen
Korean Register chiefs since 1960.
As tensions run high, many South Koreans are demanding change to the
way the government and parts of society have conducted business for
years on the basis of cozy personal ties rather than applying
standards and objective oversight.
Local media have dubbed shipping industry officials and the
government agencies that oversee them as a "maritime mafia",
guarding relationships built up over decades to guarantee jobs for
each other and turn a blind eye to negligence.
This potential conflict of interest has fed a culture where safety
can be overlooked, and where corners are cut to get things done
quickly and to maximize profit, say experts and officials, including
South Korean President Park Geun-hye.
The practice of trade groups filled with former government officials
who retired from oversight posts has been central to previous
scandals in South Korea — such as the discovery of widespread
forgery of safety certificates for parts for nuclear plants that
provide about a third of the country's power.
Similar lax oversight has resulted in questionable decisions in the
banking and insurance sector, construction and government
"It's hard to stop," said Kwon Oh-in from the civic group Citizens'
Coalition for Economic Justice, which researches corruption and
irregularities in government and big business.
"The biggest problem is government officials turning into lobbyists
working for industry trade groups," he said. "It's been going on for
decades since South Korea experienced economic development and
President Park this week promised to clean up the "accumulated evil
practices" in government to make the country safer. Tending his
resignation at the weekend, Prime Minister Chung Hong-won said the
ferry accident was the result of longstanding malpractices.
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"There are too many irregularities and malpractices in parts of
society that have been with us too long, and I hope those are
corrected so that accidents like this will not happen again," he
"South Korea has lots of cases like the Korea Shipping Association,
where a lobby group that represents members' interests also conducts
safety checks and industry supervision," said Park Jhung-soo, public
policy professor at Ewha Women's University in Seoul. "The
government says this is the efficient way to do things, but it
actually lacks objectivity."
Chon Young-kee, a rare case of a long-time technical expert rising
to the top job, resigned as Korean Register chairman and CEO on
Monday, saying his decision did "not suggest any wrongdoing,
negligence or any other deficiency by KR associated with this very
"We are confident that we have performed our duties diligently and
in strict accordance with the relevant national and international
regulations as well as our rules," KR said in a brief statement,
adding it would do all it can to assist the authorities with the
The KSA declined to comment, citing the ongoing investigations.
More Korean Register and KSA executives and staff may face
investigation for negligence and embezzlement of public funds,
prosecutors have said.
Punishment for those convicted in South Korea of causing damage and
loss of life appears lenient when set against other developed
After a 1999 fire killed 19 kindergarten children staying at a
privately-run resort where their lodging had not been inspected and
was found to contain flammable materials, the operator was sentenced
to 18 months in prison, and later went on to operate a similar
In 1970, after 326 people died on a sinking ferry, the ship's
captain was given a 3-year jail term and the owner of the ferry
operator was jailed for 18 months. Another ferry accident, in 1993,
killed 292 people. Inspectors at the port authority who were held
responsible were handed prison terms of 6-8 months.
"There's definitely a tendency of leniency by the courts in these
accident cases," said Kim Hyun, an attorney specializing in maritime
law. He said official sentencing guidelines dictate a 5-year maximum
prison term for negligence convictions — even in the event of mass
Where grievous faults are proved, such as flight and gross
negligence, that maximum can be increased to a life term, Kim noted.
"For the Sewol case, those faults will be applied."
(Additional reporting by Kahyun Yang and Sohee Kim;
editing by Ian Geoghegan)
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