Written by: Dafiq Kamal & Ranggi Rembang Rawi
Designed by: Dewi Wulandari
The world has just been shaken by the shocking news coming from one of the world’s famous bakeries from South Korea, Paris Baguette. First and foremost, Paris Baguette is a global bakery chain that has opened its outlets all over the world. However, their stellar reputation was tarnished due to an incident that occurred recently.
On the morning of 15th October 2022, a 23-year-old employee was found lifeless with her body crushed inside the factory’s mixing machine. The employee was operating a mixing machine on her late-night shift alone when she accidentally got pulled inside the machine.However, the faux pas that Paris Baguette did was they covered this incident rather than taking accountability for it. They just continued their day-to-day operations like usual and tried to neglect this problem. When this problem was exposed to the public, it resulted in a negative backfire on the company because now the world citizens, especially South Koreans, have the urge to boycott this bakery chain. They felt that Paris Baguette has violated the safety regulation as the mixing machine that is being operated by the deceased is supposed to be operated by two people.
In reality, workplace safety in South Korea has always stuck out like a sore thumb in the developed world. In 2020 alone, South Korea reported more than 2,000 work-related fatalities according to the country’s labor ministry. That fact prompted Seoul and its National Assembly to enact a new law regarding occupational health and safety in 2021 called the Serious Accident Penalty Act or SAPA for short. Seeing that the incident is beyond the effective date of the new workplace safety law, which is on 27 January 2022, it’s telling that there’s a disconnect in Paris Baguette’s corporate governance.
Corporate governance in Korea follows the Korean Commercial Code or KCC for short. Under the KCC, a company’s board of directors has a responsibility to supervise the performance of directors. Directors are obliged to perform their duties for the company in accordance with the law and the articles of incorporation. Based on the fact regarding the incident (a machine that is supposed to be operated by two people is operated by one), it’s clear that Paris Baguette’s isn’t following established workplace safety laws. That fact makes the directors of Paris Baguette liable because the KCC states that a director shall be liable for damage suffered by the company if he or she has violated any law or the articles of incorporation by his or her wilful misconduct or negligence, or has neglected his or her duties. Furthermore, under SAPA, business owners and managerial personnel are liable for “serious accidents” and corporations are liable vicariously. It’s disheartening seeing that this kind of incident still happens in today’s world, but this is also a wake-up call for companies to be more accountable and implement good governance in their business practices.
References:
https://www.sfgate.com/food/article/korean-chain-paris-baguette-boycotted-17534053.php
https://www.ft.com/content/9d29e967-4421-4551-a1df-e5ae3b59a9b4
https://www.ft.com/content/a1296f0e-58d1-4f81-9e80-090f478397ab
https://www.lexology.com/library/detail.aspx?g=0fe0c3bd-4b05-44d2-b94d-8f02ee4b2b83
https://thelawreviews.co.uk/title/the-corporate-governance-review/south-korea
https://www.shinkim.com/eng/media/newsletter/1453?page=0&code=&keyword=
