Coupang, its subsidiaries face $1.5 million fine for workplace violations

• South Korea plans to fine Coupang and its subsidiaries 1.96 billion won ($1.5 million) over 206 labour and workplace safety violations

• The probe followed the 2020 death of logistics worker Jang Deok-jun after an overnight shift; legal action over record-related allegations was barred by the statute of limitations

• Separately, the Fair Trade Commission approved 3 billion won ($1.94 million) in corrective measures over alleged unfair dealings with subcontractors

South Korea’s labour ministry has announced plans to impose fines totalling 1.96 billion won (around $1.5 million) on e-commerce giant Coupang and its subsidiaries over 206 alleged labour and workplace safety violations.

The violations were identified during an inspection of Coupang, its logistics units — Coupang Fulfillment Services and Coupang Logistics Services — and its logistics centres, Yonhap News Agency reported on Thursday.

The ministry said it would pursue legal action over 61 violations, including the failure to install adequate safety measures for conveyor belts. Fines will be imposed for the remaining violations, which include failing to report industrial accidents or delaying the submission of accident reports to local labour authorities.

Other violations included failures to conduct special health checkups for night-shift workers and the improper installation or management of workplace break facilities.

The inspection was launched following allegations that Coupang had attempted to cover up workplace accidents after the death of logistics centre worker Jang Deok-jun in 2020.

Jang died of acute myocardial infarction after working an overnight shift, prompting concerns over working conditions and occupational health risks at the company’s logistics facilities.

A subsequent ministry investigation found that Coupang founder Kim Bom-suk had instructed a company official not to retain records indicating that Jang had worked hard. However, the ministry said it could not pursue legal action over the matter because the five-year statute of limitations had expired.

The findings have added to scrutiny of Coupang’s workplace practices, particularly the safety of logistics workers and the treatment of employees working overnight shifts.

The labour ministry’s proposed penalties come as Coupang faces separate regulatory action over its business dealings with subcontractors.

South Korea’s Fair Trade Commission (FTC) recently approved voluntary corrective measures worth 3 billion won (around $1.94 million) proposed by Coupang Corp. and its private-label affiliate, Coupang Private Label Brands (CPLB), to address allegations of unfair business practices.

The decision followed an FTC investigation into the two companies’ dealings with subcontractors. According to the watchdog, Coupang and CPLB had provided 314 subcontractors with contracts that omitted information required under the law.

The companies were also found to have reduced supply prices for 94 subcontractors through discount promotions that were not stipulated in their agreements, with the practices dating back to 2022.

The FTC accepted the proposed corrective measures, allowing the case to be resolved without further legal proceedings under the consent decree process.

The two regulatory developments place Coupang under increased scrutiny over its workplace safety standards and commercial practices as South Korean authorities step up enforcement of labour and fair-trade regulations.

With IANS inputs