Environmental Law | Administrative Fines and Imprisonment Imposed on Major Corporations H and G for Violations of Environmental Law

Company H was indicted on charges of discharging approximately 2.76 million tons of phenol-containing wastewater without proper treatment from its D Plant in Chungnam between October 2016 and October 2022.

The phenol content of the wastewater was 2.5 mg/L, exceeding the legally permitted standard of 1 mg/L.

Company H argued that it was not subject to punishment because it used the wastewater as cooling water for gas-scrubbing facilities, but the court did not accept this argument.

In particular, it was found that, of the wastewater generated at the D Plant, Company H sent 330,000 tons to a subsidiary's plant for use as cooling water for gas-scrubbing facilities and sent 1.13 million tons to another subsidiary's plant for use in crude-oil desalting facilities.

An additional charge was that, between June 2017 and October 2022, the company evaporated and discharged 1.3 million tons of wastewater into the atmosphere through a stack at the Company H plant without any prevention facilities.

The court found that Company H committed the above offenses in order to save the cost of constructing a new wastewater treatment plant and the industrial-water costs of its subsidiaries, amounting to 45 billion won.

The Seoul Central District Court, which tried the case at first instance, determined that Company H had committed an organized and planned crime to cut costs, and held that "if a facility is installed to discharge wastewater without passing through prevention facilities, it is subject to punishment regardless of whether environmental pollution occurs."

The court sentenced three former and current executives who were jointly indicted to between nine months and one year and two months' imprisonment, and imposed a fine of 50 million won on Company H as a corporation.

In 2023, Company H was also notified that a penalty surcharge of 150.9 billion won would be imposed on it for discharging wastewater containing phenol above the standard level.

Relevant Provisions of the Water Environment Conservation Act

Under the Act, where a person operating discharge facilities or prevention facilities discharges water pollutants exceeding the permissible discharge standards, an order may be issued to suspend operations, to revoke the installation permit, or to close the facility.

Where the suspension of operations itself is likely to significantly impair the public interest, such as credit, employment, or prices, a penalty surcharge of 5 percent of revenue may be imposed in lieu of the suspension order.

In addition, a business operator or operator may be sentenced to imprisonment of up to five years or a fine of up to 50 million won.

∙2019: 3 violations in total

-Violation of the Clean Air Conservation Act (false recording of self-measurement results for air discharge facilities)
-Violation of the Chemicals Control Act (failure to wear safety equipment by handlers of hazardous chemicals; failure to report subcontracting of hazardous-chemical handling)
-Violation of the Soil Environment Conservation Act (exceedance of the soil-contamination concern level - order to remediate contaminated soil)

∙2020: 4 violations in total

-Violation of the Clean Air Conservation Act (exceedance of permissible standards for air-pollutant discharge facilities; failure to maintain operation logs for air discharge and prevention facilities; leaving air-pollution discharge facilities unattended without justifiable grounds)
-Violation of the Soil Environment Conservation Act (order to remediate at soil-pollution prevention facilities)

∙2021: 4 violations in total

-Violation of the Clean Air Conservation Act (leaving discharge facilities corroded, worn, or broken; failure to comply with management standards for fugitive-emission facilities; violation of waste-treatment standards; leaving machinery and equipment of prevention facilities broken or damaged; inadequate self-measurement records
-Violation of the Soil Environment Conservation Act (exceedance of the soil-contamination concern level)

∙2022: 2 violations in total

-Violation of the Malodor Prevention Act (exceedance of permissible standards for malodor discharge facilities)
-Violation of the Clean Air Conservation Act (failure to report changes to air discharge facilities)

∙2023: 1 violation in total

-Violation of the Chemicals Control Act (inadequate safety management of hazardous chemicals; failure to report the occurrence of a chemical accident)

Company G received warning dispositions together with administrative fines for its violations of environmental law.

Beyond these, administrative sanctions, including violations of the Chemicals Control Act, reached 31 cases in total, yet the actual dispositions amounted to no more than administrative fines.