Absurd law on recall of defective vehicles

The number of bills passed at the National Assembly last year was 679, much larger than that of the United Kingdom and Japan, whose parliaments process less than 100 bills a year on average. In theory, this is a result possible only when lawmakers open sessions every single day and study two bills a day, a scenario beyond imagination given the current circumstances. Then how did the lawmakers deliberate a number of bills in a year? Wouldn’t there be a possibility that a faulty bill gets to be passed?

It turns out that such a case has in fact happened. Amendments to the Motor Vehicle Management Act was passed in Korea in 2011, though it had newly added provisions, resulting in a wrongly twisted structure of criminal punishment.

On Aug. 22 that year, the Ministry of Land, Infrastructure and Transport announced that the Motor Vehicle Management Act would be split into two different acts based on policy and safety, respectively, citing inconvenience and weakening industrial competitiveness. The amendment was made to introduce the concept of service administration and to enhance safety.

Accordingly, provisions regarding recall were also modified. Rules about the correction of manufacturing defects are stipulated in Article 31 of the Motor Vehicle Management Act while penal provisions are in Article 78. Earlier, voluntary recall and forced recall actions were each stated in the first clause and second clause of Article 31. However, the contents of the second clause were pushed to the third clause in 2011, and the new second clause had a statement that manufacturers should submit a plan for economic compensation to the land, infrastructure and transport minister if they want to avoid corrective measures. Initially, manufacturers could be slapped with penalty if they failed to comply with the authorities’ order to recall defective products. However, now that the article had three clauses with the amendment, penal provisions came to be applied to the first clause, creating a loophole. Thus, manufacturers currently can be punished by imprisonment for not more than 10 years or a fine of not more than 100 million won if they do not voluntarily recall products at the right time, but ironically, they’re not subject to punishment even if they go against the land minister’s order.

The legal loophole came to be known belatedly when German carmaker BMW recalled its vehicles with defects that led to engine fires. Industry watchers say that though it is hard to point who is at fault, the amendment act has an obvious error. While it is recommended for manufacturers to voluntarily acknowledge and recall faulty parts, the government is supposed to step in when severe defects are found that affect safety. Therefore, not complying with the authorities’ order should be penalized. No other country in the world punishes companies for voluntarily recalling products. Yet, the land ministry insists that there is no error in the law, citing a separate rule that enables the government to order a disobedient manufacturer to suspend its sales.

Still, it is hard to understand that not a single public discussion was held when such a potentially controversial law was to be revised. Also, the current law doesn’t reflect the country’s responsibility for severe defects. The amended law doesn’t seem to be strengthening the safety of people or the competitiveness of industries in any parts, either.

What’s particularly problematic is that the penal provisions may be interpreted in different ways. The law stipulates that a manufacturer should “take corrective measures from the date of acknowledging the facts about defects hampering safe operations,” while “a person who has concealed or reduced defects, or disclosed defects to the public by falsity, or failed to correct such defects without delay” is subject to punishment. Grey areas are created regarding the scope of defects affecting safe operations as well as the number of faulty vehicles for defects to be acknowledged. Does “a person” refer to a working-level official or a CEO? These statements are all too vague. Experts say that penalizing companies based on such unclear criteria is a clear violation of the Constitution.

The issue was spotted and another amendment has been proposed and submitted at the National Assembly by lawmakers including Kim Sang-hoon of the Liberty Korea Party, but there’s only slow progress. Therefore, the land ministry should more actively take part in revising the law.


artemes@donga.com