FTC cracks down on toxic items

Economy

Published: 05 Jan. 2017, 20:00

FTC cracks down on toxic items

Hwang Kyo-ahn, acting president, center, and other top government officials, including Finance Minister Yoo Il-ho, left, holding a meeting on unveiling the economic government departments’ work plan for this year in downtown Seoul on Thursday. [YONHAP]

Companies whose products cause serious harm to consumers will face stricter penalties as they will be forced to pay up to three times the damages, the Fair Trade Commission said Thursday. This new move is an attempt by the government to prevent another consumer tragedy like the Oxy Reckitt Benckiser’s humidifier disinfectant, which is linked to numerous deaths.

In its 2017 policy plan released Thursday, the FTC said it will aim to improve consumers’ rights, including taking preemptive measures to ensure their safety and well-being.

As part of the initiative, the agency said it will toughen regulations on product liability.

The commission said in its report that if a consumer is injured and the manufacturer was aware of the potential harm but turned a blind eye, it will have to compensate the consumer as much as three times of the afflicted damage.

“At the moment, about nine related bills have been submitted to the National Assembly, waiting for approval,” said an officer from the consumer policy bureau of the FTC. “This is to revise the current law [product liability act] and place stern measures to prevent any injuries.”

The current version of the product liability act states its purpose is “to help protect injured persons and contribute to the improved safety of the citizens’ life and the sound development of the national economy by providing for the liability of manufacturers for damages caused by the defects of their products.”

However, the current law does not stipulate how much the producer of defected products will be held accountable for any harm.

The revision also includes a clause that would relieve consumers of the burden of proof, which often is a harrowing procedure for consumers who often lack expertise and financial means to provide proof. Under the current rule, consumers must prove a product that is defective and the relationship between the defect and damage.

The regulator expects the change will bolster the legal framework to aid consumers who will face a less arduous legal procedure to receive compensation for damages. Consumers often became lost in the process, as they were forced to go head-to-head against giant conglomerates with superiority in resources.

The FTC’s decision to strengthen the product liability law is speculated to have stemmed from a recent scandal that exposed corporate misconduct.

Last year, it was discovered that Oxy’s humidifier sterilizer contained toxic chemicals such as polyhexamethylene guanidine that can cause lung disease if inhaled. Despite being well aware of the matter, Oxy and its British parent company Reckitt Benckiser continued to sell their products, even tweaking reports and bribing researchers to conceal the matter.

By the time the company admitted to the charges, its products had killed at least 73 and sickened 108 more, according to prosecutors.

Other companies also admitted that their products contained similar deadly substances.

More than 5,000 people are registered as victims of sterilizer products with the state-led Korea Environmental Industry & Technology Institute, according to the Asian Citizen’s Center for Environment and Health, a civic group. Of them, 1,112 died from illnesses allegedly caused by sterilizers.

BY CHOI HYUNG-JO [choi.hyungjo@joongang.co.kr]