Fatal accidents and procurement corruption emerge as key issues amid defense export push
Hanwha Aerospace cited for 473 violations; LIG executive and DAPA official indicted
An explosion at a Hanwha Aerospace facility in Daejeon and bribery allegations surrounding LIG D&A's defense procurement contracts emerged as the central issues at Tuesday's national audit of the Defense Acquisition Program Administration. The audit focused on whether DAPA had adequately managed safety at production sites and ensured fairness in weapons system acquisition as it pushes to expand defense exports and build advanced military capabilities.
The National Assembly's National Defense Committee conducted the national audit of DAPA, the Agency for Defense Development and the Defense Agency for Technology and Quality on Tuesday.
An explosion struck Hanwha Aerospace's Daejeon plant in June during a cleaning operation, killing five workers and injuring two. The same facility had seen fatal accidents before — fires and explosions in 2018 and 2019 killed five and three workers, respectively.
A special inspection conducted after the accident uncovered widespread violations of basic safety requirements. According to results released by the Ministry of Employment and Labor this month, inspectors found a total of 473 legal violations at the Daejeon plant and its nearby research and development campus. The ministry said it would refer 189 of those violations for criminal prosecution and impose fines totaling 505.1 million won ($378,000) for the remaining 284.
DAPA had earlier said that if executives or employees of the company were indicted in connection with the accident, the firm could be barred from bidding on government contracts under the State Contract Act.
The bribery allegations surrounding LIG D&A have raised broader questions about the integrity of defense procurement evaluations and internal oversight. The Suwon District Prosecutors' Office's defense industry and industrial technology crime investigation unit indicted a LIG D&A official in August on charges of bribing a DAPA employee. The DAPA employee accused of receiving the bribes was also indicted and remains in detention, while four others — including another executive and subcontractor representatives — were indicted without detention.
The DAPA official, a Grade 5 civil servant, is accused of accepting payments from 2021 through last year in exchange for giving favorable evaluations to LIG D&A in assessments of major weapons development projects. The six projects involved had a combined budget of 91.5 billion won. Prosecutors believe the official's evaluations reversed the outcomes in some of those projects.
The total amount prosecutors identified as received was 460 million won. Of that, 320 million won was linked to the project evaluations, while the remaining 140 million won was paid by a subcontractor as a referral fee after the official steered business its way. Prosecutors also found evidence that the bribes were disguised as service payments through fictitious consulting contracts and funneled through accounts held under other people's names. The specific facts and criminal liability, however, will be determined through trial.
LIG D&A said it found the situation "deeply regrettable" and expressed hope that the facts would be established and the allegations resolved through the judicial process. The company added that it would continue to review its internal control systems to ensure transparent and fair business practices.
DAPA said it would consider imposing bidding restrictions on the company if a connection between the misconduct and the relevant projects is confirmed.
DAPA said it would carefully review its overall defense acquisition operations based on the issues raised at Tuesday's audit and work to improve its policies and systems.
rimsclub@heraldcorp.com
