Political dispute intensifies over typhoon-hit POSCO

POSCO Group Chairman Choi Jeong-woo, right, shovels mud at the company's steel mill in Pohang, North Gyeongsang Province, Saturday. Courtesy of POSCO

Steelmaker's management goes all out to deflect criticism from government

By Park Jae-hyuk

POSCO has been involved recently in a political dispute between the ruling People Power Party (PPP) and the main opposition Democratic Party of Korea (DPK), since Typhoon Hinnamnor dealt a severe blow earlier this month to the company's main steel mill in Pohang, North Gyeongsang Province.

While both the government and the ruling party have questioned POSCO management's responsibility for the flooding due to the super typhoon, the opposition party has defended the steelmaker, arguing that the government is trying shift blame for its failure onto a private business.

The conflict erupted after First Vice Minister of Trade, Industry and Energy Jang Young-jin said last Wednesday that the government would look into why POSCO had suffered such severe damage, despite the typhoon warning. The government also estimated that it would take at least six months for the full recovery of the Pohang steel mill.

The ruling conservative party supported the government, despite its business-friendly stance.

Rep. Sung Il-jong, chairman of the PPP's policy committee, said last Friday that POSCO's management should take responsibility for the damage, if they are found to have taken insufficient measures to brace for the typhoon that had been forecast.

“POSCO's location is vulnerable to earthquakes and typhoons, so it is a serious problem if the company did not brace for the rapidly rising volume of water in the lower reaches of its neighboring Nangcheon Stream,” the lawmaker said. “We want the relevant authorities to tell us whether POSCO had prepared any countermeasures considering its location and the climate change.”

In contrast, the main opposition party criticized the government for blaming POSCO for the damage.

“The major victims of the disaster are the public and companies,” Rep. Oh Yeong-hwan said in a statement, Sunday. “POSCO has made every effort to complete the recovery work within three months, but the government said it would find out who is responsible for the damage.”

DPK lawmakers also visited POSCO's steel mill that day to inspect the damage and discuss ways to support the recovery work.

There is also speculation that the opposition party's defense of the steelmaker is intended to prevent the ruling party from replacing POSCO Group Chairman Choi Jeong-woo, who was appointed during the previous Moon Jae-in administration. Although POSCO is a private enterprise, the government has continuously interfered with its management through the National Pension Service, the steelmaker's largest shareholder.

Minister of Trade, Industry and Energy Lee Chang-yang, however, said Monday that the government is not considering reprimanding POSCO's management at this moment.

Amid the intensifying political feud, POSCO has issued press releases almost every day since it was hit by Typhoon Hinnamnor, in order to show its efforts to normalize the Pohang steel mill's operation by the end of this year. It has also emphasized that its preemptive suspension of the steel mill's operation minimized the damage.

Last Saturday, the POSCO Group chairman even shoveled mud at the Pohang steel mill to help the recovery work.

“Although we suffered severe damage from the natural disaster, I want you to continue the recovery work to minimize negative impact on the national economy,” he told employees. “You should also prioritize safety during the recovery work.”

POSCO employees embank Nangcheon Stream in Pohang, North Gyeongsang Province, Sunday, to brace for Typhoon Nanmadol. Courtesy of POSCO

As Typhoon Nanmadol nears the Korean peninsula this week, POSCO said it halted the recovery work at the Pohang steel mill, in order to brace for strong winds and torrential rainfall.

“Once Nanmadol passes through the region on Monday afternoon, we will inspect our facilities and then resume the recovery work,” a POSCO official said.