6-8. Fines and Operational Suspensions Caused by Delayed Compliance with Legal Revisions

In all corporate activities, legal compliance is essential, but in the EHS (Environment, Health, and Safety) field, where legal revisions are frequent, a delayed response can become a serious business risk. It's not uncommon for these delays to lead directly to fines or operational shutdowns, causing significant damage to a company's finances, brand, and credibility. Here, we'll explain typical cases and lessons learned from a delayed response to legal revisions.

1. Examples from Environmental Regulations

In one manufacturing company, an amendment to the Air Pollution Control Act strengthened emission standards. However, the company's delay in updating its existing equipment resulted in emissions exceeding the new standards. As a result, the company was fined a large sum by the local government and its factory was partially shut down until a compliance order was issued. This is a classic example of how a failure to grasp the details of a revision and to plan for a response can directly impact business continuity.

2. Delayed Response to Industrial Safety and Health Act Revisions

The scope of the mandatory risk assessment for hazardous chemicals was expanded under a revision of the Industrial Safety and Health Act. Still, one company failed to gather sufficient information and neglected to update its employee training and protective equipment. The violation was discovered during an on-site inspection by the Labor Standards Inspection Office, and the company received not only a corrective recommendation but also an order to suspend operations for a certain period. During this time, the company lost the trust of its clients, and in some cases, contracts were terminated.

3. The Impact of Fines and Operational Shutdowns

Fines and operational shutdowns are not just direct financial losses. The ripple effects are immense, including customer attrition due to supply delays, demands for management accountability from shareholders, and a decline in social credibility due to media reports. Furthermore, from an ESG investment perspective, a lack of legal compliance can lower a company's rating, increasing the cost of financing and raising the risk of investment withdrawal.

4. Practical Responses to Prevent Recurrence

To prevent a delayed response to legal revisions, the following initiatives are necessary:

• Regularly monitor legal information: Always check official government announcements and industry association notices to quickly grasp revision trends.

• Strengthen collaboration between legal and EHS departments: Quickly share the details of revisions with business units and clarify the practical impact.

• Establish a response schedule: Plan and implement a revision response plan early, including equipment updates, employee training, and procedure manual revisions.

• Utilize external experts: Incorporate the expertise of consultants, industrial physicians, and lawyers to prevent misinterpretations and oversights.

5. Lessons and Summary

A delayed response to legal revisions is not excused by "I didn't know" or "I wasn't ready." It can be a fatal blow to a company. Instead, companies should build a proactive legal compliance system and view revisions not as risks but as opportunities to strengthen their competitiveness. By ensuring continuous monitoring and thorough internal training, it is possible to prevent situations like fines and operational shutdowns and achieve sustainable growth and an increase in corporate value.