COLUMN ONE : Builders: a Double Standard in S. Korea : The nation’s construction firms are known for quality overseas. But at home the industry suffers from shoddy work, lax laws and corruption. Accidents have killed hundreds.

SEOUL — The Sampoong Department Store complex was a mecca for pricey foreign goods, a playground where the rich and famous of South Korea’s capital shopped and dined in a sprawling complex of nine levels, an exclusive health club and more than 550 stores.

But after collapsing Thursday in a fearsome rain of concrete and steel that killed at least 80, injured more than 900 and left more than 200 missing, the 6-year-old, posh pink building is a stunning testament to problems that have long plagued this nation’s domestic construction industry: shoddy workmanship, substandard materials, inadequate inspection systems and blatant building code violations. And, as in other countries, bribery often plays a role in construction debacles.

As authorities intensified their criminal investigation Friday, arresting five people on charges of manslaughter, construction officials scrambled to explain how a nation that builds so well abroad can have so many problems at home.

From Singapore to Saudi Arabia, South Korean firms have built pipelines and roads, chemical plants and ports--3,000 projects all told and not one single accident, says Dai Young Kim, president of the Overseas Construction Assn. of Korea.

At the industry’s peak in the early 1980s, South Korea sent 170,000 workers to the Mideast alone, bringing more than $13 billion into the growing Korean economy. Since then, Korea has shifted its focus to Asia and is winning subcontracting work from such firms as Toyo Engine Corp. of Japan, which is constructing a $150-million power generation plant in Indonesia.

“The collapse of the Sampoong Department Store will damage the image of Korea’s construction industry,” said Moon Kwi Hoon, a senior analyst with Ssangyong Securities Corp. “But the domestic industry does not reflect the technology level or honesty of overseas construction projects.”

What the industry does reflect, critics say, is a tragedy of errors.

The Sampoong disaster is the most sensational example in a recent series of high-profile accidents, including the rush-hour collapse of the Songsu bridge in Seoul last year. But problems of faulty construction, reflected in what one Korean described as an attitude of “build now, repair later,” stretch back for decades, analysts say.

Longtime visitors to Seoul recall the fronts and backs of buildings simply dropping off 20 or 30 years ago, and despite South Korea’s tremendous economic progress, such incidents are not uncommon today. In the last few years alone, hundreds of Koreans have been killed by falling bridges, collapsing tunnels, gas explosions--not to mention plane crashes and boat fires caused by malfunctions.

“In Korea, people’s sense of responsibility toward work has been lacking since the old days, especially in the construction industry,” said Seo Sang Kyo, a Korean professor from Chungbuk University studying at Kyoto University in Japan.

The tremendous gap between the safety records at home and abroad reflects sharp differences in the environments in which South Korean firms operate, construction experts say.

Overseas, Korean firms must adhere to sophisticated standards of quality control and accountability--systems almost entirely lacking at home.

When John Lee, the Korean-born president of Ace Engineering of Los Angeles, wants to excavate, he must get his engineer certified by the city. When he wants to install steel, he must get a city inspector’s OK. When he wants to pour concrete, the inspector must come to the job site.

“When we do something, we have to have mandatory approval first from the inspector or construction management team,” said Lee, who heads the California Korean Contractors Assn. “But Korea doesn’t have such procedures.”

The underground gas explosion at a subway construction site in Taegu, which killed more than 100 people in April, almost certainly would have not occurred in the United States, he said. That’s because companies in the United States are required to notify utility authorities before excavation. The Taegu subway workers apparently drilled without knowing the location of the underground gas pipe.

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And while South Korean firms are closely monitored by independent inspectors or management firms overseas, they are often financially tied to them at home.

Sampoong hired Woosung Construction to lay the foundation in 1987 and to serve as project supervisor, a common arrangement that critics say invites abuse.

Authorities charge that Sampoong officials violated the law by building well beyond the approved blueprint. They improperly added an entire fifth floor and added twice as much floor space as allowed in a recent expansion, authorities charged.

Two Woosung officials were arrested Friday, in addition to Sampoong President Lee Joon and two other store executives.

Officials also charge that Sampoong used substandard steel reinforcing rods, thinner than required by law. And the apparent softness of the concrete exposed by the disaster has drawn fire.

Kim Jong Hoon of Hyundai Corp.--South Korea’s largest builder--said that, judging from the way the concrete buckled so easily, low-grade imported material could have been used.

When construction began eight years ago, South Korea was suffering from an acute concrete shortage amid a building boom, he said.

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Lee speculated that the firm may have used concrete mixed with too much water or poured it too quickly without allowing it to harden properly.

“There’s got to be an independent inspector and a different opinion,” Lee said. “Otherwise you’re going to have problems.”

After the October, 1994, Songsu bridge collapse that killed 32 people, Seoul officials scrambled to increase licensing fees and the number of inspectors.

And Korea has slowly begun to bring in foreign construction management firms to oversee major public projects.

But for the vast majority of private projects, Korean inspections are routine and infrequent, analysts say. Without strict systems of inspection, analysts wonder whether increasing fees or adding inspectors will make much of a difference.

Quality of domestic projects is also compromised by what analysts here say is rampant bribery. Kickbacks rumored at 10% to 15% of the project cost are used to win contracts, avoid inspections and deviate from approved building plans, according to construction analysts in Seoul.

One construction company official told a news service reporter that payoffs drive up costs, leading builders to cut more corners. “Bribery is inevitable to do business here and then we have to cut costs to make up the loss,” he said.

Newspapers have blamed the government for much of the problem.

“The government must stop its empty calls for safety and an end to corruption,” the Seoul newspaper Hankook Ilbo said in an editorial. The government has been blase as South Korea has become the “kingdom of accidents,” charged the Seoul paper Chosun Ilbo.

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Abroad, the exacting world of the global marketplace forces South Korean firms to protect their images with careful attention to quality.

After the Songsu bridge collapse, some Koreans charged that Japanese competitors were showing clippings of the disaster in order to win a Malaysian airport contract. A Japanese consortium did win the contract, despite lower bids by Hyundai and Daewoo, although both the winning bidder and Kuala Lumpur airport officials say no scare tactics were used.

The rumors were not lost on South Korean firms, which are acutely aware that they can’t afford to hurt their reputations. “One mistake, and you lose all your business,” Dai said.

At home, however, it’s a different world.

Local standards are the only test because the construction market is closed to foreigners. (It is set to open in 1997.) And those standards are looser than those in Japan or California, for example, partly because of geology.

Seo and others say Korea is not prone to earthquakes, obviating the need to maintain strict standards against collapse that are common in seismically active countries.

When Yukio Yamashita, a construction expert in Tokyo, looked at photos of the collapsed Sampoong store, he immediately noted that there were nowhere near the number of steel reinforcing rods that would be required in Japan.

“Usually there are 10 to 20 rods hanging out from the two poles,” he said. “Since Korea doesn’t have earthquakes, they don’t install rods.”

Builders here say that cost, more than safety or quality, has long been the prime concern.

Fierce competition among South Korea’s 2,800 construction firms drives prices down so far that many cut corners to survive, analysts say. Even the government considered cost as the sole factor in selecting bids until July, when the growing number of accidents prompted officials to take quality into account.

Budget constraints also result in poor maintenance, analysts say. Dai, who was shocked to see a 30-person staff maintaining the Golden Gate Bridge during a visit to San Francisco, said public agencies typically devote most of their budgets to new projects to keep up with the breakneck pace of South Korea’s economic growth.

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The Songsu bridge was built in the late 1970s when Korean trucks weighed no more than 12 tons; the maximum allowable weight was 32 tons. But as Korea rapidly grew, trucks carrying 50 tons became common and traffic swelled from 50,000 vehicles a day to more than 110,000, Dai said.

“The government didn’t know the era of 45-ton trucks would come so rapidly,” Hyundai’s Kim said. “The cause of the bridge collapse was total negligence in maintenance management and repair.”

At times, safety concerns also take a back seat to design. One Japanese construction expert in Seoul said he was shocked to find that critical supporting walls and pillars are routinely knocked out of building designs--without permits--to create more space or a freer flow of traffic. He says his warnings against such moves fall on deaf ears.

One solution to the persistent domestic disasters might be South Korean firms introducing the knowledge they’ve gleaned overseas to the home market. But no one seems to think that is likely--at least in the near-term.

Ultimately, analysts view the impending opening of South Korea’s construction market as the most likely catalyst for change. Although it is likely to shake out the industry--already reeling from a decline in profits and share prices--Korean firms will be forced to upgrade in the face of the foreign edge in quality control and management, said Seo, the Chungbuk professor.

But that will not help save people from accidents in existing structures--a prospect that sends shudders through Koreans.

“After Songsu, people were afraid to cross the river,” Dai said. “Now they’re afraid to go into high buildings. I don’t know how long this will last.”

Researchers Chi Jung Nam in Seoul and Chiaki Kitada in Tokyo contributed to this report.

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Plagued by Disasters

The deadly collapse Thursday of a South Korean department store was the latest in a series of catastrophes to occur during the presidency of Kim Young Sam. Others include:

April 28, 1995--A powerful gas blast at a subway construction site kills 100 and injures 143 in the nation’s third-largest city, Taegu. Investigators say the devastation was probably sparked by a welding torch.

Dec. 7, 1994--Twelve die when an underground gas explosion turns a teeming business and residential district in Seoul into an inferno.

Nov. 20, 1994--A pedestrian bridge collapses in Seoul after being hit by an overloaded truck, killing at least two.

Oct. 21, 1994--A central span of Seoul’s Songsu bridge collapses during rush hour, killing 32 after a loaded bus and other vehicles plunge into the Han River. President Kim takes responsibility and fires the mayor of Seoul.

Oct. 10, 1993--An overcrowded ferry sinks off South Korea’s west coast, killing 292 people in the worst ferry disaster in the nation’s history. Kim fires the transport minister and the head of maritime and port administration.

July 26, 1993--A South Korean airliner with 106 aboard crashes in driving wind and rain on the southern tip of the Korean peninsula. Sixty-six people are killed.

March 28, 1993--At least 79 passengers die when an express train derails in the southeastern city of Pusan. Investigators believe that the line caved in because of underground blasting and cabling work.

Source: Reuters