Financial institutions should scale back loans to Highwealth Construction Co, Democratic Progressive Party (DPP) Legislator Kuo Kuo-wen (郭國文) said yesterday.
Highwealth Construction is building an apartment tower from atop which a crane boom on Friday last week fell more than 30 stories onto the tracks of the Taichung MRT.
A train hit the fallen wreckage and a woman was killed in the crash.
Photo: CNA
An independent board director should be appointed at the company, Kuo said.
The director would be required to establish a special committee to investigate if an incident such as the one in Taichung occurs and publish a report, Kuo said.
Ten deaths resulting from construction safety incidents involving Highwealth Construction over the past five years underscore a failure in corporate management, Kuo said, adding that implementing measures to improve corporate management, and environmental, social and governance (ESG) investing, encourages corporations to put more emphasis on their social responsibilities.
ESG gauges investments based on corporate policies, which encourages firms to take more responsibility for their actions, he said.
Mismanagement by construction firms risks creating a housing bubble, he said, adding that there were a lot of construction-related occupational hazard incidents last year.
If construction companies are allowed to skirt the law and penalties are irrelevant, there is a generally negative risk for society, Kuo said.
The Financial Supervisory Commission (FSC) would cut its evaluation of a corporation if it assesses there has been negligence in upholding corporate social responsibility, underscoring the commission’s emphasis on ESG, Kuo said.
However, the FSC’s efforts are yet to bear fruit, as Highwealth Construction scored well in evaluations last year, he said.
Corporate social responsibility should be part of the credit risk analysis of companies, he said.
Ten deaths in five years would mean that a company would have its maximum loan cap decreased, he said.
FSC Banking Division head Chang Chia-kui (張嘉魁) said that banks could halt payments in the event of construction safety incidents and demand that firms make improvements before the funding is restarted.
However, Kuo was skeptical.
Such powers are well and good, but it is imperative that there are “punitive clauses” — such as lowering loan ceilings — as that is the only way to rein in construction companies, Kuo said.
Regarding Kuo’s suggestion that corporations establish independent ESG committees to investigate occupational hazard incidents, FSC Securities and Futures Bureau head Chen Yi-chun (陳怡均) said it was a good suggestion and was in line with the commission’s policy of establishing a roadmap for sustainable corporate development.
The commission would encourage firms to establish such committees as part of its overarching policy, Chen said.
The FSC should prioritize establishing the committees at construction firms, Kuo said, adding that an independent third party should review all occupational hazard reports.
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