Building a swift and sustainable solution

Since May 2016, Oxy Reckitt has accepted responsibility for the role Oxy HS has played in the HS issue. We recognize we were too late in providing this apology. Delays that increase the victims’ and family distress shouldn’t happen again.

Oxy Reckitt is therefore committed to establish a solution for all outstanding victims of lung damage from the Oxy HS product that is sustainable and reflects the multiple causes of the tragedy. It also recognises the importance of providing for the long-term needs of victims.

Planning for future compensation programmes

Both the United Nations Special Rapporteur (UNSR) and National Assembly (NA) reports highlighted the multi-party nature of the HS issue.

They recognised that many companies including chemical manufacturers, product manufacturers and government regulators played a role in this tragedy: all must consider their individual responsibility.

While Oxy Reckitt acknowledges that it sold the majority of HS products containing PHMG, it did not sell them all. Lessons must be learnt by all parties to ensure this cannot happen again.

The compensation to those Category 1 and 2 victims who are recognized by the government should be based on a fair allocation of responsibility for contributions between responsible parties along the entire supply chain.

What will a sustainable and fair solution look like?

Oxy Reckitt does not consider it is fair for victims to have to navigate multiple different schemes and companies. Oxy Reckitt believes it is vital that all responsible parties work to contribute to a single and commonly agreed compensation plan.

The HS incident is a multi-party, multi-causal issue that should not have happened. In order to find a long-term and fair solution from the perspective of the victims, Oxy Reckitt would like to work with other HS manufacturers with the support of the Korean government and experts to establish a joint broader compensation system led by the Korean government and with industry participation.

As of November 2019, Oxy Reckitt has provided compensation to the majority of Category 1 and 2 Oxy HS victims whose categorisation had been announced before that date, including those who used other HS brands in addition to Oxy Reckitt’s. To date, Oxy Reckitt has spent approximately KRW 282.1 billion in compensation for Category 1 and 2 Oxy HS victims from Rounds 1 through 4, KRW 67.4 billion in our share of contribution to the Special Relief Fund, and KRW 5 billion in a donation to a Humanitarian Fund. Oxy Reckitt remains committed to engaging multiple stakeholders, including the Korean government and other HS manufacturers and ingredient suppliers, to find a sustainable industry-wide solution.

New HS legislation

The HS Damage Relief Act was passed by the National Assembly in January 2017. Amended on 14 August 2018, the Act came into force on 15 February 2019.
The Act requires the Government to establish and operate a Special Relief Fund for the benefit of:

Category 1 and 2 HS victims who cannot identify the HS manufacturer responsible for their HS injuries or whose HS manufacturer is in financial difficulty and unable to pay compensation

Category 3 and 4 HS users recognised by the Minister of Environment as needing damage relief payment, a decision made upon the review carried out by the HS Special Relief Fund Management Committee

Oxy RB paid KRW 67.4 billion in lump sum to contribute to the Special Relief Fund on 8 September 2017 under the HS Damage Relief Act.
The Fund will be financed by contributions of KRW 100 billion from HS manufacturers and KRW 25 billion from ingredient suppliers. The amended Act stipulates that the government will make additional contribution to the Fund, though no such contributions have been made yet.

The Act also creates a statutory responsibility of HS manufacturers to provide damage compensation to HS victims for their lung injuries. It also provides

a presumption of causation where a substantial probability exists that a HS victim’s death or lung injuries have been caused by HS products containing harmful chemical substances verified to be toxic by the MOE, the MOHW or any other organization designated by a Presidential Decree

An extension to the time for bringing claims to the earlier of (i) the fifth year anniversary of the date on which the responsible HS manufacturer is identified or (ii) the 30th year anniversary of the date of lung damage occurrence
The Act also establishes a HS Damage Relief Committee, to be chaired by the Deputy Minister of Environment, to decide on information requests, recognition of HS Victims, pay out of HS Damage Relief Payments and any review of the Act.