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It is now approaching one month since the passenger ferry Sewol sank off the coast of Jindo, South Korea. The whole world has watched the death toll rise to an official count of 275, with several dozen people still missing. Compounding the catastrophic loss of life is the fact that the majority of the victims were mere high school students on a field trip to popular Jeju Island.

Many South Korean citizens are lambasting the government for its response to the disaster. Several crew members, including the captain, have also been arrested during the ongoing criminal investigation.

In light of these events, one question that is currently on everyone’s mind is how on earth is the ship’s operating company going to handle the financial burden of this disaster? Join us as a lawyer knowledgeable about shipwrecks gives his preliminary monetary estimates.

According to the Japanese language version of the Chosun Ilbo, a South Korean daily newspaper, the shipping company Cheonghaejin Marine Co. will owe approximately 34,500,000 yen ($338,600) per person in reparations to the bereaved families, or 10 billion yen ($98,240,000) in total. So how did they arrive at those numbers?

A lawyer specializing in shipwrecks explains the calculations:

“The system for calculating damages is different in South Korea and Japan. If the disaster had happened in Japan, you would calculate the lost profit using a statistical index called a ‘wages census’ provided by the Ministry of Health, Labour, and Welfare. Let’s apply this method to the Sewol disaster. Since so many of the victims were high school students who had not yet entered the work force, it would amount to approximately 43,600,000 yen ($428,326) in the case of a 16-year-old male. If you add consolation money to that figure, the average would be approximately 60,000,000~70,000,000 yen ($589,440~687,015). But because we’re talking about South Korea, the numbers would be about half of that, or 30,000,000~35,000,000 yen ($294,720~343,525).”

There were approximately 300 victims in the sinking, so if you do some quick arithmetic, that amounts to 9,000,000,000~10,500,000,000 yen ($88,416,000~103, 152,000) in total damages to be paid out.

▼A memorial ceremony for the victims at a park near Danwon High School

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In addition, there has been talk of raising the ship from the ocean floor. The cost of such an operation would also be colossal, and salvaging companies predict that it could take up to half a year to carry out.

Here’s what the same lawyer has to say about salvaging the ship:

“A large crane vessel costs one million yen ($9,824) per day to use. Add the wages of the crew to that. So if four or five crane vessels went out, just one day would cost 10 million yen ($98,240). Therefore, the figure of 10 billion yen ($98,240,000) sounds about right.”

▼The state of the ship at 10 a.m. on April 16

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In short, the ferry company will likely go bankrupt if it can’t scrape together all of those funds.

While the rest of the world can only wait and watch, these events have also affected the country’s perception of the government administration. For instance, South Korean President Geun-Hye Park’s approval rating dipped from 71% to 51% only a week after the tragedy. But regardless of politics, hopefully the public can first come together and provide support to the thousands of family members and friends who lost loved ones.

Source: Yahoo! Japan News
Images: Wikipedia 1, 2, 3