Published: 18:09, January 12, 2023 | Updated: 19:33, January 12, 2023
S. Korea hints at compensating victims of Japan's colonial labor
By Reuters

In this Oct 30, 2018 photo, Lee Choon-shik (center), a victim of forced labor by Japan during its colonial rule of the Korean Peninsula from 1910 to 1945, sits in the Supreme Court in Seoul. (ED JONES / AFP)

SEOUL - The South Korean government unveiled a plan on Thursday to compensate victims of Japan's wartime forced labour through its own public foundation - instead of using funds from Japanese companies - prompting backlash from victims and their families.

South Korea's Supreme Court in 2018 ordered Japanese firms to to pay reparations to former forced laborers. Although 15 South Koreans have won such cases, none has been compensated.

The plan proposed by South Korea's foreign ministry at a public hearing would compensate them using a foundation funded by businesses that benefited from a 1965 treaty in which South Korea received a package of $300 million in economic aid and $500 million in loans from Japan.

We've reviewed that it is possible for a third party to make payment as legal bonds on behalf of the defendant Japanese company.

Seo Min-jung, Foreign Ministry, South Korea

The Foundation for Victims of Forced Mobilization by Imperial Japan said it has secured initial donations from steelmaker POSCO totalling 4 billion won ($3.2 million). POSCO did not immediately respond to requests for comment.

"We've reviewed that it is possible for a third party to make payment as legal bonds on behalf of the defendant Japanese company," said Seo Min-jung, the ministry's director-general for Asia Pacific affairs, adding a "creative approach" was needed.

Japanese Chief Cabinet Secretary Hirokazu Matsuno, Tokyo’s top spokesperson, declined to comment on Seoul’s compensation plan or its public hearing, saying they were domestic matters within South Korea.

READ MORE: S. Koreans seek Nippon Steel asset seizure in 'forced labor' case

The foundation's chief, Shim Kyu-sun, said he would encourage South Korean companies to donate "from the perspective of social responsibility".

The unresolved legacy of Japan's colonization in 1910-45, including restitution for Koreans forced to work at Japanese firms and in military brothels, has long been a source of contention between the two countries.

Korean victims of Japan's forced labor and their family members raise their hands in celebration after the Supreme Court's ruling ordering Japan's Mitsubishi Heavy Industries to compensate them in Seoul, in the Republic of Korea, Nov 29, 2018. (AHN YOUNG-JOON / AP)

Relations plunged to their lowest point in decades after the 2018 ruling, with the row spilling into a trade dispute. Japan says the compensation issue was settled under the treaty, and Seo said most of the Japanese companies named in the ruling have withdrawn assets from South Korea to avoid forced seizure.

Seo said that the government would consult with victims and their families before making a decision, but that the proposal was meant to prioritize compensating victims.

But some victims immediately resisted, saying the plan would relieve Japan of its obligation to pay and apologize.

"It's an idea where Japan does not bear any burdens at all," Lim Jae-sung, a lawyer for several victims, told the hearing, accusing the ministry of ignoring the victims and "wrecking trust" between both sides.

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Kim Young-hwan, who also works with the labour victims, said: "They want an apology, and compensation as a proof of apology, because they have no other ways to be compensated for their lost youth."

Seo did not reply to them at the hearing, and the ministry did not immediately respond to Reuters' request for comment.

Some attendees held slogans saying "Apologize Japan" and jeered at officials.

A group of activists also staged a rally outside the National Assembly, where the hearing was held, criticizing Japan's refusal to provide compensation and the South Korean government's proposal.

READ MORE: ROK orders 2nd Japan firm to compensate forced laborers

Under the 1965 deal, South Korea was required to consider all pre-treaty compensation issues settled. The economic aid and loans were largely spent to rebuild its infrastructure and economy after the 1950-53 Korean War. Former forced laborers began to demand compensation in the 1990s.

The rows over wartime history have fueled concern over efforts to step up cooperation between the two key US allies.

South Korean President Yoon Suk-yeol, who took office in May, has vowed to boost bilateral ties with Japan and held the two countries' first summit since 2019 in September. Separately, Japan's Matsuno said the visit of a group of Korean lawmakers led by Chung Jin-suk to Tokyo on Thursday is a "significant move underpinning our bilateral relations."