With recent high-level talks between Japan and South Korea showing no breakthroughs, there is growing concern in East Asia that a series of successful lawsuits against Japanese corporations for their wartime use of forced labor will lead to a deterioration in the always-fraught Japanese-Korean relationship. The clock is quickly running down. South Korean courts have frozen locally held assets of two Japanese companies in order to compensate the victims, and an asset sale is expected to be finalized by August. If the sale occurs, Japanese retaliation is likely to be swift.
This current stage of tensions dates back to October 2018, when the South Korean Supreme Court upheld a lower court ruling that Nippon Steel should be held responsible for using forced labor during Japan’s colonial rule over Korea, and mandated compensation for the four plaintiffs of 100 million won (approximately $100,000) apiece. The following month, the Supreme Court awarded the same amount to five other plaintiffs in a similar suit against Mitsubishi Heavy Industries, as did an appellate court in a lawsuit against Nachi-Fujikoshi. The floodgates then opened, and over a thousand other plaintiffs filed suit against a range of Japanese companies, with many more waiting in the wings. The lawsuits have dominated headlines, and both governments have struggled to react to developments over which they have seemingly lost control.
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First, the human side. From the plaintiffs’ perspectives, these cases have led to a sense of vindication, and a renewed optimism that compensation will finally be forthcoming. There is no doubt that the mistreatment of forced laborers by Imperial Japan during the 1939-1945 period was at a scale and level of brutality rarely seen in modern times. While few of the laborers are still alive, the feeling of resentment in Korea over Japan’s abuses at the time remains acute.
From the Japanese government’s perspective, on the other hand, the sense of outrage has been palpable. Japan’s position has long been that such claims are barred by the 1965 Treaty on Basic Relations. Government officials have threatened to retaliate with tariffs and tightening visa issuance to Koreans if the assets of Japanese corporations in South Korea are seized and sold off to compensate the plaintiffs.
The South Korean government’s position has been more nuanced, and President Moon Jae-in has said little about the cases, besides asserting his unwillingness to intervene in the judicial process. On the one hand, Moon is a progressive human rights lawyer who no doubt feels empathy for the victims and their families. Some of the civil society groups supporting the victims are among his strongest political allies. On the other hand, the Japan-South Korea relationship is important to Korean economic growth and Moon faces increased U.S. pressure to reduce tensions with the Japanese.
The cases also pose a threat to the rule of law in South Korea, not just due to the perception of politicized justice, but also because they are a temptation to executive intervention. Former President Park Geun-hye allegedly already conspired with former Chief Justice of the Supreme Court Yang Seung-tae to improperly delay the Mitsubishi proceedings. Yang is now facing trial for his role in the matter.
What Is the Way Forward?
The disputes are likely to come to a head soon. Nippon Steel and Nachi-Fujikoshi’s local assets have been frozen, and are likely to be sold off by August. Now the ball is in the South Korean government’s court. There are four possible ways forward.
First, the Korean authorities could allow events to play themselves out, and withstand whatever Japanese retaliation ensues. This may be a viable reaction to the first set of cases. However, as hundreds more judgments are handed down in the coming months, the Japanese government’s reaction to further asset seizures is likely to become severe. Perhaps more importantly, Japanese public opinion would be likely to turn anti-Korean in short order. According to survey data from the Federation of Korean Industries, South Korean exports are already being adversely affected by the dispute. In the long term, a hands-off attitude is unlikely.
Second, pursuant to a Japanese proposal, forced labor disputes could be put before an arbitration panel, established according to article III(2) of the Treaty on Basic Relations. The Korean side is examining the proposal, but it would be surprising if they consented. Consent to arbitration would imply South Korean agreement that the court cases fall under the terms of the Treaty, but this goes to the heart of the legal dispute. The Korean plaintiffs claim that the Treaty does not cover claims from individuals.
Third, the Japanese have also reportedly suggested bringing the case before the International Court of Justice. The initial Korean response was to reject the idea as inappropriate, because the ICJ deals with state-to-state disputes, rather than individual complaints. Once Japanese corporate assets are sold, however, it would be open to the Japanese to claim a South Korean violation of the Treaty on Basic Relations. Then the dispute could go before the ICJ, so long as the Korean side consented. This could be a somewhat attractive exit route if Moon decides to prioritize bilateral relations over victim compensation.
The fourth option would be for the South Korean government to pass legislation suspending court action and asset seizures. Without Japanese concessions of some sort, this would be politically untenable, and Moon’s progressive supporters would view it as a cowardly surrender. If accompanied by a negotiated settlement, however, this would be an acceptable outcome from the Korean perspective. Negotiations are ongoing, but Japan so far seems reluctant to consider a broader settlement. From the Korean perspective, one obvious template would be the German Forced Labor Compensation Program, which from 2000-2007 provided 5.2 billion euros of individual compensation for 1.66 million beneficiaries. Nothing on this scale would be accepted by the Japanese, but at a more modest level some type of independently operated foundation might emerge as a compromise solution, perhaps with funding from both Tokyo and Seoul.
Whichever way forward is chosen, the courts will have played an important role. They have forced officials in Seoul and Tokyo to pay serious attention to the issue of individual compensation, even when they would have preferred to stick to the political point scoring that has long characterized the Japan-South Korea relationship. While further political tensions seem likely in the short run, one can still hold out hope that some form of reconciliation will emerge at the end of the process.
Andrew Wolman has worked as a Lecturer at City Law School in City, University of London, since September 2018. Prior to joining City, Dr. Wolman was a professor of human rights and international law for nine years at the Graduate School of International and Area Studies of Hankuk University of Foreign Studies, in Seoul, Korea.