South Korea’s top court has issued a verdict that orders two Japanese companies to provide financial compensation to their former Korean wartime workers for forced labor during Japan’s 1910-45 colonial rule of the Korean Peninsula. This ruling, a continuation of the contentious 2018 judgements, has further impacted relations between the two countries. However, observers suggest that bilateral relations may not be significantly affected, as both Seoul and Tokyo are uniting to strengthen their partnerships amidst shared challenges such as North Korea’s evolving nuclear threats and China’s increasing assertiveness.
The Supreme Court’s ruling mandates Mitsubishi Heavy Industries to compensate between 100 million and 150 million won ($76,700 and $115,000) to each of four plaintiffs, who are the bereaved families of the company’s former employees subjected to forced labor. Similarly, Nippon Steel Corp. is required to provide 100 million won (about $76,700) to each of seven Korean plaintiffs for similar colonial-era forced labor.
The 2018 South Korean court rulings that instructed Mitsubishi and Nippon Steel to compensate a total of 15 Korean employees for forced labor had sparked tensions with Japan, which has contended that all compensation issues were resolved by a 1965 bilateral treaty normalizing diplomatic relations. The court, however, stated that the treaty cannot obstruct individual rights to seek compensations for forced labor, branding Japanese companies’ use of such laborers as “acts of illegality against humanity” tied to Tokyo’s illegal colonial occupation and its war of aggression.
While these rulings led to trade status downgrades and threats to mutual agreements, the current leaders of both countries have been working to mend relations. South Korea’s President Yoon Suk Yeol recently announced that the country would use a local corporate fund to compensate forced labor victims without seeking Japanese contributions. Additionally, Japanese Prime Minister Fumio Kishida expressed sympathy for the suffering of Korean forced laborers during a visit to Seoul, resulting in a revival of high-level talks and the withdrawal of economic retaliatory measures.
The South Korean Supreme Court’s ruling, while not anticipated to cause significant trouble in Korea-Japan relationships, leaves some unresolved issues, especially concerning forced labor victims who refuse to accept compensation under the current system. The handling of these verdicts and the establishment of a domestic compensation fund by South Korea will be crucial in preserving bilateral ties.
President Yoon’s efforts to improve ties with Japan have been met with some opposition from forced labor victims and liberal politicians, who demand direct compensation from the Japanese companies. Yoon, however, perceives improved relations with Japan as essential to addressing challenges including North Korea’s advancing nuclear arsenal and global supply chain issues.
Market Capital Research 