South Korean Court’s Decision to Compensate Forced Laborers from World War II
South Korea’s Supreme Court ruled that a Japanese company must compensate South Korean workers for their wartime forced labor during Japan’s occupation of the Korean Peninsula, triggering a trade war between South Korea and Japan.
By: Daniel Lim, Staff member
Although the relationship between South Korea and Japan is often frosty given the two countries’ history, the tension has now escalated into a trade war. On July 1st, Japan announced that it would tighten the export of three key chemicals used by South Korean companies to manufacture semiconductors and smartphone display screens — fluorinated polyimides, photoresists and hydrogen fluoride. In response, South Korea initiated a complaint through the World Trade Organization, claiming that Japan is weaponizing trade for political reasons, seeking to exert political influence on another nation by attacking its economy. On August 2nd, Japan announced the removal of South Korea from its “white list” – a list of countries that have the most-favored trade status, and South Korea returned the favor by also removing Japan from its own list of nations enjoying minimum trade restrictions. In fact, the conflict has escalated beyond trade measures as South Korea also refused to renew the bilateral General Security of Military Information Agreement (GSOMIA) with Japan.
What started this conflict was actually an October 2018 decision by South Korea’s Supreme Court, in which the court affirmed a lower court’s decision that Nippon Steel & Sumimoto Metal Corporation, a Japanese company, must compensate South Korean workers for their wartime forced labor during Japan’s occupation of the Korean Peninsula. Nippon Steel Corporation was ordered to pay $88,000 each to four plaintiffs. A similar judgment was also issued ordering Mitsubishi Heavy Industries Ltd. to compensate a group of South Korean victims for their forced labor, and pay as much as $134,000 each to 10 claimants. Since then, additional South Korean victims sued other Japanese firms, and there are now more than a dozen similar cases pending in South Korea involving about 70 companies.
Japan’s official position is that all such reparation issues were settled in 1965 through the Treaty on Basic Relations between Japan and the Republic of Korea. Article II of the treaty holds that:
“[t]he Contracting Parties confirm that [the] problem concerning property, rights, and interests of the two Contracting Parties and their nationals (including juridical persons) and concerning claims between the Contracting Parties and their nationals, including those provided for in Article IV, paragraph (a) of the Treaty of Peace with Japan signed at the city of San Francisco on September 8, 1951, is settled completely and finally.”
Based on this provision, Japan contends that all claims, including individual claims from Japan’s occupation of the Korean Peninsula were resolved on a government-to-government basis. In fact, diplomatic documents that recorded the negotiations leading up to the normalization treaty suggest that the South Korean government meant to surrender the rights of individual Koreans to sue the Japanese government in return for a total of $800 million in grants and soft loans to spur economic development in South Korea. According to declassified documents relating to the normalization treaty, the South Korean government had originally demanded $364 million in compensation for roughly 1.03 million Koreans forced into labor or military service during Japan’s occupation.
On the other hand, the South Korean Supreme Court distinguished between the treaty resolving state-level claims in order to achieve diplomatic relations and resolving individual claims based on emotional suffering and pain. The majority opinion of the South Korean Supreme Court emphasized the fact that Japan and South Korea never agreed on the “illegality of the colonial era” during the signing of the treaty and that there could be no compensation for the forced-labor victims without this consensus. The court held that this consensus was a prerequisite to assuming legal accountability and therefore, Japan could not have had the intention to compensate victims through the treaty. The question of whether Japan assumed final legal accountability through the normalization treaty is also complicated by the fact that the two countries reached an agreement in 2015 to contribute $8.3 million to support living Korean victims of wartime sexual slavery. The 2015 agreement was meant to be “a final and irreversible resolution” to the issue of wartime sexual slavery — also referred to as “comfort women.” However, Japan insists that the agreement was moral and not legal, and therefore was not a concession on its legal position regarding the finality of compensation under the normalization treaty. Regardless, the South Korean court’s concurring opinion also added that even if nations can extinguish the claims of their citizens through treaties, courts should apply a higher standard of scrutiny when those rights concern the gross violation of human rights.
The legal battle is ongoing. For the first time since the signing of the 1965 treaty, Japan proposed an arbitration procedure based on Article III of the treaty which South Korea rejected. Now Japan is trying to bring the dispute to the International Court of Justice, while South Korea is bringing its strongest legal arguments to another front: the WTO. This dispute is exacerbated the unfortunate history between the two countries, including the pain and suffering of the Korean laborers during Japan’s occupation of Korea. At the same time, the trade dispute has substantial economic ramifications both on the two countries and the broader global economy, especially since global production for many high-tech products produced in the two countries could be disrupted. Therefore, whether through diplomacy or through the available international and legal regimes, it is imperative that the two countries prudently resolve this dispute.
Daniel Lim is a second-year student at Columbia Law School and a Staff member of the Columbia Journal of Transnational Law. Daniel graduated from Georgetown University in 2016 with a B.S. in Economics and International Relations.