South Korea pushes to resolve historical labour dispute with Japan

South Korea said on Monday that its companies would compensate people forced to work during Japan’s 1910-1945 occupation, seeking to end a dispute that has undermined US-led efforts to present a united front against China and North Korea.

The proposal was welcomed in Tokyo but faced immediate backlash from some victims and South Korea’s main opposition party, which accused the government of capitulating to Japan.

US President Joe Biden, whose administration has been pressing the two allies for reconciliation, hailed the announcement as a “breakthrough”.

A Japanese government source close to Prime Minister Fumio Kishida told reporters that the United States has pressured the two countries to reconcile, but the main factor that prompted South Korean President Yoon Suk Yeol to reconcile was the geopolitical threat from North Korea.

Disputes over labor and women being forced into Japanese military brothels have strained relations between two key US allies for years, but Yoon has made efforts to mend the relationship.

Under the plan, South Korea will compensate forced laborers through a public foundation funded by private sector companies, Foreign Minister Park Jin told a briefing.

Want to improve relations with Japan

“The broken South Korea-Japan relationship must not be forgotten any longer, and we must stop the vicious cycle for the national interest, for the people,” Park said. He said he hoped Japan would respond sincerely, including by “implementing previous public statements expressing regret and apologizing.”

Kishida said he accepted the proposal and said he would work with Yoon.

Japanese companies will not be expected to make payments under the plan, but will not be blocked from donating if they wish, Japanese Foreign Minister Yoshimasa Hayashi said.

“We welcome this as a step that returns Japan-South Korea relations to a healthy one,” he said.

The strained relationship between the two has become a concern for the United States, which is seeking to present a more united front with its allies against China’s rising power and the threat from North Korea’s missile and nuclear weapons.

In a statement, Biden said the announcement was “a new chapter in cooperation and partnership between two of the United States’ closest allies” and “a critical step toward creating a safer, more secure and more prosperous future for the people of Korea and Japan.”

The court ordered Japan to pay compensation

Relations fell to their lowest point in decades after South Korea’s Supreme Court in 2018 ordered Japanese companies to pay compensation to former forced laborers. Fifteen South Koreans have won such cases, but none have been awarded compensation.

Japan said the reparations issue had been settled under the 1965 treaty, and Hayashi said his government’s stance had not changed.

When Seoul first presented its proposal in January, it sparked backlash from victims and their families because it excluded contributions from Japanese companies, including those ordered by a South Korean court to pay compensation.

About a dozen protesters were outside when Park made the announcement.

“Today’s humiliating resolution is a result of (the South Korean government’s) lack of consistent attitude towards the Japanese government,” representatives of some of the victims said at a separate event.

Some 15 plaintiffs said they would reject the government’s plan, setting the stage for a more legal battle.

“This is not an apology,” Yang Geum-deok, one of the victims, told reporters. “It’s not going to be like this when someone is actually doing something wrong.”

The main opposition Democratic Party denounced the plan as “submissive diplomacy”.

“This is a shameful day,” An Ho-young, the party’s spokesman, said in a statement. “Japanese companies involved in war crimes receive indulgence without budging, and the Japanese government can avoid problems by giving them the grace to repeat past statements.”

South Korean companies include KT&G 033780.KS, Korea Electric Power Corp (KEPCO) 015760.KS and other companies that benefited from the 1965 agreement between South Korea and Japan.

Asked whether Japanese companies would pay compensation, Park said Japanese and South Korean businesses were considering plans to pay voluntarily.