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While the major news media hastily assessed the repercussions of last week’s sudden conclusion of the second Trump-Kim Summit in Hanoi, Vietnam, what has been transpiring for the past several months at the highest court in South Korea may also deserve much attention and commentary.
Since October of 2018, the Supreme Court in Seoul has ruled several times in favor of the Korean plaintiffs who were “forced to work” in various industrial expansion endeavors during Japan’s Annexation period, sentencing the Japanese enterprises to compensate for damages. While the Annexation began in 1910, the claims by these individuals (or surviving family members) involve the restless years of military mobilization and industrial buildup that led to World War II. Japan’s leading multinational corporations such as Mitsubishi Heavy Industries, Ltd., Nippon Steel & Sumitomo Metal Corp. (formerly Nippon Steel Corp.), and Hitachi Zōsen Corp. were found guilty of engaging in “forced labor” in mines, shipyards, and steel works, with the first verdict being entered on October 30 of last year against Nippon Steel for the sum of approximately US$360,000 to compensate the four plaintiffs ($90,000 each). These three lawsuits had been in the lower courts for years, and it has been noted that about 70 other industrial entities are being sued by Korean individuals for the same claim based on “forced labor.”
In July of 2016, UNESCO conferred World Cultural Heritage status to 23 sites in Japan in recognition of Japan’s Industrial Revolution during the Meiji period (1868-1912). These sites included the iron works in Nagasaki, coal mines in Takashima (Battleship Island), steel works at Yawata, and several Western-style shipyards. Both China and South Korea vehemently criticized that some of these sites as having been locales for labor exploitation under harsh conditions. Predictably, Japan agreed to acknowledge that conscripted labor was involved and resorted to inept semantics in describing it as “forced to work” as opposed to forced labor, but the Western media has been reporting the matter as forced labor of colonized men, another chapter in those who suffered under the dreadful occupation of Imperial Japan. To counter this narrative, the Japanese government and a few news outlets now refer to the issue as “wartime labor.”
The legal arguments of these lawsuits stem from how the Treaty on Basic Relations between Japan and the Republic of Korea (also known as the 1965 Normalization Treaty; hereinafter referred to as “Treaty”), signed on June 22, 1965 after almost a fifteen-year-long negotiation, is interpreted. Along with this Treaty, the Agreement Between Japan and the Republic of Korea Concerning the Settlement of Problems in Regard to Property and Claims and Economic Cooperation (hereinafter referred to as “Agreement”), a comprehensive financial commitment by Japan to South Korea, was entered into the very same day. For the total sum of US$800 million comprised of grants and loans as part of Japan’s “economic assistance” to South Korea, very specific language emphasized the objective, that “the problems concerning the property, rights, and interests of the two High Contracting Parties and their peoples” and the “claims between the High Contracting Parties and between their peoples”, namely the people of Japan and South Korea, “have been settled completely and finally.” (Article II, Item 1, Agreement Between Japan and the Republic of Korea Concerning the Settlement of Problems in Regard to Property and Claims and Economic Cooperation).
This Agreement has been Japan’s legal foundation not to engage in any further apologies and compensation arrangements to South Korea for many decades. What is not commonly known is the fact that while Japan had requested to make direct compensations to individual claims, the Korean government insisted on a bulk payment to itself so that distribution of funds would be handled at the administrative level; the funds were instead spent on major projects for modernization and an infinitesimal amount was actually disbursed to the individuals with claims.
The South Korean assertion has been, for the most part, that the 1965 Treaty and economic commitments by Japan excluded certain issues such as the Comfort Women (Japan’s military brothel system) and these wartime laborers who greatly suffered, and the Supreme Court has concluded in its decisions that the individual claims against Japanese businesses are valid. Finding the court rulings unacceptable, the Japanese corporations are refusing to pay the individuals, and the South Korean plaintiffs with the help of their legal counsels and supporters, have taken steps to freeze and liquidate assets of the corporations in South Korea. What would probably entail is a heated battle at an international forum such as the International Criminal Court, the International Court of Justice, or some other newly formed judicial body nobody has heard of, but the possibility of these lawsuits coming to America where many of the Japanese multinationals have established themselves as integral parts of the U.S. economy seems inevitable.
However, something much more extraordinary and deserving of attention happens to be what Japan had legally forfeited as a result of the 1965 Treaty and Agreement: All claims to the investment towards South Korean infrastructure and assets in South Korea, both as a nation and as individuals.
Per the language of the Agreement, the “claims” of Japan and South Korea and their peoples “have been settled completely and finally”, which follows that Japan had agreed to relinquish any rights to the business interests and assets of all types that existed and allowed South Korea to acquire ownership of them. This financial capitulation by Japan is of such magnitude that taken as a whole, it may have been much more significant a loss than the US$800 million economic assistance package (in addition, over the years Japan has also offered monetary assistance via the ODA – Official Development Assistance). It has been estimated that the total assets relinquished by Japan amounted to around US$6 billion.
The following reveals the extent of the business entities that Japan had originally owned and now operate as Korean interests:
SsangYong Motor Company; Korea Electric Power Corp.; CJ Group; SK Group; Haitai; Hanjin Heavy Industries; Hanjin Shipping; Chojiya Department Store; Shinsegae Department Store; Orion Corp.; LH (Korea Land and Housing Corp.); Dongkuk Steel Mill Co., Ltd.
Just a few weeks ago, two Democrat presidential candidates for the 2020 election proclaimed that reparations for black Americans is necessary in order to “to address the legacies of slavery and discrimination in the United States.” It appears that South Korea’s approach to address the Japanese Annexation period through repeated claims of discrimination, oppression, and extortion may be analogous to the identity politics and victimology that have become so mainstream in America. It follows then, that the notion of labor exploitation, regardless of whether the pay being adequate or even having coworkers who happened to be members of the ‘oppressor group,’ will be embraced by the media and their cohorts, setting up a stage for a judicial showdown to further assail, humiliate, and swindle Japanese corporations that have thrived in the world’s most industrial market where dedicated hard work has been the formula for success in previous generations.
Marshall Wordsworth
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