Moon Faces Hard Choice on WWII Case: Anger Korean Voters or Japan

(Bloomberg) -- South Korean President Moon Jae-in must choose between a domestic backlash or a diplomatic one in handling a court ruling holding Japanese firms liable for wartime forced labor claims.

The Supreme Court’s finding that Nippon Steel & Sumitomo Metal Corp. must compensate South Koreans pressed into wartime labor in Japan continues to roil relations between Seoul and Tokyo a week later. Refusing to support the decision risks criticism from voters still unsatisfied with Japanese efforts to atone for its colonial past, while pressuring the defendants to pay will anger Prime Minister Shinzo Abe.

In the latest sign of strain, a senior official in Moon’s office said Wednesday that the South Korean president wouldn’t hold a two-way meeting with Abe next week, when both men are slated to attend regional summits in Singapore.

The ruling has aggravated old wounds between the neighbors and U.S. allies, who were already sparring over compensation for South Korean women trafficked to Japanese army brothels and Seoul’s refusal to let the “Rising Sun” flag fly at naval review. There are 15 similar cases pending brought by South Koreans who say they worked for 69 companies during the Japanese occupation from 1910-45, according to Japan’s Ministry of Foreign Affairs.

Treaty Tensions

Japan argues such claims were settled by the 1965 treaty that established diplomatic relations between the two sides, a pact that came with a $300 million payment. Foreign Minister Taro Kono told Bloomberg News on Sunday that the ruling posed a “serious challenge” to ties and said South Korea needed to act to maintain the credibility of its international agreements.

The criticism drew an unusually harsh rebuke from South Korean Prime Minister Lee Nak-yon, who on Wednesday called Japan’s reaction “extreme.” “Japanese officials are creating a diplomatic row,” Lee said.

The senior official in Moon’s office said the government was still trying to formulate its position on the ruling, and that formal response would take time. Another South Korean official, who asked not be named while discussing internal deliberations, said the government would likely review its interpretation of the 1965 treaty.

Changing Interpretations

The government’s 13-year-old interpretation holds that South Korea, not Japan, would be required to settle any future forced labor claims. But paying the claims risks upsetting the claimants, as well as Moon’s supporters.

“If the South Korean government says it would compensate the victims, it runs counter to the Supreme Court and the South Korean public would not like that,” said Shin Hee-Seok, a researcher at the Seoul-based Transnational Justice Working Group.

Moon has expressed sympathy with the claimants’ cause, saying shortly after taking office last year that he didn’t believe the treaty could bar individuals from seeking private claims. “That’s how the government would approach the past historical issues,” he told reporters.

When asked to comment, South Korea’s foreign ministry referred requests for comment to the prime’s minister’s statements.

Shin said Moon may decide the potential political gains of seeking compensation isn’t worth the diplomatic fallout and find that “doing nothing is the easiest option.” “Damned if they do, damned if they don’t,” he said.

--With assistance from Isabel Reynolds.

To contact the reporter on this story: Youkyung Lee in Seoul at ylee582@bloomberg.net

To contact the editors responsible for this story: Brendan Scott at bscott66@bloomberg.net, Daniel Ten Kate

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