South Korea's 100-Year Grievance With Japan Still Isn't Settled

(Bloomberg) -- Japan’s colonial rule over the Korean Peninsula ended more than seven decades ago yet that legacy continues to roil everyday politics on both sides of the strait. South Korea and Japan, major trading partners and both U.S. military allies, have been at loggerheads over what constitutes proper contrition and compensation for two groups of Koreans: those conscripted to work in factories and mines supplying Japan’s imperial war machine, and those euphemistically called “comfort women” who were forced to work in military brothels before and during World War II. Japan contends all claims were settled under a 1965 bilateral treaty and a fund set up in 2015. Seoul argues Japan hasn’t atoned enough. Some of Japan’s largest companies and the emperor himself have been dragged into the fray.

1. What are the roots of the forced labor dispute?

Hundreds of thousands of Koreans were conscripted during the 1910-1945 colonial period to work, often in brutal conditions, at dozens of Japanese companies. At the time of the 1965 treaty, which established diplomatic ties between the two countries, Japan paid the equivalent of $300 million -- $2.4 billion in today’s money -- and extended $200 million in low-interest loans. The treaty said all claims are “settled completely and finally.” The then-struggling South Korea invested that money in industries that eventually helped turn it into an economic powerhouse. However, recent South Korean court rulings said the victims were not compensated for their emotional pain and suffering.

2. What is the fallout for the companies?

South Korea’s Supreme Court last year ruled against two of Japan’s largest companies: Mitsubishi Heavy Industries Ltd. was ordered to pay as much as $134,000 to each of 10 claimants, while Nippon Steel & Sumitomo Metal Corp. was ordered to pay $88,000 each to four plaintiffs. A South Korean court then ordered the seizure of shares valued at about $356,000 that Nippon Steel has in a joint venture with South Korean steelmaker Posco, a move Tokyo calls unlawful and is trying to block.

3. Are other companies affected?

There are more than a dozen such cases pending in South Korea involving about 70 companies, according to the Japanese Ministry of Foreign Affairs. An estimated 725,000 Korean workers were sent to mainland Japan, Sakhalin and the southern Pacific islands to work in the mining, construction, and shipbuilding industries, according to a Stanford University research paper. Most of the former laborers have died, but some of their family members have sought legal standing to sue.

4. What about the ‘comfort women’ controversy?

That’s also flaring. Historians say anywhere from 50,000 to 200,000 women -- many of them Korean -- were forced into service in Japan’s military brothels. There are fewer than two dozen known survivors in South Korea. In 2015, Japan and South Korea announced a “final and irreversible” agreement that came with a personal apology to the women from Prime Minister Shinzo Abe as well as about $8 million for a compensation fund. But many South Koreans opposed the deal, which was signed without consulting the victims, some of whom refused the money in protest. Under President Moon Jae-in, who took office in 2017, South Korea said it would shut down the fund, angering Tokyo. Then South Korea’s National Assembly Speaker Moon Hee-sang said in a Feb. 7 interview with Bloomberg News that Japan’s Emperor Akihito -- whom the speaker called “the son of the main culprit of war crimes” -- should hold hands with the women and personally apologize to them to end the dispute. Japan demanded an apology and retraction.

5. Has Japan apologized before?

Several times, yet many in South Korea have doubts about its sincerity. In 1990, Emperor Akihito, expressed his “deep regret” for the colonial rule over Korea. In 1991, Japan issued the Kono Statement, where it offered “its sincere apologies and remorse” to the comfort women. The statement has been Japanese government policy since then. The apologies have been undercut by comments from leading Japanese politicians seen as whitewashing the militaristic past and visits made to Yasukuni Shrine in Tokyo, dedicated to Japan’s war dead where convicted war criminals are enshrined.

6. How bad can things get?

In the past, leaders called off bilateral meetings. The friction never became a major threat to economic or military ties, although some have warned about dangers associated with the recurring feud. The Japanese and South Korean militaries argued in December over an incident where Japan claims a South Korean ship used a weapons-targeting radar on one of its patrol planes, which Seoul says was flying in a provocative manner. Nevertheless, President Moon has expressed willingness to work with Japan in other areas, including the international push to end North Korea’s nuclear ambitions.

The Reference Shelf

• The 1965 treaty between South Korea and Japan.
• A QuickTake on Japan’s military.
• Japan’s apology known as the Kono Statement.
• U.S. President Donald Trump stays out of feud between allies.
• South Korea’s Supreme Court says Japanese companies must pay up.

--With assistance from Isabel Reynolds and Grant Clark.

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, Jon Herskovitz, Paul Geitner

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