Moon Says Koreans Have Right to Sue Over Colonial Forced Labor

(Bloomberg) -- South Korean President Moon Jae-in said a 1965 treaty between the countries doesn’t prevent Koreans from suing Japanese firms, potentially aggravating a diplomatic dispute between the two nations.

Moon’s comments Friday to visiting Japanese lawmakers in Seoul challenged Japan’s views that compensation claims from the country’s 1910-1945 colonization of the Korean Peninsula were settled by the treaty. South Korea’s Supreme Court has in recent weeks held two of Japan’s largest companies liable in forced-labor cases.

While the compensation amounts in the latest cases are manageable for the companies, the rulings strike at the heart of a fraught history between the two U.S. allies that risks hurting relations in other areas including joint efforts to stem North Korea’s nuclear ambitions.

“The latest Supreme Court ruling does not deny the treaty between South Korea and Japan,” Moon was quoted as saying by his office. Moon saw the court as ruling that individual worker’s claims to seek compensation from Japanese companies still existed, the office said in a statement.

The treaty states that all claims are “settled completely and finally,” and Japan has said it can’t accept the South Korean court’s rulings. Chief Cabinet Secretary Yoshihide Suga told reporters on Friday that Japan was monitoring South Korea’s actions, adding that he would refrain from responding to every comment from Seoul on the matter.

The rulings held Nippon Steel & Sumitomo Metal Corp. and Mitsubishi Heavy Industries Ltd. liable for compensation. Mitsubishi Heavy was ordered to pay as much as $134,000 to each of the 10 people subject to forced labor while Nippon Steel was ordered to pay $88,000 each to four plaintiffs.

There are 15 other forced-labor cases pending in South Korea involving 69 companies, according to the Japanese Ministry of Foreign Affairs, which refers to the claimants as “former civilian workers from the Korean Peninsula.”

The two countries were already sparring over compensation for women, mostly from Korea, who were trafficked to Japanese Imperial Army brothels decades ago. South Korea used the compensation money from Japan, which would be about $2.4 billion in today’s money, to help build its industrial base.

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