Why Japan’s Feud With South Korea Isn’t Going Away

(Bloomberg) -- Japan’s colonial rule over the Korean Peninsula ended more than seven decades ago, yet that legacy still roils everyday politics. 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 Koreans conscripted to work in factories and mines that supplied Japan’s imperial war machine, and those euphemistically called “comfort women,” who were forced to work in military brothels. Japan contends all claims were settled under a 1965 bilateral agreement and a fund set up in 2015. Seoul argues Japan hasn’t done enough. Some of Japan’s largest companies have been dragged into the fray, and the situation is affecting the two countries’ ability to cooperate on security and other issues.

1. What are the roots of the 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 a 1965 treaty that established diplomatic ties between the two countries, Japan paid the equivalent of $300 million -- $2.5 billion in today’s money -- and extended $200 million in low-interest loans on the understanding all claims were “settled completely and finally.” The then-struggling South Korea invested the money in industries that eventually helped turn it into an economic powerhouse. However, South Korean court rulings since late 2018 have said some conscripted workers were not properly compensated for their emotional pain and suffering.

2. What is the fallout for the companies?

South Korea’s Supreme Court ruled in 2018 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 to each of four plaintiffs. A South Korean court in August 2020 ordered the seizure of shares, then valued at about $356,000, that Nippon Steel has in a joint venture with South Korean steelmaker Posco, a move Tokyo calls unlawful. These assets could be liquidated at any time, something Japan has said would inflame tensions.

3. What has Japan done to push back?

Japan rejected a South Korean proposal for a joint compensation fund, seeing it as a breach of international law and their 1965 treaty. The Japanese government removed South Korea from a so-called “white list” of trusted countries that benefit from less-stringent trade checks. That followed a move to restrict exports of materials vital to South Korean manufacturers of semiconductors and computer displays.

4. And South Korea?

South Korea removed Japan from its list of most-trusted trading partners. Seoul said it would withdraw from a military intelligence-sharing agreement, but later backed down in the face of heavy U.S. pressure. In July 2020, the World Trade Organization agreed to mediate in a dispute over Japan’s trade restrictions, which South Korea described as “politically motivated.”

5. Are other Japanese companies affected?

There are a dozen or so 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. One case was dismissed in June by a Seoul court that found the plaintiffs didn’t have legal rights to seek damages. They vowed to appeal.

6. What about the ‘comfort women’ controversy?

That’s also flared again this year after a Seoul court ruled in January that Japan should compensate the women. However, the same court but with different judges and plaintiffs ruled in April that Japan had sovereign immunity and didn’t have to pay compensation in a South Korean civil suit. 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 from then-prime minister Shinzo Abe as well as about $9.6 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 shut down the fund, angering Tokyo. Following that, South Korea’s National Assembly Speaker Moon Hee-sang said in an interview with Bloomberg News that Japan’s then-Emperor Akihito -- whom the speaker called “the son of the main culprit of war crimes” -- should hold hands with the women and personally apologize. Japan demanded an apology for that and a retraction.

7. Has Japan apologized before?

Several times, yet many in South Korea have doubts about its sincerity. In 1990, Akihito expressed his “deep regret” for the colonial rule. In 1993 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 militarist past, and visits made to Yasukuni Shrine in Tokyo, where the country’s wartime military leaders -- including Class A war criminals -- are among those honored. South Korea has also been angered by what it sees as Japan’s repeated failure to acknowledge that the human rights of Korean conscripted workers were abused at Hashima, one of a group of sites recognized by UNESCO as representing Japan’s industrial revolution.

8. How bad can things get?

A poll published in October 2020 by Genron NPO found almost 72% of South Korean respondents had a bad image of Japan, and almost 90% of South Koreans perceived relations between the two countries as bad. The friction has never escalated to the point where it has severely damaged economic or military ties, however, although some have warned about dangers associated with the recurring feud. Moon has expressed willingness to work with Japan in some 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, and some of its recent statements on “former civilian workers.”
• U.S. President Donald Trump tries to stay out of feud between allies.
• South Korea’s Supreme Court says Japanese companies must pay up.

©2021 Bloomberg L.P.