South Korea’s Plan to Compensate Victims of Forced Labour Employed in Japanese Factories During Colonial Rule: A Step Forward for Peaceful Relations, but not for Victims’ Rights

On 6 March 2023, the Republic of Korea, in the person of the Minister for Foreign Affairs Park Jin, announced a plan for South Korea to compensate South Korean citizens who were forced to work in Japanese factories under Tokyo’s thirty-five-year occupation of the Korean peninsula. The plan is an attempt to settle the long-standing dispute between South Korea and Japan over compensation for atrocities relating to the colonial past and, through this, improve the diplomatic, political, and commercial relationships between the two countries.

In this blog post, I show how, despite its (potential) positive implications from an international relations perspective, the announced compensation plan proves problematic from the point of view of corporate accountability and victims’ right to prompt, adequate, and effective reparation under international law and according to human rights standards.

The Context

Japanese occupation of Korea from 1910 to 1945 was marked by gross human rights violations and serious violations of international humanitarian law. These included the sexual enslavement of women and girls (the so-called “Comfort Women”) and the forced mobilization of men and women as workforce at Japanese industrial sites. According to the estimates, around 780,000 Koreans were conscripted into forced labour by Japan during the occupation, particularly following the adoption of the 1938 Full National Mobilization Act.

To address colonial atrocities and establish the truth, serve justice, provide reparations, and achieve reconciliation, South Korea adopted a number of transitional justice measures, although at different times and in a rather piecemeal manner. Among the mechanisms established, the most relevant to this analysis was the Commission on Verification and Support for the Victims of Forced Mobilization.

Nonetheless, the issue of compensation for the harm suffered by the former forced labourers employed by Japanese companies under colonial rule has long remained unresolved. This ultimately compelled victims to turn to South Korean courts to seek justice and obtain reparations. In 2018, the Supreme Court in Seoul ordered two Japanese firms, Nippon Steel and Mitsubishi Heavy Industries, to pay reparations to fifteen former forced labourers. Several further lawsuits have been filed against other Japanese firms, and some of them are still pending.

Both the Government of Japan and the companies involved have consistently maintained that the issue of compensation for wartime forced labour was fully and finally settled under the 1965 Agreement between Japan and the Republic of Korea on the settlement of problems concerning property and claims and on economic co-operation (an argument that South Korea’s Supreme Court firmly rejected). Under this treaty, Tokyo agreed to pay hundreds of millions of US dollars in economic aid and loans to Seoul to settle “completely and finally” any claim stemming from its occupation of Korea. As a result of the Japanese stance on the issue, none of the victims who were forced to work for Japanese businesses has been compensated so far. The 2018 Supreme Court’s decision and, eventually, the order to seize and liquidate the assets held in South Korea by the companies found civilly liable led to a long-standing diplomatic and trade crisis between Seoul and Tokyo, which the plan proposed by Minister Park aims to solve once and for all.

Businesses’ Responsibility to Provide Reparation and Remedy Their Past Behaviour

The right of victims to prompt, adequate, and effective reparation for the harm suffered as a result of human rights violations is well-established under international law, as a stand-alone human right, an essential component of all other human rights, and an “indispensable complement” of any breach of a legal responsibility. Reparations should be victim-centred and, as far as possible, be aimed at addressing the needs of rights-holders through a constellation of reparative measures (namely, restitution, compensation, rehabilitation, satisfaction, and guarantees of non-recurrence).

Effective reparation is also a key component of the corporate responsibility to respect human rights and to provide for or cooperate in the remediation of the human rights abuses that corporations cause or contribute to. As such, the provision of adequate redress is crucial to corporate accountability.

In the aftermath of conflict, repression, and colonial rule (so-called transitional justice contexts), reparations aim to provide victims of gross human rights abuses with redress for the harm suffered. While corporate accountability has traditionally remained at the periphery of transitional justice agendas worldwide, in a significant number of cases there have been efforts to address the involvement of economic actors (i.e., firms and their representatives) in the commission of atrocities and seek reparations from them. This has mainly been achieved through (civil or criminal) litigation as well as the work of truth commissions, which in some cases have recommended that economic actors also contributed to reparations. Argentina, Brazil, Colombia, Liberia, South Africa, and Timor-Leste are just some of the most relevant examples. Recently, the United Nations Working Group on Business and Human Rights affirmed that businesses “have a responsibility to remedy their past behaviour”, including by contributing to reparations.

A Critical (Human Rights-Based) Assessment of South Korea’s Announced Compensation Plan

According to what has been announced, South Korea plans to compensate former forced labourers employed in Japanese factories during occupation through an already existing public foundation, the Foundation for Victims of Forced Mobilization by Imperial Japan, affiliated with South Korea’s Ministry of the Interior. The compensation plan will be financed through voluntary donations by South Korean private sector companies and, particularly, by those firms that benefited from the grants paid by Japan under the 1965 arrangement. The foundation will compensate the fifteen plaintiffs that won the cases against Mitsubishi and Nippon Steel in 2018 as well as the plaintiffs in the other pending cases, should South Korean judges order the defendant companies to provide reparations.

Some aspects of (what is currently known about) the compensation plan do raise concerns from the point of view of corporate accountability and victims’ right to reparation. First, with the (commendable) intent to ensure former forced labourers access to reparations, South Korea arguably came up with a rather singular solution: Japanese companies that were implicated in forced labour (including those found civilly liable by South Korea’s courts and ordered to pay millions of US dollars in compensatory damages) will not be required to contribute to reparations. Instead, through an unusual scheme, South Korean companies will be expected to contribute to the compensation fund. While, in principle, Japanese firms will not be prevented from contributing to reparations should they wish, South Korean businesses will essentially be called on to indemnify the former against responsibility and liability. This failure to hold Japanese firms to account for their involvement in gross human rights abuses has led to a backlash from South Korean victims, who said they will not accept the announced payments. On their side, both Nippon Steel and Mitsubishi declined to comment on the announcement, sticking to the “1965 agreement argument”.

Second, for the right to effective reparation to be fulfilled, the actors involved in the abuses need to acknowledge and accept responsibility for the wrong inflicted. Typically, recognition of responsibility is, at the same time, something victims are most interested in and something companies are most reluctant to provide. As a former South Korean forced labourer clearly stated, “You must apologise first and then work through everything else.” By bypassing the responsibility of Japanese companies, South Korea’s compensation plan critically fails to consider the need and right of victims to obtain an apology from Japanese firms for the harm suffered.

Third, a victim-centred approach is key to effective reparations. Since reparations are ultimately about redressing victims for the harm suffered, their views about what is necessary for them to feel redressed should be adequately taken into account. While there are no clear insights on the process followed, South Korean victims have harshly criticized the lack of meaningful participation in crafting the announced remedies, which ultimately is resulting in a pretty unanimous rejection of the plan.

Fourth, it is a well-established principle that reparations should be as far as possible prompt, as the timing does have a significant bearing on the reception of redress by victims. Although there does not seem to exist an objective standard to evaluate the promptness of reparations, the announced provision of compensation almost eighty years apart with only a few of the survivors still alive risks seriously undermining the meaningfulness of such a measure.

Conclusion

Providing reparations for historical wrongs is notoriously extremely challenging, particularly when economic actors (and international relations) are involved. The long legal battle for compensation by German companies to former concentration camp forced labourers provides a clear example in this regard.

Nonetheless, despite the obvious (legal, practical, and political) challenges, any effort to provide redress to victims of historical business-related gross human rights abuses should comply with the well-established standards of prompt, adequate, and effective reparation under international human rights law and ensure that companies are held accountable for their past behaviour. Home States (in this case Japan) have a clear role to play in facilitating, instead of undermining, the provision of accountability and reparation.