Japan Institute for National Fundamentals

Speaking out

Tsutomu Nishioka

【#538】Protect Japanese Companies from Korean Damage Suits

Tsutomu Nishioka / 2018.08.29 (Wed)

August 27, 2018

     The Supreme Court of South Korea began hearings on August 23 on a damages suit against Nippon Steel & Sumitomo Metal Corp. filed by former Korean workers requisitioned by Japan during World War II. As the fact that a final ruling on the matter has been shelved for more than five years is subjected to criminal investigations as a “deep-rooted evil” of the previous Park Geun Hye administration, the Supreme Court under new Chief Justice Kim Myeong Soo named by incumbent President Moon Jae In may give a ruling that would finalize the defeat of Nippon Steel by the end of the year at the earliest.
     It would be followed by similar rulings on pending suits against Mitsubishi Heavy Industries Ltd., Nachi-Fujikoshi Corp., Yokohama Rubber Co., Sumiseki Materials Co., Hitachi Zosen Corp. and other Japanese firms, branding them as losers. More Japanese companies are likely to be sued one after another.

What Japan’s government should do
     Here, I would like to discuss what the Japanese government should do. First, Tokyo should declare that it would thoroughly protect Japanese companies’ property rights.
     Compensations to former Korean requisitioned workers were “completely and finally” resolved under the 1965 Agreement between Japan and the Republic of Korea Concerning the Settlement of Problems in Regard to Property and Claims and Economic Cooperation. Then, the Japanese Diet enacted in that year the Act on Measures in Relation to Property Rights of the Republic of Korea and Others, invalidating those former Korean requisitioned workers’ claims to Japanese companies.
     If coming rulings lead Japanese companies’ assets in South Korea to be seized for damages payments, Tokyo should clearly declare that such seizure represents an illegal infringement on property rights and should use every means to protect private companies.
     An idea whispered in some quarters of creating a foundation for former requisitioned workers and asking relevant companies to make contributions to the foundation should be rejected by the government. The government must also oppose strongly should Japanese firms move to that direction.
     Then, Tokyo should seek official diplomatic talks with Seoul under Paragraph 1 of the 1965 agreement’s Article 3. If the problem fails to be resolved, Tokyo should seek to refer the matter to an arbitration panel consisting of one representative each from Japan, South Korea and a third country under Paragraph 2 of the article.
     If plaintiffs launch procedures to seize relevant Japanese firms’ assets in South Korea, Tokyo should back up the firms in order that they can file suits to halt such seizure for the reason of continuing talks.

International public relations are required
     In addition to doing above-mentioned activities, Tokyo should engage in public relations activities to tell the international community that the requisition was implemented legally on the Korean Peninsula then under Japan’s rule, that $300 million Japan paid to South Korea as grant aid under the 1965 agreement included compensations to former requisitioned workers and that Seoul admitted the inclusion then.
     The Japanese government should emphasize the fact that the South Korean government in 2005 announced a view that $300 million received from Japan under the 1965 agreement should be interpreted as covering funds to resolve the problem of compensation to those “forced” to work in Japan and paid bonuses to former requisitioned workers.

Tsutomu Nishioka is a member of the Planning Committee at the Japan Institute for National Fundamentals and Visiting Professor at Reitaku University.