hankyoreh

Korean victims of forced labor on their way to the Supreme Court of Korea in Seoul to file an additional damages case in April 2019. (Kim Bong-gyu, senior staff writer)

Conflict between Japan and South Korea may worsen again following the South Korean government’s petitioning of the World Trade Organization (WTO) against Japan’s export controls and a South Korean court’s recent move to seize and liquidate the assets of a Japanese company that has failed to provide compensation to victims of forced labor. The Japanese government, for its part, has responded by saying it will “retaliate” if the South Korean government moves forward with the seizure.

On June 1, the Pohang branch of the Daegu District Court released a public notice to the Japanese company formerly known as Sumitomo Metal (now Nippon Steel) stating that the court had made a ruling to seize and liquidate the company’s assets and that the documentation was freely available for the company’s representatives to take away. The court decided to serve the public notice after Japan had refused to accept the seizure documents for more than one year and five months. The public notice will be considered “served” to the defendant by 12 pm on Aug. 4.

The court’s seizure order is focused on the 81,075 shares (valued at around 400 million won, or US$ 357,644) in PNR, a joint venture between POSCO and Nippon Steel formed in January 2008 to recycle by-products from steel manufacturing. The court had approved the seizure of the joint venture’s assets in January 2019 when Nippon Steel failed to follow a ruling to compensate forced labor victims. The Japanese government has indicated that it will take retaliatory measures if the seizure takes place. Yoshihide Suga, Japan’s chief cabinet secretary, stated on June 4 that the South Korean court procedures are a “violation of international law” and that “all options” are on the table to protect the economic activities of Japanese companies. Nippon Steel also stated that the forced labor issue had “completely” and “finally” been resolved through the Claims Settlement Agreement between Japan and South Korea and that it would conform to and support the Japanese government’s response to the seizure order.

Given that the South Korean-Japanese relationship is already tense, the forced labor issue could lead to further economic and security-related conflict between the two countries. Yang Gi-ho, a professor of Japan Studies at Sungkonghoe University, told Hankyoreh that “The timing of the public notice and the restart of efforts to petition the WTO against Japan’s export controls are connected to each other.” According to Yang, “Japan will never retreat because it considers [the seizure order] a violation of international law, and if Japan retaliates we [South Korea] will be forced to take our own measures and this could lead to a second-round of conflict.”

The victims of forced labor also understand the impact the seizure order could bring. This has led them to move forward with court proceedings and to demand the creation of a “consultation group” earlier this year to solve the issue. Through these efforts, the victims have aimed to find a way to solve the issue by mobilizing all facets of society in both Japan and South Korea, including lawyers, the academic and business community, politicians, proxies for the victims, and other support groups. These efforts, however, have fallen by the wayside because of the COVID-19 pandemic.

The South Korean government says that it will respect the Supreme Court ruling and that it plans to solve the issue with a “focus on the victims”; however, it will not be easy for the government to identify concrete ways to solve the issue. Kim In-chul, a spokesman for the Ministry of Foreign Affairs (MOFA), told reporters on June 4, “We are taking an open stance to reach a reasonable solution and are comprehensively taking into consideration respect for the decision of the judicial branch, while realizing the rights of the victims and bilateral relations,” adding, “We will do our best to closely consult with Japan.”

Jin Chang-soo, a senior researcher at the Sejong Institute, told the Hankyoreh, “The seizure [of the assets] has not yet taken place” and that “the Japanese and South Korean governments should view this as a potential crisis and talk with each other to prevent the worst-case scenario, instead of just trying to solve the issue immediately.”

By Kim So-youn and Noh Ji-won, staff reporters

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