Korean, Japanese companies need to donate more, head of forced labor reparation fund says

More funding and participation from both Korean and Japanese companies are needed for the third-party reparation of victims of forced labor, said the head of a foundation for the compensation of Korean victims of wartime forced labor.

Shim Kyu-sun, chief of the Foundation for Victims of Forced Mobilization by Imperial Japan, speaks during his first-ever press interview with the JoongAng Ilbo, an affiliate of the Korea JoongAng Daily, at the foundation's headquarters in Jongno District, central Seoul, on May 23. [PARK HYUN-JOO]

The Korean government-backed fund to compensate the victims of Japan's wartime forced labor needs local and Japanese companies to chip in more, the head of the fund's foundation said.

"Since the end of last year, we contacted additional victims who received a final judgment for compensation for forced labor, and more than 90 percent expressed their intention to accept third-party payment, but financial resources are insufficient," said Shim Kyu-sun, chief of the Foundation for Victims of Forced Mobilization by Imperial Japan, during his first-ever press interview with the JoongAng Ilbo, an affiliate of the Korea JoongAng Daily, at the foundation's headquarters in Jongno District, central Seoul, on May 23.

"For the total payment, we would need about 12 billion won ($8.8 million)."

Shim worried that third-party reparations "seem to have reached a crossroads,” adding that "the participation of Korean and Japanese companies is essential for the success of the solution."

In March 2023, the Yoon Suk Yeol government announced its decision to use money raised by the foundation from Korean and Japanese companies to pay compensation owed to the forced labor victims.

The foundation pays victims both compensation and delayed interest confirmed through court rulings.

The Korean Supreme Court has issued rulings holding Japanese companies responsible for wartime forced labor, beginning in 2018 when the court ruled in favor of 15 plaintiffs — including victims and bereaved relatives — in two decisions. The top court finalized its rulings in favor of the victims on Jan. 25 this year.

Among the 15 victims or bereaved relatives, the 11 who accepted third-party compensation received payments from the foundation.

In December last year and January this year, 52 additional victims and bereaved relatives received rulings in their favor in nine cases. The Korean government plans to compensate them through the third-party fund as well.

Shim Kyu-sun, chief of the Foundation for Victims of Forced Mobilization by Imperial Japan, speaks during his first-ever press interview with the JoongAng Ilbo, an affiliate of the Korea JoongAng Daily, at the foundation's headquarters in Jongno District, central Seoul, on May 23. [PARK HYUN-JOO]

“The government must keep its promise,” said Shim. “The biggest issue is to expand financial resources and pay compensation as quickly as possible to victims who want to receive it.”

Most victims who accepted compensation through the foundation said they wanted to “bring closure to a long struggle.”

Some victims have filed complaints with the Ministry of the Interior and Safety and the Ministry of Foreign Affairs to receive compensation and delayed interest as soon as possible.

In several cases, the victims specifically asked the foundation how to receive compensation, saying the “whole family” wished to receive the sum.

However, the lack of financial resources has delayed justice for the victims through third-party reparation. As time passes, interest continues to accumulate.

Of the approximately 4.11 billion won donated to the foundation by Korean steel giant Posco and others, approximately 3.8 billion won was paid to victims or to deposits for victims who refused third-party compensation. Only about 300 million won currently remain.

In principle, all compensation funding comes from voluntary donations from Korean and Japanese companies. Accordingly, critics say Korean companies that benefited from the 1965 claims agreement between Korea and Japan must assume a more active role.

Experts also urge Korean and Japanese companies that do business in each other's countries to participate in the fund voluntarily.

Given that the third-party reparation mechanism was a roundabout solution to Japanese companies' refusal to pay Korean court-ordered compensation for war crimes, the lack of Japanese participation will likely spark more Korean dissatisfaction.

“Japan may say that they have their own circumstances, but the Korean public will support third-party compensation only if Japanese companies participate,” said Shim. “The intention of the Supreme Court’s ruling was for Japanese companies to compensate the victims, so it is only right that we, as Koreans, demand the participation of Japanese companies. If companies don’t feel comfortable contributing directly to the foundation, they could contribute more to the Future Partnership Fund created by the Federation of Korean Industries and the Japan Business Federation.”

The two organizations created the fund shortly after the Korean government announced the third-party reparation solution and contributed 1 billion won and 100 million yen, respectively, to promote the future-oriented development of bilateral relations.

The funds are limited to future human resources exchanges and are not paid directly to the victims.

In a related development, a Japanese media outlet reported on May 25 that the Japan Business Federation donated more than 200 million yen to the fund, twice the target amount.

The federation did not disclose which companies made the donations. However, the media outlet reported that Japanese companies obligated to pay compensation "do not appear to have participated in the donations.”

“With the Japan Business Federation’s additional contribution, we now have about 4 billion won in the Future Partnership Fund, which is significant,” said Shim, adding that more contributions from both countries "should be made in the future.”

Shim called the third-party reparation “Korea’s decision to choose the ‘next best thing possible’ over the ‘best impossible thing,’” and a “first step toward reconciliation between Japan and Korea after years of discord and antagonism.”

While some have argued that third-party reparations have been challenging to implement due to some victims’ refusal to accept compensation, court dismissals and lack of funding, Shim disagreed.

“The number of victims who have accepted third-party reparations far outnumbers those who have refused, and as long as the Japanese defendant companies do not fulfill the courts’ judgments, third-party reparations should not be abandoned easily, as they are the only way to satisfy the rights of the victims,” said Shim. “We cannot stop this solution due to financial resources, so we earnestly hope for voluntary contributions from companies in both countries.”

Regarding the court’s dismissal of a deposit for victims who refused compensation, Shim said the deposit "was not a new option, but part of a process for third-party reparation,” adding that “we have no choice but to deposit a sum to complete the reparations, and we will humbly wait for the outcome.”

The government filed an objection against the court’s refusal to accept the deposit, but it was rejected. The government is now appealing the decision.

Resolving the forced labor issue through the implementation of a third-party reparation solution is particularly important in the increasingly volatile international environment, including the growing strategic competition between the United States and China and the war in Ukraine.

“Amid global issues such as North Korea's nuclear missile development, the U.S.-China hegemonic competition and national self-interest in supply chains, cooperation between South Korea and Japan can help expand our voice and influence,” said Shim. “Above all, we need an action plan that people can feel.”

Shim also talked about the revelation that the Japanese government kept a list of passengers from the Ukishima Maru, a Japanese ship that was carrying thousands of Korean laborers to Busan when it exploded and sank off the coast of Japan shortly after Korea's liberation in 1945.

“If Korea and Japan work together to uncover the truth, it will also help to alleviate anti-Japanese sentiment in Korea related to the issue of forced labor,” he said.

Korean academics estimate that around 5,000 Koreans were killed in the sinking, the exact cause of which has never been identified.

A Korean memorial association on the Ukishima Maru explosion announced in August 2016 that it retrieved internal documents from the Japanese government that prove the Ukishima Maru had bombs on board and other explosives at the time of its mysterious explosion on Aug. 24, 1945.

“We will also establish a separate task force on the Ukishima Maru passenger list within the foundation,” Shim said. “Academic research related to the victims of forced labor is also one of the foundation's main projects.”

BY PARK HYUN-JOO, LIM JEONG-WON [lim.jeongwon@joongang.co.kr]