South Koreans angry that their government, and not Japan, may pay WWII forced labour victims

South Korean officials are considering creating a domestic fund to compensate Koreans who were enslaved by Japanese companies before the end of the Second World War, as they desperately try to repair relations with Tokyo, whichhave deteriorated in recent years over historical grievances.

The plan, revealed Thursday during a public hearing organized by Seoul's Foreign Ministry, was met with fierce criticism by victims and their legal representatives, who have demanded that the reparations come from Japan.

Relations between Seoul and Tokyo have been strained since South Korea's Supreme Court in 2018 upheld lower court verdicts and ordered Nippon Steel and Mitsubishi Heavy Industries to compensate Korean forced labourers. The rulings ordered those companies to provide around 100 to 150 million won ($108,000 to $161,000 Cdn) each to 15 plaintiffs, including both survivors and relatives of deceased victims.

The hearing was interrupted several times by angry audience members. Some shouted "traitor" at Korea University politics professor Park Hong-kyu, who participated as a panellist, after he said it was unrealistic to expect Japan to apologize and participate in the fund.

Lingering WWII grievances

Ties between the two countries have long been complicated by grievances related to Japan's brutal rule of the Korean Peninsula from 1910 to 1945, when hundreds of thousands of Koreans were mobilized as forced labourers for Japanese companies or sex slaves at Tokyo's wartime brothels.

Japan insists all wartime compensation issues were settled under a 1965 treaty normalizing relations between the two nations that was accompanied by hundreds of millions of dollars in economic aid and loans to Seoul.

South Korean President Yoon Suk Yeol, a conservative who took office in May, has been eager to improve ties with Japan as they pursue stronger trilateral security co-operation with the U.S. in the face of the growing North Korean nuclear threat. He met with Japanese Prime Minister Fumio Kishida in November in Cambodia in the first bilateral summit between the countries in three years.

During Thursday's public hearing at the National Assembly, South Korean Foreign Ministry official Seo Min-jung said her government's priority is to arrange the payments as quickly as possible, noting that many forced labour victims are already dead and most known survivors are in their 90s.

She said it would be "impossible" to make the Japanese companies apologize on behalf of the broader forced labour issue, which has fuelled mutual frustration between the countries for decades.

"It would be important that Japan sincerely maintains and inherits the poignant expressions of apology and remorse that it already expressed in the past," said Seo.

Supreme Court yet to rule on case

Seo said the payments could possibly be handled by the Seoul-based Foundation for Victims of Forced Mobilization by Imperial Japan. Shim Kyu-sun, that foundation's chair, said the payments could be funded by South Korean firms that benefited from Japanese economic assistance when the countries normalized ties in the 1960s, including steel giant POSCO.

"The Japanese companies have reduced much of their economic activity in South Korea and withdrawn [many of their] assets, so it's not even clear whether a liquidation process would be enough to provide compensation to the plaintiffs," said Seo.

Nippon Steel and Mitsubishi Heavy Industries re-appealed to the Supreme Court after lower courts ordered them to sell off their local assets to compensate the plaintiffs. The Supreme Court has yet to make a decision on whether to allow the liquidation of the companies' assets to proceed.

Lim Jae-sung, a lawyer who represented the plaintiffs in the 2018 rulings, accused the government of pushing ahead with a settlement that excessively aligns with Japan's position while ignoring the victims.

"It seems that the South Korean government's finalized plan is to use the money by South Korean companies like POSCO to allow the Foundation for Victims of Forced Mobilization by Imperial Japan to eliminate the forced labour victims' rights to receivables," Lim said. "Japan doesn't take any burden at all."

Japan reacted furiously after the 2018 rulings and subsequently placed export controls on chemicals vital to South Korea's semiconductor industry in 2019.

Seoul accused Tokyo of weaponizing trade and even threatened to terminate a military intelligence-sharing agreement with Tokyo, but eventually backed off and kept the deal after being pressured by the administration of then-U.S. president Donald Trump.