Kim Hyun-bin began his journalism career at Arirang TV from 2012 to 2017, specializing in defense, foreign affairs and the economy. In 2018, he joined The Korea Times, covering society and business, and is currently responsible for embassy affairs.
Korean companies cautious about compensating victims of Japan's forced labor
POSCO Center in Seoul / Courtesy of POSCO Group
By Kim Hyun-bin
By Kim Hyun-bin
Korean companies, which benefited from a 1965 treaty with Japan that normalized diplomatic ties in exchange for economic aid, appear to be cautious about compensating victims of Japan's wartime forced labor, according to industry officials, Monday. The hesitation follows the Korean government's announcement that businesses here will take part in the reparations.
Under the Yoon Suk Yeol administration's scheme, a foundation for victims of forced mobilization, affiliated with the interior ministry, will collect "voluntary" donations from the private sector.
The government is expected to seek donations from 16 Korean companies, including the country's leading steelmaker POSCO, under which Tokyo offered $300 million in grants to Seoul at the time.
The list also includes KT, KT&G, KEPCO, Korea Expressway Corp. and KEB.
POSCO said it has yet to receive a request from the government, but added that it will actively review the request if it receives one.
"We will actively review the support plan according to the aim of the government's announcement,” POSCO Group said.
Other companies involved are also contemplating how much they will allocate for the forced labor compensation fund.
“We are contemplating the compensation amount, but no concrete solution has been reached at this point in time,” another industry official familiar with the matter said.
In addition, the Korean and Japanese governments tentatively confirmed a plan to jointly create and operate a future youth fund through the Federation of Korean Industries (FKI) and the Japan Business Federation.
The fund is being created to enhance relations between the two countries and will serve in part as Japan's compensation for forced labor.
Japan's Mitsubishi Heavy Industries and Nippon Steel were ordered by the South Korean Supreme Court in 2018 to compensate South Korean victims of wartime forced labor. The two companies will also take part in the fund as they are members of the Japan Business Federation.
“In the point of view of companies, it would be a bit unfair to suddenly have to pay millions of dollars. However, Korea does not have an FTA with Japan due to pending political issues, but enhanced relations with Japan will benefit the companies more in the long run,” said Kim Dae-jong, an economics professor at Sejong University.
“Companies will have to convince their shareholders. If the conflict between Korea and Japan is resolved, Japan will resume support and lift various economic sanctions against Korea and create an opportunity for companies to expand their business and, in turn, raise stock prices.”