Arbitration commission isn’t on the table

The Korean government is leaning against using an arbitration commission defined in a 1965 treaty between Korea and Japan to settle a recent dispute over suits filed by the Korean victims of forced labor, according to a diplomatic source in Seoul.

A diplomat familiar with the issue said that Korean Prime Minister Lee Nak-yon convened a meeting at the end of last year to discuss ways to deal with Japan’s discontent with the issue and Tokyo’s preparations to take the case to international arbitration.

The controversy revolves around the suits filed by Korean victims of forced labor against the Japanese companies, Nippon Steel & Sumitomo Metal and Mitsubishi Heavy Industries, for their exploitation during Japan’s colonial rule over Korea.

Last October, the Korean Supreme Court ruled in favor of the plaintiffs, saying the individuals’ rights to seek damages had not expired. The court ordered the companies to compensate them for their unpaid work decades ago.

Nippon Steel, however, refused to comply with the ruling. The plaintiffs and their lawyers then applied to seize the company’s shares in Korea with a local court. Another group of victims who won their suit against Mitsubishi is also planning to pursue the seizure of its patent rights in Korea.

At the government meeting last year, “the idea to take the case to an arbitration commission defined in the 1965 agreement came up, but was ultimately set aside because it was not appropriate,” the source said.

When South Korea and Japan normalized diplomatic relations in 1965, they also signed an agreement to settle property and claim disputes stemming from Japan’s colonial rule. Tokyo compensated Seoul with a lump sum of $800 million in loans and grants.

The agreement includes an article that outlines that any dispute concerning the interpretation or implementation of the agreement would be submitted to a specially designated arbitration commission consisting of three members - one appointed by each government and a third from a different country.

But an esteemed former diplomat present at the meeting reportedly opposed such a plan, and Prime Minister Lee also lent his weight against the proposal, according to the source.

Analysts say the issue with such an arbitration method lies in the fact that it would inevitably involve a diplomatic tug-of-war with Japan to convince the arbiter from the third country to take Korea’s side.

Seoul has also preferred to approach the forced labor issue from a general human rights perspective tied to its view on Japan’s war crimes, rather than in legal terms. Bringing the matter to arbitration could also erode the legitimacy of its judiciary, since the Korean government could appear to be discussing the ruling with a foreign entity.

Facing criticism that the government is doing little in the face of Japan’s protests against the rulings, Prime Minister Lee said on Saturday that he had been overseeing a series of internal discussions involving various relevant ministries regarding the matter since early November.

“Settling the problem will turn out more difficult if we discuss everything above the table,” Lee said in regard to the Korean government’s relative silence on the issue. As a former journalist who worked as a foreign correspondent in Tokyo, Lee has been tasked with leading Seoul’s response to Japan’s intensifying reaction to the rulings.

On Sunday, Japanese Prime Minister Shinzo Abe said he ordered his government to consider measures against the rulings according to international law. The Japanese press interpreted this as taking steps to bring the issue to the International Court of Justice (ICJ) in The Hague.

Before seeking ICJ adjudication, however, Japan may bring up forming an arbitration commission with Korea based on the 1965 agreement. Without Seoul’s consent, however, this would be impossible, as would an ICJ trial on the matter.

The only viable form of retaliation at Tokyo’s disposal if those methods fail would be economic, trade or social sanctions against Korea. Japanese right-wing newspaper Sankei Shimbun reported Monday that sanctions are currently being discussed in Abe’s cabinet.

BY CHUN SU-JIN, SHIM KYU-SEOK [shim.kyuseok@joongang.co.kr]