Posco to donate $8M to fund for conscripts

Pressure is growing on some of the country’s largest companies, built with money from Japan, following Posco’s decision to donate millions of dollars to support laborers forced to work in Japan during colonial rule.

Posco will donate 10 billion won ($8.47 million) by 2014 to a state program to support Koreans who were conscripted to work in Japanese enterprises.

According to the sources familiar with the project, Posco’s board of directors made the decision in March.

At the end of last year, the government notified a group of companies built with money Korea received from Japan under a 1965 bilateral claims settlement for the colonial occupation of its plan to establish a foundation to support the conscripts. The government asked the companies to make contributions to the foundation.

When Korea and Japan normalized relations in 1965, Korea received $500 million in grants and low interest loans from Japan as compensation for colonial rule under the Agreement Between Japan and the Republic of Korea Concerning the Settlement of Problems in Regard to Property and Claims and Economic Cooperation.

Posco, Korea Expressway Corporation, Kepco, Korail, KT, Korea Exchange Bank, KT&G and Korea Water Resources Corporation were built with the money paid by Japan. They all received the government’s request to participate in the project. The JoongAng Ilbo has found that Posco was the only company to pledge a contribution as of yesterday.

“We are not reviewing the matter at this point,” said an official from Kepco. “If the government makes a specific request, then we will think about it.”

KT said it was not contacted by the government about the project. An official of the Korea Exchange Bank said the bank was established by the Bank of Korea in 1967 and if the government had sent a request, it must have gone to the Bank of Korea.

Last year, the National Assembly passed a special law to support the conscription victims. A commission established under the Prime Minister’s Office is in charge of the project.

According to the Posco sources, the plan to donate 10 billion won dated back to early 2010.

In 2009, the company won a lawsuit filed by 99 former conscripts and family members of deceased conscripts. They said Posco violated their dignity by forming a strategic partnership with Japan’s Nippon Steel Corporation, one of the wartime enterprises that used Korean forced laborers.

The next year, Posco won another suit filed by the former conscripts asking for compensation because some of the money received from Japan under the 1965 settlement was used to establish Posco.

Although the courts ruled the steel giant was not legally liable, they advised Posco to make an effort to support the former conscripts and their families.

Following the rulings, Posco reached an internal consensus that it would provide a contribution if the government started a project to assist the victims.

Posco’s decision to make the contribution came after a landmark Supreme Court ruling last Thursday saying Japan’s wartime enterprises are still responsible for paying the conscription victims overdue wages and damages.

It ruled in favor of eight Korean men who worked as forced laborers for Japan’s Mitsubishi Heavy Industries and Nippon Steel Corporation.

The Supreme Court sent the cases back to the Seoul High Court and Busan High Court for retrials and to calculate the amount of compensation. Each plaintiff was seeking about 100 million won.

Choi Bong-tae, a lawyer from the Samil law firm who represented the eight plaintiffs in the two cases, was hopeful that the Posco’s contribution would put pressure on the Japanese firms to pay the victims. Choi was also the lawyer for the former conscripts who filed the suit against Posco in 2009.

“In 2009, Posco won the case, but was advised to support the victims,” Choi said. “And it did decide to provide the 10 billion won. The Japanese firms that were ordered to compensate the victims must do so.”

The appeals courts will recalculate the amounts of compensation and send it to the Supreme Court to finalize the rulings. If Mitsubishi Heavy Industries and Nippon Steel Corporation fail to pay the workers as stated in the rulings, Korean courts can forcibly seize their assets in Korea.

By Moon Byung-joo, Ser Myo-ja [myoja@joongang.co.kr]