They are not allies, but they are close neighbors and sometimes join hands for regional security.

Yet, there has always been tension between South Korea and Japan, as disputes stemming from their bitter history plague relations.

The current issue between the two nations is the South Korean Supreme Court’s ruling that orders Japanese companies to sell their assets based in South Korea to provide compensation for Koreans who they forced into labor during the Japanese occupation of Korea from 1910 to 1945.

As the liquidation process date is approaching -- expected around the end of August or September -- the Japanese firms are refusing to comply with the ruling, and their government has been demanding Seoul come up with a solution.

President Yoon Suk-yeol, who has set out a goal of restoring the soured relations with Japan, is now striving to address the impending liquidation of the Japanese firms.

It is a tall order: The required solution must prevent the liquidation while at the same time compensate the victims for their suffering.

Just last week, the Foreign Ministry delivered a written opinion to the Supreme Court that is currently reviewing the lower court’s ruling for the companies to sell off their assets.

The letter explained its “diplomatic efforts” to resolve the issue, an apparent attempt to earn more time before the court makes a final decision.

“The government is consistently in discussion with Japan to find a rational solution that can mutually benefit both countries. It is also making multilateral efforts, such as collecting opinions from different interest groups, including the plaintiffs (victims) via a consultative group,” the Foreign Ministry wrote in the letter, according to a ministry official. 

’Agree to disagree’

In 2018, Seoul’s Supreme Court ruled in favor of the Korean victims of forced labor, saying the Japanese companies, Mitsubishi Heavy Industries and Nippon Steel were liable for their wartime actions. This judgment reminded many of the root cause of the unending historical disputes between the neighboring countries.

The ruling immediately prompted a backlash from Japan, which argues that all claims related to its annexation of Korea were settled once and for all by an agreement signed in 1965 that opened the diplomatic relations between Seoul and Tokyo.

The top Korean court, however, made the ruling under the premise that the Japan-Korea Annexation Treaty of 1910 was illegal, null and void under the 1948 Korean Constitution -- reminding how South Korea and Japan have long held completely different interpretations of their bilateral accord signed in 1965.

The controversial Article 2 of the Treaty on Basic Relations between Japan and the Republic of Korea states, “It is confirmed that all treaties or agreements concluded between the Empire of Japan and the Empire of Korea on or before Aug. 22, 1910, are already null and void.”

Seoul interprets this as meaning that Japan’s annexation treaties were “already null and void” at the time of their signing in 1965. Tokyo counterargues that the article means the treaties were null and void then, but they were still valid until 1948 when Korea was established.

Despite the gap in their understanding of the clause, the two countries at the time did not negotiate further, leaving it as an “agreement to disagree.”

“The biggest cause of dispute when South Korea and Japan try to stabilize their bilateral ties has been their differing perspectives on Japan’s annexation of Korea,” Shin Kak-soo, former South Korean ambassador to Japan, said in an interview with a local daily Hankyoreh. Shin served the post from 2011 to 2013.

“The two countries had mended their differences and ‘agreed to disagree.’ They had resorted to a diplomatic solution to the legal problem. And the Supreme Court’s ruling in 2018 reopened the Pandora’s box that was sealed diplomatically.”

Japan has been showing a completely different attitude toward South Korea and other countries over its wartime forced labor issue. To Chinese victims who were forced into labor during wartime, Japan has been accepting of its faults.

Last November, a Japanese civic group erected a memorial stone in Nagasaki, Japan to commemorate the Chinese victims who worked at a mine in Hashima Island. Mitsubishi Materials, an affiliate of Mitsubishi Heavy Industries that used forced labor, provided the funds to produce the stone.

For Korean victims, the Japanese government and the companies maintain they do not owe an apology, because they were Japanese nationals during its occupation of the Korean Peninsula. 

A solution for mutual benefit?

While the previous Moon Jae-in administration held a victim-centered approach to the top court’s ruling and refrained from intervening in the issue, the Yoon Suk-yeol administration has been actively seeking ways to resolve the dispute to prevent the liquidation of the Japanese firms’ assets.

Making his first official trip to Japan in July, South Korean Foreign Ministry Park Jin met with his Japanese counterpart Yoshimasa Hayashi to share concerns over asset liquidation and explain Korea’s efforts to resolve the issue before the liquidation is carried out.

In a government interpellation session, Park also said that resolving the forced labor issue is the “key” that will open the way to the next step to normalizing ties with Japan.

“The victims are aging, and the liquidation is drawing near, so we will make the best efforts to resolve this issue as soon as possible. I also asked Japan to sincerely take responsive measures,” Park had said during the interpellation session on July 25.

Earlier in July, Seoul launched a consultative group of the government and private groups to collect the opinions of experts and the victims.

Over the Korean government’s stepped-up moves to address the court ruling, opinions are divided here.

Yuji Hosaka, a political science professor at Sejong University, criticized the Yoon Suk-yeol administration for taking a “submissive attitude” toward Japan and that it was “inappropriate” for either country’s government to wield influence on the result of a civil suit.

“Japan has not said a word about what it will do to resolve the dispute. And it is highly unlikely that Japan’s stance demanding Korea for a solution will change soon, at least not until the national funeral for the late Prime Minister Shinzo Abe,” Hosaka told The Korea Herald.

Several options are being discussed, including a “subrogation payment,” in which the South Korean government pays the victims and then asks the Japanese companies for reimbursement later. Seoul could also create a fund to gather donations from South Korean and Japanese companies to pay the victims.

But if the Yoon Suk-yeol administration’s approach lifts the burden on Japanese companies, Hosaka said it would effectively endorse Japan’s interpretation of the 1965 agreement.

“The top court handed down the ruling, based on the country’s laws, and Japan has no right to say anything about the decision. But if the Yoon Suk-yeol administration follows Japan’s logic to resolve this issue, it would be the same as accepting Tokyo’s interpretation of the 1965 agreement.”

The professor said the only way for the dispute to be resolved is for the two governments to “stop intervening” and allow the victims and the companies to reconcile.

“This is a civil suit. When the victims and the companies can directly negotiate, and the firms apologize to the victims, they can take the reconciliation process in the litigation.”

Choi Eun-mi, an expert on Japan Japan at the Asan Institute for Policy Studies, said the Korean government’s attempt to resolve the dispute should be seen positively, since the negotiation between the victims and companies failed to make progress in three years since the court’s ruling.

“The most crucial part of the negotiation would be getting the consent from the victims (on whatever solution they decide on), of course. At the same time, the relations with Japan should not be left unrepaired,” Choi told The Korea Herald.

It is too early to judge the Korean government’s gesture to resolve the wartime forced labor issue, and it is important that the government take preventive measures to avoid irreversible damage to relations with Japan, she added.

The victims have asked the Korean government to guarantee “diplomatic protection” -- to step up efforts to protect the rights of its nationals.

A discretionary right identified by international law, diplomatic protection is an action taken by a state against another to protect its nationals whose rights and interests have been injured by a state.

“Since the Supreme Court’s ruling in 2018, we asked the companies multiple times for direct negotiation, but the Japanese companies refused,” said Lim Jae-sung, a legal representative for Korean forced labor victims.

“So we request that the Korean government exercise its diplomatic protection rights, to push for the victims to directly negotiate with the companies,”

The Foreign Ministry did not recognize the case as subject to diplomatic protection but said it would make efforts to resolve the dispute.

By Jo He-rim ( herim@heraldcorp.com)