Protesters gather in front of a statue symbolizing former South Korean wartime laborers to criticize then–President Yoon Suk-yeol's diplomacy, March 16, 2023, in Seoul. (©Kyodo)
The wartime labor issue began with South Korean court rulings against Japanese companies. In 2018, the Supreme Court ordered Japanese companies to pay damages to former Korean wartime laborers and others. Plaintiffs claimed they had been mobilized from the Korean Peninsula during Japan's colonial rule and forced to work.
Japan rejected the rulings, arguing that all such claims were settled under the 1965 treaty that normalized relations. In March 2023, the Yoon Suk-yeol administration announced a "third-party reimbursement" solution. Under this plan, a government-backed foundation, the Foundation for Victims of Forced Mobilization by Imperial Japan, would raise donations and pay damages to the plaintiffs.
Audit Fallout
On March 22, news broke that South Korea's Lee Jae-myung administration had decided to dismiss the foundation head Shim Kyu-sun.
The foundation, which had previously operated under former President Yoon, aimed to help resolve the longstanding wartime labor dispute between Japan and South Korea. After a subsequent audit, however, the Lee administration found procedural omissions and held Shim responsible.
An expert from a public-private consultative body on the issue commented that the punishment was too severe, warning it could harm the progress made in Japan-South Korea relations. Meanwhile, the Lee administration appears intent on highlighting wrongdoing at the foundation and aims to discredit the previous government's wartime labor achievements. This could potentially undermine stability and trust between the two countries.
Irregularities in Court Deposit Procedure
More details emerged from interviews with people familiar with the case and from an audit report obtained by the Sankei Shimbun. Under the Yoon administration's proposed plan, the foundation would pay the court-awarded compensation. When some plaintiffs refused the funds, the foundation subsequently deposited the money with the court.
During the court deposit process, foundation staff created seals with the chairman's name differing from his officially registered seal and used them improperly on application documents. As a result, some of the documents may not have been legally valid.
Shim, having been informed of this, also appears to have condoned the action. The urgency to complete the procedure likely influenced these decisions, leading to potential legal complications for the foundation.
According to the report, the foundation operated under instructions from the presidential Office of National Security, which oversaw foreign policy during the Yoon administration. The urgency was heightened by upcoming major diplomatic events, including a July 2023 Japan-South Korea summit and a trilateral summit with the United States the following month, which increased pressure on the foundation.
Shim Denies Wrongdoing
Shim told Sankei Shimbun, "We rushed the process, and there were paperwork problems. But there was absolutely no misconduct, neither in going against the victims' families nor seeking personal gain."
The audit was launched after members of the ruling Democratic Party of Korea raised concerns. President Lee has said that relations between states rest on trust and that consistency matters. He has indicated that he intends to maintain the solution put forward by the Yoon administration.
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Author: Tatsuya Tokiyoshi, The Sankei Shimbun
