Via Financial Times

South Korean political groups are lobbying victims of wartime forced labour to drop proceedings against Japanese companies to defuse a bitter dispute between Tokyo and Seoul.

But while the move could ease trade tensions between Japan and South Korea — two of Washington’s most important allies in Asia — the victims’ lawyers said it risked undermining Seoul’s promises not to intervene in the judiciary.

Moon Hee-sang, speaker of South Korea’s national assembly and a senior member of President Moon Jae-in’s Democratic party, and his staff have in the past week met victims to discuss a proposal for reparations for servitude during the second world war. These would be paid by a foundation funded by private and public sources from South Korea and Japan, his office told the FT.

The proposal comes a year after South Korean courts awarded damages against Japanese companies for forced labour.

The decision, which could establish a precedent for thousands of claims against Japanese companies, has been at the heart of a dispute that has dragged bilateral ties to their worst level in decades.

Tokyo believes the rulings breach a 1965 treaty on claims related to Japan’s colonial rule over the Korean peninsula.

Japanese prime minister Shinzo Abe’s administration hit back in July with export controls on South Korean electronics manufacturers, raising concerns over the potential fallout for the global tech supply chain.

In response, Seoul threatened to pull out of an intelligence-sharing pact with Japan but on Friday backed down after pressure from Washington.

While Friday’s decision was seen as a sign relations might improve, Tokyo has warned that any move by South Korean courts to pay claims by liquidating the assets of Japanese companies would spark further retaliation.

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Moon Hee-sang’s efforts to talk directly to the victims potentially marks a shift after months of tough rhetoric from the South Korean president and top officials who have vowed not to intervene in the judicial process.

“We will never again lose to Japan. We have come this far today by overcoming countless hardships,” President Moon said in August.

A spokesperson for South Korea’s presidential Blue House said the latest proposal had not been co-ordinated with the government and that officials would listen to the victims’ responses.

Kim Jeong-hee, an attorney representing victims, said the offer stood in direct conflict with the court’s decision.

“The victims would need to drop their claims once they received compensation from the fund and would likely be bound by an obligation not to take any further legal action against Japan,” Mr Kim said.

Lee Hee-ja, the leader of a victims’ advocate group whose Korean father died after being conscripted into the Japanese military, was concerned the meetings took place behind closed doors and did not include all of the victims involved in the court proceedings.

“We went all the way to the Supreme Court after fighting against Japan for decades. Now the struggle and the court ruling will become nothing,” she said.

South Korean business representatives met Japanese counterparts in Tokyo this month and “both sides agreed to donate to a fund aimed at improving bilateral relations and exchanges”, a person at the meetings said.

While Moon Hee-sang’s approach would respect the 1965 treaty, officials in Tokyo cast doubt over any deal that involved fresh payments from Japanese companies — even if they were voluntary.

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From Tokyo’s point of view, the question is whether such a deal would resolve anything. A 2015 agreement to settle a dispute over women forced into sexual slavery during the war involved a voluntary payment from the Japanese government. But it was repudiated almost immediately by Moon Jae-in.

Additional reporting by Song Jung-a