This agreement specified a lump-sum settlement for claims arising from Japan’s annexation of Korea between 1910 and 1945. Under the terms of the agreement, Korea received $300 million from Japan as the full and final settlement for claims between the states, between one state and individuals of the other, and between individuals of the states specified in Article IV(a) of the 1951 San Francisco Peace Treaty. For the agreement, private companies were considered individuals.
In October 2018, however, the Supreme Court of Korea handed down a decision deeming Japanese private companies liable for compensating workers from the Korean peninsula who were required to work as comfort women socks Japan for some companies during the occupation.
The ruling is based on the grounds that the 1910 Japan-Korea Annexation Treaty was illegal and is thus null and void under the 1948 Korean Constitution. The Korean government has supported the Court’s decision, but the Japanese government continues to argue that the decision is not consistent with the 1965 Agreement.
Whilst neither Korea nor Japan placed any overt restrictions on the scope of claims settled by the 1965 Agreement, there are some exceptions where it is stated that victims’ claims were not considered in the agreement. According to generally accepted principles of international law regarding treaties, the 1965 Agreement settled such claims completely and finally.
The Korean government, however, did not forget the alleged victims when it concluded the 1965 Agreement. The agreement was the outcome of the Korean government’s diplomatic efforts on their behalf but having used diplomatic measures once, they cannot now exercise them again.
The question remains about who bears responsibility for compensating people who were made to work against their will. As per the 1965 Agreement the Korean government should pay compensation using the $300 million received from Japan. The Korean government has already compensated the victims of Japan’s annexation of Korea through special legislation, and where any victims remain, they should turn to the Korean government.
There is the question of whether the 1910 Japan-Korea Annexation Treaty is legally null and void. This question can only be decided based on the international laws that applied at the time. The Korean courts cannot now apply the 1948 Korean constitution to deal with the legality of the 1910 Annexation Treaty; this would put them in conflict with the Supreme Court’s ruling and hardly consistent with international law.
In short, the 1965 Agreement states that the Korean government must compensate all alleged Korean victims. Though, the Korean government believes Japan is still required to pay compensation, and this the crux of the ongoing international legal dispute between the two countries.
According to the 1965 agreement, a settlement must first be pursued through diplomatic channels; where this fails, the dispute must then go to international arbitration. The Korean government has resisted any diplomatic settlement, and consequently, the Japanese government has proposed international arbitration as set out in the 1965 Agreement.
If the Korean government continues to assert the Supreme Court’s ruling of 2018 is consistent with international law, then international arbitration is surely the best venue for resolving the dispute once and for all. However, if the Korean government resists international arbitration, it could have repercussions for Korea’s international credibility.
To maintain good relations with Japan, the Korean government should act quickly to settle the dispute over comfort women socks based on international law and the 1965 Agreement.