SEOUL, June 19 (Reuters) - South Korea said on Wednesday it proposed a joint fund with Japan to compensate South Koreans forced to work by Japanese companies during World War Two.
The proposal aimed to resolve an issue that has strained bilateral ties since a series of rulings by South Korean courts ordered Japanese firms to compensate former labourers.
Japan believes the claims were settled in a 1965 treaty that normalised ties between the two regional neighbours and has accused Seoul of breaking that treaty.
South Korea’s foreign ministry said the fund would receive contributions from Japanese firms sued by former labourers, and South Korean companies that benefited from the 1965 treaty.
“It was seen to be desirable to foster reconciliation by compensating victims, whose lawsuits have been finalised, with funds donated voluntarily by companies from both countries,” the ministry said in a statement.
South Korea and Japan share a bitter history that includes the latter’s 1910-45 colonisation of the Korean peninsula, the forced mobilisation of labour at Japanese companies and the use of comfort women, Japan’s euphemism for girls and women, many of them Korean, forced to work in its wartime brothels.
The South Korean court rulings ordered Nippon Steel & Sumitomo Metal Corp and Mitsubishi Heavy Industries Ltd. to pay hundreds of thousands of dollars to South Korean plaintiffs.
There was no immediate comment on the fund proposal from the companies or Japan’s foreign ministry.
Speaking at a regular news conference before the South Korean announcement, Chief Cabinet Secretary Yoshihide Suga repeated Tokyo’s call to refer the dispute to an international arbitration panel.
Under the 1965 treaty, South Korea received a package of $300 million in economic aid and $500 million in loans from Japan in exchange for Seoul considering all pre-treaty compensation issues settled.
The money was largely spent to rebuild its infrastructure and economy ravaged by the 1950-53 Korean War, but former forced labourers began to demand compensation in the 1990s.
The rows over wartime history have long been a stumbling block for relations between the East Asian neighbours, sparking concern that their joint efforts to rein in North Korea’s nuclear programme could be affected. (Reporting by Hyonhee Shin; Additional reporting by Jane Chung and Ju-min Park in SEOUL and Elaine Lies and Linda Sieg in TOKYO; Editing by Darren Schuettler)