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Thursday, June 14, 2012

Posco to pay off forced laborers


SEOUL — Posco, the world's third-largest steelmaker, will donate millions of dollars to support people in South Korea who were forced to work in Japan during colonial rule, decades after the company was set up through Japanese reparations.

Other South Korean firms that also benefited from the reparations are being encouraged to follow suit, as victims of Imperial Japan's forced labor programs or their descendants keep pressing for compensation.

Japan's brutal rule of the Korean Peninsula from 1910 to 1945 is still a source of resentment among older generations.

But its 1965 reparations package of $800 million in grants and cheap loans, along with U.S. aid, funded the "Miracle on the Han," which transformed South Korea's economy.

Authoritarian President Park Chung Hee plowed the compensation into modernizing the economy and infrastructure of a country left in ruins by the 1950-1953 Korean War.

A self-sufficient, integrated steel mill was Park's priority. His government poured $118 million into building the initial plant, which began output in 1972 with an annual capacity of 1 million tons.

Little was left over to redress Korean conscript laborers, estimated by the government to have numbered 780,000 and mostly forced overseas during the war. It was not until 1975 that a law was passed to compensate them.

The redress scheme was poorly publicized and only 8,500 people applied. The state started paying 300,000 won (now $255) for each victim, but many applicants turned it down as too small.

Under new legislation in 2008, compensation was raised to 20 million won, but victims were still dissatisfied. Their feelings of resentment against Japan and their own government spread to Posco and other corporations.

Posco in 2009 and 2010 won lawsuits filed by forced laborers or their descendants. They sought compensation because the steelmaker had benefited from the Japanese reparations.

The courts ruled Posco was not legally liable but said it would be "desirable" for the giant firm to support forced laborers or their families.

Posco's board decided in March to donate 10 billion won to a government fund soon to be launched to compensate victims.

A company spokeswoman said the decision was not an admission of liability but a gesture of good will. She said the firm, which was privatized in 2000, long ago repaid all its startup costs.

The government will launch the fund in a few months and start paying compensation next year, said Lee Jae Chul, spokesman for a committee in charge of the project.

In addition to Posco's donation, the government plans to allocate 12.5 billion won from next year's budget. The committee will also seek "donations" from the nine other corporations that benefited back in the 1960s.

One of them, Korea Expressway Corp., has promised to consider the request "positively." Others, including Korea Railroad and Korea Electric Power Corp., want more details, Lee said.

Lee said 226,584 Koreans claimed they or their ancestors were mobilized as workers or soldiers by Japan.

Despite the subsequent controversy, historians say the reparations were well spent.

"But for the money from Japan, Posco would not have existed," said professor Park Young Goo of the Busan University of Foreign Studies.

"No country in the world at that time was prepared to lend money to South Korea to build an integrated steel plant and highways."

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