[Editorial] A messy settlement?

The settlement of a dispute over the withdrawal of South Korean companies from the North Korean border town of Gaeseong may become messy, given that the North Koreans are notoriously tenacious in making unreasonable demands in negotiations, as witnessed time and again in the past.

As the South Korean unification minister says, however, yielding to undue demands is out of the question this time. Still, North Korea can have its way if it decides to confiscate all assets that the departing companies left behind in the Gaeseong industrial complex.

Initial talks with North Korea are being conducted by the seven South Koreans that were left behind when the last batch of 43 factory managers was withdrawn on Monday, as there is no other channel for negotiations, official or private. For effective negotiations, North Korea will have to accept the South Korea government’s call for working-level talks and a proposal by the companies to send a delegation.

South Korean negotiators will have to agree with their North Korean counterparts on how much money the 123 South Korean companies that have had operations in the complex owe in back pay and severance pay. They will also have to agree on what to do with materials for manufactured and finished products that are left behind.

There are many other issues they will have to deal with, including potential claims by the companies whose operations came to a halt when North Korea withdrew 53,000 workers from the industrial estate. As they were forced to leave the complex, they may choose to demand compensation for the damages.

But there is no guarantee North Korea will continue talks in good faith. The negotiations will be disrupted once it decides to confiscate all the properties, as it did in a separate case several years ago.

When no progress was made in negotiations over the death of a South Korean tourist, who was shot when she strayed into an off-limits area at the Mount Geumgangsan resort in 2008, North Korea closed the resort and took possession of the properties of the tour operator, Hyundai Asan.

It is necessary for South Korea to establish its rules of engagement before the negotiations go into full swing. First among them is that it will conduct them on the premise that no South Korean company will resume operations in the complex unless North Korea commits itself again to honoring the four inter-Korean economic cooperation agreements signed in June 2003, including the investment-protection accord, and promises never to withdraw workers from the complex unilaterally, as it has done on several occasions in the past.

Advocates of an early resumption of operations are calling on the South Korean government to read between the lines when it listens to what North Korea says about the fate of the industrial complex.

Some of them claim that North Korea does not want a permanent shutdown of the complex and that it wants a face-saving way out of the predicament, given a commentary in one of its papers that it would be a grave sin for the South Korean government to make the complex inoperable. Rep. Park Jie-won, a former floor leader for the opposition Democratic United Party, says it was impatient of South Korea to give North Korea just one day when it demanded it accept a proposal for talks or face a withdrawal ultimatum.

However, if South Korea makes any concession, the North would mistakenly perceive that it came out of weakness, as it has often done in the past. If it is to avoid such misunderstanding, South Korea should set unmistakable conditions for restarting operations, give the North a deadline for accepting the conditions and make public the course of action to be taken when the proposal is turned down.

South Korea’s schedule must include when to bring home the seven people remaining in the complex. They cannot be allowed to be held hostage. The schedule should also include when to cut off its supply of power and water on which the industrial complex depends for its operations. Moreover, experts say many of the assembly lines in the industrial complex would be rendered inoperable if they were not restarted by July at the latest.

It is time for South Korea to prepare itself for the demise of the industrial complex, no matter how valuable it looked for security and business reasons.