South Korea, Oct 30 (AP/UNB) — In a potentially far-reaching decision, South Korea's Supreme Court has ruled that a Japanese steelmaker should compensate four South Koreans for forced labor during Japan's colonial rule of the Korean Peninsula before the end of World War II.
The long-awaited ruling, delivered after more than five years of deliberation at Seoul's top court, could have larger implications for similar lawsuits that are pending in South Korea and will likely trigger a diplomatic row between the Asian U.S. allies.
Japanese Foreign Minister Taro Kono said that the ruling "clearly violated" a 1965 treaty between Seoul and Tokyo accompanied by Japanese payments to restore diplomatic ties. He threatened "resolute" counter-measures from Tokyo, which could potentially take the case to the International Court of Justice.
"We strongly urge South Korea to correct the illegal status under the international law and take appropriate measures," Kono said.
South Korea's Foreign Ministry spokesman Noh Kyu-duk said Tokyo and Seoul "should gather wisdom" to prevent the ruling from negatively affecting their relations.
The court said Japan's Nippon Steel & Sumitomo Metal Corporation should compensate 100 million won ($87,680) each to four plaintiffs, who were forced to work at Japanese steel mills from 1941 to 1943. Among them, only 94-year-old Lee Chun-sik has survived the legal battle that extended for nearly 14 years.
"I won the case but I am here alone, so I am sad, a lot of tears are coming out," an emotional Lee told reporters after the ruling. "It would have been good if we were still here altogether."
The court rejected Nippon Steel's argument that the matter of compensating forced laborers had already been settled by the 1965 treaty. The court also rejected the company's argument that it was a different entity from the steelmaker that forced the South Koreans to work for it during the war.
Seoul and Tokyo's bitter disputes over history, also including issues surrounding South Korean women forced into wartime sexual slavery, have complicated Washington's efforts to strengthen trilateral cooperation to deal with North Korea's nuclear threat and China's growing influence in the region.
South Korean President Moon Jae-in, who once represented South Korean forced laborers as a lawyer in the 2000s, said after taking office last year said that the 1965 treaty cannot prevent individuals from exercising their rights for damage compensation. Tokyo saw Seoul as departing from a long-standing position held by both governments that the issue of forced labor compensation had been settled.
Moon has also questioned the validity of a 2015 agreement with Japan negotiated by Seoul's previous conservative government to compensate South Korean women forced into sexual slavery by Japan's wartime military. Many South Koreans believe Seoul settled for far too less in the sex slave deal and have been calling for the disbanding of a Seoul-based foundation established to support the victims with the 1 billion yen ($9 million) provided from Japan.
Tokyo maintains that the $500 million Japan provided to South Korea under the 1965 treaty was meant to permanently settle all wartime compensation issues. But the Supreme Court in Tuesday's ruling said the treaty does not terminate individuals' rights to seek compensation for the "inhumane illegal" experiences they were forced into.
The four plaintiffs filed a damage lawsuit against Nippon Steel with the Seoul Central District Court in 2005 after two of them lost a similar suit filed in Japan. The Supreme Court in 2012 overturned rulings by lower courts that denied compensation for the plaintiffs and sent the case back to the Seoul High Court, which in 2013 ruled that Nippon Steel compensate the plaintiffs 100 million won each.
Tuesday's ruling came more than five years after the company appealed the high court decision in August 2013.
London, Oct 30 (AP/UNB) — Britain's Treasury chief unveiled Monday a new tax on big internet companies' revenues, insisting it is time that the global tech giants with profitable business in the U.K. pay their fair share for public services.
Philip Hammond made the announcement as he outlined his budget, explaining that while he preferred trying to find a global solution to address the borderless nature of the wealth of the likes of Google and Facebook, negotiations with other countries had been too slow.
He said the tax will be "narrowly-targeted" on the U.K.-generated revenues of specific digital platform business models.
"The rules have simply not kept pace with changing business models," Hammond said. "And it's clearly not sustainable, or fair, that digital platform businesses can generate substantial value in the U.K. without paying tax here in respect of that business."
Companies typically pay their taxes where they are based. But while local governments can impose a sales tax on physical goods in shops and restaurants, that has not been the case with online service providers.
And in the European Union, foreign companies like Amazon, Google and Facebook pay what tax they owe in the country where they have their regional base — usually a low tax haven like Ireland. So their business generates little to no tax revenue in countries, like the U.K., where they have significant operations.
Hammond said the digital sales tax will be structured to apply to "established tech giants" rather than tech startups and was at pains to emphasize that it was "not a online-sales tax on goods ordered over the internet." It will only apply to firms making 500 million pounds ($640 million) a year in global revenues. The text will come into effect in April 2020 and is forecast to bring in 400 million pounds a year.
Dan Neidle, a partner at law firm Clifford Chance, said the tax could chill innovation and, given the dominance of the tech giants in the United States, would likely be met with a hostile reception by the Trump administration.
"For 100 years, businesses have been taxed based on where they are, not where their customers are," he said. "The digital tax represents a revolutionary change - it taxes digital companies, regardless of their legal structure, if they have users in the U.K. There are many - particularly in the U.S. - who will regard limiting that revolution to one particular sector as opportunistic, particularly when it's a sector where the U.K. (and Europe as a whole) have conspicuously failed to create world-beating businesses."
The announcement came as Hammond splashed out on health services in a spending plan signaling the easing of eight years of austerity with a modest uplift in public spending and few major tax increases.
Hammond declared the end is in sight for the budget cuts implemented by a series of Conservative-led governments after the global financial crisis, reiterating a commitment made by Prime Minister Theresa May this month. But he cautioned that the government's plans to end austerity could be thrown off track if Britain fails to secure a deal that protects trade with the EU.
Hammond said improving public finances after years of belt-tightening meant he could give government departments a real-terms spending boost next year. Beneficiaries include the Ministry of Defense, which will get an extra 1 billion pounds.
There was also more money for mental-health services and social care, and 1 billion pounds to ease the transition to a simplified benefits system known as Universal Credit. Small businesses got a cut in property tax rates, and workers will see an increase in the amount they can earn before paying income tax.
"Austerity is coming to an end - but discipline will remain," Hammond said.
The pressure has been on for May's administration. Government workers and the public have been agitating to end years of austerity that have slashed funding for everything from law and order to schools as May and her predecessor sought to close the budget deficit.
Police are warning they don't have the resources to fight crime; school principals are marching with demands to help children; and the military is concerned about its eroding ability to defend the nation. Further complicating the picture, the government is pushing ahead with plans to roll out a new comprehensive welfare program that critics say will leave the most vulnerable worse off.
Hammond got some help in meeting the demands from an unexpected increase in tax revenue. The independent Office of Budget Responsibility upgraded its forecast for economic growth in 2019 from 1.3 percent to 1.6 percent, then expects 1.4 percent in 2020 and 2021, 1.5 percent in 2022, and 1.6 percent in 2023.
But Hammond said further specifics on which programs would get more money would have to wait until next year — after Brexit talks are completed. If the negotiations collapse, a no-deal scenario would represent a "very big transition" in the way the economy operates.
Istanbul, Oct 30 (AP/UNB) — Turkey's president inaugurated a gleaming new aviation hub in Istanbul on Monday, a megaproject that he has pushed to fulfill his dream of making Turkey a global player.
President Recep Tayyip Erdogan announced that Istanbul Airport was open for operations on a special day — the 95th anniversary of Turkey's establishment as a republic following its war of independence.
With the sprawling new airport on shores of the Black Sea, Erdogan declared that Turkey has become the "most important transit location on the north-south, east-west axes, connecting 60 countries and $20 trillion economies."
"With this airport, we are furthering our country's key role in the integration of global economies," he said.
It was a symbolic opening, with only a few flights scheduled this week. But by the end of the year, the massive airport will replace Istanbul's Ataturk International Airport, named after Turkey's founder.
Istanbul Airport is expected to host 90 million passengers per year in its first phase, and in 10 years handle 200 million travelers on six runways. That's almost double the traffic at the world's current busiest airport, Atlanta's Hartsfield-Jackson.
In a reversal, Erdogan said the old airport would remain open for non-commercial flights, aviation fairs and other activities. Some of its grounds will be turned into a park.
Turkish Airlines will launch its first flights out of the new airport to three local destinations: Ankara, Antalya and Izmir. It will also fly to Baku and Ercan in northern Cyprus.
Erdogan slammed critics who doubted that the megaproject could be completed safely on time. The 5-company consortium Istanbul Grand Airport, which built the airport and will run it for 25 years, said 36,000 workers completed the first phase of the project in 42 months.
But labor issues have also tarnished the airport's image.
"The prestige project has been marred by reports of accidents and arrests of protesting workers," said Emma Sinclair-Webb of Human Rights Watch, which cited at least 38 workplace deaths over the past three years.
Hundreds of workers were detained in September after a strike against poor working conditions, including unpaid salaries, bedbugs, unsafe food and inadequate transport to the site. Human Rights Watch said some protesters were fired and at least 31 people, including a union leader, were arrested.
Posters of Erdogan in the shiny terminal read "This is not just an airport. This is a monument to victory."
Mexico City, Oct 30 (AP/UNB) — Mexico's president-elect said Monday he will respect the result of a referendum that rejected a partly built new airport for Mexico City, effectively ending the $13 billion project.
"The decision taken by the citizens is democratic, rational and efficient," Andres Manuel Lopez Obrador said after 70 percent voted against the plan. "The people decided."
It is unclear what will be done with the enormous foundations already built on the site, a former lake bed known as Texcoco.
Organizers of the referendum reported late Sunday that just over 1 million people voted in the referendum. The vote has been criticized in part because only about one of every 90 registered Mexican voters participated.
Mexico's peso slid more than 3 percent against the U.S. dollar after the decision was made public, with the interbank rate ending at 20.06 pesos to $1. Banco BASE said it was the biggest single-day drop since Nov. 9, 2016, when markets reacted to Donald Trump's election as U.S. president the day before. Monday's fall wiped out all the peso's gains this year.
The Mexican stock exchange's IPC index ended the day down 4.2 percent. Critics of the cancellation had said it might affect investor confidence in Mexico, but Lopez Obrador said investors, debt holders and contractors in the abandoned project will be protected.
Lopez Obrador pledged during his campaign to cancel the Texcoco project, claiming it was marred by overspending and corruption. After winning, he said the issue should be put before Mexican citizens.
He favors adding two commercial runways to a military air base in the town of Santa Lucia, about 28 miles (45 kilometers) from the capital. That would imply an improved road to get there from Mexico City and the current 1940s-era airport. The city's airport is now working at near capacity and would have been closed had Texcoco been built.
Lopez Obrador said he has received assurances from international experts that the current airport and Santa Lucia could operate simultaneously. Still, given the distances between the current airport, the planned Santa Lucia terminal and an existing satellite airport in the nearby city of Toluca, it is unclear how people could make connecting flights within any reasonable amount of time.
The president-elect said Mexicans will save about $5 billion by abandoning the unfinished Texcoco project, which was started with what critics said was little real environmental study by current President Enrique Pena Nieto, who leaves office Dec. 1.
Pena Nieto said later Monday that his government respects whatever decision Lopez Obrador may make once president, but construction will go ahead until Nov. 30, to meet obligations under bonds that were issued to finance the project.
He warned that if the airport is canceled, it could cost taxpayers. "It is anticipated that ultimately there would have to be prepayment of bonds issued to finance this project, and probably this will demand fiscal resources additional to" existing funding currently being collected through an airport tax, he said.
It was supposed to be the signature infrastructure project of Pena Nieto's administration, though it wouldn't have been finished for several years more. But the outgoing administration was marked by corruption and allegations of insider dealing with contractors, which helped propel Lopez Obrador to the presidency July 1.
The referendum held Thursday-Sunday marked the first time such a large project had been submitted to a public debate and vote. Lopez Obrador said the decision meant "corruption has ended."
Mexico's business community, which overwhelmingly supported the now-cancelled project, questioned the referendum, which they said was unofficial, unrepresentative and biased.
Juan Pablo Castanon, the head of Mexico's Business Coordinating Council, an industry group, fiercely criticized Lopez Obrador's decision to obey the vote, saying it "seriously hurts Mexico's image in the world" and "sends a message of uncertainty" to financial markets.
Some questioned whether such a decision, involving complex issues of air traffic control, should be decided in a referendum. The national Confederation of Chambers of Commerce wrote that "it should be a technical and financial decision, not a political one, based on a popular vote."
Lopez Obrador called the decision "a triumph for the environmental movement," saying the Texcoco project threatened to eliminate the last remaining vestiges of lakes that once covered the Valley of Mexico. Lake Nabor Carrillo had become a refuge for migratory birds but was too close to the Texcoco site and would have posed a threat of birds hitting jet engines.
However, much of the environmental destruction associated with the Texcoco project is already done. Millions of tons of rock were quarried in nearby towns and transported to the site to fill and drain the swampy former lake bed.
Lopez Obrador said he hoped the unfinished site could be used to create "a big sports and ecological center for Mexico City."
Raleigh, Oct 29 (AP/UNB) — IBM announced Sunday it will acquire North Carolina-based open-source software company Red Hat in a $34 billion stock deal that the technology and consulting giant's chief executive says will advance the company to the next step in cloud computing.
IBM and Raleigh-based Red Hat said in a joint statement that IBM would buy all Red Hat common shares at $190 apiece — 63 percent above Red Hat's closing price Friday. The two companies said the deal, approved by their respective boards, is subject to Red Hat shareholder and regulatory approval and should be completed in the latter half of 2019.
Ginni Rometty, IBM's chairman, president and CEO, says the acquisition would make IBM the world's No. 1 hybrid cloud provider — that's when companies use a mix of on-site, private and third-party public cloud services.
"The acquisition of Red Hat is a game-changer. It changes everything about the cloud market," Rometty said in the news release.
The two companies said IBM intends to keep Red Hat's headquarters in Raleigh, where it has more than 2,000 employees in a downtown office building, as well as maintain Red Hat's "facilities, brands and practices."
Red Hat started in 1993, with its headquarters previously on the North Carolina State University campus. Today it has 12,600 workers worldwide in more than 35 countries. The two companies called the acquisition a logical step after they've worked together for 20 years, saying IBM served as an early supporter of Linux, a key component of Red Hat's software distribution system.
"Today's announcement is the evolution of our long-standing partnership," Rometty said.
In an email to Red Hat employees, Red Hat president and CEO Jim Whitehurst said the company will be a "distinct unit within IBM" and that he'll report directly to Rometty.
"Our unwavering commitment to open source innovation remains unchanged," Whitehurst said in the email text released by the company.