Volkswagen’s refusal to pay compensations to Korean consumers

German carmaker Volkswagen on Wednesday announced a plan to donate some 10 billion won (8.6 million U.S. dollars) in social contribution funds, ruling out compensations to Korean owners of Volkswagen cars for cheating on emissions. It is only a fraction of the 14.7 billion dollars, or 5,000 to 10,000 dollars per person, Volkswagen agreed to pay to settle consumer lawsuits in the United States. Audi Volkswagen Korea, the local unit of the German carmaker, said Volkswagen has no plans to provide compensations to Korean owners of Volkswagen cars, noting that the U.S. settlement is “not intended to apply to or affect Volkswagen's obligations under the laws or regulations of any jurisdiction outside the United States." The company claims that although it feels moral responsibility, it is not legally obligated to pay compensations to Korean consumers.

In fact, regulations against emissions manipulation were introduced to Korean law in January 2012. Late last year, the Ministry of Environment confirmed illegal tinkering with emissions as a result of its probe of 120,000 Volkswagen vehicles sold in Korea. Volkswagen claims that the regulations do not apply to its cars in question because they won the ministry’s environmental certification between December 2007 and December 2011. The current issue involves Volkswagen’s alleged violation of laws, including Article 46 of the Clean Air Conservation Act. It is misleading for the carmaker to discuss the certification issue.

The prosecution added to the confusion by calling Volkswagen’s donation offering “compensations.” If the prosecution acknowledged the company’s offering of 10 billion won (8.6 million dollars) in social contribution funds as appropriate compensations, it does not understand the public sentiment at all. Under the circumstances, what meaning would the continued investigation into Audi Volkswagen Korea have?

Moreover, prosecutors allege that Volkswagen committed other illegal acts, including the forging of emissions test results and the selling of vehicles with uncertified components. Nevertheless, Volkswagen’s refusal to recall its products for its illegal acts reveals its arrogance of not fearing Korea and Korean consumers. If Korean consumers cannot receive Volkswagen’s compensations because of the Environment Ministry’s failure to have the carmaker admit its cheating on emissions on its recall plan, who should be held responsible? We hope that the ministry and the prosecution answer this question.