• Kyodo


Japan rejected an offer by South Korea to settle a wartime labor dispute through diplomatic channels Wednesday, saying the time for talks had already passed and it is now seeking to proceed with an arbitration process involving other countries.

Bilateral ties have been frayed following South Korean court decisions last year ordering Japanese firms to pay damages to victims of forced labor during Tokyo’s 1910-1945 colonial rule of the Korean Peninsula.

South Korea said Wednesday it is willing to hold discussions with Japan on the condition that companies of the two countries chip in funds to compensate the victims.

Japan argues that the issue of compensation was settled by a 1965 bilateral accord under which it provided $500 million in funds to the South Korean government and a further $300 million in private credit.

Under Seoul’s proposal, the implicated Japanese companies, including Nippon Steel Corp. and Mitsubishi Heavy Industries Ltd., as well as South Korean firms that benefited from the financial aid would contribute to a joint fund.

It is the first time that South Korea has made a specific settlement proposal since the court rulings.

But Japan quickly shot down the proposal, with Foreign Minister Taro Kono saying in a Twitter post, “This will not correct the situation of South Korea being in violation of international law.”

If South Korea continues to ignore the request to establish an arbitration panel and allow lawyers to seize and liquidate the Japanese companies’ assets, Kono has said he would consider taking the dispute to the International Court of Justice.

The highly charged comments came a day after a deadline for South Korea to name their own member to an arbitration panel, along with Japan and a third country, came and went.

As outlined in the 1965 accord, Japan has asked South Korea to take part in forming an arbitration panel along with members selected by other countries.

Underscoring the frosty relations, Japanese officials say Prime Minister Shinzo Abe plans to forgo holding talks with South Korean President Moon Jae-in on the sidelines of the Group of 20 summit next week in Osaka.

Kono and his South Korean counterpart, Kang Kyung-wha, are planning to meet on the fringes of the June 28-29 G20 summit to discuss the issue, according to the officials.

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