Photo/IllutrationProtesters gather at a statue commemorating wartime laborers near the Japanese Consulate General in Busan, South Korea, on March 1. (Takuya Suzuki)

The South Korean government failed to appoint a member for a proposed arbitration panel to deal with the compensation issue for wartime laborers by Japan's requested timetable, according to Japanese officials.

"We've been handling the matter in a careful manner," a South Korean Foreign Ministry spokesperson said on June 18, the same day as the deadline.

Relations between the two countries have become further strained since the South Korean Supreme Court ordered a number of Japanese firms to pay compensation to South Koreans who were forced to work for them during Japan's 1910-45 colonization of the Korean Peninsula.

After failing to realize direct negotiations, Tokyo in May asked Seoul to enter an arbitration process requiring each government to appoint one member to an arbitration panel within 30 days.

The Japanese government argues that all compensation claims for the period before and during World War II were settled under a 1965 bilateral agreement, which includes a clause for arbitration.

While the Japanese government has appointed a member for the proposed panel, the Korean counterpart apparently ignored the deadline request as a "one-sided demand" made by Japan.

"If the South Korean government entered the arbitration process, its position that Japan's colonial occupation was illegal and Japan's position that it was legal under international law would conflict," a South Korean government official said, explaining that the country has taken a cautious approach to the establishment of a panel. "The bilateral relationship would then become out of control, involving the sentiments of people from both sides. That's the perception."

South Korean media have recently reported that a meeting between South Korean President Moon Jae-in and Prime Minister Shinzo Abe during the Group of 20 summit to be held in Osaka on June 28 to 29 will likely be postponed if South Korea maintains its approach to the issue of wartime laborers.

“If the South Korean government makes a settlement proposal, we will have a full opportunity to discuss it in line with the arbitration process or outside of it,” Foreign Minister Taro Kono said at a news conference on the afternoon of June 18, prompting a response from South Korea.

Kenji Kanasugi, director-general of the foreign ministry's Asian and Oceanian Affairs Bureau, summoned Kim Kyung-han, vice minister of the South Korean Embassy in Japan, to the ministry's office the following morning, telling him, "It's regrettable that the South Korean government has not fulfilled its (panel member selection) obligation outlined under the agreement."

Kanasugi added: "The South Korean government's next obligation under the agreement is to select a third-party nation. I strongly urge the South Korean government to move forward with the arbitration process."

A clause in the 1965 bilateral agreement requires the two countries to start a process to establish an arbitration panel with procedures handled by a third-party country in the event that one of the two does not appoint a panel member.

Under the agreement, South Korea is required to select its pick of third country within 30 days, or by July 18.

(This article was written by Hajimu Takeda in Seoul and Tamiyuki Kihara.)