Corporate Japan deals an unwitting blow to US East Asia policy

Japanese trading giant Itochu’s decision to cut ties with an Israeli defence contractor over the ICJ’s preliminary ruling on Israel’s war on Gaza will have consequences beyond Palestine.

Itochu’s decision is surely the harbinger of increasing Israeli isolation, writes Takahashi [Toru Hanai/File Photo/Reuters]

Japanese trading giant Itochu’s surprise announcement on February 5 that it was terminating its agreement with the Israeli defence contractor Elbit Systems has sent shockwaves throughout corporate Japan. Itochu stated specifically that they based their decision on the International Court of Justice ruling that Israel may be committing genocide in Gaza, and on the position of the Japanese government that the ICJ decision must be implemented “in good faith”.

Itochu matters; it is a household name in Japan, being the third largest trading firm and one of the titans of the country’s economy with a 2023 revenue of over $104bn. Prominent trading companies like Itochu are also politically important, as they have historically been looked at as the captains of Japan’s trade-based economy. Itochu’s decision sends a very clear message about the acceptability of doing business with Israel.

The decision puts Itochu in a different league from the many Western states and companies that have either ignored the ICJ ruling or disparaged the charges of genocide as “without merit”. The governments of the United States, the United Kingdom, France and Germany, just to name a few, have continued to shower Israel with weapons and political support to continue the wanton slaughter of innocent civilians, in blatant violation of the ICJ’s preliminary decision. Some Western governments have started to backtrack on their support, but words are cheap, and the flow of weapons continues.

Indeed, those governments have taken their criminal complicity to a new level, by terminating funding to UNRWA, the main UN agency serving Palestinian refugees, on the basis of no doubt spurious Israeli accusations that a handful of the organisation’s 13,000 staff may have been involved in the October 7 attacks on Israel. One cannot help but question the timing of the “dodgy dossier” Israel submitted to its Western accomplices, literally hours after the ICJ issued its ruling that Israel was plausibly committing genocide.

Always recipient to the Israeli narrative, the pliant Western media have duly highlighted UNRWA’s imagined involvement in terrorism, while practically ignoring the ICJ ruling. The defunding of UNRWA will almost inevitably result in famine amongst the over 85 percent of Palestinians in Gaza who are displaced – a textbook example of “deliberately inflicting conditions of life calculated to bring about the physical destruction” of an ethnic group, which qualifies as an act of genocide under international law.

Generally, Japan is not an outspoken champion of Palestinian rights – indeed, the country joined its Western allies in stopping funding for UNRWA – or of human rights in general. Itochu, for its part, is one of the first Japanese companies to start human rights-based due diligence of its business operations (a process which clearly failed when they signed an agreement with Elbit in the first place).

Nevertheless, in recent years Japanese companies have proven increasingly sensitive to public opinion on human rights and environmental issues. The failed 2020 Tokyo Olympics left behind a legacy of wasted public funds and corruption, but it at least served as a catalyst for corporate Japan to take the UN Guiding Principles on Business and Human Rights (which state that companies have a responsibility to respect international human rights norms) more seriously. That is not to say that Japanese companies are necessarily better than their Western counterparts – they are not – but in this instance, the demonstrations that had been taking place in front of Itochu’s Tokyo headquarters, and the popular boycott of the Itochu-owned convenience store chain Family Mart in Muslim countries like Malaysia, clearly pushed the company over the line.

According to Itochu, the agreement with Elbit was to procure material for the Japanese military, not for the provision of Japanese technology or weapons to Israel (Itochu also stated they tied up with Elbit on the basis of a Japanese government request – a claim implausibly denied by the authorities). Assuming that is true, that makes the cutting of ties even more significant. Itochu has essentially accepted that doing business with Israeli military companies ipso facto results in complicity with Israeli genocide. It logically follows that relations with companies – Israeli or not – that are involved with other Israeli violations of international law should also be terminated. That is exactly what the Boycott, Divestment, and Sanctions (BDS) campaign rightfully calls for, to hold the apartheid state to account for its crimes.

Itochu’s decision is surely the harbinger of increasing Israeli isolation. The Western world has long been the primary front line of the BDS movement and the Israeli attempts to suppress it. The developments in Japan show, if there ever was any doubt, that BDS has truly gone global.

The decision by Itochu may also have reverberations far beyond Palestine, since Japanese remilitarisation has long been integral to the US’s grand strategy in East Asia. After World War II, Japan adopted a pacifist constitution that prohibits the use of force to resolve international disputes. However, US pressure on Japan to play a larger military role in Asia has increased in recent years, as Americans get more and more anxious about Chinese challenges to US hegemony.

What until then was a cautious Japanese approach changed dramatically in 2012, with the advent of the ultranationalist Shinzo Abe as prime minister. With little to no regard for public opinion, Abe rammed through extremely controversial bills and policies aimed at remilitarisation, in particular giving the military much greater latitude in fighting in concert with allied (read: US) forces even outside of Japan. Weapons exports and international joint development, long a taboo, became a government priority overnight. Japan also proactively entered into alliances overtly aimed at keeping China in its place in the international pecking order, such as the Quadrilateral Security Dialogue. Abe finally stepped down in 2020, but the general direction has remained the same, and in 2022 the government jumped on Russia’s invasion of Ukraine to push forward a near-doubling of the military budget.

From the get-go, stronger relations with Israel were integral to Japan’s greater incorporation into the US military alliance. Heavy reliance on oil from Arab countries had made Palestine a traditionally sensitive topic for Japanese foreign policy, but Abe abandoned all inhibitions, visiting Israel in 2015 and overtly pushing forward trade and defence agreements with the country. Murky information of joint weapons development with Israel surfaced shortly, only to be swiftly denied. Pro-Israeli puff pieces appeared in the conservative media, including ones praising Israeli Prime Minister Benjamin Netanyahu’s alleged virility as a brave man defending his country.

The government also embarked on a campaign to strong-arm businesses into doing deals with Israel. Local chambers of commerce were strongly “encouraged” to visit Israel and forge partnerships. I personally received numerous calls from leading Japanese companies who were feeling official pressure, and yet were mindful of the reputational risk of doing business with Israeli companies involved in the colonisation of Palestine. They would beg me to point to a “clean” Israeli company they could do business with and not be targeted by the BDS movement. Of course, I had to tell them there was no such thing: The entire Israeli economy is built on the oppression of the Palestinian people and the theft of their land. Many of the companies eventually bowed to government pressure, but it is a sure bet they are urgently revisiting their portfolios now. Itochu’s move to cut ties with Elbit Systems may mark the beginning of a new trend, and a major step back in Japan’s remilitarisation and full integration into US’ anti-China military grouping in East Asia.

Itochu’s decision should be commended, and the BDS movement should continue its boycotts of companies complicit in Israel’s abuses. Still, there is a limit as to how much can be expected from private companies, which at the end of the day exist to maximise profits. It is governments that shape the playing field for businesses, through laws and regulations. Governments need to make sure companies respect human rights and punish them when they fail. In particular, Western governments (and Japan) have to stop their shameless support of Israeli apartheid and genocide and make sure companies in their jurisdictions do the same. That is the only way to salvage the last vestiges of their decaying credibility.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial stance.