The Japanese government is getting ready to ask the Diet to approve a bilateral pact with Israel aimed at encouraging investment between the two countries. The government led by Prime Minister Shinzo Abe is rapidly approaching Israel amid the growing international outcry over the Middle Eastern nation’s expansion of settlement activities. The signing of the agreement not only runs the risk of Japanese companies being boycotted but may expose Japan to international criticism on the grounds of “lack of ethics.”

The pact is intended to promote the liberalization of bilateral investment and stipulates the freedom of money transfer and procedures for settling disputes. Tokyo and Tel Aviv concluded the bilateral pact in February this year. It will take effect if approved by the Diet.

The Ministry of Foreign Affairs of Japan (MOFA) says that Israel has high technological skills in telecommunications and medical care and that Japanese companies are showing increasing interest in them. It also says that the agreement was reached in response to a strong request from the business community.

On the other hand, 70 Japanese Israel and Palestine scholars submitted a petition asking for careful deliberation on the pact to the speakers of both chambers of the Diet on April 5.

The petition calls for measures for Japanese companies to avoid involvement in business related to the settlements and for informing companies of risks, saying that it is not clear that the Israeli territory defined in the pact excludes settlements.

Israel occupied East Jerusalem, the West Bank and Gaza Strip in the 1967 Middle East war. The country is continuing to add settlements in the occupied territories and there are currently about 150 settlements in the West Bank, accommodating 600,000 Israelis.

The United Nations Security Council (UNSC) in December 2016 adopted a resolution calling for the immediate cessation of settlement activities in the occupied areas, saying, “Israel’s establishment of settlements in Palestinian territory occupied since 1967, including East Jerusalem, had no legal validity, constituting a flagrant violation under international law.” Even the United States, a long-time advocate of Israel, practically approved the resolution by abstaining from the vote on it.

But the new administration led by President Donald Trump downplays the quarter-century-old peaceful coexistence between Israel and Palestine. The pro-Israel administration has also hinted at relocating the U.S. Embassy in Israel from Tel Aviv to Jerusalem, which Israel considers its capital, undermining the framework for peace.

Japan had maintained a relatively neutral stance on Israeli-Palestinian issues. But Abe visited Israel and met with Israeli Prime Minister Benjamin Netanyahu in January 2015 in a bid to strengthen bilateral relations.

Regarding concerns that the sealing of the investment accord may result in Japan’s involvement in business related to the settlements, MOFA’s First Middle East Division said: “The agreement says that it follows international law in defining Israeli territory, thus so-called settlement business is excluded.”

“Israel interprets international law differently from other countries and insists that the settlements are “disputed territories under international law.” The possibility of [Japan] being involved in business related to the settlements remains unless the treaty clearly stipulates “settlements are excluded,” says Eisuke Naramoto, an honorary professor at Japan’s Hosei University. “EU nations have made it clear that they will not play a part in business related to the settlements. But if Japanese companies get involved in settlements, that means Japan virtually supports Israel’s continued occupation and Japan will be exposed to international criticism.”

Mari Oka, a professor at Kyoto University of Japan, says, “Israel has consistently violated international law and UN resolutions. It is not too much to say that air strikes on Gaza are state-sponsored terrorism. Japan partnering with such a “lawless country” is ethically impossible.”

She also says, “Japanese companies which will invest in Israel may be at risk for being the subject of a boycott. But staying out of business related to the settlements alone does not solve the problem. The highest price for being involved with Israel is Japan’s being regarded as a nation that teams up with a country that is continuing to violate human rights as long as it can make money.”