Republic of Nauru Country Brief – May 2009
Introduction
Nauru is an island republic in the South Pacific Ocean, 42kms south of the Equator (0º32' S, 166º55' E) and 4,000 km north-east of Sydney. A raised coral atoll, Nauru is one of the three great phosphate rock islands in the Pacific Ocean - the other two being Banaba (Ocean Island) in Kiribati and Makatea in French Polynesia. Nauru has a total area of 21 square kilometres.
Nauru has a population of approximately 11,000 people, most of whom are indigenous Nauruans of predominantly Micronesian origin. The remainder are mostly Chinese, Australian and New Zealand expatriates and other Pacific Islanders.
Political Overview
Government
Nauru is one of the world’s smallest independent, democratic states. Its constitution, adopted in 1968, established it as a republic with a Westminster style parliamentary system of government. The President is elected by and responsible to the unicameral Parliament and, in an unusual variation of the Westminster system, is both head of government and head of state. The Nauruan Parliament consists of eighteen Members of Parliament (MPs), who are elected every three years by resident Nauruan citizens over the age of twenty. Nauruans outside the country at the time of an election cannot vote directly but they are able to provide their proxy to another voter in Nauru.
Nauru is divided into fourteen districts, which are grouped into eight electoral constituencies. Seven of the constituencies are represented by two MPs but Ubenide, which comprises four of the smaller districts, has four representatives in Parliament. There are no formal political parties in Nauru. Candidates stand as independents, contesting elections largely on the basis of personal or family ties. Loose and fluid alliances develop in Parliament. Governments are formed by coalitions of like-minded parliamentarians, with a majority consisting of at least ten votes. At its first sitting, Parliament chooses a Speaker and a Deputy Speaker, before proceeding to elect the President from among the remaining members. The President then appoints five members of Parliament to join him (or her) in forming a Cabinet.
In 2006, the Government of Nauru took the initiative to conduct a review of its Constitution. The first four steps in the process (a community awareness program, community consultations, community submissions and a Constitutional Convention) have been completed. In early 2009 a parliamentary Select Committee reviewed the recommendations of the Constitutional Convention and submitted its report for further debate in June 2009. There are two bills proposed; one which contains the Articles of the Constitution that can be amended by Parliament alone, and the other containing Articles which can only be amended by Parliament and a following referendum (due to be put to the people of Nauru in late 2009).
The President of Nauru, HE The Hon Marcus Stephen MP, is both Head of State and Head of Government. Cabinet comprises President Stephen (who is also Chairman of the Cabinet, Minister for the Public Service, Police, Prison and Emergency Services, Home Affairs, and the Nauru Phosphate Royalties Trust); Dr Kieren Keke (Minister Assisting the President, and Minister for Foreign Affairs & Trade, and Finance & Sustainable Development); Sprent Dabwido (Minister for Transport, and Communications); Frederick Pitcher (Minister for Commerce, Industry & Environment); Roland Kun (Minister for Education, and Fisheries); and Mathew Batsiua (Minister for Health, and Sport and Justice). The Speaker of Parliament is Riddell Akua and the Deputy Speaker is Dominic Tabuna.
History
In 1798, Captain John Fearn was the first European to visit Nauru and named the island "Pleasant Island". Germany annexed Nauru in 1888 and, following the accidental discovery of phosphate just after 1900, commenced phosphate mining in 1907 with the establishment of the Pacific Phosphate Company (a German-British consortium). At the outbreak of World War I in 1914, Germany surrendered Nauru to Australian military forces sent to take possession of the island. In 1920, a League of Nations mandate named Australia, New Zealand and the United Kingdom (UK) as co-trustees of Nauru, with Australia the administering power. Phosphate mining was taken over by the British Phosphate Company (owned jointly by the Australian, New Zealand and UK governments).
During World War II, Nauru was occupied by Japanese forces, which used the island as an aircraft base. Twelve hundred indigenous Nauruans (out of a total indigenous population of 2000) were shipped by the Japanese to Truk (now Chuuk in the Federated States of Micronesia), where 463 died of starvation. In 1947, Nauru was placed under United Nations trusteeship, with Australia once again the administering power with New Zealand and the UK co-trustees. The British Phosphate Company resumed phosphate mining operations. Following progressive localisation of the legislature, Nauru became self-governing in January 1966. After a two-year Constitutional Convention, Nauru became an independent state on 31 January 1968. On 30 June 1970, control of phosphate mining passed to the Nauru Phosphate Corporation.
Governments since independence
For the first two decades following independence, Nauru's political system was very stable. Hammer DeRoburt served as President for most of the period from 1968 to 1989 (in 1977 he briefly lost the Presidency to Bernard Dowiyogo). However, as income from phosphate mining declined from the mid 1980s onwards, the nation was plagued by political instability. Nauru had twenty changes of administration between 1989 and 2008.
Stability was restored with the landslide election victory of President Ludwig Scotty and his young pro-reform cabinet on 23 October 2004. The election victory confirmed the Scotty Government’s appointment following a vote of no-confidence in the previous Harris Government in June 2004. The Scotty Government served its full term and was re-elected with another comfortable majority in August 2007. Three new Ministers were appointed by President Scotty on 13 November 2007, following the resignation of three members of Cabinet (Kieren Keke, Freddie Pitcher and Roland Kun) five days earlier. On 19 December, the Scotty Government lost a vote of no confidence. A new government, led by President Marcus Stephen, and including Keke, Pitcher, Batsiua, Kun and Dabwido, was subsequently sworn in. Following a period of tension and political stalemate in the parliament, a national election was held on 26 April 2008, and the Stephen Government was returned with an increased majority.
With the help of the Australian Finance Team (see below), Nauru has implemented key financial and governance reforms that have done much to restore Nauru’s international financial reputation. Nauru posted its fifth successive balanced budget in 2008-09. It was removed from the OECD’s Financial Action Task Force on Money Laundering (FATF) blacklist in October 2005 and from the US Treasury Financial Crimes Enforcement Network (FiNCEN) list of countries posing a money laundering concern in April 2008. Staff numbers and salary levels in the public service and state-owned enterprises (SOEs) have been reduced to more sustainable levels and the Nauru Phosphate Corporation (NPC) has been reorganised into the leaner RONPhos Corporation, which recommenced phosphate exports in September 2006.
Economic Overview
Nauru continues to face serious economic challenges. Phosphate production, which first began to decline in the 1980s (from 1.67 million tonnes in 1985-86 to 162,000 tonnes in 2001-02) ceased altogether in 2003. Funds invested to provide post-mining income for Nauru are largely gone and the Nauru Government has assessed Nauru’s total debt as $1005 million, or 20 times current GDP (Nauru 2006-07 Budget). This amount is well beyond what Nauru could ever repay and the government has developed a debt management strategy, based on seeking remission of as much of debt as possible.
Following investment from Australian phosphate company Incitec Pivot in 2005, basic mining infrastructure was repaired and the first tentative phosphate exports recommenced in September 2006. Mining and export of primary (ie. surface) phosphate reserves reached about 400,000 tonnes in calendar year 2008. Remaining primary reserves could last until 2010, and a recent study suggested that secondary phosphate reserves (those beneath the currently exposed pinnacles) could be mined economically, in conjunction with the rehabilitation of mined lands, for up to thirty years, at about 600,000 tonnes per year. The export to neighbouring PICs of gravel from crushed coral pinnacles (a by-product of secondary mining) is adding significantly to the island’s revenues.
As an isolated island, Nauru is dependent on shipping and air services for the provision of food and other supplies, mostly from Australia. It has no natural harbour. Ships moor at deep-water anchorage buoys. Crushed phosphate is loaded via conveyors belts along two massive cantilever arms which can rotate out over ship’s holds. Fuel ships pump fuel ashore through piping attached to the northern cantilever; the pipes then continue up to the tank farm.
Fishing licenses issued to China, Japan, South Korea, Taiwan and the United States of America are an important source of revenue for Nauru. While pelagic fish abound in Nauruan waters, Nauru has been unable to establish a fishing industry of its own. An Australian-funded fisheries adviser has recently been engaged to help maximise revenue from the country’s marine assets.
During the decades of high incomes from phosphate mining royalties, most of the island's needs were imported and traditional fishing and horticulture declined. Income from royalties and investments had all but disappeared by 2003, and today remains very low. As a result, there are some small-scale efforts to revive the food production skills of former generations. Buada Lagoon, Moqua Cave and a few other small ponds were Nauru's traditional sources of (brackish) fresh water but the island is now heavily dependent on four reverse osmosis plants and rainwater collection tanks for drinking water. Each plant can produce up to 120,000 litres of fresh water in 24 hours from about 5 times that amount of seawater.
Economic indicators for Nauru (such as GDP, inflation and GDP growth) are not available.
Bilateral Relationship
Australia enjoys good relations with Nauru and is its key trade, investment and development assistance partner. Australia is represented in Nauru by a Consul-General, a Vice-Consul and an AusAID in-country officer. The Australian High Commissioner in Suva, Fiji, is accredited as Australia's non-resident High Commissioner to Nauru.
The ICJ Case and Compact of Settlement
In August 1993, the Nauru and Australian Governments signed a Compact of Settlement (NACOS) which ended litigation by Nauru against Australia in the International Court of Justice over rehabilitation of phosphate land mined before independence. As part of the settlement, Australia paid Nauru $57 million in cash and agreed to provide $50 million over a period of twenty years (paid in annual instalments of $2.5 million indexed at 1993 values, eg. $3.7 million in 2008-09). The projects to be undertaken with this money are governed by the Rehabilitation and Development Cooperation Agreement (RADCA). Australia and Nauru are cooperating closely on using NACOS funds to facilitate the mining of residual primary and, later, secondary phosphate reserves, followed by the rehabilitation of mined-out lands.
Australian assistance to Nauru
Australia provides assistance to Nauru under the Memorandum of Understanding (MOU) for Australian Development Assistance to Nauru, the latest Amendment of which was signed on 31 July 2008. The MOU is part of a multi-year Australian commitment to help Nauru restore essential infrastructure and services, and move towards economic self sufficiency.
Under the MOU, Australia has deployed Australian officials and contracted advisers to work within the Nauru Government. An Australian finance team, comprising a Secretary of Finance, an Economic Adviser and a Budget Adviser, is responsible for the formulation of Nauru's budget, and providing technical advice on economic reforms needed to improve financial management. An Australian Federal Police officer is deployed as the Commissioner of the Nauru Police Force, supported by Australian Federal Police officers in advisory positions who manage a program of police infrastructure development and training, and provide advice to the Nauru Government on law and justice reforms. In addition, Australia funds the placement of a Director of Education, a Secretary for Health, a Health Planner and a Health Educator for the Republic of Nauru Hospital, a CEO and Director of Operations and Maintenance for the Utilities Department, and a Fisheries Adviser.
Several officials - the Secretary for Foreign Affairs, a planning specialist, a Resident Magistrate, and a Director of Public Prosecutions - are provided under the auspices of the Pacific Islands Forum’s Pacific Regional Assistance to Nauru (PRAN) program.
Bilateral Economic and Trade Relationship
Australian exports to Nauru in 2007-08 totalled $24 million (principally refined petroleum and goods vehicles). Australian imports from Nauru in the same period totalled $5 million (principally crude fertilizers).
Foreign Relations
Nauru became a full member of the Commonwealth in May 1999 but has fallen behind in membership dues in recent years and its status has slipped to ‘Member in Arrears’. Nauru was admitted as the 187th member of the United Nations on 14 September 1999. It is also a member of several regional bodies including the Pacific Islands Forum, Pacific Community, the Asian Development Bank, the UN Economic and Social Commission for Asia and the Pacific ESCAP and other specialised agencies. Nauru is reviewing the need to remain a member of so many international organisations.
Nauru maintains official overseas representation in Australia (Brisbane), Fiji, Taiwan, Bangkok and at the United Nations in New York. It has Honorary Consuls in Singapore, Kaohsiung (southern Taiwan), London, Auckland and Brussels.
Taiwan and Nauru first established diplomatic relations in 1980. These were severed in July 2002 when the Harris Government recognised China, but were subsequently re-established by the Scotty Government on 14 May 2005.
Visitor Information
Our Airline (formerly Air Nauru) currently operates twice weekly flights between Brisbane and Nauru via Honiara (Solomon Islands). Onward flights to Tarawa (Kiribati) have ceased.
Visitors should be aware that Australian passports are not available from the Australian Consulate-General in Nauru. The Consulate-General is able to accept passport applications which are processed via the Australian High Commission in Suva.
Local infrastructure, including power generation, drinking water and health services, has been adversely affected in recent years by the decline in national income. Power is rationed and distributed to districts; 4 hours on and 4 hours off during daytime, and on for most of the night.
A valid passport and visa is required for Australians travelling to Nauru. Transit visas are available on arrival. For further information, contact the Consulate-General of the Republic of Nauru.
The former airport fee of A$50 is no longer payable on departure - it is now included in the ticket cost. Local currency is the Australian dollar. There are no ATMs, nor any other commercial banking services on Nauru. Credit cards are not accepted, other than at the Menen Hotel where American Express and Diners Club cards may be used subject to a 5% surcharge.
Nauru is NOT a signatory to the International Drivers Licence agreement. It is not legal to drive a vehicle (or motorcycle of any size) without an appropriate local licence.
Australians travelling to Nauru are advised to consult the Smartraveller travel advice website.