Fifty years ago, on January 31, 1968, Nauru became an independent nation. It is the smallest island republic in the world with a land area of just 8.1 square miles (“about 0.1 times the size of Washington, DC“) and a population of around 10,000 people. Prior to independence, from 1947 onward, the island was subject to a United Nations trusteeship agreement involving Australia, New Zealand and the United Kingdom (UK), with Australia being responsible for its administration. This agreement followed a 1920 League of Nations mandate - the predecessor of the United Nations – involving the same countries. Prior to World War I, Germany had been granted Nauru under the 1886 Anglo-German Agreement regarding the Western Pacific, and annexed it in 1888 as part of its Marshall Islands Protectorate. In 1914, Australian forces captured the island and it was subsequently administered by the UK until the League of Nations mandate was drawn up. During World War II, Nauru was occupied by Japan, which held the island between 1942 and 1945.
Contributing to this tumultuous history of different countries controlling the island was the fact that phosphate was discovered there in 1900: Nauru has “extensive deposits of phosphate from centuries of bird droppings” (also called guano). A British company, the Pacific Phosphate Company, commenced mining in 1906. Rights to the phosphate were later vested in the British Phosphate Commission under the 1919 Nauru Island Agreement entered into by the three mandate countries. Over the subsequent decades the island was strip-mined of its phosphate deposits. By the 1960s, only the coastal strip around the island was inhabitable; 80% of the island’s surface had been mined, leaving just jagged limestone pinnacles and no fertile land. Australia even offered to resettle the population on an island off the coast of Queensland, but the Nauruans instead opted for self-determination and independence.
Much has been written about Nauru’s economic, political, and social situation since independence. Until the 1990s, Nauru had one of the highest levels of GDP per capita in the world due to its phosphate exports. This “allowed the government to develop a vast welfare state, including universal health care and compulsory education, without imposing any taxes on its citizens.” Profits from the sale of phosphate were placed in the Nauru Phosphate Royalties Trust and invested in accordance with the Nauru Phosphate Royalties (Payment and Investment) Ordinance 1968. However, the phosphate started running out, its price dropped, and investments made by the trust proved to be unwise, resulting in the government needing to borrow additional funds and also engage in different ventures. This included entering the offshore banking and company registration industries, leading to it being identified as a tax haven by the Organisation for Economic Co-operation and Development (OECD) until 2003.
Nauru has also received money from Australia under various arrangements. In 1989, Nauru instituted proceedings against Australia in the International Court of Justice (ICJ), claiming that Australia had breached its trusteeship obligations in failing to rehabilitate or pay restitution for the phosphate lands mined during its administration of Nauru. The ICJ issued a decision in 1992 regarding some preliminary objections to the proceedings by Australia. The case came to a halt, however, in September 1993 when the parties informed the ICJ that they had reached a settlement and agreed to discontinue the proceedings. In the settlement, Australia agreed to pay Nauru AU$120 million (about US$97 million) over twenty years, with the first AU$57 million (about US$46 million) to be paid within a year.
The Memorial of the Republic of Nauru submitted to the ICJ includes a detailed history of the phosphate mining during the different colonization periods, including the German mining laws that applied in the early 20th century, and the structures and arrangements related to mining throughout the mandate and trusteeship periods.
In 2001, the Australian government began transferring asylum seekers who sought to reach Australia by boat to processing centers in Nauru and Papua New Guinea. The so-called “Pacific Solution” involved the signing of a memorandum of understanding and an agreement for Nauru to receive extra development assistance from Australia as part of the arrangements. The total amount of this assistance was AU$26.5 million (about US$21.4 million). The Pacific Solution ended in 2007. However, the Australian government resumed offshore processing of asylum seekers in 2012, and a new agreement was signed with Nauru.
According to the ADB [Asian Development Bank], direct payments to the Republic of Nauru under the offshore detention regime currently comprise an estimated 28% of Nauru’s domestic revenue. The indirect revenue contribution generated by the Regional Processing Centre (RPC) in construction and services amounts to an estimated 15-20% more, meaning that a good half of Nauru’s revenue currently depends on asylum seeker detention.
Phosphate mining also resumed in the country in 2006, which contributed to a growth in GDP. It is estimated that the secondary phosphate deposits may last another thirty years. A 2016 article points to both the challenges and opportunities for this tiny nation, with ideas for future development including energy projects and mining the limestone pinnacles for different minerals.
Nauru is a fascinating country to learn about. Searching the Library of Congress catalog for items leads to many interesting results, including Nauru 1888-1900: an account in German and English based on official records of the Colonial Section of the German Foreign Office held by the Deutsches Zentralarchiv in Potsdam and Australian reports to the League of Nations regarding its administration of Nauru.
The Law Library of Congress holds copies of the Nauru government gazette and you can also view Nauru’s laws online using the government’s legal database, RONLAW. Another source for researching Nauruan law is the PacLII (Pacific Legal Information Institute) database, which contains court decisions in addition to laws and regulations. I occasionally write articles about legal developments in Nauru for the Global Legal Monitor, and the Law Library can assist with your legal research queries regarding this and any other country in the world – big or small.