Nauru Phosphate History and the Resource Curse Narrative‪ Nauru Phosphate History and the Resource Curse Narrative‪

Nauru has been in the news ever since the Pacific Solution began in 2001, but the history of the tiny island nation has been one of extraordinary waste. Now the expulsion of its chief justice has prompted new questions about the rule of law on the island,

writes Keri Phillips.

Today Naruans are sick, impoverished and reliant on Australia’s immigration detention centre for income, but they were once among the wealthiest people in the world. Had they been able to capitalise on the natural resources of their island, their story could have been very different.

The modern history of Nauru, a tiny speck in the South Pacific, begins at the turn of the 20th century with the discovery of phosphate. Phosphate is a fertiliser that encourages better root development, flowering and faster root growth.

The Nauruans are essentially a sick people, physically a sick people. They have astonishing rates of diabetes and heart conditions and obesity.
Michael Field, reporter

‘Everybody wanted phosphate,’ says Michael Field, a reporter who has covered the South Pacific for most of the past 35 years. ‘And of course phosphate is also a part of the explosives industry and the world was arming up incredibly 100 years ago.’

At the time phosphate was discovered on Nauru, the island was a German protectorate. In 1914, after the outbreak of World War I, Nauru was captured by Australian troops. When the war ended Nauru was given in trust to Britain, Australia and New Zealand. These three governments created the British Phosphate Commission which took over the rights to phosphate mining.

This new management of mining replaced the structure initially set in place under German administration and the Pacific Phosphate Company when mining first began in 1906. After World War I when German possessions were redistributed under the League of Nations Mandate, responsibility for Nauru was assigned to the uk, at Australia’s particular behest. The status of the mining operation was not specified as a separate entity from development of Nauruan affairs. But the Mandate specified under its provisions that the British Empire, through the Commissioners «as managers of a business concern» was responsible for ensuring: ‪

«not only the present welfare of the natives, but also in conformity with the recommendations of the Covenant, the development of the population of the mandated area.» (cited in Weeramantry 1991, Appendix II: 381)

similar development obligations were set in place when Nauru became a United Nations Trust Territory after World War II. Nauruans drew attention of successive un Visiting Missions to bpc failures to observe those obligations.‪

‪Nauruans lost use of their lands in return for a very small share of those returns. When mining began on plots of land in the south east corner of Top Side two or three land holders received a few pfennigs per ton initially, then two pence per ton of phosphate extracted from her/his land after 1922 when the British Phosphate Commissioners established control of the island and all its resources. ‪

‪In contrast at that time the bp Commissioners were selling that phosphate to Australia and New Zealand at Australian 4 pounds 52 pence per ton – many hundred per cent profit. And those were mates’ rates! – i.e. below open market rates. As Weeramantry has demonstrated (figure 2.1): ‪

‪«it is important to note that not only was the Nauruan landowner receiving so minute a fraction of the value of the phosphate taken from his land, he was also left with the added burden of the devastation of his land which had been enjoyed by his people from time immemorial.» (Weeramantry, 1992: 23)

During the Second World War, the Japanese occupied Nauru and its inhabitants suffered horribly. Some 1,200 Nauruans—two-thirds of the population—were deported to Micronesia to work as forced labour: 500 died from starvation or bombing. After the war, Nauru was made a UN trust territory under Australian administration. It became the world’s smallest independent republic in 1968.

According to Tess Newton Cain, principal consultant at Devpacific, a research consultancy business focused on Pacific development and policy, among the biggest challenges newly-independent Nauru faced was having to pay to get its remaining phosphate deposits back.

‘In order to take ownership of those resources the country was basically in debt from day one to the pre-existing countries and corporate interests that had owned and managed the mining,’ she says. ‘Then there was all the issues around setting up a new country and taking on its own administration and government, and Nauru has had a very turbulent political history post independence.’

Nonetheless, in the period following independence, Nauruans enjoyed enormous wealth. Yet despite the fact they knew that the phosphate would eventually run out, a series of unwise investments undermined the nation’s economic future.

‘A lot of money was invested in things which never actually turned out to work,’ says Professor John Connell, head of the School of Geosciences at the University of Sydney. ‘For example, buildings in overseas countries, like Nauru House in Melbourne, hotels in some countries, phosphate factories, curiously, in countries like India and the Philippines, most of which never really survived.’

Perhaps most expensive of all was Air Nauru, an airline operated by the government through the 70s and 80s. At its peak, Air Nauru had seven aircraft and could carry 10 per cent of the country’s population at one time. Needless to say, its planes were often empty and it ran at an extraordinary loss.

The environmental effects of phosphate mining also took their toll on the island, according to Connell.

‘The island is 21 square kilometres, which is quite small, about the size of an average university campus like Sydney or Melbourne, so it’s a tiny island.’

‘The effects of mining are very distinctive, because the phosphate develops within coral pinnacles, so you have to scoop the phosphate out from within the pinnacles themselves. So those scooped areas descend about three metres … So it produces an extraordinary landscape which is visually quite dramatic and is totally useless for anything else.’
Squalid housing in the bankrupt island state of Nauru Image: Squalid housing in the bankrupt island state of Nauru, the world’s smallest republic.

By the new millennium, Nauru had been reduced to an environmental wasteland, and declining phosphate prices and the government’s financial mismanagement had combined to virtually bankrupt the island.

‘The Nauruans are essentially a sick people, physically a sick people. They have astonishing rates of diabetes and heart conditions and obesity,’ says Michael Field.

‘They seem to have lost, although it could be recovered, many of the traditional skills that they had. The waters around Nauru are rich in fish and they could easily lead a healthy lifestyle. Their land before it was destroyed was very rich.’

‘I don’t mean it in an insulting fashion but what you see is a population of battered survivors who have gone through hell and are trying to maintain what living standard they have, in this particular case by taking money from Australia to hold asylum seekers.’

The Nauru detention centre opened in 2001 as a temporary measure to take refugees during the Tampa crisis, but became a permanent part of the Howard government’s Pacific Solution. Asylum seekers taken there were to be processed under Australian law, and during the Howard years the vast majority of them were determined to be refugees and were settled in Australia. The centre was closed by Kevin Rudd after his election in 2007 but reopened again by Julia Gillard in 2012.

In the lead-up to last year’s election, then Prime Minister Kevin Rudd introduced a change to the endpoint of the process, meaning that those who are determined to be refugees would not be settled in Australia, a policy continued by the Abbott government. Although living conditions have been condemned by the UN High Commissioner for Refugees, Nauru’s regional processing centre has provided a boost to the economy.

‘So the economy is functioning on one level,’ says Newton Cain.

‘In terms of a sustainable economy, Nauru is very vulnerable. If and when the [processing centre] closes it’s hard to know what Nauru’s next economic sustenance will be. There is a certain amount of money to be made in issuing of fishing licences, which Nauru does. There is still some money to be made in phosphate, there are some tailings and there are possible opportunities for further mining.’

‘But life is tough for a lot of people. There are very few employment opportunities. The private sector is very, very small, to the point of being not much more than a few trade stores. You know, if you’re trying to build a house on Nauru it’s very hard to get access to a builder or an electrician or a plumber.

‘Obviously that then creates a bit of a vicious cycle; because there are so few opportunities, there are very few incentives to get qualifications and be able to enter into employment because there’s no point getting a qualification if there isn’t going to be a job for you at the end.’

In areas like the legal sector Nauru employs expatriates, often Australians and New Zealanders, to keep the institutions of the state running because there is no one else to take on those roles. The judicial system is also substantially dependent on development assistance financing from Australia and New Zealand. So not only are the judicial officers largely Australian but also the entire judicial system is underpinned by funding from Australia and New Zealand.

Nauru, a tiny South Pacific island, is the location of one of Australia’s two offshore asylum seeker processing centres.

In January Nauru expelled its only magistrate, Peter Law, and cancelled the visa of its chief justice, Geoffrey Eames. According to ANU’s Kevin Boreham, the dispute had its origins in the Nauru government’s desire to expel an Australian called Rod Henshaw who had previously had a position in the government.

‘As I understand it, the resident magistrate had brought down an order halting that deportation and that was what led to the resident magistrate’s expulsion and there seems to have been a concern that the Australian chief justice would support the resident magistrate’s action.’

‘So arising from this initial episode with Rod Henshaw there seems to have been a desire by the Nauru government to exercise control over the courts so the courts would not act contrary to what Nauru’s government saw as being its own business,’ he says.

According to Tess Newton Cain, it has got to the point where the rule of law no longer applies in Nauru.

‘Whoever you are on Nauru, whether you are an asylum seeker, whether you are an Australian resident working for the regional processing centre or, more importantly, a citizen of Nauru, there is no guarantee that any of your legal rights and interests can be adequately protected within that jurisdiction.’

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