With Strings Attached


The end of the Howard Government’s ‘Pacific Solution’ might be good news for asylum seekers but it could mean disaster for Nauru, which was facing financial chaos before the Australian Government pledged massive amounts of aid in return for Nauru taking our unwanted boat arrivals for ‘processing’. The closure of the detention centre on Nauru will mean a huge decrease in national revenue and the loss of many jobs. According to the Nauruan Government, the revenue generated by the centre amounts to 20 per cent of the country’s gross domestic product.

On 10 December, new Immigration Minister Chris Evans announced the first step in dismantling the policy, by granting refugee status to seven Burmese men held on Nauru since August 2006. There are a number of decisions still to come, to resolve the plight of a group of 83 Sri Lankans still detained on Nauru. Seventy-two members of this group have already been granted refugee status, but are awaiting a country willing to give them sanctuary, while a small number face criminal charges in Nauru following an alleged incident of sexual assault.

The obvious solution is to bring the remaining refugees to Australia rather than wait for third country resettlement. This was the reality for the Afghanis and Iraqis who made up the bulk of the Tampa-era detainees. In spite of the perception promoted by John Howard that sending people offshore would keep them out of Australia, 58 per cent of the 1,064 people resettled from Nauru and Papua New Guinea’s Manus Island detention centre between 2001 and 2007 ultimately ended up in Australia. Another 36 per cent of the group went to New Zealand, with only 3.9 per cent resettled in other countries.

Beyond the fate of the remaining refugees, however, the end of the Pacific Solution requires the renegotiation of Australia’s aid package to Nauru. At a time when many Nauruans face losing their jobs at the detention centre, it will be important to develop transitional arrangements and new employment strategies to cope with this loss of income.

A major problem has been that much of the aid to Nauru since 2001 has been distorted to meet Australian priorities rather than Nauru’s development needs. For example, from 2005-06, the aid program allocated $6.6 million for the Police Development Program, including the placement of an Australian Federal Police officer as Nauru’s police commissioner. In the same period, only $2.1 million was pledged for health and $1.7 million for education and training.

Since the Tampa crisis of 2001, the aid program to Nauru has ballooned, as the Howard Government tried to encourage the small island nation to host hundreds of asylum seekers (at the peak of the Pacific Solution in February 2002, there were 1,515 asylum seekers on Nauru, a country of just 10,000 people). Mark Thompson, a former staff member of the official Australian aid agency AusAID, describes the early aid payments to Nauru as ‘an unmitigated bribe’ to ensure the Pacific Solution continued. Even Nauru’s Foreign Minister David Adeang has stated that money provided in the early years of the Pacific Solution under the previous Government of President Rene Harris, was ‘basically just money poured into Nauru in order to ensure that the processing centre remains on Nauru.’

Between 1992 and 2001, Australia only gave $24.6 million in aid to Nauru – most of this came under the 1993 Compact of Settlement for Nauru’s claims of environmental damage from phosphate mining in the colonial era. But from the establishment of the detention centres in late 2001 until mid-2006, Australia gave over $123 million in Overseas Development Assistance (ODA).

Since 2001, the two countries have signed a series of five Memoranda of Understanding (MOU), which outline the responsibilities of each government for the Pacific Solution and the development aid that will be provided, and the economic and political reforms that Nauru must undertake.

Once one of the richest islands in the world, Nauru’s economy has been faltering since the early 1990s due to the decline in the production and price of phosphate (the country’s sole export commodity) and mismanagement of the country’s assets. This economic crisis has meant difficult times for ordinary Nauruans, who saw a drop of per capita income from US$2000 in 2004 to US$500 in 2005.

With the country in dire economic straits, the Howard Government saw an opportunity to ramp up aid conditionality for Nauru. Facing economic collapse, the small Micronesian nation became the laboratory for the Australian Government’s new program of ‘performance aid’, which set strict conditions requiring reform of economic and governance structures in order for the aid to keep flowing, including demands for public sector reform and proposals to privatise public utilities.

As the Rudd Government dismantles the Pacific Solution, there’s a need for public debate about the priorities of Australia’s aid program. What are the costs and benefits of the aid conditionality that Australia and other donors are enforcing? Can we end the serious imbalances in the allocation of aid in Nauru, when we spend twice as much on police programs as on public health? Will the changes benefit all members of the Nauruan population?

Ending the Pacific Solution will remove a stain on Australia’s international reputation. But our relationship with Nauru must be transformed to meet the development needs of the population, rather than the needs of Australia’s border security.

Launched in 2004, New Matilda is one of Australia's oldest online independent publications. It's focus is on investigative journalism and analysis, with occasional smart arsery thrown in for reasons of sanity. New Matilda is owned and edited by Walkley Award and Human Rights Award winning journalist Chris Graham.