The 2024 Nauru-Australia Treaty focuses more on Australia’s own strategic objectives than helping Nauru develop sustainably. Nauru’s attempts to raise funds have led to significant issues, emphasising the need for cooperative solutions rather than exclusively self-focused strategies.

Under the 2024 Nauru-Australia Treaty, which builds on the countries’ bilateral relationship to secure Nauru’s long-term economic and social resilience and deepen security cooperation, Australia pledges AU $140 million in budget security support in exchange for questionable levels of extraterritorial authority. Australia needs to allow Nauru a higher degree of agency and assist in finding sustainable pathways to do so. 

Many have compared this Treaty to the Australia-Tuvalu Falepili Union treaty, signed in November 2023, which also created a special visa pathway to support mobility with dignity for Tuvaluans to live, work, and study in Australia, as climate change makes it difficult to remain on Tuvalu. Australian Foreign Minister Penny Wong stated that, while Australia is prepared to be an engaged partner of choice, it would be left up to Pacific countries to decide whether they wanted to strike a deal. 

No such agreement has been made with Nauru, though there have been previous propositions for mass relocation. In 1963, Curtis Island in Queensland was proposed as a possible relocation area for Nauruans in anticipation of complete environmental destruction on Naura due to phosphate mining. Under this plan, sovereignty over the island would remain with Australia (Naura was yet to gain independence), and Nauruans would become Australian citizens while retaining only local administrative powers. A similar idea resurfaced in 2003 but was again shut down as then Foreign Affairs Minister Alexander Downer expressed concern about the viability of Nauru’s future. Then Nauruan Prime Minister Rene Harris dismissed the proposal, arguing that such relocation would undermine Nauru’s identity and culture. In 2019, then Tuvaluan President Enele Sopoaga rebuked the “imperial thinking” of Kevin Rudd’s proposition that Australia offer citizenship to residents of Tuvalu, Kiribati and Nauru in exchange for control over their exclusive economic zones, seas, and fisheries.  

Nauruans are clearly committed to staying in Nauru. The government aims to raise an initial AU $65 million to finance its Higher Ground Initiative, which aims to relocate 90% of its citizens and infrastructure to higher ground from coastal areas to ensure their safety from coastal erosion, rising sea levels, and flooding. To generate this capital, the government is selling citizenship for upwards of US $105,000. A Nauruan passport grants visa-free access to over 89 destinations without any minimum stay requirements. Although this scheme could be an avenue for independent finance generation, it also raises issues if passports are sold to dubious buyers. Multiple alleged terrorists travelled while holding Nauruan passports in the late 1990s and early 2000s, before the sales of passports ceased in February 2003 under pressure from the Unites States and Australia. Repeats of this phenomenon risk damaging the credibility of Nauru’s passports. A lack of resources and productivity has led Nauru to turn to desperate measures, but there must be other ways to “mitigate sustainability risks and enhance climate resilience. Since the formally lucrative phosphate deposits have depleted, Nauru has a significant trade deficit and has grown heavily dependent on foreign aid, 66% of which comes from Australia. 

Indeed, the sale of passports is not the only instance of unethical means to generate state revenue. Australia’s Nauru Regional Processing Centre was established in September 2012 and has been shut down multiple times, getting Australia six referrals to the International Criminal Court on grounds on crimes against humanity. 

When the Centre closed for the first time in 2008, then Nauruan foreign minister Kieran Keke lamented that 10% of the population would be economically affected. But most of the revenue made from the Centre is not beneficial for Nauruans–the company that operates the facility, Canstruct, made a profit of AU $101 million in 2021, yet poor conditions still led detainees to suffer serious harm to their wellbeing. On top of that, the Centre’s operation also raises concerns over extraterritorial sovereignty. 

The Commonwealth Bank of Australia has agreed to establish operations in Nauru at the encouragement of the Australian government, following Nauru signing a Memorandum of Understanding with the Bank of China to explore solutions to its banking issues after the exit of Bendigo Bank. Under the 2024 Treaty, Nauru will have to get approval from Australia to engage other states in critical infrastructure activities, including banking. 

Canberra was worried about Beijing expanding its “sphere of influence” in a country that has otherwise seen Australia as its most important partner. As a publicly listed company, Commonwealth Bank has no incentive to establish or maintain operations in Nauru without expectation of profit. If the Australian government wants Nauru’s banking services to stay Australian, it should subsidise operations. 

Australia has been criticised for using states such as Nauru as pawns in some sort of geopolitical chessboard in its efforts to limit China’s influence in the region. While in some cases, this competitiveness could be leveraged for their benefit, it does more harm than good. Excessive increases in aid projects can overwhelm limited local governmental and bureaucratic capacity in smaller states, which could divert urgent resources to manage multiple projects. There has been a surge in diplomatic activities, with almost 800 being recorded since 2018, and a growing number related to defence and policing – reflecting the donors’ priorities rather than those of the receivers. Nauru has demonstrated its agency and diplomatic heft before, in switching alliances between Taiwan and China for its own economic benefit. It has also withdrawn from the Pacific Islands Forum over leadership disagreements and walked out of COP29 negotiations when its concerns were not being heard. It is not out of the question to consider Nauru passing up Australia as a partner to work with a more preferrable state. Yet, the idea that Pacific Island states play on more powerful and rich states such as China and the United States to incite competition for their own benefit overlooks the power imbalances that exist in the region. Geopolitical competition simply adds another layer of complication to the already inundated development aid space. 

The Treaty shows how entrenched neocolonialism still is. Nauru does rely on assistance from Australia but should still retain sovereignty over its territory and people. The Treaty does little to address Nauru’s pressing issues and instead throws money at issues that Australia is concerned with, revealing how Australia cares more about upholding its own strategic objectives than uplifting Nauru’s sustainable development. Rather than forcing Nauru to get its approval for actions on critical issues, Australia should work collaboratively to prioritise Nauru’s objectives, rather than just its own. 

Kira Atkins is a Bachelor of International Security Studies student at the Australian National University. She is a 2023 New Colombo Plan scholar to Japan, the founding president of the ANU chapter of the Asia-Australia Youth Association, and an editor at the East Asia Forum.

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