Closing Eighty Per Cent of the Sea
In October 2015 Palau passed a law shutting four-fifths of its ocean to all extractive activity, giving up the licence fees that distant-water fleets had been paying to fish it. The plan was that visitors would make up the difference, and the law took full effect in January 2020.
Palau has 459 square kilometres (177 sq mi) of land and an exclusive economic zone of roughly 604,000 square kilometres (233,000 sq mi) — about thirteen hundred times as much sea as ground, held by a country of some eighteen thousand people. For most of the modern era that ratio was a revenue model. Purse seiners and longliners flagged in Japan, Taiwan, Korea and China bought access to the tuna crossing those waters, and the fees they paid were a line in the national budget that required nothing of Palau except a signature and a patrol boat it could not really afford to run.
In October 2015 the Olbiil Era Kelulau passed the Palau National Marine Sanctuary Act and President Tommy Remengesau Jr. signed it. It closed about 475,000 square kilometres (183,000 sq mi) — eighty per cent of the zone — to all extractive activity, permanently, and reserved the remaining fifth as a domestic fishing zone for Palauan boats selling into the local market. The foreign fleets were given until the end of 2019 to leave. On 1 January 2020 the law came fully into force, and ten weeks later the borders shut and the tourists stopped coming.
The habit the law came out of
The sanctuary is usually written up as an act of environmental idealism by a small country, which is both flattering and slightly wrong. Palau has a functioning traditional institution for exactly this: the bul, a closure declared by chiefs over a reef or a species when it needs to be left alone, enforced socially rather than by a court, and old enough that nobody can date it. The modern legal architecture was built deliberately on top of it. The Protected Areas Network Act of 2003 let individual states put their own reefs and forests into a national system rather than having a conservation regime imposed from Koror, and it was funded from 2009 by a green fee levied on departing visitors. Six years before the sanctuary, in 2009, Palau had already declared the whole of its zone a shark sanctuary — the first country to do it — after President Johnson Toribiong announced it from the podium of the United Nations General Assembly. None of this arrived from outside. What arrived from outside was the money to enforce it, and that came later and less reliably.
What was actually given up
The number that makes the decision serious is the price of a fishing day. Palau is one of the eight Parties to the Nauru Agreement, the group of Pacific states whose waters yield roughly half the world's skipjack tuna, and in 2007 they replaced a cap on the number of licensed vessels with the Vessel Day Scheme: fishing days in their combined waters are capped, allocated between members, and sold. The benchmark minimum price has been US$8,000 a day since 2015, and the scheme is the single most effective piece of resource cartelisation any group of small states has ever managed — it multiplied the revenue those countries take from their own tuna several times over. Palau, having helped build it, then chose to stop selling most of its days. It kept its PNA membership and the leverage that comes with it, and forfeited the bulk of the income.
Every other member of the agreement was working out how to charge more for access to its ocean. Palau worked out how to charge for not selling it, which is a much harder invoice to write.
The hundred dollars inside the ticket
The replacement revenue was designed to arrive at the airport. In 2017 the green fee was folded into a single Pristine Paradise Environmental Fee of US$100, charged inside the price of every inbound air ticket from January 2018 — collected by the airlines, unavoidable, and paid before anyone lands. In December 2017 the government went further and made the Palau Pledge a condition of entry: a paragraph printed in the passport and signed at immigration, written by Palauan children and addressed from them, committing the signatory to tread lightly. It won the Grand Prix for Good at Cannes the following year, which tells you it was a marketing object as well as a legal one, and it was followed in 2018 by the Responsible Tourism Education Act, banning reef-toxic sunscreens containing oxybenzone, octinoxate, octocrylene and seven other listed compounds from 1 January 2020. Palau was the first country to do that too. Taken together the package says something specific: this place will be paid per visitor, at a high price, and will set conditions on the visit.
The arithmetic that did not close
The trouble is that the visitor economy was already unstable before the sanctuary took effect, and Palau had destabilised part of it on purpose. Arrivals peaked above 160,000 in 2015, driven overwhelmingly by charter flights from China, and the surge overwhelmed a country with one town and one reef system. The government cut the charter capacity that had produced it, deliberately trading volume for value, and arrivals fell back toward ninety thousand by 2019. That was the plan working. What was not planned was the border closing in March 2020, tourism going to approximately zero for two years, and the fishing revenue having already been surrendered. Palau spent the pandemic with neither income stream, on budget support and Compact funds from the United States, in the first full years of a law that was supposed to be paid for by people getting off aeroplanes.
The reopening argument
Surangel Whipps Jr. took office in January 2021 and did not treat the sanctuary as settled. His argument, made publicly and repeatedly, is not that conservation is wrong but that the design is inefficient: Palau imports tinned and frozen fish while tuna it is not allowed to catch swims through four-fifths of its own zone, the domestic fishing zone has never developed the fleet or the cold chain the Act assumed it would, and a country that has given up an export industry deserves to ask what it received in exchange. He asked Congress to look again at the boundaries. In the same period Palau hosted the seventh Our Ocean Conference in Koror in April 2022 and launched Ol'au Palau, a scheme that scores visitors on their behaviour and unlocks places normally closed to outsiders for the ones who score well — a reward mechanism built on the same premise as the Pledge, that the visitor is a party to an agreement rather than a customer.
Both things are true at once, and it is worth resisting the urge to resolve them. The sanctuary stands. It is one of the largest fully protected areas of ocean anywhere and it was declared by a country that could least afford the gesture and did it anyway, out of an institution older than the state. It also has a financing problem that nobody has solved, because designation is a single act of parliament and surveillance of half a million square kilometres of water is a recurring bill, paid annually, by a treasury that removed one of its own revenue lines to create the thing being surveilled. Palau is not a curiosity here and it is not a morality tale. It is a government running a live argument about what its ocean is for, in public, with a legislature and an election calendar — and the reason the argument is legible at all is that it was honest enough to write the trade-off into law rather than into a communiqué.