Marshall Islands end US Compact hold-out

Analysis: Majuro - When an 11th hour appeal for more nuclear test compensation by Marshall Islands leaders fell flat in the United States Congress in mid-July, the government endorsed a stalled funding agreement ending a seven-month hold-out.

The agreement, announced Friday by Marshall Islands chief negotiator Phillip Muller, puts Washington on track to complete security and economic agreements with three north Pacific nations viewed as critical to US defense posture in the Pacific islands.

Palau and the Federated States of Micronesia had both signed off in May on new funding agreements as part of their Compacts of Free Association with Washington. But Marshall Islands leaders were unhappy with the US response to the ongoing health and environmental problems from the 67 nuclear weapons tests at Bikini and Enewetak atolls.

But with Palau and the FSM already endorsing their new 20-year Compact funding packages, the Marshall Islands was the odd man out, with the 30 September end of all US funding and federal programs looming large on the horizon - and concern rising over the possible need to begin tapping into the Marshall Islands Compact Trust Fund that numerous evaluations say is not yet at an adequate level to support withdrawals.

Following hearings in the US Senate and House of Representatives in mid-July, Muller briefed the country's Cabinet and the Compact Negotiation Committee (CNC), recommending the Marshall Islands accept the Compact funding agreement as outlined in the controversial memorandum of understanding (MOU) signed in January.

In response to Muller's briefing, the Cabinet and the CNC approved the January MOU, and Muller transmitted the decision to US Special Envoy for the negotiations Joseph Yun.

Muller said it was still up to the Nitijela (parliament) to review and decide on the Compact. "I told Ambassador Yun that we can't guarantee (the outcome) but we'll take it to parliament and see what they say," he said in an interview on his brief return from Washington where he attended the hearings and participated in multiple meetings with Congressional leaders.

"Basically, the boat had left the dock," Muller said of the negotiating options available to the Marshall Islands. "Our friends in Congress urged us to get on board and take what you have," he said of the MOU, which lists about $US1.5 billion for Marshall Islands over 20 years for government services and projects, and another $US700 million to be put into a trust fund that could be for nuclear compensation or other uses. Details have not been negotiated on use of the funding.

Muller said many of the Congressional friends of the Marshall Islands said they would work with the Marshall Islands to address outstanding issues going forward.

Muller said the situation did not offer the Marshall Islands any flexibility to negotiate further on funding. This was because, based on the three MOUs signed in January, a total amount of funding for the three freely associated states had already been locked in and submitted for Congressional approval by Yun. The current 20-year funding agreements for Marshall Islands and Micronesia end September 30, while Palau's ends in a year.

If the Marshall Islands walked away from the Compact deal to attempt to continue trying to increase funding for nuclear test legacy needs, "there was no guarantee the US will come back to the table for talks," Muller said. "These were all issues we agonised over (prior to briefing Cabinet)."

By agreeing to accept the earlier-disputed MOU, the RMI is now on the same footing as the FSM and Palau. There is still significant negotiation work that needs to be accomplished for the details of the fiscal procedures agreement and trust fund agreement for all three FAS, Muller said. "There are still some major hurdles to overcome in the agreement," he said of the details still needing to be resolved on these agreements. "We've already started discussions."

Muller elaborated about the visit to Washington earlier this month, during which parliament Speaker Kenneth Kedi and Foreign Minister Jack Ading testified at the House and Senate hearings respectively. "We explained (to the Cabinet and CNC) the environment in Washington and why it was difficult (to achieve more funding)," he said. "That's why we recommended taking the deal."

While the agreed-to amount that can be for nuclear compensation remains in dispute, particularly among leaders of nuclear affected islands, Muller also expressed optimism. "Friends in the Congress assured us they will work with us on outstanding issues, especially the nuclear legacy," Muller said. "The message is, this is not the end. It's the beginning of another process."

Muller also emphasised the numerous federal and state programs that provide services benefiting thousands of Marshallese living in the United States as a consequence of the Compact of Free Association relationship. This was another motivating factor to ensure there was no lapse in the agreement that could cause possible collateral disruption in the services for Marshallese residing in the US, he said. Nearly half of all Marshallese now live in the United States.

The decision to move forward with the January MOU reflected the negotiators and Cabinet "looking at the bigger picture," Muller said.