Palau First Pacific Bank

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Shuster, Donald R.

The Contemporary Pacific, Volume 15, Number 1, Spring 2003,
pp. 166-173 (Article)

Published by University of Hawai'i Press
DOI: 10.1353/cp.2003.0029

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166                           the contemporary pacific • spring 2003

lent crime, including armed robbery        forty million dollars from the estate.
and murder. There were many robbery        Several others received money in
attempts at the twenty-four-hour           return for not taking the dna test
poker palaces scattered throughout the     and dropping their paternity claims.
island. The government of Bangladesh                   samuel f mcphetres
is reported to have filed a request with
the State Department in Washington
to investigate the death of one of their
nationals, an employee of one of these
establishments. Saipan also experi-        During the period under review, Presi-
enced its first armed bank robbery,         dent Tommy E Remengesau, Jr, into
when a small savings and loan estab-       his second full year as the Republic
lishment was robbed of several thou-       of Palau’s chief executive, established
sand dollars. A warning shot was           himself as a proactive leader. His
fired, but there were no injuries.          agenda was full with international
    On the positive side, a new high       and domestic matters.
school opened in the Kagman Home-             Given the special political relation-
stead area and another one is nearing      ship of free association which Palau
completion in the southern part of         and the United States established in
Saipan. This will relieve much of the      1994, the island nation responded to
pressure leading to social problems at     the September 11th terrorist attacks
the only public high school on Saipan.     on the United States by issuing
In addition, a contract has been issued    messages of condolence, conducting
to build a new prison. The construc-       memorial services, sending monetary
tion of the 300-plus-bed facility will     contributions, and flying the national
get under way shortly. It will be in       flag at half mast. President Remenge-
compliance with federal standards and      sau informed the US government that
be completely funded by the federal        Palau’s airport and harbors would be
government.                                available for mobilization efforts in
    The saga of Larry Hillblom, the        the war against terrorism.
founder of the dhl air-freight empire         In August, Remengesau made a
presumed killed in an aircraft acci-       mark for himself and Palau at the
dent off Saipan in 1995, continues         Pacific Islands Forum conference held
unabated. Two more children, this          on Nauru. He signed two trade agree-
time from New York City, were              ments with the other sixteen heads of
brought to Saipan in 2001 to claim         Pacific Island states but, more impor-
a share of Hillblom’s large estate.        tantly, led the group of chief execu-
Although their cases were quickly          tives in urging all nations to support
dismissed because the statute of limi-     ratification of the Kyoto Protocol,
tations had expired, this brought the      which addresses global climate change
number of putative heirs to eleven.        by establishing measures to reduce the
Only four of the claimants, who hail       emission of greenhouse gases.
from the Philippines, Vietnam, and            Prior to the Forum meeting on
Palau, have been certified as legal         Nauru, Remengesau made his second
heirs. Each received approximately         state visit to Japan, where he met with
political reviews • micronesia                                                 167

Prime Minister Junichiro Koizumi. In        ington dc to enter Palau as a member
March 2002, the president also made         of the Overseas Private Investment
a state visit to the Republic of China      Corporation, which has the potential
(roc) where he and his party met            of stimulating American private
with President Chen Shui-bian and           investment in Palau. While in Wash-
toured several important operations,        ington, the president signed an agree-
including an aquaculture center. Later      ment with the Department of Justice
in the year, the president publicly         concerning mutual cooperation on
came out in support of Taiwan’s mem-        immigration issues; he also met with
bership in the World Health Organiza-       federal officials regarding Palau’s
tion, and Palauan health officials have      membership in the National Exchange
been impressed by the quality of            Carriers Association and Universal
health care in the Republic of China        Service Program, which would result
and its medical assistance to Palau.        in lower long-distance telephone rates
Mr Remengesau attended the repub-           for Palau.
lic’s ninetieth anniversary celebration        In April, the president sent the
hosted by Ambassador Chen in Koror.         National Congress proposed resolu-
Also, Palau opened its embassy in           tions to ratify Palau’s accession to the
Taiwan with Mr Johnson Toribiong            1996 Comprehensive Nuclear-Test-
serving as Palau’s first ambassador          Ban Treaty. In his message to the con-
to the Republic of China. The accep-        gress, Remengesau stated that Palau’s
tance of Toribiong’s credentials was a      party to the treaty would reaffirm its
most impressive event, which had an         constitutional commitment to a Pacific
element of high security.                   nuclear-free zone, and that Palau
    In March, President Remengesau          desires “that . . . no nation, whether
made his first official visit to Mexico       industrial and mighty or poor and
where he and 149 other heads of state       developing, will resort to the awful
attended a un-sponsored conference          concept of such weapons of mass
on development. He urged his fellow         destruction.” Should Palau become a
conferees to attack the problems of         signatory to the test-ban treaty, the
poverty and tension head on.                organization that implements the
    In visits to the United States during   treaty would establish and fund the
the period under review, President          operation of a monitoring station to
Remengesau attended the fifty-sixth          be located in Ngaremlengui State on
session of the un General Assembly.         Babeldaob Island. The station would
In his speech to the world body,            be able to detect low-level nuclear
Remengesau urged acceptance of              explosions and seismic activity thou-
Taiwan as a member; he also recom-          sands of miles away.
mended that Japan be seated as a per-          Remengesau also sent the National
manent member of the Security Coun-         Congress the South Pacific Regional
cil, that member nations ratify the         Environmental Program’s convention
Kyoto Protocol, and that they recog-        for the protection of island natural
nize more clearly the needs of the          resources and environments. Covering
Pacific Island micro-nations. In March,      a wide range of issues from mining
President Remengesau was in Wash-           and coastal erosion to waste dumping
168                          the contemporary pacific • spring 2003

at sea, Remengesau argued that par-       important to Palau if carried out as
ticipating in the convention would        envisioned. The “Voice” will seek
expand Palau’s involvement in             Islanders’ views on environment-
regional environmental protection         development issues, include those
issues and thus serve to expand the       views in a program of action for
protection of Palau’s environment.        sustainable development of island
Earlier in the year, Vice President       states, and encourage people to
Pierantozzi signed the Cartagena          become actively involved in environ-
Protocol at the United Nations. This      ment-development issues. This initia-
agreement, approved by Palau’s sen-       tive is designed to begin at the grass-
ate, seeks to assure safe transfer and    roots level and could complement
handling of living modified organisms.     state and national planning in funda-
    In related actions, Remengesau        mentally significant ways.
endorsed Palau as a party to the             Concerning domestic affairs, Presi-
Vienna Convention for the Protection      dent Remengesau proposed legislation
of the Ozone Layer and a related pro-     to the congress for three constitutional
tocol. Through an intermediary, the       amendments. The first would change
president endorsed the Stockholm          the National Congress from a bicam-
Convention, the purpose of which is       eral body of twenty-five seats to a uni-
to protect human health from persis-      cameral one of twenty-five seats; the
tent organic pollutants. With the two     second proposal would require that
other freely associated states, the       presidential and vice-presidential can-
Federated States of Micronesia and        didates run as a team; and the third
the Republic of the Marshall Islands,     proposal would allow for dual citizen-
Palau signed an agreement, based on       ship. The House of Delegates held
the model of the Niue Treaty, that        hearings on the bill. Should the
allows the three nations to enforce       National Congress approve these
fisheries, customs, and immigration        proposed amendments, final passage
laws in a uniform and efficient manner     would be left to Palau’s electorate at
in their respective territorial waters.   the 2004 national elections.
Palau also carried out a round of            Two other domestic issues received
successful talks with Australian gov-     attention, but only one got closure.
ernment officials regarding defense        The latter was an executive-congress
cooperation.                              agreement to take $5 million from the
    Finally, the new French ambassador    Compact Trust Fund interest to cover
to Palau, Renee Veyret, presented her     overexpenditures in the public sector.
credentials and paid courtesy calls on    This is the first time since 1994 that
several of the republic’s ministries.     Palau’s political leadership has tapped
    Given Palau’s unique and fragile      into the trust fund interest. The trust
ecosystem and the Remengesau gov-         fund now totals some $144 million—
ernment’s sensitivity to environmental    $70 million in principal and $74 mil-
issues, unesco’s recent initiative,       lion in interest (Remengesau 2002).
“Small Islands’ Voice 2004,” while        Some citizens are concerned that dip-
appearing to be just another bureau-      ping into the trust fund is bad gover-
cratic program, could be extremely        nance because it is robbing from the
political reviews • micronesia                                                 169

future. Be that as it may, the president   that Palau’s banking laws would be
has continued to push the congress to      enforced. The two most recent revo-
consider passage of revisions of Palau’s   cations were the charters of the Asian
current tax and foreign-investment         International Bank of Commerce and
laws. Remengesau has also urged the        the First International Pacific Bank—
congress to consider legislation that      both highly questionable operations
would allow Palau to issue bonds to        (T BN , 10 –16 Nov 2001, 8).
generate income for operations and             During the year, President Remen-
capital improvements.                      gesau swam against the current
    The nagging issue that did not gain    regarding the issues of gambling and
closure by period’s end centered on        oil exploration under the sea near
Palau’s banking industry. Although the     Kayangel Atoll at the northern most
National Congress had passed some          portion of the Palau archipelago.
important banking legislation, it was      Remengesau rejected the National
not sufficient. Remengesau requested        Congress’ bill that would have
the congress to pass legislation pro-      allowed casino gambling in Angaur
viding immunity to Palau Financial         State. He also opposed seabed oil
Institutions Commission. Such immu-        exploration for environmental reasons
nity would give the commission the         and stated that the issue should go to
clout to properly regulate, and if nec-    a nation-wide referendum. Reminis-
essary sanction, Palau’s local banking     cent of the giant super-port concept
industry. Apparently the president was     that galvanized Palau into pro- and
worried by the International Monetary      anti- factions in the late 1970s, the oil
Fund’s inspection of Palau’s banking       exploration project likely will get sim-
activity, which resulted in a failing      ilar scrutiny by both local and inter-
grade. Given the lack of immunity          national environmental organizations,
for the watchdog commission, Palau’s       although the group of supportive local
banking industry was judged as             political leaders appears large and
“materially noncompliant” with             dedicated, and foreign investors are
international banking norms as of          mentioning very large (multimillion-
May 2002. The president sounded the        dollar) figures.
alarm by stating to the congress, “It is       Vice President Sandra Pierantozzi,
tragic that the efforts and gains made     Palau’s first woman vice president,
in the past two years are being wasted     also serves as the minister of health,
by the failure of the National congress    one of the republic’s eight ministries.
to take this action seriously. The peo-    She has thrived in her position and has
ple who will ultimately suffer from a      become a popular minister through
banking crisis are the residents and       her work in Palau and overseas. For
citizens of Palau” (PH , 24–30 May         the first time in Palau’s history,
2002, 6).                                  Pierantozzi signed a treaty on the
    On the other hand, Remengesau’s        behalf of the government at un head-
attorney general revoked the corpo-        quarters in New York (see reference
rate charters of nine banks operating      above). She also addressed the un
in Palau, as a way of showing the          General Assembly twice during special
international financial community           sessions on hiv/aids, and later in
170                            the contemporary pacific • spring 2003

2002, on the health and welfare of          ther investigations into Chin’s eligibil-
children. At the hiv/aids session, the      ity. The senate came to the same con-
vice president urged that “women not        clusion as earlier: Chin did not meet
be tasked alone with the responsibility     the residency requirement of five years
of this humankind affliction.” Later in      established by the Palau Constitution.
the year, Pierantozzi met with a group      Curiously, this second conclusion
of Harvard University medical school        made no reference to the issue of citi-
professors to discuss Palau’s high rate     zenship. In January 2002, Supreme
of schizophrenia and suicide. She           Court Justice Michelsen ruled, sur-
made clear Palau’s need for training        prisingly, that the senate by way of its
to help individuals deal more effec-        resolution of 1 May 2001, voted to
tively with the stress of culture change.   seat Chin. Michelsen ruled that the
    In contrast to the active profiles       additional qualification (or condition)
presented by President Remengesau           of signing a consent form was uncon-
and Vice President Pierantozzi, Palau’s     stitutional, ie, that it was not a quali-
National Congress appeared dis-             fication for office required by the Con-
tracted, even inactive. While the con-      stitution of Palau. Further, Michelsen
gress did good (albeit incomplete)          ruled that Senate Resolution 6-55,
work on the budget bill and banking         which attempted to repeal the 1 May
legislation, it did little more of note.    resolution, did not pass by a two-
As a result, public criticism mounted,      thirds vote and thus failed to remove
especially regarding the reduction of       Chin (T BN , 26 Jan–1 Feb 2002, 1, 5).
the $25 cost-of-living allowance that       Given this ruling, it appeared as
retirees had previously been granted,       though the senate had made several
large sums spent by legislators for         technical errors to Chin’s favor. The
overseas travel, and the senate’s seem-     two sides dug in their heels more
ingly endless battle concerning Elias       deeply and Judge Michelsen came
Chin.                                       in for some criticism from Senator
    The senate remained embroiled in        Koshiba. A significant segment of
the Elias Chin issue described in last      community sentiment favored Chin.
year’s review (Shuster 2001, 206–207).      Therefore, a movement to recall Sena-
Chin was elected to the senate in the       tors Andres and Koshiba, leaders of
November 2000 election but was pre-         the Chin opposition, picked up steam
vented from taking his seat in January      with a petition filed and signature
2001 by a majority of the senate, on        verification efforts mounted by the
the basis that Chin did not meet the        election commission. By the end of
citizenship and residency requirements      the period under review, Andres and
established in the Palau Constitution       Koshiba were marshaling their sup-
as determined by the senate. Chin was       porters as the recall date neared.
successful in his request for a tempo-      According to Palau’s constitution,
rary restraining order that prevented       removal of a congressperson by the
the Palau Election Commission from          people requires a majority vote. With
holding an election to fill his seat. In     a low turnout of 51 percent of Palau’s
response, the senate reactivated its        electorate, the recall effort failed. Sen-
credentials committee to conduct fur-       ators Andres and Koshiba both had
political reviews • micronesia                                                171

about 60 percent voter support to         Also, in cooperation with the repub-
remain in office.                          lic’s national patrol boat, aircraft from
   The international issue of greatest    New Zealand patrolled Palau’s exclu-
importance for Palau during the period    sive economic zone. From Okinawa,
under review was the request by Aus-      two f-18 fighter-bombers, a cargo
tralia for Palau to temporarily house     plane, and four attack helicopters
some 750 mainly Afghan refugees—          landed in Palau in late March. Of
boat people. Nauru and Papua New          interest to the US military was the
Guinea had taken in refugees at Aus-      condition of the Peleliu airstrip.
tralia’s request—and financial support         Perhaps the single most important
—for processing and temporary hous-       event of the year was the opening of
ing. However, Palau and Australia         the graceful k-b Bridge, appropriately
agreed by year’s end not to set up a      named the Japan-Palau Friendship
refugee base on Palau’s Angaur Island     Bridge. This $25-million structure
because of “significant concerns           connects Koror Island to Babeldaob
regarding the potential social, eco-      Island and was a gift to Palau from
nomic, legal and environmental            Japan through its International Coop-
impact from such a center” (PH ,          eration Agency. In another important
21–27 Dec 2001, 1). Having direct         project completed with private fund-
talks with Australia on the refugee       ing from a Japanese citizen and friend
issue was a good exercise in nation       of Palau, Mr Hideo “Joe” Morita,
building and Palau’s assertion of its     the splendid Dolphins Pacific Park /
sovereignty.                              Research Facility was opened to the
   Goodwill visits to the Republic of     Public in November. Designed as a
Palau by foreign military ships were a    tourist attraction, Dolphins Pacific is
comforting sight, particularly given      an ecological and aesthetic achieve-
the September 11th terrorist attacks.     ment of huge proportions. As an edu-
From the United States were the uss       cational and research facility, the park
Frederick and the huge uss German-        offers a series of encounters with the
town. Two Australian patrol boats         dolphins, from touching to swimming
from Darwin visited Palau as part of      to snorkeling to taking a scuba dive
a training exercise for Palauan sailors   with them. In a beautiful natural set-
manning the republic’s own patrol         ting among Palau’s famous rock
boat, a gift from Australia. Also, the    islands, the park is a ten-minute
Yamayuki and Kikuzuki from Japan          speedboat ride from Koror. Dolphins
were open for public visitation and       Pacific opened with eleven bottled-
were the first Japanese warships to        nosed dolphins and a team of marine
visit Palau since the end of the Pacific   scientists, including a veterinarian.
War. Without the controversy of last      One dolphin died since opening day.
year, two roc navy frigates paid a        The unique facility should help boost
friendship call on Palau in April 2002.   Palau’s tourism numbers, especially
A marching band, drill team, and mar-     from Japan.
tial arts team provided entertainment,        Two other important infrastructure
and there was an official exchange of      projects for Palau are the fifty-three-
speeches and plaques aboard ship.         mile circle road on Babeldaob and the
172                          the contemporary pacific • spring 2003

new capitol project in Melekeok. Both     Airlines, Seid and his partners began
are incomplete. With an extended          selling shares in Palau Rock Island Air,
period of dry weather, Daewoo, the        which needed some $5 million to
road contractor, made considerable        begin operations in or about October
progress and brought in a large num-      2002. To date, $1 million has been
ber of pieces of heavy equipment for      raised in Palau, Yap State committed
twenty-four-hour construction work.       a half million dollars, and Joe Morita
The US Army Corps of Engineers indi-      pledged $1 million. If it gets off the
cated that if Palau’s weather remains     financial ground, the new airline
relatively dry, a 2004 completion date    would fly to Yap, Guam, and Manila.
for the road is possible. Daewoo won         Palau’s first luxury hotel, Hotel
the contract for removing Palau’s         Nikko, built when Continental
temporary bridge and any other scrap      Airlines was establishing itself,
metal that needs removal. Regarding       announced it was laying off its forty
the capitol project, President Remen-     employees and pulling down the
gesau is soliciting funding support of    attractive, but old, two-story struc-
$10 million from the Republic of          tures. A new 150-room building is
China to complete the final phase of       planned. Given the site is on a steep
the work. Private-sector projects of      hillside prone to landslides, the new
significance to tourism were in a          structure’s architects and engineers
holding pattern as of 30 June. These      had better keep this in mind during
include the exclusive Ngerur Island       their planning work.
resort, the Malakal marine village, a        The vice president of Daewoo Engi-
shrimp farm, the Aimeliik golf course,    neering and Construction Company,
and the Oikull golf course in Airai.      South Korea, visited Palau in May to
Since these five projects total over       review the recent good progress his
$110 million in investment funds,         company was making on the fifty-
the Asian economic situation will         three-mile Babeldaob road project.
have to improve for them to get off       And a delegation of government lead-
the ground in the near future.            ers including Minister of State Temmy
   In private-sector investment and       Shmull were in Seoul to formalize
development, a number of projects         economic ties with South Korea
were started or gained some momen-        through the Korea-Palau Economic
tum. Alan Seid’s Micronesia Internet      Cooperation Federation. This is an
Development Technologies Corpora-         interesting development and Palauans
tion (midtech) signed an agreement        may find more affinity with South
with Palau’s communication corpora-       Koreans than with businessmen from
tion to begin Internet gambling and       Taiwan.
several royalty payments, totaling over      Regarding cultural matters, Palau’s
$850,000 were made to the national        women’s leaders met in their ninth
government. It is claimed that annual     annual conference to discuss a wide
payments to Palau of $5 to $7 million     range of issues. The women wanted
will be generated when the cyberspace     the licenses of businesses engaged in
gambling venture is fully operational.    prostitution revoked, wanted people
With the backing of Hawai‘i’s Aloha       to minimize expenses on food during
political reviews • micronesia                                                        173

funerals, and urged every household          after fifteen years of preparation and
to maintain a vegetable garden.              study. Her final vow as a member of
   During the period under review,           the Mercedarian Missionaries of
Palau lost a number of very impor-           Berriz followed a two-year assignment
tant titleholders (titles are italicized):   in Spain. A month after Sister
Balang Toyomi Singeo passed away at          Nestor’s ordination, Fr Wayne Tkel,
eighty-six. Of mixed Japanese-Palauan        age thirty-eight, became Palau’s sec-
heritage, she served as a goodwill           ond Jesuit priest in thirty-five years.
ambassador for many years. The               He went through a rigorous eighteen-
ranking female leader of northern            year training period, which began in
Palau, Ebilreklai Yaorong, died at           1985 and included two years in Palau
age eighty-five. She was the leader of        under Fr Yaoch’s tutelage. Over 1,000
the ten-member women’s council of            Catholics gathered at Koror’s Sacred
Melekeok, one of Palau’s key tradi-          Heart Church to witness the four-
tional village-states. Also, the ranking     hour ceremony. Thirteen priests and
chief of Angaur passed away. Ucher-          brothers were in attendance at the
belau Masao Gulibert Endo was an             ordination mass, presided over by
active leader during both the Japanese       Bishop Amando Sama and assisted by
and American periods in Palau. Fur-          Fr Felix Yaoch, the Jesuit Superior in
ther, Adelbai-re-Kesewaol Eledui             Micronesia. With Fr Tkel’s ordina-
Omeliakl and Ngirameketii Tutii              tion, Palau has four local priests in
Delmau passed away. Both of these            service in Palau, an event of great
traditional chiefs played important          pride for Fr Yaoch.
roles in their village-states and were
                                                               donald r shuster
highly respected for their wisdom and
integrity. Timothy Olkeriil, a Con-
                                             Special thanks to Yoichi K Rengiil
gress of Micronesia member from
                                             for comments on an earlier draft of
Palau, died suddenly. He was a Koror
                                             this review.
businessman, and active in the Liberal
Party in the late 1960s and 1970s.
Tragically, Palau lost Felix Kyota,          References
who was just thirty-six years old. He
                                             PH ,   Palau Horizon. Weekly. Koror.
was a gifted athlete who brought
Palau considerable fame and success          Remengesau, Tommy E. 2002. State of the
in interisland sports competition.           Republic Address. Office of the President,
                                             Republic of Palau. 25 January.
   Renewal, pride, and optimism
characterized the enlargement of             Shuster, Donald R. 2001. Palau. Micro-
Palau’s religious community with the         nesia in Review: Issues and Events, 1 July
ordination ceremonies for a new nun          2000 to 30 June 2001. The Contemporary
and priest in Palau. Sister Esther           Pacific 14:205–212.
Nestor took her final vows on 8 June          TBN ,   Tia Belau News. Weekly. Koror.

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