Palau’s Protected Areas Network Act

Palau’s Protected Areas Network Act Restore the Health of our Oceans

The Protected Areas Network Act establishes the framework for a network of marine and terrestrial protected areas ensuring a long-term sustainable use of natural resources. It involves local and supports traditional systems of natural resource management, which have a long history in Palau. Palau seeks to protect 30 per cent of its near-shore marine environment and 20 per cent of its terrestrial environment by 2020.

Palau was honoured with the Future Policy Gold Award in recognition of the two outstanding marine policies, the Protected Areas Network Act, initiated in 2003, and the Shark Haven Act from 2009. 

At a Glance
  • The Palau Protected Areas Network (PAN) Act establishes a nationwide framework that empowers communities to designate and manage marine and terrestrial protected areas.
  • It provides standards, criteria, application processes, technical and sustainable financial assistance for management and monitoring of sites.
  • The Protected Area Network Fund (PANF) is sourced from visitor and other contributions.

Policy Reference

Connected Policies

Constitution of the Republic of Palau (1979) (Article I, Section 2) states that:

“Each state shall have exclusive ownership of all living and non-living resources, except highly migratory fish, from land to twelve nautical miles seaward from the traditional baselines”

and Article IX, Section 5.12:

The Olbiil Era Kelulau [House of Delegates] shall have the following powers: “12) to regulate the ownership, exploration and exploitation of natural resources, thus agreement is needed to draft clear legislation specifying the rights of each party (Government of Palau, 1996).”

Environmental Quality Protection Act (1983) (Text available for download here)

Endangered Species Act (1975) (Text available for download here)

Marine Protection Act (1994) (Text available for download here)

Selection as a Future-Just Policy

Palau is regarded as a leader in marine conservation, and is the first developing country to have developed comprehensive policies on marine protected areas. It has a long history of successful indigenous management of its fisheries and marine natural resources through systems known as ‘bul’, and has largely preserved its rich biodiversity.

In recent years threats to the ecosystem, in particular to coral reefs have been increasing and the traditional systems of management are less able to deal with global drivers of change such as climate change, El Niño Southern Oscillation (ENSO) events. The Protected Areas Network Act was therefore created to provide a framework for Palau’s national and state governments to collaborate and establish a coordinated, nationwide network of marine and terrestrial protected areas that will address local resource management needs and protect national biodiversity, habitats and natural resources.

To achieve this, the Palauan government has been working with local and international NGOs to devise monitoring and management protocols based on international standards, who have in turn been working with local governments and communities to help them devise their own management plans and provide technical support to manage and monitor their own natural resources.

The government amended the Act in 2008 to include provisions for the Protected Area Network Fund and Green Fee aimed at tourists to Palau, which will help finance the implementation and management of the protected areas. To date 22 marine and terrestrial sites have been included in the network of protected areas, including mangroves, reefs, lagoons and a sardine sanctuary. Ecosystem-based adaptive management is a key feature; sites are being added as new evidence is emerging from surveys, such areas that have corals that are resilient to bleaching.

Due to its exemplary application of ecosystem-based and adaptive management that supports traditional decision-making, Palau’s PAN Act is an excellent recipient of the Gold Award.

Future-Just Policy Scorecard

Our “Best Policies” are those that meet the Future Just Lawmaking Principles and recognise the interconnected challenges we face today. The goal of principled policy work is to ensure that important universal standards of sustainability and equity, human rights and freedoms, and respect for the environment are taken into account. It also helps to increase policy coherence between different sectors.

   Sustainable use of natural resources

  • The PAN assists Palau in meeting its obligations under the Convention on Biological Diversity.
  • National biodiversity is protected through an integrated, inter-state network.
  • Natural resources are managed to ensure their sustainable use.

   Equity and poverty eradication

  • A model approach for natural resource management has been developed that ensures state control with national support in terms of funding, as well as technical and monitoring aspects.
  • PAN contributes to states’ and communities’ economy by employing people to manage sites and work as conservation officers.
  • State (local level) sovereignty over natural resources is maintained.

   Precautionary approach

  • The precautionary approach is demonstrated by protecting habitats that demonstrate resilience to increasing sea surface temperatures.
  • National marine biodiversity targets (protecting 30% of the near-shore marine environment by 2020) are set higher than internationally agreed targets under the Convention on Biological Diversity for marine environments (aim of protecting 10% of marine environments globally by 2020).

   Public participation, access to information and justice

  • The public is informed through outreach in training programmes and local media.
  • Improved participation in national level policy-making means that multiple stakeholders are involved in drafting legislation.
  • Local communities and the state governments have access to funds for the management of natural resources.
  • There is access to technical assistance to build state capacity in terms of natural resource management
  • Workshops are held with representatives of the main science and resource management agencies, communities, state and national government to develop an agreed set of protected area design principles, conservation targets, goals and stratification.
  • Since its establishment by the government, the PAN Fund has been working transparently; financial data, disbursements, annual status reports and the conservation activities are regularly published on their website.

   Good governance and human security

  • Local communities have enhanced prosecution capabilities under PAN. Previously there was only limited capacity for communities to address illegal poaching or fishing.
  • Community-based management plans and monitoring protocols based on: biological, ecological, socio-economic, cultural, and historical gap analyses, mutually agreed goals and objectives.
  • The PAN Fund, founded by the government to act as a financial trustee of the monies obtained to support the PAN Act was officially launched in 2012.

    Integration and interrelationship

  • By encouraging public participation, protecting Palau`s oceans and ecosystem and promoting economic sustainability, the PAN addresses many pressing issues at the same time, setting an example of responsible policy-making.

   Common but differentiated responsibilities

  • A coordinated approach to protected areas enables access to international technical and financial support.
  • Conservation goals are set by community members.
  • The “resource-user pays” principle means tourists to Palau are obliged to pay a ‘Green Fee’ upon leaving which goes into a restricted PAN fund reserved for PAN member sites’ use.


The 343 islands that make up Palau are located at the northeastern margin of the Coral Triangle in the Pacific Ocean, a hotspot of shallow-water coral reef biodiversity. Its diverse marine environment supports over 350 hard coral species and reef fish.

Threats to the marine environment in Palau are similar to threats faced by other coral reef nations, such as increased coral mortality caused by rising sea surface temperatures, ocean acidification, pollution and sedimentation from land-based sources and extraction of marine natural resources.

States in Palau had set up protected areas prior to the PAN Act, but there was little coordination and financing available to manage these reserves. By careful planning and ensuring connectivity between sites, resilience to global stressors is hoped to be increased, as well as ensuring that the full range of Palauan biodiversity is protected.


Palau’s Protected Area Network Act aims to establish a network of marine protected areas that would cover all of Palau’s rich biodiversity. The specific objectives included within are:

  • To provide rules and regulations outlining the process for an area’s designation as part of the Protected Areas Network, to effect the purposes of this chapter, and to enforce such regulations, which shall have the force and effect of law.
  • To establish criteria for the selection of an area to be included in the Protected Area Network which incorporate the following considerations: bio-geographical importance, ecological aspects, naturalness, economic importance, social importance, scientific importance, international or national significance, feasibility of management and protection, and duality or replication.
  • To determine reasonable conditions for the ongoing inclusion of an area in the Protected Area Network.
  • To investigate and develop mechanisms for sustainable financing of protected areas in the Protected Area Network.
  • To accept and disburse appropriations, loans, and grants from the Republic of Palau, foreign governments, the United Nations, or any agency thereof and other sources, public and private only for the purposes of the PAN.
  • To collect information and establish record keeping, monitoring, and reporting requirements as necessary and appropriate; and
  • To provide technical assistance to state governments for management of their protected areas including but not limited to, assistance in surveying, developing site preservation plans, identifying and establishing sustainable use practices, conducting scientific investigations, and educating the public about preservation and protected areas.

Methods of Implementation

The PAN is implemented through a variety of methods, namely:

  • Management categories based on IUCN’s guidelines for protected area management.
  • Community-based management plans – gap analysis, biological, ecological, socio-economic, cultural, and historical, mutually agreed goals and objectives.
  • Capacity building and training.
  • A ‘Protected Area Network Fund’ to be used for management of the protected areas. Only once a management plan has been approved will funds be distributed to the relevant community.
  • The PAN Fund is partially supported by a Green Fee for tourists.
  • Palau International Coral Reef Center developed a new ‘Standardized Environmental Monitoring Protocol’ based on international guidelines, to also be adopted by the Micronesia Challenge – a commitment by the Federated States of Micronesia, the Republic of the Marshall Islands, the Republic of Palau, Guam, and the Commonwealth of the Northern Marianas Islands to preserve the natural resources that are crucial to the survival of Pacific traditions, cultures and livelihoods.


The Protected Areas Network Act demonstrates that it is possible to successfully integrate traditional management systems with modern legislation, providing this is carried out with high community participation. Region wide initiatives have been established on the success of Palau’s PAN Act: Micronesia Challenge, Caribbean Challenge, Western Indian Ocean Challenge, which illustrates the scalability of the ecosystem-based based approach.

The development of a standardised monitoring protocol is being adopted by neighbouring countries and the Micronesia Challenge. In 2006, the states of Micronesia (Palau, Federated States of Micronesia, Marshall Islands, Guam and Northern Marianas Islands), announced the Micronesia Challenge at the CBD COP8, under which they pledged to protect 30 per cent of their near-shore waters by 2020. Creation of (so far) 35 protected areas with a goal of protecting 30% of the near shore marine resources and 20% of the terrestrial environment by 2020

PAN has created job opportunities for small communities allowing people to return to their villages to live and work, thereby reducing the pressure to come to urban areas to seek employment. 98 people are now employed by PAN related communities in 13 out of 16 states of Palau. At least $1.8 million from tourists goes directly to supporting local communities’ economies.

Recent scientific research indicates that fish biomass is significantly higher and the habitat diversity is greater than in non-protected areas with the potential to overflow into nearby fished areas, thanks to Palau`s initiative to protect its ocean.

The PAN Act brought international attention to Palau as an exemplary policy that has taken the lead in conserving the oceans. Despite being a smaller country, Palau has taken leadership in international efforts and raising awareness for the environmental concerns about oceans.

Potential as a Transferable Model

The success of the PAN Act in Palau resulted in region-wide interest, with similar initiatives introduced in neighbouring countries. In 2006, President Remengesau, initiated discussions for the Micronesia Challenge, with the goal to “conserve 30 per cent of the near-shore marine resources and 20 per cent of the terrestrial resources across Micronesia by 2020”. This pioneering work in Micronesia inspired similar initiatives in other regions including the Caribbean Challenge and Western Indian Ocean Challenge.

The PAN Act demonstrates it is possible to successfully integrate and respect traditional management systems, tenure and knowledge with contemporary science-based decision-making, and support this through a modern legislative system. It is an adaptive, ecosystem-approach to marine spatial planning is scalable, and although it is easier in a country that has a small and relatively homogenous population like Palau, there are attempts to apply lessons learnt region-wide.

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