Palau’s Protected Areas Network Act

Palau’s Protected Areas Network Act

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. The Act involves local communities by enabling them to undertake a scientific and social assessment of their local environment and supports traditional systems of natural resource management, which have a long history in Palau. To date, 35 protected areas have been designated, including reefs, lagoons, mangroves and a sardine sanctuary. 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. In early 2014 Palau Palau’s President Tommy Remengesau Jr. has declared the Pacific nation will become a marine sanctuary which followed the Shark Haven Act from 2009.

In 2015, the Palau National Congress (Olbiil era Kelulau) made a monumental decision: to designate 457,077 square kilometres of Palau’s ocean as a fully protected marine sanctuary. The vote cemented Palau, an archipelago consisting of more than 500 islands, as a global leader in efforts to establish “no-take” marine protected areas (MPAs), where all extractive activities such as fishing, and mining are prohibited. The Palau National Marine Sanctuary (PNMS) now makes up 80 percent of Palau’s territorial waters, with Palau holding the record for the largest percentage of exclusive economic zone (EEZ) designated as a fully protected marine area in the world. Locally managed fisheries are still permitted to operate in the remaining 20 percent of Palau’s EEZ. The PNMS is known locally through bul, a traditional practice that places a moratorium on actions that have a negative impact on the community. Fusing tradition with innovation, the Palauan nation has become a guiding light when it comes to protecting marine life for future generations.


On Jan. 1, 2020, Palau’s National Marine Sanctuary came into effect. The sanctuary covers 80% of Palau’s waters, including the exclusive economic zone. All extractive activities, including fishing and mining, are now prohibited in this area. The remaining 20% will be reserved for traditional fishing and highly regulated and reformed domestic fishing fleet to serve only Palau’s domestic and tourism needs as much as possible. ( (

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 Republic of Palau created an independent non-profit organization to serve as a financial trustee of the monies obtained to support the PAN to manage the funds from donations and arrival fees. This non-profit organization is called the PAN Fund (PANF). Surveys showed that no-take Marine Protected Areas had, on average, nearly twice the biomass of resource fishes (i.e. those important commercially, culturally, or for subsistence) com- pared to nearby unprotected areas. Biomass of non-resource fishes showed no differences between no-take areas and areas open to fishing. The most striking difference between no- take MPAs and unprotected areas was the more than 5-fold greater biomass of piscivorous fishes in the MPAs compared to fished areas. The most important determinates of no-take MPA success in conserving resource fish biomass were MPA size and years of protection. Habitat and distance from shore had little effect on resource fish biomass. The extensive network of MPAs in Palau likely provides important conservation and tourism benefits to the Republic and may also provide fisheries benefits by protecting spawning aggregation sites, and potentially through adult spill over.[1]
  • Conservation in Palau has evolved from the traditional “bul” to more western Marine Protected Areas (MPAs). The government of Palau was instrumental in establishing the Micronesia Challenge – a conservation initiative to protect >30% of the marine ecosystems of the region by 2020 through the establishment of local Protected Areas Network (PAN).[2]
  • Currently, there are 35 MPAs throughout Palau, encompassing all major habitat types, ranging from nearshore mangroves and seagrass beds to offshore coral reefs, with > 45% of the country’s nearshore waters under some form of protection. These MPAs range in management from complete no-take to subsistence fishing only, and not all are included in the PAN.[3]
  • The people of Palau and other tropical island nations rely heavily on coral reefs for the eco- system services they provide, such as protection from storms, food provisioning, perpetuation of cultural practices, and revenue from tourism. Palau is one of the world’s top dive destinations, with tourists coming to experience its high biodiversity and unique marine eco- systems. In recent years, tourism has contributed roughly three quarters of GDP growth, more than 80% of exports of goods and services, 15% of total tax revenue, and 40% of total employment. [4]
  • Since December 2020 Visitors are required to sign an environmental pledge upon arrival, which asks them to act in an ‘ecologically and culturally responsible way’.
  • Due to local and global threats, coral reefs are becoming increasingly degraded worldwide, necessitating better conservation and management measures. MPAs have proven to be an effective ecosystem-based management tool to conserve biodiversity and manage fisheries. By protecting populations, habitats, and ecosystems within their borders, no-take MPAs provide a spatial refuge for the entire ecological system they contain and provide a powerful buffer against anthropogenic effects and natural variability. In addition to resource management, MPAs also contribute to the long-term livelihoods of island people though the strong cultural and economic connections between islanders and the sea, as well as their interdependence on a healthy marine environment for survival and prosperity. [5]
  • Palau generates substantial income from tourism. A recent economic study in Palau showed that divers would be willing to pay more for diving in no-take MPAs because of more and larger fishes.
  • Palau was the first country to address the global decline in shark populations by declaring its entire exclusive economic zone 629,000 square kilometres a shark sanctuary. To protect sharks and the ecosystems they support, commercial shark fishing has been outlawed, and no sharks are permitted on board boats; bycatch must be released alive.
  • However, a major point of notice is that in the 27 PNC (Palau National Code – this is Title 27 of the PNC) which is the title that contains most of the laws relating to marine protection and fisheries management in Palau, title 27 does not include commissions for a Shark Sanctuary; nor does it contain the language or paragraphs contained in Senate Bill 8-105 (the proposed Shark Haven Act). []
  • The value of live sharks in the water brings in $1.9 million to Palau’s economy through dive tourism, compared to $10,800 if these sharks were killed for sale. These results suggest that greater levels of protection may bring greater economic revenue to Palau and could provide a model for other Pacific islands. [6]
  • While in the ecosystem health of Palau’s MPAs are likely below historical baselines, they represent a step in the right direction towards recovery of the marine ecosystem, which is so critical to Palau and its people. The recent crea- tion of the Palau National Marine Sanctuary protects ~500,000 km2 of its offshore waters, rep- resenting 80% of the country’s EEZ. The protection provided by this new, large MPA around Palau could support increased diving tourism revenues, improve local fisheries, and ensure the long-term sustainability of marine resources. [7]
  • Although it is strictly prohibited to catch any living beings inhabit to reef areas, any species collected for research purposes, or collected as gametes, or bred in captivity at an aquaculture or mariculture farm by a person licensed by the minister, may possess, sell or export no matter the amount, taken, or reintroduced to the wild.

[1] Friedlander_etal_2017_PLoSONE_Palau_MPAs.pdf

[2] Friedlander_etal_2017_PLoSONE_Palau_MPAs.pdf

[3] Friedlander AM, Golbuu Y, Ballesteros E, Caselle JE, Gouezo M, Olsudong D, et al. (2017) Size, age, and habitat determine effectiveness of Palau’s Marine Protected Areas. PLoS ONE 12(3)

[4] Friedlander et al. (2017)

[5] Friedlander et al. (2017)

[6] Friedlander et al. (2017)

[7] Friedlander et al. (2017)

Last update: 2019

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.

Furthermore, Palau is searching for stability. The country’s request for additional American military support reflects not just Palau’s interest in obtaining concrete security guarantees, but also may be linked to an ongoing Compact review, a critical means to support America’s former Pacific territories.

Palau knows it needs help. The country has staked its future on tourism and fishing, but authorities struggle to secure 630,000 square kilometres of exclusive economic zone. It is hard to keep predatory “fishing” fleets at bay. Without real enforcement capability (Palau has a few patrol boats on hand to enforce its massive exclusive economic zone), territorial encroachment and illegal, unregulated and unreported fishing will become chronic problems. And as Palau just closed 80 percent of its waters to commercial fishing this year, preventing outsider encroachment into Palau’s exclusive economic zone encroachment is an absolute necessity.

Organizations such as Greenpeace, Conservation International, the Global Environment Facility and The Nature Conservancy partner with the government of Palau and the Palauan people to enforce these progressive environmental laws. Greenpeace has signed a joint agreement with the government of Palau and are helping Palauans monitor the shark sanctuary for any lawbreakers. Additionally, The Nature Conservancy, Conservation International, and the Global Environment Facility have all pledged millions of dollars to the Micronesia Challenge, in hopes that the investment will allow the connections between the nation states to strengthen and the flow of information between countries to increase, thereby improving conservation overall.

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.

Today, Palau is faced with new unprecedented challenges – from climate change and ocean acidification to increasing pollution and illegal fishing. Palau is now reaching to the past to the caring wisdom of our ancestors and implementing the age old conservation method “bul’ in these modern times. This traditional practice is Palau’s foundational step towards effective conservation and sustainable management of its marine environment through the establishment of the Palau National Marine Sanctuary.

On October 28, 2015, President Tommy E. Remengesau, Jr. signed into law the Palau National Marine Sanctuary Act, one of the world’s most ambitious ocean conservation initiatives to date aimed at not only protecting Palau’s marine resources, but also at protecting the world’s tuna stocks.

This landmark legislation creates a no-take Marine Sanctuary (approximately 500,000 square kilometers) covering 80% of Palau’s Exclusive Economic Zone (EEZ), in which no fishing will occur, and creates a Domestic Fishing Zone covering approximately 20% of Palau’s EEZ in which traditional and domestic fishing activities will be allowed to provide fish solely for the domestic market.

Stewardship of the ocean and working within the limits of the environment has always been the way of the Palauan people. Balancing growth and sustainability remains in the best interests of this nation and its people. Palau’s economy is the environment and the environment is its economy and the Palau National Marine Sanctuary is the foundation that supports the sustainability and balance between our natural resources and economic development, ensuring that all of what makes Palau the Pristine Paradise it is today, will last for generations to come.[1]


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, as well as the state and the 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 is a signatory to the UN Convention on the Law of the Sea, the UN Fish Stocks Agreement, the Convention on the Conservation and Management of Highly Migratory Fish Stocks in the Western and central Pacific Ocean, and the Washington Convention on International Trade in Endangered Species of Wild fauna and Flora (CITES). Palau is also a party to several treaties and agreements relating to the management of regional fisheries.


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.
  • Palau’s Medium Term Development Strategy states that the goal for aquaculture and fisheries is to achieve sustainable economic development and management of the marine and coastal resources of Palau.
  • However, the management objectives of coastal fisheries are less formalised. In general, the objectives of much management are to assure the sustainability of fishery resources for domestic food for recreation for Palauans and for viewing by tourists.
  • 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.

In 2015, the government announced plans to establish a 500,000 km2 reserve by 2021, making it the sixth largest fully protected marine area in the world and building on the marine reserve network already in place in Palau. With this addition, the country has announced that 80% of its EEZ will be closed by 2021to fishing and 20% will be open for domestic fishing only.

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”. Not only is the PNMS a testament to the effectiveness of MPAs, but it is also a call to action for the rest of the world—to follow the example of Palau and play our part in protecting at least 30 percent of all oceans by 2030. Effective marine conservation can help people and nature, conserving critical marine habitat where species may thrive, and significantly boost the global economy, for example by fostering healthy and sustainable fisheries. 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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