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2008 Amended Version of the PAN Act

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

“Each state shall have exclusive ownership of all living a

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. 

Palau, heavily reliant on tourism and fishing, faces increasing challenges in enforcing its 630,000 square kilometre exclusive economic zone against illegal fishing, especially after closing 80% of its waters to commercial fishing. In this, Palau seeks the assistance of other countries and NGOs (e.g. Greenpeace, Conservation International, the Global Environment Facility and The Nature Conservancy). 

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. 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 as 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. 

On October 28, 2015, then 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. 

nd 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)

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.

Palau, heavily reliant on tourism and fishing, faces increasing challenges in enforcing its 630,000 square kilometre exclusive economic zone against illegal fishing, especially after closing 80% of its waters to commercial fishing. In this, Palau seeks the assistance of other countries and NGOs (e.g. Greenpeace, Conservation International, the Global Environment Facility and The Nature Conservancy). 

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. 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 as 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. 

On October 28, 2015, then 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. 

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.

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. 
• Since its declaration, various institutional, financial, economic, governance, and legal challenges have hindered the full implementation of the PNMS and DFZ. In particular, it requires more resources to monitor the large area of sea and prevent illegal activities. Currently, the country is enhancing its methods of electronic surveillance and improving institutionalisation of the protected area. It also cooperates with other countries such as Japan and Australia to secure technical support and equipment (e.g. boats) to enforce the PNMS.
  https://www.undp.org/pacific/projects/palau-national-marine-santuary   
• Palau is rethinking the “business model” of its economy. Currently, the protection of the PNMS requires significant international funding. However, by scaling high-quality ecotourism it could finance these activities self-sufficiently. Also, improving its ecosystems increases its value for tourists while the income from selling fishing rights already contributes only a marginal share to the economy. The latter could be exceeded by revenues from tourism by an order of magnitude.  
• Palau secured a range of international partner organisations, providing it with a stronger stand against interests of foreign fishing fleets. https://www.undp.org/pacific/projects/palau-national-marine-santuary  

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. According to UNDP, the PNMS already receives 10% of the $100 Pristine Paradise Environmental Fee (PPEF) that each tourist pays upon entering Palau, resulting in $1 million for every 100,000 tourists. At least $1.8 million from tourists goes directly to supporting local communities’ economies.  

Research conducted by the Palau International Coral Reef Center 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. 

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. As a result, the country has closed 80% of its EEZ to fishing and 20% will be open for domestic fishing only. 

 The protection of this large area of sea poses significant difficulties to a small country like Palau. Currently, it is still not self-sufficient in this regard which hinders the effectivity of the policy. 

The success of the PAN Act in Palau resulted in region-wide interest, with similar initiatives introduced in neighbouring countries. In 2006, then 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. In fact, in 2023 the Biodiversity Beyond National Jurisdiction was signed by many UN members, including the EU and the 30by30 target (protecting 30% of terrestrial and marine areas by 2030) was agreed upon as part of the Kunming-Montreal Global Biodiversity Framework. 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 and scalableecosystem-approach to marine spatial planning. 

PNMS Science and Monitoring Strategy as of July 11th, 2023 by PICRC 

UNEP-WCMC (2008), National and Regional Networks of Marine Protected Areas: A Review of Progress  

Palau Conservation Society, Palau Protected Areas Network (PAN) 

Friedlander, et al. (2017)  

Friedlander AM, Golbuu Y, Ballesteros E, Caselle JE, Gouezo M, Olsudong D, et al. (2017)   

The Pew Charitable Trust (2021)   

Legal Amendment to Title 27 of Palau National Code  

Grorud-Colvert, Kirsten et al. (2019)   

SPREP (2020)   

Palau PAN Fund   

Paulau Environment Data Portal