REHABILITATION AND DEVELOPMENT CO-OPERATION AGREEMENT BETWEEN THE GOVERNMENT OF AUSTRALIA AND THE GOVERNMENT OF THE REPUBLIC OF NAURU 
(Bridgetown, Barbados, 5 May 1994)

ENTRY INTO FORCE: 5 MAY 1994

THE GOVERNMENT OF AUSTRALIA AND THE GOVERNMENT OF THE REPUBLIC OF NAURU, 
DESIRING to strengthen the existing cordial relations between the two countries, 
HAVE AGREED as follows: 
Article 1
Purpose 
1. As part of the Compact of Settlement agreed between the Government of Australia and the Government of the Republic of Nauru on 10 August 1993, this Agreement provides for the implementation of the Program of rehabilitation and development co-operation that was provided for as part of the compact. 
2. Development assistance shall be provided as part of an agreed program of co-operation which contributes to the rehabilitation, development and self-reliance of Nauru, allows for forward planning and implementation in accordance with policies and priorities set by Nauru, and takes due account of both Government's policies on development co-operation but with emphasis upon development assistance in accordance with a Nauruan rehabilitation program. 
3. Development co-operation between the two countries shall be mutually beneficial and based on full participation by both countries having regard to the sovereign rights of each country, and on mutual respect. 
Article 2
Activities of the Program of development co-operation 
1. The Program shall be directed to assisting those sectors of the economy of Nauru to which the Government of the Republic of Nauru accords greatest priority and in which Australia has some manufacturing and technical expertise. The following sectors have been given emphasis for possible activities: 
(a) rehabilitation technologies; 
(b) forestry; 
(c) education and skills development, particularly in the area of technical and vocational training; 
(d) industrial development; 
(e) public administration. 
2. The Program undertaken by the Government of Australia, in assisting Nauru pursuant to this Agreement, shall be in support of specific projects and related activities undertaken within such sectors. 
3. The Program may include the following forms of assistance: 
(a) the sending of missions to Nauru to undertake Program planning missions for Australian assistance; 
(b) the granting of scholarships to nationals of Nauru for studies in Australia, Nauru or a third country; 
(c) the assignment of Australian experts, advisers and other specialists to Nauru in connection with project activities; 
(d) the provision of equipment, materials, goods and services required for the successful execution of development projects in Nauru; 
(e) the provision of commodities, equipment and material for development purposes; 
(f) any other form of assistance, reportable as Official Development Assistance (ODA) under the OECD Development Assistance Committee (DAC) guidelines as may be determined by the two Governments. 
Article 3
Definitions 
In this Agreement: 
1. "activity" means any discrete unit of development assistance which may include any one or more of the forms of assistance described in Article 2; 
2. "Australian project personnel" means Australian nationals or permanent residents or other persons who are not nationals or permanent residents of Nauru who are working in Nauru on an activity under this Agreement and whose salaries or other costs are funded from the contribution of the Government of Australia to the activity; 
3. "Australian project supplies" means equipment, material, and other goods supplied for the execution of approved rehabilitation and development activities under this Agreement; 
4. "dependant" means the spouse, and dependent minor children of a member of the Australian personnel or any other person recognised by the two Governments as a dependant of a member of the Australian personnel; 
5. "intellectual property" shall include all copyrights, patents, registered and unregistered trademarks, registered designs, trade secrets and know-how, all rights subsisting in the national legislation of any other sovereign state, including protection conferred upon circuit layout of semi-conductor chips or similar technology, and all other intellectual property as defined by Article 2 of the Convention establishing the World Intellectual Property Organization of July 1967; 
6. "personal and household effects" means equipment and other goods imported by members of the Australian personnel for the personal use of Australian personnel or their dependants; and 
7. "project" means a self-contained activity based on a mutually approved design and involving the provision of Australian services and project supplies. 
Article 4
Financial commitments 
1. As provided in the Agreement between Australia and the Republic of Nauru for the Settlement of the Case in the International Court of Justice concerning Certain Phosphate Lands in Nauru, the Government of Australia shall pay the Government of the Republic of Nauru an amount of fifty million dollars (A$50 million) to be paid at an annual rate of 2.5 million dollars, maintained in real terms by reference to the Australian Bureau of Statistics' non-farm GDP deflator, for twenty years commencing in the financial year 1993-94. 
2. The amount available each year in current dollars shall be advised by the Government of Australia as soon as the non-farm deflator is available. 
3. The funds paid under this Article shall be expended only for the purposes detailed in Articles 1 and 2 as mutually determined by the Government of Australia and the Government of the Republic of Nauru. 
Article 5
Sharing of costs 
1. The Government of Australia shall meet, on a grant basis, costs incurred outside Nauru relating to training, materials, services and equipment as appropriate for each activity, together with payment of salaries, allowances, travel between Australia and the project areas, accommodation and living expenses of all Australian project personnel. 
2. The Government of Australia may, subject to specific agreement, consent to meet costs other than those included in paragraph 1 of this Article. 
3. The Government of the Republic of Nauru shall meet all costs incurred by it in Nauru in support of each activity, other than those which the Government of Australia has specifically agreed to meet in accordance with paragraphs 1 and 2 of this Article. The costs to be met by the Government of the Republic of Nauru shall normally include both salaries and allowances of personnel other than Australian personnel, and materials, services and equipment as appropriate supplied from within Nauru for the activity. 
Article 6
Unspent funds 
1. At the end of each financial year, the Government of Australia shall provide to the Government of the Republic of Nauru a detailed and certified statement of expenditure of funds for the financial year. 
2. Where at the conclusion of a financial year there are unspent funds made available in accordance with Article 4, such unspent funds shall be paid by the Government of Australia into a Trust Account established for this purpose only by the Government of the Republic of Nauru. 
3. Accumulated funds in the Trust Account shall be used, with the concurrence of the Government of Australia, consistent with the terms of this Agreement, to meet agreed costs for activities approved by both Governments under the development co-operation Program. 
4. The Government of the Republic of Nauru shall provide to the Government of Australia at the conclusion of each financial year a certified statement of accumulated funds in the Trust Account. 
Article 7
Coordinating Authorities 
1. The Coordinating Authorities shall be, for the Government of Australia, the Australian International Development Assistance Bureau of the Department of Foreign Affairs and Trade and, for the Government of the Republic of Nauru, the Ministry of External Affairs, or such other authority as the Government concerned nominates by notice in writing through the diplomatic channel. 
2. Subject to the overall responsibility of the Government of the Republic of Nauru for implementation and co-ordination of activities under this Agreement, the two Coordinating Authorities shall be responsible for the planning and co-ordination of the Program which function shall include but not be limited to: 
(a) establishing priorities under the Program; 
(b) choosing activities for implementation under the Program; 
(c) monitoring, reviewing and reporting on progress in the Program to the two Governments; 
(d) recommending to the two Governments any appropriate changes to the Program including budget and future development; and 
(e) monitoring the annual financial statements provided by both Governments in accordance with Article 6. 
Article 8
Specific activities 
1. In order to give effect to the Program the two parties to this Agreement may enter into arrangements in writing for the purpose of carrying out specific activities. 
2. Such arrangements shall make particular reference to this Agreement and the terms of this Agreement shall, unless otherwise stated, apply to such arrangements. Wherever possible, such arrangements shall set out: 
(a) the name and duration of the activity; 
(b) description and statement of objectives of the activity; 
(c) the nominated implementing agencies in both countries; 
(d) details of the contributions to the activity by the two Governments including: 
(i) financial contributions; 
(ii) materials, services and equipment to be supplied; 
(iii) the numbers and areas of expertise of Australian and other personnel to be engaged; and 
(iv) estimated annual budgets; 
(e) timetable for implementation; and 
(f) monitoring, review and evaluation arrangements. 
3. The two parties to this Agreement may consent to amend and supplement the arrangements for each activity. 
Article 9
Project coordinating committees 
1. In respect of a project arranged under the Program, a Joint Project Coordinating Committee shall normally be established to: 
(a) monitor, review and report on progress to the two Governments; 
(b) recommend to the two Governments any appropriate changes in the project including budget and future development; and 
(c) undertake such other functions as may be set out in arrangements between the Coordinating Authorities. 
2. The Chairman of each Project Coordinating Committee shall be appointed by the Republic of Nauru Coordinating Authority. The Committee shall include members appointed by the Republic of Nauru Coordinating Authority and the Australian Coordinating Authority. 
3. Unless mutually arranged otherwise between the two coordinating authorities, Project Coordinating Committees shall meet at least twice a year at mutually acceptable times and places following monitoring visits to the project location undertaken by officials of the two Governments. 
Article 10
Tendering procedures
1. Recognising the special nature of the development co-operation arrangements as reflected in the Compact of Settlement, both Governments agree that on a three-year interim basis the following procedures shall apply to competitive tendering for project personnel and Australian supplies for mutually agreed purposes: 
(a) The provision of project personnel and Australian project supplies shall be subject to competitive tendering and be restricted to firms which are able to demonstrate a beneficial domestic Nauruan, Australian or New Zealand ownership of not less than fifty-one percent. 
(b) The highest quality technology and expertise available from these three countries should be used in accordance with appropriate international standards. 
(c) If the Government of the Republic of Nauru is able to demonstrate at any time that these standards are not being maintained, and that superior cost effective overseas technology and expertise is available, the Government of Australia shall give close and sympathetic consideration to drawing upon it in the implementation of the agreed Program. 
(d) The Government of the Republic of Nauru's views shall be taken into account in the Government of Australia's tendering procedures, specifically: 
(i) at its discretion the Government of the Republic of Nauru may provide a nominated representative to participate in any technical advisory panels appointed to make recommendations to the Government of Australia on the purchase of goods and/or services; 
(ii) the Government of Australia shall use its best endeavours to ensure that firms and/or individuals nominated by Nauru have the opportunity to participate in the tendering process. 
(e) If the Government of the Republic of Nauru considers that it is necessary either to undertake a specific project or to receive independent technical advice regarding aspects of the co-operation Program, the Government of Australia would consider releasing funds for this purpose from either the annual commitments provided for under Article 4, or from the Trust Fund provided for under Article 6. 
(f) The Government of the Republic of Nauru may veto a tender provisionally selected in accordance with this Article. 
(g) An alternative tender process set out in this Article may be adopted by subsidiary arrangements in writing mutually determined by the Government of the Republic of Nauru and the Government of Australia. 
Article 11
Evaluation 
An evaluation of progress of each project may be made by a joint review team appointed by the two Governments at times arranged between them. 
Article 12
Australian project personnel 
In order to facilitate the engagement of Australian project personnel required to implement the Australian contribution, the Republic of Nauru shall in respect of such personnel: 
1. grant exemption from income taxes on salaries and allowances; 
2. grant exemption upon import or export from customs duties, other duties, taxes, levies and other charges of similar nature on personal and household effects of themselves and their dependants declared at their first entry into Nauru; 
3. assist in clearance through Customs and other import or export controls of the goods mentioned in sub-paragraph 2; 
4. grant all rights and entitlements accorded to the aid personnel of any other donor country or organisation; and 
5. expedite the issue of all documentation required for the entry and exit of Australian personnel and their dependants to and from Nauru and the performance of the work of Australian personnel. 
Article 13
Motor vehicles for personal use 
1. Australian personnel assigned to work in Nauru for more than twelve months on an activity under this Agreement may import within the first six months of arrival in Nauru, free from customs duties, other duties, taxes, levies and other charges of a similar nature, a vehicle that conforms to Nauru motor vehicle regulations for personal use and use by dependants and may re-export that vehicle free from the above charges at the conclusion of the assignment. 
2. If the vehicle is sold or otherwise disposed of to non-exempt entities or personnel, it shall be subject to the normal duties and other charges at the rate in force on the date that the exemption was given and on its entered value at the time of disposal. 
Article 14
Australian project supplies 
1. In respect of Australian project supplies the Government of the Republic of Nauru shall: 
(a) be responsible for all formalities of clearance including payment of import duties and other taxes; 
(b) facilitate movement of such supplies by providing appropriate customs and wharfage facilities including any necessary storage costs at the first port of discharge of the Australian project supplies in Nauru; and
(c) provide expeditious transport from the first port of call of the particular aircraft or vessel in Nauru to the project site.
2. Australian project supplies shall be available only for the purposes of the project and shall not be withdrawn from that use without the consent of the Australian Coordinating Authority.
Article 15
Intellectual property
The Government of the Republic of Nauru shall have ownership and licensing of intellectual property arising directly or indirectly from projects under this Agreement. 
Article 16
Facilitation of activities
The Government of the Republic of Nauru shall use its best endeavours to facilitate the implementation of activities under this Agreement. 
Article 17
Claims
Recognising that activities under this Agreement are being undertaken for the benefit of the people of Nauru, the Government of the Republic of Nauru shall bear all risks associated with operations carried out in pursuance of this Agreement and shall hold harmless and indemnify the Government of Australia in respect of the amount of any claim including legal costs arising from such claim that is brought by third parties against the Government of Australia, its servants or Australian personnel (whether such claim is brought in a court or tribunal in Australia or Nauru or a third country) and shall hold harmless the Government of Australia and Australian personnel in case of any claims resulting from operations under the Agreement, except where it is mutually decided by the parties that such claims arise from gross negligence, gross professional negligence or willful misconduct on the part of the servant or representative of the Government of Australia. 
Article 18
Security
The Government of the Republic of Nauru shall arrange for protective services necessary to ensure the safety of:
1. the person and property of the Australian personnel and their dependants; and
2. Australian project supplies.
Article 19
Consultations
1. There shall be an annual meeting of senior officials from the two Governments to consider:
(a) the direction, composition and contribution of Australian development co-operation to the development of Nauru and to the promotion of mutual economic links;
(b) the effectiveness of the administration of development co-operation; and
(c) future development co-operation between the two countries.
2. Representatives of the Coordinating Authorities of both countries and other institutions and organisations of both Governments may attend the meeting.
Article 20
Settlement of differences
1. The two Governments shall consult together at any time upon request of either Government regarding any matter relating to the terms of the Agreement and shall endeavour jointly in a spirit of co-operation and mutual trust to resolve any difficulties or misunderstandings which may arise.
2. Where there is a dispute as to any matter relating to the content or implementation of the terms of the Agreement, either Government may request that the two Governments meet and consult together with a view to resolving the dispute in a spirit of co-operation and mutual trust.
3. If, following such consultation, there has not been a resolution of the dispute satisfactory to both Governments, either Government may give notice to the other that the dispute be arbitrated.
4. Upon receipt of such notice, both Governments shall promptly proceed to constitute a tribunal.
5. The tribunal shall consist of a sole arbitrator appointed as both Governments shall agree. The procedures of the arbitration shall be determined by both Governments in joint consultation with the arbitrator. Costs of the proceedings, including those of the arbitrator, shall be borne as assessed by the arbitrator.
6. The award of the arbitrator shall be final and binding on both Governments.
7. The arbitral award shall contain a statement of the reasons on which it is based.
8. Where both governments fail to agree on the appointment of a sole arbitrator, the Chief Justice of the High Court of Australia, or his nominee, shall be requested to appoint an arbitrator.
Article 21
Amendments
The Agreement may be amended and supplemented by agreement in writing between the two Governments. 
Article 22
Entry into force and duration
This Agreement shall enter into force on the date of signature, and shall remain in force for a period of twenty years. The Agreement shall be reviewed by the two Governments in three years' time and thereafter from time to time, and at intervals of not greater than five years.

IN WITNESS WHEREOF, the undersigned, being duly authorised thereto by their respective Governments, have signed this Agreement.
DONE in duplicate at Bridgetown, Barbados on this fifth day of May, 1994.

FOR THE GOVERNMENT OF AUSTRALIA

[Signed:]
GORDON BILNEY	
FOR THE GOVERNMENT OF THE REPUBLIC OF NAURU
[Signed:]
BERNARD DOWIYOGO