Australia Secures Veto Power Over Nauru’s Foreign Deals in Multimillion-Dollar Agreement

Australia announced a multimillion-dollar agreement with the Pacific island nation of Nauru on Monday, granting Canberra a veto over a range of foreign policy decisions, particularly those involving security, banking, and telecommunications partnerships with third countries, including China, CNN reports.

The five-year, AU$140 million (approximately US$89 million) deal includes AU$40 million (US$26 million) specifically allocated to bolstering Nauru’s policing and security capabilities. Australian Prime Minister Anthony Albanese emphasized the mutual security interests underpinning the agreement, stating that the treaty ensures joint approval for any engagement by other nations in these crucial sectors.

Nauruan President David Adeang underscored the importance of the partnership with Australia, Nauru’s former colonial ruler, describing it as “vital” to his nation’s well-being. The agreement mirrors a similar deal struck with Tuvalu in May, also granting Australia veto power over third-party agreements. This follows China’s 2022 security pact with the Solomon Islands, which prompted concerns about potential Chinese naval base development in the South Pacific.

Meg Keen, director of the Pacific Island Program at the Lowy Institute, a prominent Australian think tank, analyzed the agreement, suggesting Nauru has traded its autonomy in negotiating security, banking, and infrastructure deals with China and other nations in exchange for substantial Australian funding. Keen characterized the deal as an Australian strategy to curtail China’s influence in the region.

A key element of the agreement involves maintaining an Australian presence in Nauru’s banking sector. The Commonwealth Bank of Australia will establish a branch in Nauru next year, following the withdrawal of the Bendigo Bank.