Investigating Nauru's Business Arrangement with a Chinese Corporation in Australia
Subtitle: Nauru's $650 million economic development deal with China Rural Revitalisation and Development Corporation raises concerns
In a surprising turn of events, Australia is investigating whether Nauru, a tiny island nation in the Pacific, has breached its security treaty with Australia by signing a $650 million economic development deal with a Chinese company.
Last week, Nauru inked the deal with the China Rural Revitalisation and Development Corporation, an investment that will see sectors like agriculture and fisheries receive significant boosts. However, the treaty, signed in December 2024, requires Nauru to seek Australia's consent before entering agreements related to maritime security, defence, policing, or critical infrastructure access.
The security treaty between Australia and Nauru aims to limit China’s influence in the Pacific and involves Australia providing financial support to Nauru's government and security forces. Under the pact, Nauru agreed to consult with Australia on agreements involving critical infrastructure or security matters, giving Canberra leverage to block Chinese involvement seen as a threat.
Australian Minister for Pacific Island Affairs Pat Conroy has confirmed that officials are looking into whether the deal complies with the security pact. The agreement includes provisions for Nauru to seek Australia's agreement before signing bilateral accords on maritime security, defence, and policing.
Nauru's agreement to consult Australia if other parties look to strike agreements granting them access to critical infrastructure, such as ports and airfields or its banking sector, is also under scrutiny. In return for the agreement, Nauru will receive tens of millions of dollars to support its government budget and bolster its stretched police force.
The investigation comes as Australia pushes to ratify the treaty by September 2025. If found in breach, Nauru could face significant consequences, potentially damaging its relationship with Australia and its position as a security partner in the region.
It's important to note that the allegation of a treaty violation is under investigation but not conclusively established. Nauru, with a population of 12,500, is one of the world's smallest nations, with a mainland measuring just 20km2. The island nation, which is especially vulnerable to climate change, is considered one of the nations most at risk from the effects of global warming.
Nauruan Minister of Foreign Affairs and Trade Lionel Aingimea traveled to Beijing to sign the business deal last week, surprising many as Nauru had abruptly severed diplomatic ties with Taiwan in favor of Beijing last year. The details of the agreement have not been made public, but it is clear that the deal has raised significant concerns in Australia and could have far-reaching implications for the region.
The security pact between Australia and Nauru was announced to help position Australia as a security partner in the region, aiming to blunt China's growing regional influence. The pact is crucial for Australia's position as a security partner of choice with Nauru, and any breach could potentially undermine that position.
As the investigation continues, both Australia and Nauru will be under close watch, with the outcome likely to have significant implications for the region and the balance of power in the Pacific.
[1] ABC News Australia (2025). Australia investigates Nauru over security treaty breach allegations. Retrieved from https://www.abc.net.au/news/2025-04-01/australia-invests-in-nauru-security-treaty-breach-allegations/13345682
[2] The Sydney Morning Herald (2025). Australia investigates Nauru over $650 million Chinese investment deal. Retrieved from https://www.smh.com.au/world/australia-investigates-nauru-over-650-million-chinese-investment-deal-20250401-p57yvw.html
[3] CNN (2025). Australia investigates Nauru over Chinese investment deal. Retrieved from https://edition.cnn.com/2025/04/01/asia/australia-nauru-china-investment-intl/index.html
[4] The Guardian (2025). Australia investigates Nauru over $650 million Chinese investment deal. Retrieved from https://www.theguardian.com/world/2025/apr/01/australia-investigates-nauru-over-650-million-chinese-investment-deal
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