Tourism and Land in Palau

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Tourism and Land in Palau
Authored by Ivory Vogt

“President John F. Kennedy once said about economic development that ‘a rising tide lifts all boats’. Kennedy was, of course, right, but he missed something really, really important: A rising tide only lifts all boats when everyone has a boat.” – (The Daily Take Team, 2014)

In Palau, tourism brings the “rising tide of economic development” and land is the boat few Palauans have. Given that tourism is first and foremost an agent of globalization in a capitalist system; my degree program sought to explore how tourism can be adapted in destinations that continue to depend on it economically but are seeking more sustainable social and environmental solutions. Sustainability in tourism can be defined as beneficial for the livelihoods of local people and the conservation of life on our planet.

In Palau, there are a lot of court cases going on in the Land Court revolving around individual and clan land disputes. Outside of court, you hear stories about “good” and “bad” land deals, for example: “A Palauan got a million dollars leasing land to so and so Chinese company or partner for so and so many years, but now this family or that clan is in dispute of the action because they cannot use the land”. 

In Palau, we get over 50% of our GDP from tourism (WTO, 2018;, 2019). We are so dependent on it for our economy, we even call tourism “our bread and butter”. But why are more Palauans preferring to work in the government rather than in the tourism sector (Palau Statistical Yearbook, 2017)? And why are so few Palauan families, owners or managers of hotels and tour operations in the tourism industry? 

Inspired by these questions, my research mapped the land tenure and tourism nexus in Palau. I analyzed the 99-year lease policy and the decision-making power of key stakeholders that are resulting in increasing land alienation for future generations of Palauans. I define land alienation as not being able to use the land for a long period of time, even though the land might legally be in the ownership of the clan or the family. 

I conducted the research over the summer of 2019 in Palau, by interviewing 10 people who were all considered key informants in the land-tenure and tourism nexus in Koror, Palau. Some were government officials and traditional leaders with authority to make decisions about land, as well as a few representatives in the tourism and private sector to talk about trends in tourism and land use. Others were representatives from the land court and lending institutions who had observed an increase in land alienation through land lease deals with foreign investors. 

Koror state is the hub of hotels, resorts and tour operations in Palau. 

What is happening in Palau is not unusual to what is happening in other parts of the world. As part of my thesis, I reviewed literature on tourism and land tenure. There is this popular idea that, “All boats will be lifted by a rising tide — a metaphor to describe the intentions of corporate globalization” (Reid, 2003:27). One common critique of tourism is that the involvement of multinational corporations in the tourism industry is a form of neocolonialism and economic imperialism (Wijesinghe, Mura and Bouchon, 2017; Sinclair-Maragh and Gursoy, 2014; Munt and Mowforth, 2008). Essentially this means, corporations from privileged nations (often in the Global North) exert power and control over the politics and the economics of underprivileged nations (often in the Global South). The ‘Global South’ is used to discuss countries that have historically been exploited and (indirectly as well as directly) colonized by the ‘Global North’. There is even empirical evidence that small island developing nations receive an average of four times more foreign direct investment per capita than any other developing countries (Briguglio, Persuad and Stern, 2006). This influence means that foreign corporations and governments have the power to define and determine the direction of development and politics of the country. 

This control is seen in Palau through the fact that most hotels and motels are owned and operated by non-Palauans, although supposedly with Palauan partners and on Palauan land. In the future, I hope to research and find out exactly who is behind the multinational corporations listed by the Palau Foreign Investment Board (FIB), in order to see to what extent they are involved in land deals and tourism developments like hotels and resorts. The information on who are landowners and managers of hotels in Koror was not available at the time of my research. One recent trend in Palau is the increase of Chinese foreign investors in the past decade. In fact, about 60% of all foreign investors in Palau are Chinese (FIB, 2019). One interviewee even dubbed this trend, “economic imperialism by the Chinese” and asked, “Is leasing really the only way Palauans are involved in hotels and resort developments? Where is the career path for them to become managers and owners?” 

Although, it is understandable that most Palauans lack the large amounts of money it takes to become a hotel or resort owner, we have to ask ourselves: At what cost we are willing to lease out our lands to foreign investors? And, what are the consequences for future generations of Palauans? 

“Land is paramount to the continued existence and viability of Pacific islanders.” -(Diaz & Haulani Kauanui, 2001:318) 

In addition to understanding the impacts of foreign investments in tourism developments, as part of my research I found that it is equally important to understand the significance of land in most Pacific Island cultures. The Pacific is a unique region because land is still held communally unlike many parts of the world where it has become completely privatized to individuals or put into government care. The structure of land tenure is traditionally considered as “held” rather than “owned”, because it means that land is temporarily under guardianship rather than ownership. Land is so much more than just a commodity, it is actually “Paramount to the continued existence and viability of Pacific Islanders” (Diaz & Haulani Kauanui, 2001:318). 

In Palau, land is part of our social fabric. We even have names for each parcel of land. It is a part of our identity; it helps us understand who we are related to and where we come from. Nowadays, policies use the term ownership when speaking of land tenure, and lands that are considered private are actually divided into either individual or clan ownership. Although labeled “private” ownership, clans are made up of many families who are related to one another in some way. Clan ownership is special in Palau, because clans are made up of chiefs and their female counterparts, called the “Ourrot”. As Palau is a matriarchal society, the female elders have the power to elect chiefs and have a voice in many important clan decisions. Although each clan member should have claim to their clan land, the decision-makers are the chiefs and the other stronghold members. In the past, this was not such a huge issue where lands were used for livelihood purposes and so the benefits were felt in non-monetary ways. 

Today, land has increasingly become a prized commodity, especially in the commercial capital of Koror. The land disputes and reclamation cases have arisen largely from a misappropriation of private lands into public domain during the periods of colonization starting in the 19thcentury, especially in the state of Koror. Within the last century Palau has been colonized by the Spaniards (1885-1898), the Germans (1899-1914) and the Japanese (1914-1945) before being taken under a trusteeship agreement post-World War II between the United Nations and the United States of America (1945-1994). Palau became a republic in 1981, although its independence was not officially recognized until 1994 (Smith 1983:11; Pristine Paradise Palau, 2019). These nations each had an impact on changing customary land tenure (Tobin et al., 1958). The most important turning point for land ownership in Palau took place during the Japanese period of colonialism starting with a survey in 1938 to register landowners, known as the tochi daicho or “Land Book” (Tobin and Fischer, 1958; Crocombe, 1987). The tochi daicho listed landowners who were in most cases not the actual landowners but those who worked on the land or just happened to be there at the time. In Palau, colonization initially brought about the concept of land privatization to individuals rather than clans and families. Since then, the push for economic and social development has resulted in increased privatization of lands.

Koror during Japanese Settlement: 

My research found that although Palau’s Constitution aims to protect indigenous land holding rights by restricting land ownership to Palauans only (Art. XIII, Sec. 8), there are gaps in policies, trends with foreign investments and abuse of traditional decision-making power that are resulting in land alienation. Here are some findings from my research: 

• Land in Koror is either public or private. Public land is the jurisdiction of Koror State Public Land Authority (KSPLA), whereas private lands are either clan-owned or individually owned. It is important to note that in clan-owned lands, not all members participate in making decisions about land use. 

• Chiefs and stronghold members are the main decision-makers for clan lands. 

• In the case of clan members: chiefs are restricted from selling clan lands without the consent of all other stronghold members of their clan, but they are not restricted from leasing out clan lands to other clan members

• In the case of non-clan members: chiefs need the permission of other stronghold members to lease out or sell clan land to non-clan members (see Ngeribkal Clan Civil Action No.18- 077, August 2019). In both cases, it should be noted that there are still only a few decision-makers who have the power to make decisions, such as the 99-year lease, that could affect many families within the clan and also future generations of clan members. 

• If clan land is leased for a sum of money, there is no regulatory body or committee to ensure that all clan members reap the benefits. There are cases of chiefs and stronghold members not distributing the money from a lease  arrangement to the other clan members. 

• Tourism developments seem to be increasing on public and individually owned private lands more than on clan-owned private lands. For example, the research found that Malakal is a land-filled area under Koror State Public Land Authority (KSPLA) which requires leases directly from the state government. Malakal is also where most tour operations are located, as well as the main docking sites. 

• Palauans are involved in tourism developments like hotels and resorts mostly through lease arrangements, either through direct leases to foreign investors or subleases firstly from the state government for public lands and then on to a foreign investor. In the case of subleases, it allows a Palauan businessperson to get a cut of the money, rather than if the foreign investor were to lease directly from the Koror state government. 

• Land leases for hotels and resorts are currently dominated by foreign investors (it should be noted that the extent of this still needs to be researched). The current data which was available at the time of this research was from the Palau Foreign Investment Board (2019) which shows that 60% of foreign registered companies in the hotel/resort sector are Chinese individuals or corporations. 

• The 99-year lease is considered by some to be the equivalent of ownership because it can span three generations of Palauans. 

• The 99-year lease is believed by others to be necessary for foreign investments because it gives enough time to recuperate costs. 

• Bad lease deals are characterized as not accounting for inflation, lacking investment on the part of the lessor to save money for future generations and lacking timeframes for leasehold reevaluations. 

Land and Tourism Nexus In Palau 

My research paper touched on the issues of land displacement with reclamation of clan lands in Koror, however, it sought to focus only on its relation to tourism developments and the 99-year lease. There were discussions in my interviews about the issue of land displacement, often in relation to the use of land in Koror for tourism developments rather than local housing needs. There needs to be further research to see exactly where and to what extent this is happening. It is evident that land disputes are a huge and complex issue in Palau right now. Tourism developments, driven by foreign investors who negotiate long-term leases with a few Palauans that have decision- making power in both the public and private sector, will limit the access to available lands and the opportunities of future generations of Palauans. Here are a few actionable ideas that were inspired by the people I interviewed that could be a starting point for more equitable policies and practices: 

• Reassess policies like the 99-year lease. If it remains, Palauans ought to maximize their benefits. In order to do this, there needs to be guidelines to ensure that projects actually happen and clauses to help Palauan landowners reclaim land in the case that the project does not begin within a given timeframe. There should be reevaluations of the lease agreements every 5-10 years to examine project development and reassess lease terms. In addition, there should be a way for Palauans to invest a lump sum of money to help future generations. 

• In order to do the first point, education is needed to improve financial literacy for Palauans who want to take part in business contracts and land deals. 

• Control and decision-making power are very important in the customary clan ownership of land. Those who make the deals often keep the money. In order for tourism benefits to be more equitable, Palau could create a trust fund to give voice and assurance to all clan or family members to benefit from land deals. A good example is Fiji, where they have a Native Land Trust Board that acts as an agent between foreign investors and clans to administer the money from land deals into a single trust. Each clan member receives a share and part of the money goes to create community improvement projects. 

• Most importantly, Palauans should be able to play a larger role in the tourism industry. Tourism planners could create pathways for Palauans to actually gain ownership and management of tourism developments through training and funding opportunities. 

• Lastly, where is Palau’s future headed? Leaders in the government, traditional leaders and tourism planners need a long-term plan for holistic sustainability (social and environmental) that is guided by our traditional values and customs. 

My main goal with this research was to clearly express how land and tourism are deeply connected in Palau. Globalization and neocolonialism have resulted in the commodification of land for tourism in Palau. It is clearly evident that traditional values of land and notions of land use are in conflict with dominant capitalist values of land and notions of land use. The current policies and decision-making power of key stakeholders seeking to accommodate foreign investments are resulting in legal land alienation. If we define land alienation as not being able to use the land for up to three generations, even though it might legally be in the ownership of a clan or a family, it does not value the intentions of Palau’s Constitution to keep lands solely in Palauan ownership because it alienates some members and generations of Palauans. 

Tourism might be the “bread and butter” in Palau, but it is creating a divide between families and disrupting the social fabric and customary forms of land use through the commodification of land. Through the case study of Palau, my research argued against the idea that, “All boats will be lifted by a rising tide — a metaphor to describe the intentions of corporate globalization” (Reid, 2003:27). My hope is that while we continue to praise our positive efforts in sustainable tourism. We also discuss the social issues we are facing that are driven by tourism dollars, all for the hopes that tourism can benefit Palauans in more sustainable and equitable ways.

Photo of an “Abai”, a Palauan traditional meeting house, taken by Cristian Etpison Nicolescu in 2018. 

Disclaimer: This article that comprises the conscientious research, analysis and findings based on a comprehensive Master of Science research work performed in Palau during June-July this year (2019) by the dissertation author, Ivory Vogt, whose nationality is 1/2 Palauan and 1/2 German, may contain confidential and proprietary data of Ivory Vogt under the ethics and regulations of King’s College London. The information provided in this article is based on privately and formally arranged interviews with willing and significant experts and stakeholders in both the government and private sectors of the Republic of Palau. The message from this article is intended only for the professional and confidential use of the designated recipient(s) and the staff involved in the publication of such article and by the readers of the PATA newsletter. If you are not the intended recipient of the message conveyed through this article presented by Ivory Vogt, then you are hereby notified that any review, dissemination, distribution or copying of any or all contents of this article entitled “Tourism and Land in Palau” is strictly prohibited in accordance with Palau and international copyright laws. In addition, if you as the reader have received this message in error, or find that you have concerns or questions, then please direct them to PATA by email within 45-days or in a timely manner before December 31, 2019. 

Ivory Vogt is our Sustainability Associate here at PATA. She comes from the islands of Palau and has grown up most of her life as a global citizen. Being from Palau, she is especially concerned about the way climate change and tourism are impacting the livelihoods and environments of small- island nations in the Pacific. Palau has been getting a lot of positive international recognition for their environmental efforts. It created the first shark sanctuary in the world and designated 80% of their exclusive economic zone (500,000 square kilometers) as a marine sanctuary. Then, it created the Palau Pledge, which won many international awards for promoting responsible tourism and making tourists aware of their ecological footprint (Heilprin, 2009; Kurtenbach, 2015;, 2019). Recently, Palau Visitors Authority won the PATA Gold Award for their community-based tourism project in Airai state. 

Ivory is proud of these efforts and passionate about promoting sustainable tourism in the Pacific- Asia region. She believes that sustainable tourism can create livelihoods for people, preserve local cultures and help conserve life on our planet. She recently finished her Master of Science degree in Tourism, Environment and Development at King’s College London (UK) where she wrote her dissertation about Tourism and Land in Palau. This article is a summary of her thesis. 


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