[Senate Hearing 118-286]
[From the U.S. Government Publishing Office]
S. Hrg. 118-286
PROPOSED LEGISLATION: THE COMPACT OF FREE
ASSOCIATION AMENDMENTS ACT OF 2023
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HEARING
BEFORE THE
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
JULY 13, 2023
__________
Printed for the use of the
Committee on Energy and Natural Resources
Available via the World Wide Web: http://www.govinfo.gov
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
__________
U.S. GOVERNMENT PUBLISHING OFFICE
55-568 PDF WASHINGTON : 2025
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COMMITTEE ON ENERGY AND NATURAL RESOURCES
JOE MANCHIN III, West Virginia, Chairman
RON WYDEN, Oregon JOHN BARRASSO, Wyoming
MARIA CANTWELL, Washington JAMES E. RISCH, Idaho
BERNARD SANDERS, Vermont MIKE LEE, Utah
MARTIN HEINRICH, New Mexico STEVE DAINES, Montana
MAZIE K. HIRONO, Hawaii LISA MURKOWSKI, Alaska
ANGUS S. KING, JR., Maine JOHN HOEVEN, North Dakota
CATHERINE CORTEZ MASTO, Nevada BILL CASSIDY, Louisiana
MARK KELLY, Arizona CINDY HYDE-SMITH, Mississippi
JOHN W. HICKENLOOPER, Colorado JOSH HAWLEY, Missouri
Renae Black, Staff Director
Sam E. Fowler, Chief Counsel
Melanie Thornton, Professional Staff Member
Richard M. Russell, Republican Staff Director
Justin J. Memmott, Republican Chief Counsel
John Tanner, Republican Deputy Staff Director for Lands
David Gardner, Republican Legislative Assistant
C O N T E N T S
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OPENING STATEMENTS
Page
Manchin III, Hon. Joe, Chairman and a U.S. Senator from West
Virginia....................................................... 1
Barrasso, Hon. John, Ranking Member and a U.S. Senator from
Wyoming........................................................ 3
WITNESSES
Panel I
Yun, Hon. Joseph Y., Special Presidential Envoy for Compact
Negotiations, United States of America......................... 4
Cantor, Hon. Carmen G., Assistant Secretary, Insular and
International Affairs, U.S. Department of the Interior......... 8
Mohandas, Dr. Siddharth, Deputy Assistant Secretary of Defense
for East Asia, Office of the Secretary of Defense, U.S.
Department of Defense.......................................... 14
Panel II
Whipps, Jr., His Excellency Surangel S., President, Republic of
Palau.......................................................... 21
Falcam, Jr., Leo A., Chief Compact Negotiator, Federated States
of Micronesia.................................................. 29
Ading, Hon. Jack, Minster of Foreign Affairs and Trade, Republic
of the Marshall Islands........................................ 36
ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED
Ading, Hon. Jack:
Opening Statement............................................ 36
Written Testimony............................................ 38
Responses to Questions for the Record........................ 128
Barrasso, Hon. John:
Opening Statement............................................ 3
Map showing size comparison of Exclusive Economic Zone of the
Freely Associated States and the United States............. 52
Blinken, Hon. Antony J., U.S. Secretary of State:
Press statement entitled ``Announcing the Special
Presidential Envoy for Compact Negotiations'' dated March
22, 2022................................................... 947
Cantor, Hon. Carmen G.:
Opening Statement............................................ 8
Written Testimony............................................ 10
Responses to Questions for the Record........................ 97
Letter addressed to Chairman Manchin, dated July 11, 2023.... 212
Letter addressed to Ranking Member Barrasso, dated July 11,
2023....................................................... 214
Cheng, Dean:
Issue brief entitled ``Countering Chinese Inroads Into
Micronesia'' published by the Heritage Foundation, October
27, 2016................................................... 797
COFA Alliance National Network:
Statement for the Record..................................... 60
Diamond, Dan:
Article entitled `` `They Did Not Realize We Are Human
Beings' '' published in POLITICO, January 26, 2020......... 216
Falcam, Jr., Leo A.:
Opening Statement............................................ 29
Written Testimony............................................ 31
Responses to Questions for the Record........................ 123
Frosch, Dan and Christine Mai-Duc:
Article entitled ``Nuclear Tests Ravaged Their Home--Their
Leaders Drained a Compensation Fund Dry'' published in the
Wall Street Journal, July 15, 2023......................... 134
Gootnick, David, Director, International Affairs and Trade, U.S.
Government Accountability Office:
Testimony before the Subcommittee on Fisheries, Wildlife, and
Insular Affairs, Committee on Natural Resources, U.S. House
of Representatives, January 7, 2014........................ 250
Testimony before the Committee on Energy and Natural
Resources, U.S. Senate, July 11, 2013...................... 396
Testimony before the Subcommittee on Insular Affairs,
Committee on Natural Resources, U.S. House of
Representatives, June 10, 2008............................. 560
Testimony before the Subcommittee on Indian, Insular, and
Alaska Native Affairs, Committee on Natural Resources, U.S.
House of Representatives, July 6, 2016..................... 735
Testimony before the Committees on Natural Resources and
Foreign Affairs, U.S. House of Representatives, September
26, 2019................................................... 758
Heaton, Thomas:
Article entitled ``Nuclear Descendants in Hawaii Are Incensed
by Blown Bikini Atoll Reparation Funds'' published in
Honolulu Civil Beat, June 21, 2023......................... 143
Hezel, Francis X.:
Report entitled ``On Your Mark, Get Set . . . Tourism's Take-
Off in Micronesia'' published by the East-West Center, 2017 948
Jibas, Peterson:
Letter for the Record........................................ 800
Johnson, Giff:
Article entitled ``Bikini Resettlement Trust Fund Money Is
History'' published in Marianas Variety, May 15, 2023...... 150
Article entitled ``Congressmen Angry That Bikini Islanders'
Trust Fund May Have Been `Squandered' '' published in RNZ
News, June 30, 2023 155
Lyons, Kate:
Article entitled `` `Palau Against China!': The Tiny Island
Standing Up to a Giant'' published in The Guardian,
September 7, 2018.......................................... 814
Manchin III, Hon. Joe:
Opening Statement............................................ 1
Manchin III, Hon. Joe et al.:
Letter addressed to Secretary of the Interior Deb Haaland,
dated June 23, 2023........................................ 802
(The) Marshall Islands Journal:
Pages from the June 30, 2023 issue with articles relevant to
the hearing topic.......................................... 805
Pages from the July 28, 2023 issue with articles relevant to
the hearing topic.......................................... 812
McKenzie, Pete:
Article entitled ``$59 Million, Gone: How Bikini Atoll
Leaders Blew Through U.S. Trust Fund'' published in the New
York Times, May 3, 2023.................................... 130
Article entitled ``Trump-Era Officials Under Fire as Nuclear
Fund for Bikini Islanders Is Squandered'' published in the
Guardian, June 5, 2023..................................... 159
Mohandas, Dr. Siddharth:
Opening Statement............................................ 14
Written Testimony............................................ 16
Responses to Questions for the Record........................ 107
Panuelo, Hon. David W., former President, Federated States of
Micronesia:
Letter to the Congress of the Federated States of Micronesia,
dated March 9, 2023........................................ 824
Risch, Hon. James E.:
Statement for the Record..................................... 129
Simina, Hon. Wesley W., President, Federated States of
Micronesia:
Letter to Chairman Manchin, dated July 6, 2023............... 837
Trust Fund for the People of the Federated States of Micronesia:
Fiscal Year 2006 Annual Report............................... 838
Fiscal Year 2007 Annual Report............................... 843
Fiscal Year 2009 Annual Report............................... 848
Fiscal Year 2010 Annual Report............................... 851
Fiscal Year 2011 Annual Report............................... 860
Fiscal Year 2012 Annual Report............................... 885
Fiscal Year 2013 Annual Report............................... 914
U.S. Citizenship and Immigration Services:
Fact sheet entitled ``Status of Citizens of the Freely
Associated States of the Federated States of Micronesia and
the Republic of the Marshall Islands'' September 2020...... 941
U.S. Department of the Interior, Office of Insular Affairs:
Press Release entitled ``Compact-Mandated Palau Economic
Advisory Group Launched'' dated September 15, 2022......... 236
Press Release entitled ``Initial Economic Impact of COVID-19
Reported for Micronesia, the Marshall Islands, and Palau''
dated June 22, 2020........................................ 240
Press Release entitled ``Interior Secretary Zinke Applauds
Completion of Palau Compact Funding Agreement'' dated
September 20, 2018......................................... 244
U.S. Government Accountability Office:
Report to the Chairman, Committee on Energy and Natural
Resources, U.S. Senate, May 2018........................... 266
Report to Congressional Requesters entitled ``Compacts of
Free Association: Improvements Needed to Assess and Address
Growing Migration'' November 2011.......................... 413
Report to the Chairman, Committee on Energy and Natural
Resources, U.S. Senate, June 2020.......................... 584
Wasuka, Evan and Toby Mann:
Article entitled ``Federated States of Micronesia Calls on
Solomon Islands to Reconsider Security Treaty With China''
published by the Australian Broadcasting Corporation News,
March 31, 2022............................................. 248
Whipps, Jr., His Excellency Surangel S.:
Opening Statement............................................ 21
Written Testimony with attached Senate of Palau Joint
Resolution No. 11-41....................................... 23
Responses to Questions for the Record........................ 114
White House National Security Strategy, October 2022............. 164
Yun, Hon. Joseph Y.:
Opening Statement............................................ 4
Written Testimony............................................ 6
Responses to Questions for the Record........................ 73
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The text of the proposed legislation addressed in this hearing can be
found on the Committee's website at: https://www.energy.senate.gov/
hearings/2023/7/hearing-to-receive-testimony-regarding-the-compact-of-
free-association-amendments-act-of-2023
PROPOSED LEGISLATION: THE COMPACT OF FREE ASSOCIATION AMENDMENTS ACT OF
2023
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JULY 13, 2023
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC.
The Committee met, pursuant to notice, at 10:00 a.m. in
Room SD-366, Dirksen Senate Office Building, Hon. Joe Manchin
III, Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. JOE MANCHIN III,
U.S. SENATOR FROM WEST VIRGINIA
The Chairman. We are here today to discuss the
Administration's proposal to amend and renew the terms of our
nation's Compacts of Free Association with the Republic of
Palau, the Federated States of Micronesia, and the Republic of
the Marshall Islands. This Committee has a responsibility for
matters relating to the Freely Associated States, including
authorization and oversight of the United States economic
assistance provided under the Compacts of Free Association, and
we take that responsibility very seriously. We have a time
sensitivity on this issue because various provisions of the
Compacts are set to expire on September 30 of this year.
History and current events leave no room for doubt that U.S.
strategic control and close alliance with our Compact partners
are vital to international peace and security in the Indo-
Pacific region, which is why it is so important that we renew
these agreements in a timely fashion.
Our Compacts of Free Association constitute the political,
economic, and security architecture that drives development and
the prosperity of the larger Indo-Pacific region and bolsters
and sustains security. The United States and the Freely
Associated States have a longstanding relationship formed 75
years ago amid the destruction left by World War II, when
100,000 Americans died liberating the islands. After the war,
the United Nations entrusted the United States with the defense
and security of the region to prevent further aggression
against the U.S. and our allies and to foster sustainable
economic development and self-determination for the island's
peoples. The Compacts of Free Association evolved from that
true trusteeship. These are bilateral international agreements
freely entered into by sovereign nations, which reflect the
shared values and commitments of both the United States and the
Freely Associated States.
To date, the United States has provided at least $800
million in economic assistance to Palau, $2 billion to the
Marshall Islands, and $4 billion to Micronesia, which has
helped those countries invest in education, health care,
infrastructure, and more. At the same time, the Compacts have
underwritten America's sea lines of communication throughout
the Indo-Pacific while promoting regional security by granting
the United States exclusive powers to control military access
to the Freely Associated States. This is especially important
considering China's rise and malign economic tactics. It is
therefore vital to maintain our bilateral political, military,
and economic relationship with the Freely Associated States
under the Compacts.
This proposal addresses several key pillars of the
Compacts. First, the United States must continue to commit to
address our nuclear legacy in the Marshall Islands. From 1946
until 1958, the United States tested nuclear weapons in the
Northern Marshall Islands. Those tests were necessary to win
the cold war against Soviet aggression, but it is important to
recognize the disproportionate sacrifice borne by the people of
the Marshall Islands. While the United States fully settled all
legal nuclear compensation claims in the 1980's, our moral and
statutory responsibility to the people of the Marshall Islands
endures, especially in light of any changed circumstances.
I also understand that the final Compact agreements will
assure greater accountability and effectiveness in the use of
U.S. economic assistance. And I believe it is important that we
ensure U.S. taxpayer dollars appropriated to these trust funds
are managed and invested as intended. We must also ensure that
these agreements provide the resources needed to continue
economic development and mutual security in the islands. It is
in the mutual interest of both the United States and the Freely
Associated States to not allow the Compacts to lapse, and I
applaud the Administration's successful negotiation of the
Compacts with Palau and the Federal States of Micronesia. But
unfortunately, I must acknowledge that the same cannot be said
for the negotiations with the Marshall Islands, which are
ongoing. The Senate is not able to give its consent to an
agreement that does not exist, and I am hopeful that
negotiations with the Marshall Islands conclude quickly and in
accordance with the previously agreed to Memorandum of
Understanding so that we can take action. Congressional
consideration of this legislative proposal comes as China is
increasingly challenging the United States for regional
influence. Renewing the Compacts illustrates our commitment to
a free and open Indo-Pacific.
We are ready to get to work with our colleagues in the
Senate, House, the Administration, and the Freely Associated
States to meet the demanding deadline for renewal and to ensure
the continued success of the special relationship between the
United States and the three Freely Associated States. I know
our witnesses from the Federal States of Micronesia, the
Republic of the Marshall Islands, and the Republic of Palau
have traveled great distances to be here and I truly thank all
of you for making that effort and I look forward to our
discussion today.
Before I turn it over to Senator Barrasso for his opening
remarks, let me just run through some logistics, since we are
doing things a little differently here this morning. We have
two panels. The first panel before us will have witnesses from
the Administration, and the second panel will have witnesses
from the Freely Associated States. We will begin with opening
statements from our first panel and then turn to our second
panel for their opening statements. Next, we will move to the
question round for panel one, then on to panel two for
questions.
Now I will turn it over to Senator Barrasso for his opening
remarks.
OPENING STATEMENT OF HON. JOHN BARRASSO,
U.S. SENATOR FROM WYOMING
Senator Barrasso. Well, thanks so much, Mr. Chairman.
Thanks for holding today's hearing and thank you to our
witnesses for joining us today.
Today, we are discussing the Administration's proposals for
renewing the Compacts of Free Association. The Compacts are
agreements between the United States and three strategically
important island nations. Palau, the Federated States of
Micronesia, and the Republic of the Marshall Islands make up
the Freely Associated States. The islands are integral to our
national security and our strategic interest in the Pacific.
The Compacts are crucial to preserving international maritime
stability, maintaining geopolitical security, and countering
Chinese hostility. The compacts create a mutually beneficial
security and defense relationship between the United States and
the Freely Associated States. The Compacts give us exclusive
military authority over the Freely Associated States' lands and
waters. This strategic denial authority guarantees that our
military can operate bases on the islands. It also allows us to
deny access to any potential adversary in an area of the
Pacific that is larger than the continental United States. This
is a critical authority because Chinese aggression in the area
is increasing.
China is expanding its power in the Indo-Pacific region and
is threatening the Freely Associated States. It is actively
trying to upset the security and the power dynamic in the
Pacific and threaten Taiwan. In March of this year, the
outgoing President of the Federated States of Micronesia
outlined Chinese attempts to undermine his country's ties to
the United States through bribery and threatening public
officials. China has also tried to use aggressive and coercive
actions against the economies of Palau and the Marshall Islands
by threatening their tourism and their fishing industries. I am
pleased the Administration has reached agreements with the
Federated States of Micronesia and Palau. I understand the
Administration is continuing to negotiate with the Republic of
the Marshall Islands. These negotiations need to be completed
as soon as possible. It would be in all parties' interests to
have the agreement signed into law that covers all three of the
Freely Associated States. So I look forward to hearing an
update from today's witnesses on the state of the negotiations
with the Republic of the Marshall Islands.
Mr. Chairman, the proposal that the Administration has sent
us is extensive. It includes a request for $7.1 billion over 20
years and numerous reforms to existing programs. This proposal
requires our scrutiny. I look forward to working with you and
other members of the Committee to ensure the Administration's
proposal is fiscally responsible and reflects our national
security interests.
I would also like to highlight the contribution of the
citizens of the Freely Associated States to the U.S. Armed
Forces. They serve at high rates and with high distinction. We
owe them a debt of gratitude. I am pleased that the proposal
that the Administration has sent us includes provisions that
will ensure these veterans receive the care that they have
earned.
Mr. Chairman, I look forward to a robust discussion today
regarding the Administration's proposal. I am eager to work
with you and other members of the Committee to ensure that the
Compacts of Free Association are renewed.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Barrasso.
We are going to begin with Ambassador Yun, Special
Presidential Envoy for Compact Negotiations.
Then we will go to Ambassador Cantor, Assistant Secretary
for Insular and International Affairs with the Department of
the Interior.
And then, finally, we will have Dr. Mohandas, Deputy
Assistant Secretary of Defense for East Asia with the
Department of Defense.
Ambassador Yun, we will start with you.
STATEMENT OF HON. JOSEPH Y. YUN, SPECIAL PRESIDENTIAL ENVOY FOR
COMPACT NEGOTIATIONS, UNITED STATES OF AMERICA
Ambassador Yun. Thank you, sir.
Chairman Manchin, Ranking Member Barrasso, distinguished
members of the Senate Energy and Natural Resources Committee,
thank you for this opportunity to testify before you today.
With your permission, I will make short remarks and then submit
a longer testimony for the record.
The Chairman. Thank you.
Ambassador Yun. Our history with the three Freely
Associated States--Palau, Micronesia, and the Marshall Islands,
began nearly 80 years ago. After World War II, the United
Nations assigned the U.S. as administering authority over the
Trust Territories of the Pacific Islands, which included
Micronesia, the Marshall Islands, and Palau. The Compacts grew
out of this relationship, with our Compacts with Micronesia and
the Marshall Islands entering into force in 1986 and with Palau
in 1994. The Compacts reflect that these countries are
sovereign nations in free association with the United States.
Under the Compacts, the FAS governments conduct their own
foreign relations and the United States has full authority and
responsibility for defense and security matters. As noted, FAS
citizens also serve in the U.S. Armed Forces and volunteer at
per capita rates higher than most U.S. states.
The Compacts, in fact, define our relationship with each
Freely Associated State and have become the bedrock of U.S.
policy and strategy in the Pacific. The three Compacts do not
expire, although each can be terminated in accordance with
applicable provisions of the Compacts. However, economic
assistance provisions of the Compacts do expire, and they are,
of course, central to the mutually beneficial relationships of
the Compacts. And unless renewed, these economic assistance
provisions will end after Fiscal Year 2023 for the FSM and RMI
and Fiscal Year 2024 for Palau. Our strategic competitors are,
of course, well aware of this. At this time of genuine
competition from the People's Republic of China, we certainly
should not take the historic friendship with our FAS partners
for granted.
Mr. Chairman, we have coordinated closely across the
interagency to develop robust proposals to continue assistance
over all three countries. With me today are my two colleagues,
Interior Assistant Secretary Carmen Cantor, and Deputy
Assistant Secretary of Defense, Siddharth Mohandas. They and
their teams have been instrumental in the progress we have
made. I am also delighted that you have invited President
Whipps of Palau, FSM Chief Negotiator, Leo Falcam, who I might
add, was a Colonel in the U.S. Marines, and RMI Foreign
Minister Ading. We have worked very closely with them and their
teams. I am deeply appreciative of the genuine cooperation of
all three of my counterparts, and two of them, of course, are
here--Palau Finance Minister Udui and FSM Chief Negotiator, Leo
Falcam, and until a month ago, RMI Foreign Minister, Kitlang
Kabua.
I would also like to highlight the instrumental role played
by Palau President Whipps, with us today also, and FSM former
President Panuelo. These leaders are true friends of the United
States, sharing our values of open society and our policies for
an open and democratic Indo-Pacific.
Mr. Chairman, as you noted, our proposed legislation
requests $7.1 billion over the next 20 years to fund two
agreements. These agreements have been signed--Palau and FSM--
but also include the amount specified in the Memorandum of
Understanding with the Marshall Islands, although we have not
yet reached the final agreement with the RMI and the
negotiations are ongoing. The $7.1 billion also includes $600
million for the U.S. Postal Service to continue to provide
postal services to the FAS. The legislation also provides
authorities under U.S. domestic law to provide services,
especially for the veterans in the FAS.
Mr. Chairman, we appreciate your continued support for our
legislation with the FAS and welcome the opportunity to work
with you and your Committee to secure long-term U.S. strategic
impact in this vital region.
Thank you, sir.
[The prepared statement of Ambassador Yun follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you.
And now, we will go with Ms. Cantor.
STATEMENT OF HON. CARMEN G. CANTOR, ASSISTANT SECRETARY,
INSULAR AND INTERNATIONAL AFFAIRS, U.S. DEPARTMENT OF THE
INTERIOR
Ms. Cantor. Chairman Manchin, Ranking Member Barrasso, and
distinguished members of the Committee, the Department of the
Interior welcomes the opportunity to join Congress today to
recognize the importance of the Federated States of Micronesia
(FSM), the Republic of the Marshall Islands (RMI), and the
Republic of Palau (collectively, the Freely Associated States,
or FAS) to U.S. national interests in the Indo-Pacific for more
than 75 years. A month ago, the Administration submitted a
legislative proposal, the Compact of Free Association
Amendments Act of 2023, to the U.S. Congress. The proposal
contains funding and related provisions necessary to implement
agreements related to the Compacts that the United States
negotiated with FSM and Palau. The proposal also includes
funding for agreements relating to future assistance to be
negotiated with the RMI based on a Memorandum of Understanding
that we signed in January. This full legislative package will
deepen our relationships with the FAS over the coming decades
and serves as a clear signal of the United States' commitment
to achieving and maintaining a free and secure Indo-Pacific
region.
According to the U.S. Government Accountability Office, in
2018, after over 70 years of close social, political, economic,
and cultural ties, first under the U.N. Trusteeship and then as
sovereign nations in free association with the U.S., there were
an estimated 94,000 FAS individuals living in the U.S., with a
presence in nearly every state and territory. To put this in
perspective, 94,000 is equivalent to about half the total
population of the three nations. Moreover, roughly half of the
FAS population in the U.S. are now U.S. citizens. These FAS
communities serve in the U.S. military, and they live, work,
and pay taxes throughout the U.S.
For the past 35 years, the Compacts have been a foreign
policy, national security, and people-to-people success story.
The Administration's proposal builds on this success story. It
includes supplemental provisions that rectify two longstanding
challenges for FAS citizens. First, it adopts language from the
bipartisan Compact Impact Fairness Act, which restores
eligibility for key federal public benefit programs for FAS
individuals while they are lawfully present in the U.S., an
important long-term solution to the financial impacts of these
communities on U.S., state, and territorial governments.
Second, our proposal also includes language to achieve the
same goals as another bipartisan bill to provide U.S. military
veterans residing in the FAS with improved access to the
Department of Veterans Affairs benefits they earned and
rightfully deserve for their service. However, the brave FAS
citizens who have chosen to return home after their service
face challenges to receiving their full benefits. These
provisions will remove restrictions from the Secretary of
Veterans Affairs that currently impede the offering of medical
care to these service members.
We have reached agreements or understandings for future
Compact assistance for each country that continues U.S.
assistance in a reasonable and prudent manner. That includes
assistance for education, health, environmental issues, and
infrastructure. The United States and FSM agreed to a package
that will provide $2.8 billion in grants over 20 years for core
public services and infrastructure. The United States and Palau
agreed to a package that will provide $729 million in grants
over 20 years for core public services and infrastructure.
While the United States and RMI have yet to complete
negotiations on a full suite of agreements, we signed a
Memorandum of Understanding in January, reflecting an
understanding that we will offer assistance totaling $2.3
billion.
While some people may argue that the United States is
spending too many resources to secure renewed engagement with
these Compact-related agreements, others will counter that the
United States, as a Pacific nation itself, cannot afford to
abandon decades of investment in these special relationships at
such a critical time for the Indo-Pacific region. The Compact-
related packages will be debated in the U.S. Congress and
national legislatures of our Compact partners. Now is the time
to send a clear signal across the Pacific that these Compacts
and their related agreements are a cornerstone of U.S. national
interest in the Pacific. The Department of the Interior urges
Congress to swiftly introduce and approve this Compact-related
implementing legislation. Let us conclude our work with
Congress and for the American people to secure a bipartisan
success that lays to rest how committed the United States is to
the Pacific and to remain the preferred partner for our friends
and cousins in the Pacific Islands.
Thank you, sir.
[The prepared statement of Ms. Cantor follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you.
And now, we have Dr. Mohandas.
STATEMENT OF DR. SIDDHARTH MOHANDAS, DEPUTY ASSISTANT SECRETARY
OF DEFENSE FOR EAST ASIA, OFFICE OF THE SECRETARY OF DEFENSE,
U.S. DEPARTMENT OF DEFENSE
Dr. Mohandas. Thank you, sir.
Chairman Manchin, Ranking Member Barrasso, and members of
the Committee, thank you for inviting me today to testify about
the importance of renewing the Compacts of Free Association for
the Department of Defense and the critical role that the
Compact states play in implementing the national defense
strategy and our strategic vision for the Indo-Pacific region.
The Compact renewal comes at a time of unprecedented U.S.
commitment to the Pacific Islands. In September of last year,
the Biden Administration released the first-ever Pacific
Partnership Strategy, which prioritizes broader and deeper
engagement with the Pacific Islands and identifies the
successful conclusion of the Compact negotiations as a key
objective. We are moving out on implementing that strategy in
close coordination with our allies and partners, including
through the partners in the Blue Pacific Initiative. As you
have heard from my colleagues, we have made great progress
toward renewing the Compact agreements and we have appreciated
recent opportunities to engage with both Congressional members
and staff on the importance of the renewal and we are here
today to seek the Committee's support to ensure the continued
economic assistance for the Compact states.
The defense rights guaranteed by the Compact agreements
provide security, not only for the Compact states, but for the
broader Pacific Islands region and for the U.S. homeland as
well. I can tell you today that the renewal of the Compact
agreements is vital to the Department of Defense's ability to
deter aggression, and if necessary, prevail in conflict,
ensuring peace, security, and stability in the Indo-Pacific.
The most comprehensive challenge we face to U.S. national
security, as identified in the Department's 2022 National
Defense Strategy, is the PRC's coercive and increasingly
aggressive effort to change the status quo of the Indo-Pacific
region and the international system to align with its
interests. The PRC seeks to challenge U.S. alliances and
partnerships in the Indo-Pacific and leverage its growing
capabilities, including its economic influence, to coerce its
neighbors and threaten their interests. The PRC has also
expanded and modernized nearly every aspect of the People's
Liberation Army with a focus on offsetting U.S. military
advantages. As the National Defense Strategy states, ``The PRC
is the pacing challenge for the Department.''
With our Pacific Island partners, we are bound by a shared
history, shared values, and profound links between our people.
A renewal of the Compact honors our commitments to the people
of the Freely Associated States and facilitates continued
strategic partnerships with our Palauan, Micronesian, and
Marshallese partners, which is critical to our ongoing
operations, force posture, and footprint in the Indo-Pacific
region. Additionally, as has been noted, a unique aspect of our
relationship with the Freely Associated States is their
commitment and service in the U.S. military, which the
Department of Defense is forever grateful for.
The Compacts of Free Association demonstrate our long-term
commitment to our Pacific Island partners and they provide
value across two priority areas. First, assured access under
the Compacts provides locations for bilateral and multilateral
training, exercises, and force posture. The assured access
guaranteed by the Compact agreements protects the strategic
approaches of the United States and allows us to operate freely
in critical terrain in the Pacific.
In addition, the Compacts also allow the establishment of
defense sites like the U.S. Army Garrison installation and
missile defense testing site at Kwajalein in the Marshall
Islands. We have also engaged in construction of the Tactical
Multi-Mission Over-the-Horizon Radar (TACMOR) in Palau, and the
Department of Defense is working toward designating further key
defense posture sites in Palau, as well as in the Federated
States of Micronesia to facilitate Agile Combat Employment
(ACE) for the U.S. Air Force. Failure to enact implementing
legislation for the new Compacts would complicate our ongoing
efforts to advance these defense initiatives.
Second, the Compacts provide for a mutual commitment
between the United States and the FAS. The Compacts provide
strategic denial rights for the FAS, enabling the United States
to deny adversaries and third parties access to the territory,
air space, and territorial waters of the FAS, which is coupled
with the United States' significant role as the defense force
for the Freely Associated States.
The Compacts are an important signal to both our partners
and our competitors of the United States' commitment to the FAS
and that that commitment is ironclad. That is why we at the
Department of Defense urge the speedy passage of this
legislation, and we thank you very much for your time and
attention today. I look forward to your questions.
[The prepared statement of Dr. Mohandas follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you so much. I want to thank the first
panel. And I know we have to play musical chairs now. If the
second panel could come forward, please? Then we will come back
again with the first panel so we can have our questions.
First of all, thank you all for making the effort to be
here, and it is going to be very helpful for all of us to get a
conclusion here.
We are going to start with President Whipps, Jr., from the
Republic of Palau.
Then, we are going to go to Mr. Falcam.
And then, we will finally have Minister Ading, Foreign
Affairs and Trade for the Republic of the Marshall Islands.
So we will start with Mr. President Whipps, Jr. to give
your testimony, sir.
STATEMENT OF HIS EXCELLENCY SURANGEL S. WHIPPS, JR., PRESIDENT,
REPUBLIC OF PALAU
Mr. Whipps. Chairman Manchin, Ranking Member Barrasso,
distinguished members--``alii'' from Palau, and thank you for
this hearing. Accompanying me today are Compact Negotiator
Udui, Senator Sungino, Delegate Rechelulk, Ambassador Kyota,
and my family.
The relationship between the U.S. and Palau began with
fierce battles that decimated our islands in a final step in
retaking the Philippines. Since the war, the U.S. has sought to
preserve its strategic control, from Hawaii to the Philippines
and Indonesia, with financial and domestic program assistance.
Palauans wanted self-government but grew to admire and feel a
deep kinship with the U.S. The solution was free association.
President Reagan, in urging acceptance, said, ``you will always
be family to us.''
Palau is the westernmost Freely Associated State. We have a
landmass similar in size to Guam and an EEZ the size of Texas.
We also provide land needed for U.S. defense, and the military
says Palau is part of ``the homeland.'' The U.S. has put its
closest-to-Asia early warning radar in Palau. Yet, we are
challenged economically as a small island state. The Compact
provides Palauans with free access to the U.S., domestic
federal programs, and financial assistance, primarily through a
trust fund that was to last for 50 years, but which has proven
inadequate. Wisely, it also required joint reviews of Palau's
needs, with a U.S. commitment to act on these. This legislation
would do just that.
The legislation would not only provide needed financial
stability and program assistance for 20 years, but a basis for
this continuing after. Palau and the U.S. are joined at the
hip, and Palau recognizes Taiwan's right to exist. Continuation
of the relationship, however, cannot be taken for granted.
Palau is being subjected to extreme economic carrots and sticks
to shift its alliances. China, our largest source of tourists,
cut off visits when we did not follow their request. This,
coupled with the pandemic, shrank our economy by more than 30
percent. Our economy has not fully recovered. China has offered
to send more tourists than ever and make huge investments if we
shift.
For the last ten years, China has provided the largest
amount of economic investment. The U.S. does not have a command
economy. This legislation is geared toward growing Palau's
economy, not only through its economic assistance, but through
a joint economic advisory group and in annual economic
consultations. There are, though, three additional measures
that should be addressed. One is to reestablish an Office of
Freely Associated States Affairs in the State Department, with
coordinators from the Interior and Defense Departments, which
have greater equities than State. The Congress insisted on such
an office in initially acting on the Compacts. State, however,
later got rid of it.
Some at State want to treat the Freely Associated States
like other island nations, but our relationships are much more
closer than the U.S. has with any other nation. None let the
U.S. exercise aspects of their sovereignty. None have U.S.
domestic programs. This Compact review succeeded only after we
got Envoy Yun, who could ensure attention from top decision-
makers and work out fair solutions. But we need constant
policy-level attention. We are on the front line of
competition, and not just because the early warning radar makes
us a first target. Thus, my second request is that you urge the
Administration to complete the negotiations on the U.S.
programs agreements while Envoy Yun is in Office. And finally,
I request the restoration of FEMA coverage. Typhoon Mawar just
devastated Guam, and we know FEMA is critical to recovery.
Our relationship was significantly undermined by the
failure to implement the 2010 agreement for eight years while
Palauans were being wooed by China. Enacting the legislation by
the negotiated date, September 30, is critical. Palau's
Congress has ratified the agreement. I support it. I
respectfully request that you and your colleagues do too. Thank
you for your past support and for your consideration.
[The prepared statement of Mr. Whipps follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you.
Now we will have Mr. Falcam.
STATEMENT OF LEO A. FALCAM, JR., CHIEF COMPACT NEGOTIATOR,
FEDERATED STATES OF MICRONESIA
Mr. Falcam. Thank you, sir, and good morning.
Chairman Manchin, Ranking Member Barrasso, members of the
Energy and Natural Resources Committee, thank you very much for
convening this hearing and the opportunity to testify before
you today. I bring you greetings and respect from the people of
the Federated States of Micronesia and our President, President
Simina. My name is Leo Falcam, Jr. I am the Chief Negotiator
for the Federated States of Micronesia in the current talks
with the United States. I have also had the privilege to serve
as Chief of Staff to the last three Presidents of the FSM.
The United States and the FSM enjoy an extraordinarily
close relationship that continues to deepen through our broad
diplomatic, economic, and military partnership and the
steadfast support of the United States for the FSM's economic
development and self-sufficiency. Our governments are committed
to building a safe, peaceful, and democratic Indo-Pacific
region. The FSM has no greater friend than the United States.
Our deep bonds are reflected in our decades of close
cooperation, dating back to shortly after World War II, and
continuing when the FSM became a sovereign nation in 1986. The
ties between our peoples are also reflected in the fact that we
have FSM citizens who have proudly served in the U.S. military
and are continuing to do so at very high rates. Thousands of
FSM citizens proudly live, work, and study in the United
States, contributing economically and culturally as members of
their communities across many of your home states. We are most
grateful for this privilege.
When the FSM achieved independence in 1986, we entered into
our first Compact of Free Association with the United States.
The 1986 COFA, as it's called, was renewed and amended in 2003.
Congress approved both prior COFA agreements with resounding
bipartisan support, and we are pleased that this bipartisan
support has not only endured, but is strengthened in the
current Congress. Since the first Compact entered into force,
the FSM continuously granted the United States security and
defense rights in our territory, which represents a very large
section of the Pacific Ocean of utmost strategic importance to
both the U.S. and the FSM. This includes the right of the U.S.
military to operate in the FSM and to deny foreign militaries
access to use of FSM's territory. This defense partnership is
vital to securing and maintaining peace and prosperity
throughout the Pacific.
Our defense ties remain strong and ongoing. In addition to
the broad rights of strategic denial in our extensive waters
and air space, the U.S. Embassy in the FSM includes a U.S.
military attache who is in constant communication and
collaboration with our government. As the U.S. military knows
well, the FSM is prepared to do even more on military issues.
While these crucial defense commitments do not expire, we are
at a crossroads on economic support by the United States. The
Compact's economic assistance commitments will expire in less
than three months unless extended or renewed by this Congress.
I am pleased that the FSM and the U.S. under both the Trump and
Biden Administrations diligently developed a framework for a
new 20-year period of assistance. The package is designed to
address the needs of our government and people as we advance
toward increased self-sufficiency and maturity as a nation. The
Compact's pledge of $140 million a year in sector grants and
$500 million in additional Compact Trust Fund contributions are
essential to advancing our government's mutual goals.
We are extremely pleased that the proposed legislation will
ensure that the FSM citizens living lawfully in the U.S. are
again eligible for key public benefits as a result of the
bipartisan Compact Impact Fairness Act. We appreciate the
leadership of so many Members of Congress on this issue,
including Senators Hirono, Boozman, and Schatz. The proposed
legislation also incorporates the bicameral and bipartisan Care
for COFA Veterans Act, which will provide improvements to
medical care access to our veterans, thanks to the leadership,
again, of Senators Schatz, Hirono, Murkowski, and Boozman. This
package will ensure the continued eligibility of FSM students
for key education benefits and access to crucial federal
programs and services. These measures will strengthen our
country for generations to come.
United States assistance will build on the advances made to
date, and enable the following important developments in this
assistance period: increasing educational opportunities for
children, teacher training, building and maintaining schools;
upgrading the level of medical care in FSM hospitals and
increasing access to basic health care in our remote islands;
protecting our environment and addressing the increasing
effects of climate change in our vulnerable country; and
developing public infrastructure to include roads, ports, and
bridges. At this stage in our development, more than half of
key government services in the FSM are funded by the U.S.
through the Compact. A funding lapse would create an
unprecedented economic and political crisis for our country and
our people, and would have an overall destabilizing effect in
the region.
We appreciate the Committee's consideration of the Compact
proposal and urge Congress to advance it before current
provisions expire at the end of this fiscal year. Thank you
again for the opportunity to testify, and I would be pleased to
answer any questions.
[The prepared statement of Mr. Falcam follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you very much.
And now, we will go to Mr. Ading--Minister Ading--I'm
sorry, Minister Ading.
STATEMENT OF HON. JACK ADING, MINISTER OF FOREIGN AFFAIRS AND
TRADE, REPUBLIC OF THE MARSHALL ISLANDS
Mr. Ading. Thank you, Chairman.
Mr. Chairman and distinguished members, thank you for this
opportunity. I am joined by our Parliament Speaker Kedi and our
new Chief Negotiator, Mr. Muller.
First, understand that the RMI regards the Compact of Free
Association relationship as mutually beneficial.
Second, we appreciate the effort of the U.S. Administration
that favorably resolves many issues, but not all that must be.
In January, the RMI was presented with a dilemma--a deadline
for President Biden's budget. The MOU was signed on our side
without the proper authorizations. We have repeatedly requested
further negotiations, but have received unfavorable responses.
So we ask you to direct the Administration to resume the talks.
The major issue is inadequate funding related to nuclear
weapon tests that the U.S. conducted while it administered the
Marshall Islands as a trustee for the United Nations. The yield
was equal to 1.7 Hiroshima bombs every day for 12 years. The
radioactive iodine was 42 times more than in Nevada and 50
times Chernobyl. In 1954, U.S. officials learned that a change
in wind would blow test fallout to inhabited atolls. Almost 70
percent of the children on Rongelap who were under ten
developed thyroid cancer. Rongelap was evacuated after the
test, but two years later it was still, ``by far, the most
contaminated place on Earth,'' according to U.S. Atomic Energy
Agency Health and Safety Laboratory Director Merrill Eisenbud.
He, nonetheless, suggested sending the people back home so they
could be used as human guinea pigs. The people of Rongelap and
Utrik did indeed become human guinea pigs without their consent
under the secret radiation study codenamed ``Project 4.1.''
Many of our people who were exiled from their atolls eventually
returned based on U.S. assurances that it was safe, only to
find out years later that the radiation levels were too high
and no local food could be consumed. Some islands will be
unsafe for as long as anyone can imagine. The people have been
in exile since 1954, and Rongelap since 1985 because of high
radiation contamination.
Former Attorney General Thornburgh found the Nuclear Claims
Tribunal's procedure proper, and compensation ``manifestly
inadequate.'' The Compacts include procedure for remedies. One
is a ``changed circumstances petition.'' Since the Compact was
negotiated, we learned that there was significant fallout on at
least six more atolls than the four recognized at the time of
the Compact by the U.S.--the ``Midrange Atolls.'' Cancer
increased substantially. The U.S. National Cancer Institute
estimates 500 excess cancers. Grandchildren born on atolls
other than the four recognized by the U.S. have been born with
defects--such as no limbs. Radioactive waste from Nevada was
dumped in Enewetak Lagoon. When the Compact was amended in
2003, the State Department negotiator assured that the nuclear
issue would be seriously addressed if the RMI submitted a
changed circumstances petition. After we did, State dismissed
it. Another supposed remedy procedure commits the U.S. to
engage in consultation if the RMI requests it. State has
refused.
The MOU favorably responds to many of our concerns, but we
will not be put off again. We need the contributions to the
Compact Trust Fund to be adequate for the Nuclear Claims
Tribunal awards. The contribution can also cover the costs of
damages in other atolls and other issues. As a low-lying atoll
state, climate change is the most significant security threat
facing the RMI and U.S. In that regard, we seek your support.
Our full proposal is in my written submission. We do not want
to hold up this important legislation for the RMI, but we will
need some additional measures to allow our people and
parliament to support it. During this period, which we want to
be as expeditious as possible, we request financial assistance
and U.S. programs and services at the current level. It is not
too late for a fair and just agreement.
Thank you.
[The prepared statement of Mr. Ading follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you.
And now, if we could make musical chairs one more time and
we will go back to our first panel for questions.
I want to welcome you all back, and I will start the
questioning now. I have three questions. I am going to try to
get to all three. So if your answers could be pretty short on
this.
I think I will go to Ambassador Yun first. Ambassador, you
noted in your testimony that representatives of the governments
from each Freely Associated State signed a Memorandum of
Understanding earlier this year. So all of them signed. It is
our understanding that in doing so they all accepted a good-
faith, top-line offer of $6.5 billion in direct economic
assistance over 20 years. I also understand that a total
Compact proposal includes funding for the U.S. Postal Service
of $634 million, which brings the total package to $7.1 billion
over 20 years. That was all agreed to, I understand.
And as you mentioned in your testimonies, it is important
that we successfully renew the Compacts of Free Association to
avoid any lapse in our assistance, the U.S.'s assistance to all
of these important partners. So I am asking--the Compacts of
Free Association with Federated States of Micronesia, Palau,
and the Republic of the Marshall Islands are important to the
United States. It is important to the Compact and to the
islands and also to us. So it is mutually important. Why is the
mandatory funding necessary? Quickly, if you can.
Ambassador Yun. So mandatory funding is necessary so that
these islands can plan their future. We had an experience----
The Chairman. Mandatory funding started when? What years
did we actually start mandatory funding?
Ambassador Yun. We have done it every time. The first time,
1984.
The Chairman. So it started in the 1980s.
Ambassador Yun. Yes. And we also did it in 2003.
The Chairman. Got you.
Ambassador Yun. The only one where we did not do it was for
Palau, for the last agreement, we did not do it. As a result,
their agreement took eight years to be passed by the Congress.
And as a result, they could not plan yearly budgets, and so
this is why they----
The Chairman. So it gives you sustainability. It is
important for them to have sustainability, to be able to plan
their life out for the next 20 years and be able to take care
of their citizens.
Ambassador Yun. Yes, sir. Yes.
The Chairman. Okay.
My second question is going to be also to you and to
Ambassador Cantor. The proposal requests that funding for the
Compacts be appropriated to a new Compact Assistance Fund
administered by the Secretary of State rather than the
Secretary of the Interior, even though jurisdiction and the
responsibility still will remain with the Interior Department.
Since 1986, Congress appropriated funds for Compacts to the
Secretary of the Interior, as the Secretary is the most
appropriate official to fulfill this responsibility. So why did
the Administration propose the change?
Secretary Cantor, we will start with you and then we will
go back to Mr.----
Ms. Cantor. Thank you, sir.
I understand that OMB--the Administration--chose State due
to the current focus on the region, on China. As you know, the
world has changed over the past 20 years. My understanding is
that there is going to be a new account at the State
Department, but at the same time, they are going to leverage
our expertise, you know, at DOI since we have been implementing
this since the 1950s.
The Chairman. Is this just another layer? Can it cause us
more bureaucratic uncertainty?
Ms. Cantor. It could. It's something that, you know, we
ask, you know, why OMB chose this. So basically most----
The Chairman. So you did not offer it up and say let them
help us?
Ms. Cantor. My understanding is that we did not offer.
The Chairman. Okay, we will figure this one out. Okay, we
are going to figure that one out.
Now, my final question goes to Ambassador Yun and Special
Envoy--really, all three of you. We understand that
negotiations for the Marshall Islands have yet to conclude.
This is concerning because Congress faces a dawning deadline to
complete our work in the Compacts before the end of this Fiscal
Year. What is the plan for the Compact negotiations with
Republic of the Marshall Islands to get this finished?
And we will start with Dr. Mohandas and we will go right up
the chain.
Dr. Mohandas. Thank you, sir.
So we are not directly involved in the negotiations, so I
will defer to Ambassador Yun on that. But what I will say is,
from the Department's perspective, we are strongly in favor of
a quick resolution of the issue.
The Chairman. Ms. Cantor.
Ms. Cantor. Sir, we are hopeful that we will resume
negotiations with the RMI, but if the amendments to the Compact
with FSM are not ratified by September 30, and there is no
other extension of the funding, FSM will need to rely on their
Compact Trust Fund for financial assistance. This will be the
same thing with RMI and then with Palau. Their economic
assistance does not expire until 2024, so they will continue to
receive economic assistance.
The Chairman. I think the question was directed to you, Mr.
Yun, because you have been the Special Envoy for Compact
Negotiations. Tell me what's going on and what's the hiccup
here?
Ambassador Yun. So I need to be completely frank with you.
We have offered them $2.3 billion over the next 20 years, and
that memorandum was signed some months ago. And so, it does
puzzle me as well why it has become not acceptable. Of course,
the reason they state is because the nuclear issues have not
been resolved. The nuclear issues have not been resolved yet.
I would like to point out two aspects of nuclear issues.
One is, as you rightly mentioned, sir, our legal responsibility
for nuclear liability has been met and they have agreed to
that.
The Chairman. That was settled--was that not settled in the
1980s?
Ambassador Yun. It was settled in 1980.
The Chairman. But we have always still met the needs of the
citizens.
Ambassador Yun. Exactly. We have always felt that there
were additional needs.
The Chairman. We still feel that way, right?
Ambassador Yun. We still feel that way, which is why,
within the $2.3 billion that we offered them, $700 million was
set aside----
The Chairman. Trust.
Ambassador Yun. To put into the trust fund. And that $700
million could be used for development, education, environment
issues of nuclear atolls, as well as other atolls. So from the
beginning, the RMI government has insisted that they would like
to have a bigger role in setting up their priorities, which is
why we put that aside for them to decide how they want to
apportion that with, obviously, some oversight from the United
States.
The Chairman. Thank you so much. And I think when we get to
our second panel, we will get a little bit more into these
concerns.
With that, I will turn to my friend, Senator Barrasso.
Senator Barrasso. Well, thanks, Mr. Chairman.
Ambassador Yun, will you commit to keeping members of this
Committee informed on negotiations as they unfold on this
critical matter?
Ambassador Yun. Absolutely, sir.
Senator Barrasso. Thank you.
Dr. Mohandas, as mentioned during my opening statement, the
Compacts of Free Association provide us with strategic denial
rights. This means the United States has the exclusive
authority to make national security decisions on the lands and
waters surrounding the Freely Associated States. The space
outlined on this map in orange is the Exclusive Economic Zone
of the Freely Associated States, up here, and you are familiar
with that. For everyone else to see, it's nearly as large as
the continental United States, the areas are.
[The map referred to follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Senator Barrasso. So can you detail the importance of
strategic denial rights to our national security and to the
stability of the Indo-Pacific region?
Dr. Mohandas. Sir, thank you for the question, and I think
you have stated it well. The combined maritime expanse covered
by the Freely Associated States is, as you note, the equivalent
to the size of the continental United States in a key strategic
terrain in the Indo-Pacific. What we get from Title III of the
Compact are two fundamental things. One is unfettered access
for access basing and overflight, which allows freedom of
operation in this area. And the second is exclusive access. We
have the ability to deny foreign militaries access and the
ability to operate in the Exclusive Economic Zone of the Freely
Associated States. And this is critically important at a time
when, as I noted, China is becoming increasingly active and
aggressive throughout the Indo-Pacific.
So these rights are a critical strategic advantage for the
United States. They are critical to our strategy in the Indo-
Pacific, and that is why we strongly endorse passage of the
economic assistance package because we see that as reinforcing
our security guarantees.
Senator Barrasso. And Ambassador Yun, China is aggressively
engaging in the Indo-Pacific region, working to rapidly
increase their power, their influence. It should concern all of
us that in April 2022, the Solomon Islands signed a security
pact with China. China continues to threaten the Freely
Associated States and other U.S. territories. Could you explain
how renewing the Compacts of Free Association will help to
counteract China's aggression in the region?
Ambassador Yun. There is no question in my mind that both
the economic provisions and security provisions will ensure
that these Compact states will not be in any way aligned with
China. So I mean, I also want to point out that these are
countries that we have had historic relations with. They share
same culture and many of them have English as their spoken
language and many Compact states folks live in the United
States. Where I come from, in Oregon, we are home to many
Marshallese and Micronesians there.
And so, given these factors, it is not, I would say, just
about China, but also about open society and also about
historic ties. These are special relations. I am used to
working with countries like Japan and Korea, where we have
alliance relations, but Compact relations are a step beyond
that because we are also in charge of their defense and
security. So these are vital relations, and I believe the
economic elements will ensure that, for the foreseeable future,
we will continue this type of strategic, as well as historic
relations with the three critical states. Thank you.
Senator Barrasso. Thank you.
Secretary Cantor, please explain what your Department is
going to do if an agreement is not reached with the Marshall
Islands before the current Compact expires.
Ms. Cantor. Senator, I mentioned a few minutes ago that if
the amendments to the Compact, for example, with the FSM are
not ratified, the FSM will need to rely on their Compact Trust
Fund for financial assistance as it was envisioned back in
2003. Similarly, the U.S. and the RMI have not come to an
agreement on renewing certain economic provisions, and
without--funding extending the economic assistance, the RMI
will have to rely on distributions from the trust fund as well.
Senator Barrasso. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator.
Senator Heinrich.
Senator Heinrich. Thank you, Chairman.
Palau, Micronesia, the Marshall Islands--these are our
friends. They are our allies. And while our relationship with
the Freely Associated States has always been important, I would
argue it has never been more important than it is today. I want
to thank the leadership of the Republic of Palau and the
Federated States of Micronesia for their efforts to complete
this Compact, and I would urge both the Republic of the
Marshall Islands and our Administration to quickly complete
negotiations with respect to the Compact as well.
It is important to realize we have a very complex
relationship with our friends in the Pacific. My father was
present in the Marshall Islands when our nation exploded
nuclear devices on both Bikini and Enewetak Atolls. Chairman,
in my view, that history creates a special responsibility with
respect to the Republic of the Marshall Islands and seems to be
at the core of why we do not have complete agreement with
respect to RMI just yet. But all of our island friends in the
Pacific are critical, and time is short and the need to resolve
the terms of the Compact has never been greater.
I want to thank the Chairman for holding this hearing, and
I would just urge all of us--in the Administration, in the
Freely Associated States, and those of us in the Senate--to
work in good faith to move forward with renewal of this Compact
expeditiously.
Ambassador Yun, I want to ask you a question--a very open-
ended question--the Chinese government is continuously
attempting to exert influence in the region, as demonstrated by
their recent agreements with the Solomon Islands and with
Kiribati. What sort of void is the United States leaving if we
do not successfully finalize these agreements and continue
robust diplomatic efforts in the Pacific?
Ambassador Yun. We have already seen that quite a bit, even
among the Compact states, and in fact, about three months ago,
President Panuelo of FSM wrote an eleven-page letter
essentially telling his population what this is all about,
which is corrupting politicians there, which is bringing in
Chinese labor to do their own construction there, as well as,
of course, illegal fishing and so on. And so, I would really
urge everyone to read President Panuelo's piece there. And to
me, it brought home--not just on Compact states, but throughout
Pacific--the challenge that is China.
Senator Heinrich. Yes, Ambassador, I could not agree more.
And I want to follow up with Dr. Mohandas on that issue that
you raised of illegal fishing. The Administration and Congress
need to be actively engaged with all of the Freely Associated
States and across the Pacific. And lack of engagement on our
parts cedes space and influence to the Chinese government at a
time when we simply cannot afford to do so. One of the things I
am most concerned about is illegal, unreported, and unregulated
fishing in the Pacific. It is something that, when I was in the
Marshall Islands, was raised repeatedly to me. Sharing defense
and intelligence community, intelligence surveillance or
reconnaissance capabilities, and information with the Freely
Associated States is imperative in their ability to defend
their economy, their sovereignty, and the livelihood of their
people. Does Department of Defense actively share ISR
information about illegal fishing near and around the Freely
Associated States with the governments of Micronesia, Palau,
and the Marshall Islands, and how are we ensuring that the
Freely Associated States and the U.S. are sharing intelligence
and information in an effort to protect their economy? Doctor.
Dr. Mohandas. Senator, thank you for the question, and I
absolutely agree with you. IUU fishing is an incredibly serious
issue in the region. What we see is that China is essentially
sending out vast armadas of fishing fleets with associated
maritime militia to engage in illegal and unreported fishing on
an industrial scale. This depletes fish stocks. This is
damaging to the environment and this harms the livelihoods of
communities that are dependent on fishing. So we agree on the
seriousness of the issue.
I can report that the Department of Defense is very focused
on enhancing the maritime domain awareness of our Pacific
partners, and in particular, the COFA states. The President,
last year, announced the Indo-Pacific Maritime Domain Awareness
Initiative, which seeks to collect commercially available
satellite data, aggregate it, and provide it to our Pacific
partners through a common platform. Critically, a feature of
the platform is that it also will illuminate so called dark
shipping.
Senator Heinrich. Right.
Dr. Mohandas. So ships that have turned off their
transponders are still picked up by this commercially available
satellite data. We are working with our partners in the Quad--
Australia, Japan, and India--to make this available, both in
Southeast Asia and the Pacific Islands, and we plan to work
this through the Forum Fisheries Agency.
Senator Heinrich. Chairman, I think this is incredibly
important. I would love to get a brief on the status of this
effort. I don't think you can understand just how destabilizing
it is to lose an entire tuna fishery to illegal fishing. I
suspect our Senator from Alaska has more context for this. But
it's one of those issues that doesn't always hit the radar
screen in the continental United States, but it is incredibly
important for all of our allies in the Pacific, and I think we
need to do everything we can to support them.
The Chairman. Thank you, Senator.
Senator Murkowski.
Senator Murkowski. Thank you, Mr. Chairman, and thank you
to the witnesses today, and thank you for this hearing. It is
vitally important. I perhaps come at this with a little bit of
a unique perspective. I may be the only member who was actually
born in a territory. I am looking at my colleague from Hawaii
there, but yes, I was born in one of the territories. So I
relate here.
But I am also one of the few on this Committee, though, who
was here when we finalized the 2010 Compact with Palau, and as
was pointed out, that was a deal that was a long time in the
making. We had good conversations yesterday about this, but,
you know, my recall, my experience with that last round, I am
looking at this and I don't want to be in a situation where
it's deja vu all over again, because as you have pointed out,
Ambassador Yun, what happened in that intervening time period
was unfortunate. It was inexcusable on many levels, this back
and forth. It was literally a situation of our federal family
pointing fingers at one another in terms of whose
responsibility it was to come up with the funding, but that
uncertainty, I think, did considerable damage to the reputation
of the United States. It sent a signal, not only to Palau, that
we might be pretty good at signing things, but our follow-
through was not very good, and it was not just Palau that was
paying attention to that. It was others in the region. It was
China.
And so I am very cautious as we are sitting here today. We
know that the national security outlook in the Pacific has
changed considerably since 2010. You know, China is not sitting
back. They're not sitting on their hands here, and Ambassador
Yun, you encouraged us to read this lengthy letter from
President Panuelo. And it's really quite telling. I have read
it. And it should disturb us all, the actions that they are
taking. I was going to ask you a question very similar to what
my colleague from New Mexico has asked in terms of what message
does inaction on this agreement send to the world. And I think
you have articulated that relatively well.
I think, Dr. Mohandas, you have also shared with us how the
national security outlook in the region has changed in these
past 20 years and how this advances the urgency, if you will,
and the importance of finalizing these agreements in an
efficient manner.
I want to direct this question to you, Ambassador Yun. The
issue with the Marshall Islands and the challenges now in
getting them on board as a signatory, even though they have
signed the MOU. It has been identified that insufficient
compensation, effectively, is what is holding things back. Can
you speak first to how important it is that we avoid the
situation from the last round, when agreements were delayed so
considerably, and then, would you please very generally
summarize the top-line funding amounts and weigh in as to
whether or not you think that this is enough. Perhaps one way
to do that is to compare the Compact 2003 level of funding for
Marshall Islands and Micronesia and the 2010 Compact with
Palau.
Ambassador Yun. Thank you, Senator Murkowski.
I think you can understand that with my Marshallese
counterparts here, I am a little bit reluctant to----
Senator Murkowski. I understand.
Ambassador Yun [continuing]. Get into it too deeply into
the weeds because they are new to negotiations. As you know,
they have said they have changed the Chief Negotiator, who used
to be Kitlang Kabua, and now Foreign Minister Jack Ading and
Chief Negotiator Phillip Muller are with us today. But we talk
frankly with each other, as well as the Speaker Kedi, who is
here.
I mean, to be, again, you know, you can ask them the same
question. I do believe the amount we have offered them is, you
know, we talked about it for months and came to a very
satisfactory agreement. In fact, RMI was the first country to
agree with our top-line offers. And then came Palau next and
then came Micronesia last. So when they agreed, the first to
agree, I never thought we would not reach an agreement until
now, you know? So I believe there are involved domestic issues
there. There is an election coming up in November, and for a
while, you know, there were rumors that there would be a vote
of no confidence for the President that would be coming up next
week.
So I mean, you know, again, despite being uncomfortable
speaking in front of my Marshallese friends, I offer that as
maybe partial reasons--you know, domestic politics, of course,
triumphs everywhere over anything else. And so I told my
Marshallese colleagues, listen, there is no more money, you
know, $2.3 billion is more than double what we have given them
over the last 20 years. And so, one reason this Compact package
is large is because of our concerns that even though our legal
responsibility for nuclear testing has been met, we still owe
them, politically, as well as for continued radiation and
suffering and health effects they are suffering. So we are
making allowances for that while upholding our legal
responsibility. That is a fine line to make sure I don't get
into trouble, legally, with our own legal side. At the same
time, do something that is dignified, as President Kabua
initially said that we should do. And that test is something we
met and they were the first one to sign the MOU.
And so, am I disappointed? Of course I am disappointed. But
at the end of the day, when it's all settled, I firmly believe
they will see that this is an offer that they can meet, that
should be acceptable. So there we are.
The Chairman. Thank you, sir. Thank you.
Senator Murkowski. Thank you.
The Chairman. And now, we have Senator King.
Senator King. Thank you, Mr. Chairman.
Late last year, I had the occasion to visit New Zealand and
Australia with members of the Intelligence Committee, and we
met with our Intelligence Community people and also our
National Security people. The major takeaway from those
meetings was the strategic importance of these islands, and
Pacifica, generally. And to say that circumstances have changed
since 2010 is an understatement. Circumstances today are
radically different, and China is not watching, they are
acting. And they are being very active in terms of everything
from corruption of public officials to--I call it debt
diplomacy--and what we are talking about here could not be more
strategically important. I did a quick calculation. The annual
cost of this deal is about four one-hundredths of one percent
of our annual defense budget. Considering the strategic
importance of these islands, and I am not trying to spoil your
negotiating power, Mr. Ambassador, but given the strategic
importance of these islands, that is a very reasonable price
for the American taxpayers to bear. So this is a very important
item.
Now, here is the problem. We have about 20 legislative days
between now and September 30 and so we have got to move on
this, and I hope that the representatives of the Marshall
Islands realize that, as we talk about here, this is a train
that is leaving the station and it's one that we have to get
resolved. And when we say quick, I wrote in my notes--define
quick. We are talking days or weeks, not months, in order to
resolve this issue with the Marshall Islands.
So Dr. Mohandas, am I right about the strategic importance?
I mean, we have all touched upon it, but I don't think that can
be emphasized enough.
Dr. Mohandas. Senator, you are absolutely right. This is a
key strategic terrain. The access that we have is actually
equivalent only to the access that we have in the U.S.
homeland, but here it is forward in the priority theater for
our national defense strategy. You know----
Senator King. If we did not have this access, getting it
would be one of our highest strategic priorities, would it not?
Dr. Mohandas. Yes, sir.
Senator King. Ambassador Yun, one of the proposals has been
for the re-creation of an office dealing with the Freely
Associated States in the Department of State. Does the
Department have a position on that? It seems to me that is
something that might be important in resolving the overall
issue and elevating these islands to their proper importance.
Ambassador Yun. I would be personally very supportive of
any move to create a structure to deal better with the problems
and with issues and challenges that come from Compact states.
Senator King. One of my life mottoes is ``structure is
policy.'' And if there isn't an office to deal with this
policy, it won't appropriately attended to.
On the Marshall issue, I think Mr. Ading testified that the
MOU signing was unauthorized or was somehow improper. Is that
your understanding, or where does--I am going to ask him that
same question.
Ambassador Yun. That was certainly not my understanding at
the time of signing.
Senator King. Okay.
Ambassador Yun. Nor is it my understanding now.
Senator King. Thank you.
Well, again, I think this is an incredibly important matter
to be resolved, and 20 legislative days is not a lot. I may be
overestimating--between now and September 30--and there are a
lot of other things on the agenda, including a biannual budget.
So I think that this is really a critically important area to
move on as quickly as possible.
I see the Chairman had to go to an Appropriations meeting.
On behalf of the Chairman, Senator Hirono.
Senator Hirono [presiding]. Thank you.
I will take the gavel until the Chairman comes back.
Senator Kelly.
Senator Kelly. Thank you, Madam Chair.
Ambassador Yun, very nice talking to you at the beginning
of the hearing. We talked about veterans a little bit, and I
understand, you know, that the citizens of the Freely
Associated States serve in our military at some of the highest
rates per capita of any community and often do not have access,
as we discussed, access to veterans benefits that for others
who have served are easily obtained.
So how does this proposed legislation on the Compacts, can
you talk about how it improves access to benefits earned for
those who have served in the U.S. military?
Ambassador Yun. So the legislation as we have proposed will
give authority to the Secretary of Veterans Affairs to offer a
wide variety of benefits to veterans living in Compact states.
At the moment, they would have to travel to either Guam or
Hawaii to get those services, and these expenses are quite
daunting, as you can imagine. So we can, you know, for example,
pharmaceutical services can start as well as telehealth can
start. And so, once this legislation is in place, it gives
authority and leeway to the Secretary to offer these services.
Senator Kelly. Well, telehealth and pharmacy benefits are
incredibly important, but without access to a clinic and
doctors, you know, it is still rather limited, the kind of
health care that can be delivered to folks who have served our
country. So in the legislation, is there a proposal to fund
physical infrastructure, like a clinic somewhere within the
Freely Associated States?
Ambassador Yun. There is no specific funding for those, but
again, the Secretary of Veterans Affairs can offer those as
well, and we talked to VA, and we have also talked to VA
doctors and nurses, making trips there. So let's see how VA
carries on with this. And so, I would hope that as legislation
is approved, we will have more structure in place.
Senator Kelly. Well, thank you, Ambassador.
And Madam Chair, I yield back the remainder of my time.
Senator Hirono. Thank you.
I will take five minutes to ask my questions.
Before I begin, though, I would like unanimous consent, in
the interest of this Committee, collecting the viewpoints of a
variety of stakeholders in these agreements, I ask unanimous
consent to submit the testimony of the COFA Alliance National
Network into the record.
Hearing no objections, so ordered.
[COFA Alliance National Network testimony follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Senator Hirono. There is absolutely no question how
strategically important the Compacts are, and Ambassador Yun,
you have been working assiduously on these agreements for I
would say close to two years, and certainly, my office has been
very much in contact with you on an ongoing basis because there
are some very important provisions in this iteration of our
Compacts. And while the defense aspects of the Compacts
continue, the economic support that we provide under the
Compacts is an integral part of these Compacts. And that is
what this Committee, and well, what Congress is confronted with
with these agreements.
So it does come as news to me that the Marshall Islands
have a concern. They have apparently a change in leadership,
and so that has led to some question as to whether or not their
signature on the MOUs are what we can go by. I am not sure, but
I do share the sense of urgency, as expressed by other members
of this Committee, particularly the person to the right at the
moment. So we don't have a lot of time.
Secretary Cantor, you noted that if the Marshall Islands do
not agree to these Compacts--and we cannot force any
independent nation to sign these agreements--you say that they
will need to, for the economic part, to resort to the trust
fund. How much is left in the trust fund for the Marshall
Islands?
Ms. Cantor. I do not have the exact figure, but I will get
it for you.
Senator Hirono. Does anybody--do the other two testifiers?
Ambassador Yun. It is about $600 million.
Senator Hirono. $600 million over the--and that trust fund
is supposed to last for 50 years? I don't know how long we are
into the trust fund at this point.
Ambassador Yun. The trust funds are designed to last in
perpetuity. And so, it would be very damaging to go into corpus
at this point, and we would like to build the trust fund more.
And I am sure my counterparts at RMI would agree that they
would want to build it more.
Senator Hirono. And so there is about $600 million for the
Marshall Islands in the trust fund. Meanwhile, there is $2.3
billion for the Marshall Islands under these Compact
agreements.
Ambassador Yun. Yes, over the next 20 years. Yes.
Senator Hirono. And it is up to the Marshallese to decide
how they want to allocate some of this economic assistance.
Ambassador Yun. Some of that $2.3 billion, yes.
Senator Hirono. You and I have discussed the idea that we
can't wait 20 years before we focus on the portions of the
Compacts, and there should be an ongoing engagement with the
Marshallese. And as President Whipps has said, he has requested
that we reestablish an Office of Freely Associated States
Affairs at the level of the State Department's Office of
Australia, New Zealand, and Pacific Islands. And so, do you
agree--well, I will ask the entire panel--do you think that is
a good idea so that we can have an ongoing engagement with our
friends in our Compact nations?
Ambassador Yun. I am not sure my colleagues at the State
Department would agree, but I certainly would agree.
Senator Hirono. Well, we don't have the State Department
sitting here, so Interior--Secretary Cantor?
Ms. Cantor. Yes, I agree with that.
Senator Hirono. Dr. Mohandas.
Dr. Mohandas. Obviously, I defer to the State Department on
how it organizes itself, but we are supportive of anything that
will enhance relations with the Compact states.
Senator Hirono. I certainly agree that this is something we
should do because I recognize that we cannot wait 20 years for
us to pay attention to the needs of our Compact friends, and by
the way, this particular Compact has two really important
provisions, and that is the restoration of key public benefits,
and clearly, the veterans benefits that have been discussed.
Those are two--I would say key--provisions under these Compacts
that have been pretty much a long time coming, and we are going
to need to deal with that.
So time is short. I would urge our friends from the
Marshall Islands to be aware of the time frame. And I hope that
we can resolve some of these issues. And by the way, Ambassador
Yun, are you going to continue to negotiate provisions of the
Compact?
Ambassador Yun. I certainly would like to see through these
three Compacts, ma'am.
Senator Hirono. So is that a yes? Are you going to reopen
negotiations with the Marshallese?
Ambassador Yun. Of course, I am open to negotiating with
the Marshallese. I have never been closed. And so, we are
waiting for them to really come back to us with what more needs
to be done. In particular, the fiscal procedures agreement and
trust fund agreement, we need to work out with them.
Senator Hirono. Before I turn to Senator Cortez Masto, I
would like to thank you, Ambassador Yun, in particular, for
your openness in including provisions that had not been
addressed before. And to the other panelists, thank you very
much.
Senator Cortez Masto.
Senator Cortez Masto. Thank you, Senator Hirono.
Thank you. Let me just echo the comments of my colleagues
when I say that the Freely Associated States are vital allies,
right, of the United States, as well as strategic partners. I
thank you for being here on the panel. I look forward to the
conversation with the next set of panelists as well. We know
that for nearly 100 years, our countries have worked together
to build a freer, more prosperous world. Now, at this critical
juncture in history, it is imperative, for all the reasons that
we have just talked about and you have heard today, that we
continue our partnership with as much vigor as possible. So I
am hopeful that the follow-through on all these negotiations
with our friends and allies comes through here, because it is
so important, for the reasons we have talked about.
I have just one follow-up and then I am going to let this
panel go. And this is for Ambassador Cantor. I know in the
past, the Bikini fund, there have been concerns about possibly
the depletion of those funds and lack of oversight by, I think,
the Department of the Interior at times. Obviously, there is an
important reason why we want to make sure the funds get to
where they need to go. So can I ask, for the Department of the
Interior, what actions have you taken to really provide that
essential oversight for these funds in light of what we have
seen in the past with the depletion of these funds?
Ms. Cantor. Senator, thank you so much for that question.
We are very aware of the recent reporting on the KBE management
of the trust fund since the 2017 rescript. We have taken this
very seriously and we are committed to work to address the
concerns of the members of the KBE community. We recently
received an accounting of the current balance. It was almost
$59 million back in 2018, and now it is down to almost
$100,000. We are--during the negotiations, we have been working
very closely with the other countries, especially trying to
strike a balance between, you know, their self-determination
and autonomy of their governments, and at the same time, we are
trying to make sure that there is, you know, that
accountability, the oversight, the transparency is there. We
need to make sure that every dollar that is being spent on
these Compacts is accounted for.
I am proud of what we have done. We continue to work with
others within the Department of the Interior. We have reached
out to the Office of the Inspector General. We are in the
management of the trust fund. We might be talking to other
members of the Interagency as well, but again, we are taking
this very seriously.
Senator Cortez Masto. Thank you. I don't have any further
questions, but I appreciate all of the work that you are doing.
I look forward, again, to the conversation in the next panel as
well.
Thank you.
Senator Hirono. I would like to excuse the first panel.
Thank you very much. And for the second panel to come back and
we can start the questioning with Senator Cortez Masto.
Senator Cortez Masto, you can proceed.
Senator Cortez Masto. Sure. I was not sure if we were
giving them opening statements.
Senator Hirono. They already did.
Senator Cortez Masto. Oh, they already did. I am so sorry.
So, and I apologize, I missed the opening statements, but
let me ask the Honorable Jack Ading, I have heard the
conversations about the agreement and the concerns of the
Compact. Can you address some of the conversation that some of
the Senators have brought forward with respect to the
signatures and signing of the Compact and the concerns that you
have?
Mr. Ading. Thank you, Senator.
Before I answer your question, may I briefly say that I am
saddened and disappointed at the statement regarding our
internal affairs--political internal affairs--what came up
about the vote of no confidence. If there was a vote of no
confidence motion, our Speaker here would not be with us today.
So I can assure you there is no such vote of no confidence
pending in our Parliament.
Senator, if you are talking about the MOU, I can say that
the MOU was not authorized. It was an incomplete MOU. Not all
of the issues that we wanted to be in the MOU were in the MOU,
even though we discussed it before the former Chief Negotiator
flew over to LA and signed the MOU with Ambassador Yun. We
discussed the other issues that needed to be included in the
MOU and they were not included. So that is why the MOU was not
authorized. Thank you.
Senator Cortez Masto. I appreciate that. So based on moving
forward, do you think there is an opportunity then, from what
you have heard, for negotiations and to move forward to
finalize the MOU?
Mr. Ading. Again, like I said, there were issues that
needed to be included and we are happy to continue the
negotiation with Ambassador Yun and his delegation on other
matters that we think should have been included, but they are
not. And that is why we haven't really endorsed anything yet.
Senator Cortez Masto. Okay. Let me jump to a separate
subject then. The conversation around infrastructure in the
region, infrastructure building and Chinese workers that are
coming in. I would like to hear specifically. I have heard
anecdotally. I am curious from all three of you, what you are
seeing in the region with respect to China, build-out, and
Chinese workers coming in. And I am assuming that is happening
because one, there is a challenge to get workers in the first
place for construction that needs to be done, and I would just
love to hear that conversation and what you are seeing. So I
don't know, Foreign Minister, since you have already started,
if you don't mind talking about this issue, if there is
something that you are aware of?
Mr. Ading. Thank you, Senator.
We do have Chinese business people in our country, but we
don't have any Chinese infrastructure being built at the
moment.
Senator Cortez Masto. Do you have infrastructure that is
being built and are you challenged with workers?
Mr. Ading. Yes, we do. Well, in previous years, because of
COVID-19, we were very challenged with labor. We are always
bringing in foreign laborers from the Philippines and other
countries, but we stopped bringing those over because of COVID-
19. Currently, we don't have an issue with the labor force.
Senator Cortez Masto. Thank you.
President Whipps.
Mr. Whipps. As I mentioned in our opening statement, we
have diplomatic relations with Taiwan. So therefore, we don't
have relations with the PRC. However, in the private sector,
they are investing, and that is where we see this type of
activity. Unfortunately, a lot of the investments that they
have done are low quality, if I would put it, and not
necessarily in the best interest of what we would like to see,
but they have also managed to secure a lot of property that
would be prime real estate for development. That is kind of the
activity that they have done on our island, and then not do
anything with it or build junk. So it is a different approach.
Senator Cortez Masto. Yes.
Mr. Whipps. Because of our relationship.
Senator Cortez Masto. I appreciate that. Thank you.
Mr. Whipps. Yes.
Senator Cortez Masto. And Mr. Falcam, do you have anything
else to add?
Mr. Falcam. Thank you, ma'am.
On the issue of the PRC, the FSM, as everybody here knows,
does have diplomatic relations with the PRC. That diplomatic
relationship has its foundations in some economic assistance
that we do have from the People's Republic of China. We do have
infrastructure projects in terms of vertical buildings,
government buildings, recreational facilities that the PRC does
bring in PRC laborers for. Now, we are very attuned and
diligent in ensuring that any PRC laborers that come in for
these projects are there for that specific purpose and that
they ensure clearance through U.S. immigration ports of entry
prior to getting into the FSM.
Our experience with the kinds of infrastructure that the
PRC provides us has been mixed. Some have been, as President
Whipps has made mention of, some have been of a little bit of a
mediocre quality. Others have been up to standards. But we do
have a relationship with them and we do have infrastructure
projects that they do for us.
Senator Cortez Masto. Thank you.
Thank you, all three of you, for being here. I appreciate
your comments.
Senator Hirono. I recognize myself for five minutes.
President Whipps, thank you very much for your suggestion
that we reestablish the Office of Freely Associated States. I
take it that that is a way for us to remain in contact or
discussions with all of you on an ongoing basis as opposed to
waiting 20 years to address some of the issues. So State
Department was not here, but I think that, based on the
discussion, I would say that that is a suggestion that I would
like to see happen.
With regard to Palau being supported by FEMA, it is my
understanding that the Marshall Islands and Micronesia both
receive FEMA support. For some reason, Palau does not. Is that
correct? That is why you wanted FEMA assistance going forward?
Mr. Whipps. So for Palau.
Senator Hirono. President Whipps, yes, for Palau, sorry.
Mr. Whipps. For Palau, FEMA assistance under the Compact
was taken out, but for FSM and RMI, it was continued, and then
my understanding is, later taken out and changed. So that is
why we feel that. And I think the argument at the time was we
don't get typhoons.
Senator Hirono. I'm sorry. That seems----
Mr. Whipps. But now, that isn't the case, so.
Senator Hirono. So you would like to be in the same
position with regard to FEMA support as the Marshallese and
Micronesia?
President Whipps.
Mr. Whipps. Yes, and maybe they can help share what FEMA
assistance they are getting now. My understanding is that has
also changed. It's not the same as it was before 2003, if that
is--if they can share.
Senator Hirono. Thank you very much. We will figure that
part out. I think that FEMA assistance to Palau would be
important.
So Minister Ading, a lot of discussion about the Marshall
Islands' position with regard to these agreements, and time is
short. And if--we certainly cannot force your island nation to
sign the MOU, and if the MOU is not signed, we cannot go
forward with the Compacts with regard to the Marshall Islands.
Correct?
Mr. Ading. Madam Chair, that is correct. As you know, the
MOU is a non-binding agreement, and to us it is not a dignified
agreement. And so, that is why we ask that the Committee or the
Congress direct the Administration to continue the discussion
on the Compact issues.
Senator Hirono. The concern is, as articulated here, is
that if there are no changes with regard to the Marshall
Islands in terms of economic support, that the Marshall Islands
will look to the trust funds, some $600 million left, which
gets you into the corpus of the trust fund. Is that what would
happen if we do not--if the Marshallese do not conclude this
agreement?
Mr. Ading. Madam Chair, I understand the trust fund was
established for the purpose of continued funding for the
operation of the RMI government should there be no Compact. And
Madam, we are ready to have--we are prepared to go that route.
We are prepared to use the Compact trust fund to continue the
operation of our nation.
Senator Hirono. That does get you into the corpus of the
trust fund, however. So our hope is that there will be a
successful resolution so that we can conclude the Compacts with
all three island nations--it is very important for all us, it
is a mutually beneficial Compact.
For Mr. Falcam, are there areas not addressed in the
Compacts and auxiliary agreements that are a priority for
Micronesia?
Mr. Falcam. Ma'am, are you referring to--did you say areas
that are not addressed?
Senator Hirono. That are not covered. Are there additional
areas that you would want us to pay attention to?
Mr. Falcam. Well, thank you very much, Senator. As you
know, we are at about the 98-99 percent solution for finalizing
our federal programs and services agreement. There are two
services in particular. Those have not been finalized yet, we
are in the final stages of trying to secure the right language
and the right terms for USPS and for disaster assistance. We
don't anticipate that that is going to be too much of a
challenge and we anticipate that we will be able to come to a
mutual agreement--sometime within the next month is what we are
hoping, or sooner.
Senator Hirono. Thank you.
I thank the panelists and I turn to Senator King.
Senator King. Thank you, Madam Chair.
Mr. Ading, I am somewhat confused. I guess you have cast
doubt upon the signing of the Memorandum of Understanding.
However, are the Marshall Islands accepting of the top-line
number that is specified in that Memorandum of Understanding?
Mr. Ading. Thank you, Senator.
We appreciate what was addressed in that MOU, but we feel
like there are other issues that needed to be included, and
especially additional funding for the nuclear-affected
populations.
Senator King. So I take it that is a no.
Mr. Ading. That is a no.
Senator King. You are not committed to the top-line number
that was agreed to in the Memorandum of Understanding. Is
that--that is correct?
Mr. Ading. That is correct.
Senator King. Thank you.
Well, I hope that this issue can be resolved because, as I
say, when a train moves through this place, you never know when
the next one is going to come, and we are going to be doing
everything we possibly can to move these agreements before
September 30, which is going to be a minor miracle in itself.
So I hope that your people can come to an agreement that is
fair and takes into account the issues that you have raised
today.
Thank you all for joining us here today and for the
seriousness with which you have come to the table to treat on
this issue. Thank you very much.
Thank you, Madam Chair.
Senator Hirono. I want to thank all of the witnesses, and
of course our hope and expectation is that these Compact
negotiations will successfully conclude for the benefit of our
island nation friends and for the United States.
Members will have until close of business tomorrow to
submit additional questions for the record.
This Committee stands adjourned.
[Whereupon, at 11:48 a.m., the Committee was adjourned.]
APPENDIX MATERIAL SUBMITTED
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