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Palau held a constitutional convention in 2005 to review proposed amendments, a number of which were approved, subject to a vote at the next general election. The House of Delegates approved the creation of a special commission to prepare for negotiations with the United States for a new economic assistance package.
The United States administered Palau, which consists of 8 main islands and more than 250 smaller islands, as a UN Trusteeship Territory from 1947 until 1981, when it became a self-governing territory. Full independence was achieved in 1994 under the Compact of Free Association with the United States. Under the terms of the compact, the United States provides Palau with $442 million in economic aid between 1994 and 2009. In return for the maintenance of military bases in the island state until 2044, the United States provides Palau with defense protection. In anticipation of the termination of economic assistance in 2009, the government will form a commission to consider Palau's future, and economic, social, and environmental assessments will also be conducted.
Vice President Tommy Esang Remengesau was elected president in a narrow victory over Senator Peter Sugiyama in November 2000. In the November 2004 presidential poll, Esang was re-elected, winning two-thirds of the total number of votes cast.
In a referendum held concurrently with the November general election, voters endorsed the initiation of a constitutional convention in 2005 to consider amendments to the constitution. Matters for consideration include allowing dual citizenship, limiting terms in congress to three, making legislative posts part-time positions, merging the bicameral legislature into one, and allowing presidential and vice presidential candidates to run for election as a team. The constitution currently states that only citizens can vote and own land in Palau. An amendment would allow Palauans living in the United States (about 25 percent of all Palauan citizens) and elsewhere to acquire citizenship in their resident countries without losing their right to vote and own land in Palau. Other measures aim to reduce factional fighting and the cost of running a legislature for the country's small population. Seventeen delegates representing the various states had 60 days to review and approve the 251 proposed amendments. The review was completed in mid-July with the approval of 25 proposed amendments. Citizens will put the approved amendments to a vote in the next general election, which is scheduled for November 2008.
In recent years, the country has been plagued by reports of human and drug trafficking, prostitution, and money laundering by criminal groups. The government has said that more resources are essential to make the necessary improvements in law enforcement and the judiciary; among recent changes is a new border management system. In January 2005, two Chinese nationals, who were arrested for alleged illegal entry, reportedly traveled with Taiwanese passports and fake U.S. visas.
Citizens of Palau can change their government democratically. A bicameral legislature, the Olbiil Era Kelulau, consists of the 9-member Senate and the 16-member House of Delegates. Legislators are elected to four-year terms by popular vote. The president and vice president are also elected to four-year terms by popular vote. There is no limit on the number of terms, except that the president may serve only two terms consecutively. President Tommy E. Remengesau Jr. was elected to his first term in November 2000, and Senator Sandra S. Pierantozzi became the first female vice president. Remengesau won a second four-year term and Camsek Chin was elected Vice President in November 2004. Politically, the island republic is organized into 16 states, each of which is headed by a governor.
There are no political parties, but there are no laws against their formation. Political alliances, quickly formed and dismantled, dictate politics and in recent years have had a serious destabilizing effect on governance.
Official corruption and abuses are serious problems. Public dissatisfaction with government corruption pressured the government to charge two lawmakers with fraud in February 2004. Palau was not surveyed in Transparency International's 2005 Corruption Perceptions Index.
Freedom of speech and the press is respected. There are three main regular publications: Tia Belau, an English weekly; Palau Horizon, another English weekly; and Roureur Belau, a Palauan weekly. There are five privately owned radio stations and one television station. Most households receive cable television, which rebroadcasts U.S. and other satellite television programs. There are two FM radio stations and one government-run station. The internet, though not in widespread use, is accessible without government intervention. Diffusion is limited by cost and access outside the main islands. The launch of www.palauradio.comin October this year provides an internet radio discussion forum to islanders in Palau and overseas.
Citizens of Palau enjoy freedom of religion. Although the government requires religious organizations to register with the Office of the Attorney General, no application has ever been denied. There were no reports of restrictions on academic freedom, and the government hopes to use the internet to improve access to education in the island republic.
Freedom of assembly and association are respected. Many nongovernmental groups focus on youth, health, and women's issues. No laws or policy bar formation of trade unions. The largely subsistence agricultural economy is heavily dependent on economic aid and rent from the United States under the compact, as well as remittances from citizens working overseas. The government and tourist industry are the main employers.
The judiciary is independent and trials are fair. A 300-member police and first response force maintain internal order. Palau has no armed forces; external defense is the responsibility of the United States under the compact. There are no reports of prisoner abuse or extreme hardship for prisoners.
Foreign workers account for about one-third of the population and 73 percent of the workforce. There have been reports of discrimination against and abuse of foreign workers, and the law bars foreign workers from changing employers in the country. In 2003, the government announced tighter supervision to prevent marriages of convenience between foreigners and Palauans. Foreigners are said to have used fake marriages to extend their stay in Palau and to enter the United States, which grants Palauan citizens visa-free entry and residence under the compact. There have been reports of human trafficking from China, the Philippines, and Taiwan. Some of the trafficked persons work in Palau, while others use it as a conduit to enter the United States.
High regard for women in this matrilineal society, in which land rights and descent are traced through women, has allowed many women to be active in both traditional and modern sectors of the economy, as well as in politics. A small number of domestic abuse cases, many linked to alcohol and drug abuse, have been reported. Civil society groups assert that the true number may be higher as a result of underreporting due to fear of reprisal and family pressure. The law prohibits rape, including spousal rape. Prostitution and sexual harassment are illegal.