by Brenna Schneider

As a small, isolated island, the country of Palau has a limited number of income options. Today the tourism industry is a vital source of income for this nation state, as it makes up about 56% of Palau’s gross domestic product (GDP) (Vianna et al, 2012). There are more than 40,000 divers who visit Palau each year who spend money on lodging, food, equipment, boats, souvenirs and guides, among other things. This money stimulates the economy by creating jobs, and consequently accounts for more than 39% of the nation’s GDP. Of the many divers who choose to visit Palau every year, many specifically visit to shark dive.

Divers choose to shark dive in Palau because the white tip and grey reef sharks who reside in Palauan waters are predictable- they are in relatively high numbers, and they spend 99% of their lives in one place, in their “home”(Vianna et al, 2012). The predictability of sharks in Palau makes divers confident that they will have a worthwhile experience, even before they get on the plane. Sharks are a massive component of the tourism industry in Palau, which is fortunate because they are a renewable resource- it is expected that they will stay in Palau attracting divers as long as they are safe and their environment is taken care of.

In 2010 the Australian Institute of Marine Sciences and The University of Western Australia published a research paper that stated the economic importance of sharks to the economy of Palau (Vianna et al, 2012). The study uses statistics based on surveys and the collection and compilation of data to prove that it is much more economically beneficial to keep the sharks alive then to allow them to be captured and killed. The study concludes that each reef shark can contribute almost two million dollars to the economy of Palau within their sixteen year expected lifespan (Sinha, 2011). On the other hand, if a fisherman kills a shark he might be able to get a one-time payment of a couple of hundreds of dollars for the shark’s fins (Sinha, 2011).

The study solidifies the shark’s important role in the economy, and makes obvious the fact that protecting the sharks of Palau is a wise economic investment. In recent years, Palau has taken this information and has progressively pursued options that secure the safety and health of Palauan sharks. In 2003, the Protected Area Network (PAN) act passed into law in Palau. The goal of this act is to connect community land with government land and privately owned land to encourage cooperation to preserve biodiversity and to sustainably manage available resources (Palau protected areas network (PAN), 2012). Protected lands can apply to be part of PAN, and thence are eligible for national funding, other such resources, and are officially part of a national monitoring system. The act was revised in 2008 to include a Green Fee, which is a $50 departure fee charged to guests leaving Palau, that goes straight to the PAN piggybank (Palau protected areas network (PAN), 2012).

After PAN was enacted, a broader task was undertaken by the Federated States of Micronesia, the Republic of the Marshall Islands, the Republic of Palau, Guam, and the Commonwealth of the Northern Marianas Islands, called the Micronesia Challenge (Micronesia Challenge Update, 2008). The countries committed to Micronesia Challenge are tasked with the goal of conservation of at least 30% of their near-shore land and resources, and at least 20% of their terrestrial resources by 2020(Micronesia Challenge Update, 2008). The sense of competition incited from this challenge is an effective way of causing actual legislative change in the participating states. Since the creation of the Micronesian Challenge, each country has made progress towards the larger goal and has done so proudly.

More recently, in 2009 Palau’s waters were declared to be a shark sanctuary under the Shark Haven Act of 2009(United Nations, President Johnson Toribiong, 2009). Commercial shark fishing is officially banned in Palau, and in this declaration former President Johnson Toribiong lists reasons why sharks are important, not just in Palau but all around the world. He focuses on the environmental role of sharks instead of the economic role, by placing a strong emphasis on their role as a top predator in the ecosystem. Sharks are apex predators who develop slowly and produce a relatively small number of offspring, so their existence is especially important to the ecosystem (United Nations, President Johnson Toribiong, 2009). If they continue to decrease in unsustainable numbers their absence would affect the entire food chain and ecosystem.

The Protected Area Network Act and the Shark Haven Act, combined with the will of the Palauan government to enforce laws, has inspired other Pacific island nation states to implement similar laws. After Palau created the first shark sanctuary, four of the Federated States of Micronesia have decided to ban commercial shark fishing and create a five million square kilometer “Micronesia Regional Shark Sanctuary”(Leahy, 2012). Palau is a global leader in shark conservation, being the 2012 recipients of the Future Policy Award, which is awarded to a country that the World Future Council feels have led by example, enacting policies to create “just, sustainable and peaceful societies”(Reis, 2012).

Despite the progressive restrictions to protect sharks in Palau, there are rule-breakers who continue fishing in restricted areas. As a component of Greenpeace’s “Defending our Pacific” ship expedition, the government of Palau and Greenpeace signed an agreement in December of 2011(Greenpeace, 2012). Greenpeace agreed to help the Palauan government “enforce fisheries regulations and bring illegal pirate fishing operations to justice”(Republic of Palau, Office of the President, 2012). The agreement was useful recently, when Palauan officials and Greenpeace members caught a fishing boat illegally shark finning in Palau’s waters, charging the fishermen $65,000 and banning them from Palauan waters for a year (Republic of Palau, Office of the President, 2012). Similarly in July of last year, 53 Filipino fishermen were apprehended for illegally fishing in Palau. When they were caught, they were detained for more than a month, and each boat owner was charged $13,500 (Carreon, 2012). Some believed this punishment to be too lenient, as the fee was greatly reduced after the embassy of the Philippines made a plea to ex-President Johnson Toribiong.

The current system in place that protects the sharks of Palau works for multiple reasons. The system of protection is effective in part because the people of Palau understand the importance of the shark to their economy, their environment and their future. A Palauan young adult who is a member of the International Youth Forum Go4BioDiv, Heather Ketebengang, was recently quoted mentioning that the people of Palau were previously unaware of the occurrence of illegal shark finning in their country (Leahy, 2012). Now that they are educated on the subject, Palauans are in full support of banning of shark finning and the enforcement of the various laws in place to protect the sharks (Leahy, 2012). Additionally, within the Protected Areas Network Act, Palauans are given a large amount of control over the enforcement of restrictions on protected lands and the sustainable usage of the available natural resources. The Palauan communities handle this responsibility traditionally and fulfill their modern goals with the help of the government of Palau and other outside organizations and countries (Leahy, 2012).

Organizations such as Greenpeace, Conservation International, the Global Environment Facility and The Nature Conservancy partner with the government of Palau and the Palauan people to enforce these progressive environmental laws. As mentioned above, Greenpeace has signed a joint agreement with the government of Palau, and are helping Palauans monitor the shark sanctuary for any law-breakers. Additionally, The Nature Conservancy, Conservation International, and the Global Environment Facility have all pledged millions of dollars to the Micronesia Challenge, in hopes that the investment will allow the connections between the nation states to strengthen and the flow of information between countries to increase, thereby improving conservation on the whole(Conservation International, 2012). Outside countries are also aiding in this attempted goal, by donating resources such as boats (Leahy, 2012).

Significant resources are contributed to enforce laws that protect the environment and the natural resources of Palau, especially sharks, because data proves that the environmental health of Palau is vital to it’s long-term economic survival. The substantial numbers of tourists who flock to Palau each year to enjoy SCUBA diving, specifically shark diving, prove to be a vital source of income for the country. Congruently, the sharks of Palau are considered a keystone species that is necessary for the survival of the large marine food chain they dominate, and so the environment and economy are irreversibly dependent on one another.

The mutual dependence between the economy and the environment has a very positive effect on the country and many other countries around it. Dependence is undeniable based on the amount of money shark diving brings to the country, so environmental conservation and protection measures were quickly developed and implemented. The quick adoption of such regulations, caused by the willingness of the government and people of Palau to participate, caused Palau to be a leader in such sustainable environmental conservation, and created a domino-like effect on the countries around it. Today, four nation states of Micronesia banned shark fishing in their territories, and an even greater number of countries participate in The Micronesia Challenge, which pushes countries to conserve and protect land and sea environments, resources, and organisms, not solely sharks.

The culture of conservation that has taken place in Palau because of the interconnectivity between the economy and the environment has spread throughout the Pacific and has caused many natural environments to be protected and sustainably managed. This is a positive first step towards widespread environmental awareness that is necessary for a thriving future.


Carreon, B. (2012, July 13). 53 Pinoy fishermen, nabbed for fishing illegally in Palau, released Thursday. GMA News Online. Retrieved March 15, 2013, from

Conservation International. (2012, March 15). Conservation International Makes $3 Million Pledge to the Micronesia Challenge [Press release]. Retrieved March 13, 2013, from$3-Million-Pledge-to-Micronesia-Challenge.aspx

Greenpeace. (2012, November 8). Palau authorities sink illegal fish aggregation devices [Press release]. Retrieved March 15, 2013, from

Leahy, S. (2012, Oct 22). Environment: Palau proves sharks worth more alive than dead. Global Information Network. Retrieved March 10, 2013, from

Sinha, S. (2011, May 3). Palau identifies Shark tourism to drive economy. International Business Times. Retrieved March 10, 2013, from

Palau protected areas network (PAN). (2012). Palau Conservation Society. Retrieved March 20, 2013, from

Reis, A. (2012, September 26). Future Policy Award 2012 goes to Palau | Global Environment Facility. Future Policy Award 2012 Goes to Palau | Global Environment Facility. Retrieved March 10, 2013, from

Republic of Palau, Office of the President. (2012, February). Palau Announces Settlement with Taiwan over Shark-Finning Violation [Press release]. Retrieved March 10, 2013, from

Micronesia Challenge Update. (2008). The Nature Conservancy. Retrieved March 20, 2013, from

United Nations, President Johnson Toribiong. (2009, September 25). Declaration naming Palau's waters a shark sanctuary [Press release]. Retrieved March 15, 2013, from

Vianna, G. M., Meekan, M. G., Pannell, D. J., Marsh, S. P., & Meeuwig, J. J. (2012). Socio-economic value and community benefits from shark-diving tourism in Palau: A sustainable use of reef shark populations. Biological Conservation, 145(1), 267-277. doi:

Author Bio: Brenna Schneider is a rising junior in the USC Dana and David Dornsife College of Letters, Arts and Sciences working towards a degree in International Relations with a minor in Environmental Studies. In the future, she hopes to affect and improve international environmental policy.

Previously in this series:

The 2013 Guam and Palau Expedition Begins

A New Faculty Member on the Team

An Analysis of Sargassum Horneri Ecosystem Impact

Marine Protected Areas and Catalina Island: Conserve, Maintain and Enrich

Northern Elephant Seals: Increasing Population, Decreasing Biodiversity

The Relationship Between the Economy and Tourism on Catalina Island

Guam and Palau 2013: New Recruits and New Experiences

Bringing War to the “Island of Peace” – The Fight for the Preservation of Jeju-do

Dreading the Dredging: Military Buildup on Guam and Implications for Marine Biodiversity in Apra Harbor

Is the Commonwealth of the Northern Mariana Islands Doing Enough?

The Status of Fisheries in China: How deep will we have to dive to find the truth?

The Philippines and Spratly Islands: A Losing Battle

The Effects of Climate Change on Coral Reef Health

The Senkaku/Diaoyu Island Dispute in the East China Sea

The UNESCO World Heritage Site Selection Process

Before and After the Storm: The Impacts of Typhoon Bopha on Palauan Reefs