In its proposal of key elements of Title Two assistance dated March 27, 2002, the United States stated that its economic assistance proposal “includes funds already agreed to under the U.S. Military Use and Operating Rights Agreement (MUORA) in connection with U.S. Defense department use of defense sites at Kwajalein Atoll through FY-2016.
The inclusion and characterization of payments made under the existing MUORA1 as part of Title two financial and economic assistance is erroneous both in fact and as a matter of law for the following reasons.
Background of Kwajalein Payments
The lands of Kwajalein Atoll used by the U.S. as a defense site are privately owned. Thus, in order for the RMI to make Kwajalein available to the U.S., the RMI must lease the necessary land interests from the private landowners of Kwajalein Atoll pursuant to concomitant terms and conditions that the RMI has in its agreements with the U.S. in order to secure the necessary military use rights.
As part of a settlement to bring an end to Kwajalein landowner demonstrations, the Government of the Republic of the Marshall Islands (RMI) and the Kwajalein Atoll Corporation (KAC) entered into the “Land Use Agreement” dated October 19, 1982.2 The LUA provides for the use of Kwajalein from 1982 through the term of the MUORA.
The following day, October 20, 1982, the RMI entered into the Interim Use Agreement 1982-85, (IUA) with the U.S Government that, among other things, established the payments to be made by the U.S. to the RMI in respect to the continuing use of Kwajalein until such time that the Compact and MUORA came into effect. Those payments were in turn paid to the KAC in accordance with the LUA.
On October 21, 1986, the Compact of Free Association came into effect as it applied to the RMI.3 During the Congressional approval process, the U.S. Congress added the provisions of Section 103(d) of the U.S. Compact Act, P.L. 99-239, in respect to payments made by the RMI under the provisions of the LUA.
Relationship between the LUA and MUORA
Many key provisions of the MUORA and the LUA track each other with respect to the granting of, and payment for, land use rights. For example, Article IV (1) of the MUORA provides “Consistent with Section 352 of the Compact the Government of the United States has free access to and unrestricted control of the defense sites, …” Correspondingly, Section 3(a) of the LUA entitled “Unrestricted Use” provides that the Kwajalein landowners grant to the RMI the “…free and unrestricted right to use (Kwajalein) property interests in order that the (RMI) may satisfy its obligations to the United States under the IUA 81-82, the IUA 82-82, and MUORA.
Similarly, payments made by the U.S. for the use of Kwajalein under MUORA are directly referenced, quoted, and incorporated in the LUA. Section 4(a)(4)(a) of the LUA provides that during the second fifteen year period of MUORA, for the use of their land, the Kwajalein landowners shall receive “an amount not less than $7.1 million, annually, adjusted in accordance with the formula specified in Section 217 of the Compact, from funds received by RMI pursuant to Article X, Section 4,a., of MUORA,”4
The same is true with respect to the former Section 213 payments of $1.9 million annually, the so-called “impact” payments. Section 6(f) of the LUA provides that the Kwajalein Atoll Development Authority (KADA), shall receive “$1.9 million, annually, from money designated in Article X, Section 4.b. of MUORA during the second 15 year term of MUORA;5
Payments made by the U.S. under MUORA are appropriated, allocated and paid out in accordance with the LUA as a matter of RMI domestic law.
Payments made under MUORA and the LUA to the landowners of Kwajalein Atoll for the use of their land are paid into, and distributed out of the Kwajalein Trust Fund pursuant to law.6 These funds do not comprise part of the Marshall Islands General Fund and are not available for any purpose other than specified in the law; that is to pay the landowners of Kwajalein for the use of their land by the United States.
Similarly, the fixed amount of $1.9 million the U.S. pays to the RMI under Article X, Section 4(b) of MUORA is paid under RMI law to KADA.7 Likewise, these funds do not comprise part of the Marshall Islands General Fund and are not available to the RMI for other purposes.
The provisions of the LUA have been incorporated into the U.S. Compact legislation and thus are part of U.S. law.
Section 103(d)(1) of U.S. PL 99-239, the U.S. Compact Act states that it is U.S. policy that “payment of funds by the Government of the Marshall Islands to the landowners of Kwajalein Atoll in accordance with the land use agreement dated October 19, 1982, and related allocation agreements, is required in order to ensure that the Government of the United States will be able to fulfill its obligations and responsibilities under Title Three of the Compact and the subsidiary agreements concluded pursuant thereto.” (e.g. MUORA)
Section 103(2) goes on to provide that in the event the RMI does not make payments in accordance with the LUA, the matter is to be expeditiously resolved pursuant to Section 313 of the Compact as a security and defense matter relating to the Marshall Islands. Further, these provisions are to be enforced in accordance with Section 105(g)(2) of the U.S. Compact Act. Section 105(g)(2) permits the U.S. to declare a breach of the LUA by the RMI as action “incompatible with the authority and responsibility of the United States for security and defense matters in or related to the Marshall Islands…” Failure of the RMI to adhere to the provisions of the LUA are grounds for the U.S. to declare a “material breach” of the Compact by the RMI permitting the U.S. to suspend in whole or part its obligations under the Compact.
Indeed, it is difficult to find another part of the Compact where sanctions for a breach are as immediate and far ranging as non-compliance by the RMI to the terms of the LUA. Thus it is clear that the provisions of the LUA have been incorporated into, and have become a part of the Compact.
Funds paid under MUORA are not financial or economic assistance to the RMI. The provisions of MUORA must be read in conjunction with the provisions of the LUA.
From the foregoing it is obvious that neither the MUORA nor the LUA are stand alone agreements. Although MUORA is an agreement between the U.S. Government and the RMI Government, it is obvious that the terms of MUORA have been modified, amended, or supplemented by the provisions of the LUA. The laws of the RMI reflect this reality as do the laws of the U.S.
Consequentially, although MUORA characterizes funds paid under Article X as a “grant” and to “ameliorate the adverse impact…”, the purpose and use of these funds are in fact specified in the LUA. That purpose is to pay the private landowners of Kwajalein for the use of their land and to provide funding to KADA.
Accordingly, it is both contrary to law and inappropriate that the U.S. include funds payable under MUORA as economic assistance under Title Two of the Compact. These funds are not available to the RMI to allocate for sectors such as health, education, etc., and including them in this manner only skews the amounts provided as economic assistance to the RMI under Title Two.
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