In February 2008, the Government promulgated the Phoenix Islands Protected Area Regulations 2008, thereby creating the Phoenix Islands Protected Area (PIPA), the largest marine protected area in the world. In cooperation with Conservation International (CI) and the New England Aquarium (NEAq), efforts are underway to provide a mechanism by which conservation activities in the PIPA may be funded. Through use of an innovative financing model, the Government will also be compensated for fishing revenue lost through reduction of fishing effort in the PIPA. The parties have agreed to jointly establish a trust fund to receive donations from those who wish to support the efforts of the Government in preserving the terrestrial and marine resources of the PIPA. Money will then be available to fund both the conservation activities and the reduction in the fishing effort.
This Act gives the trust (to be known as the Phoenix Islands Protected Area Conservation Trust ("the Trust")) a legal existence. Through this Act, the Trust will be created under the laws of Kiribati. However, it is essential that the Trust be set up so as to ensure that it will be given charitable status under the laws of the United States of America, as it is anticipated that it is from there that most of the donations will come. Drafting assistance has been provided on a pro bono basis by a prominent United States law firm to ensure that this aim is met.
Part I of the Act provides for a number of preliminary matters, including definitions. Of special note is the definition of the expression 'special majority vote' in section 3. Under the Act, the special position of the Government, CI and NEAq as the founder members of the Trust is preserved by having certain decisions require a special majority vote, or the unanimous support of all three parties.
In Part II, the Trust is established as a legal entity (section 4). Section 5 restricts the Trust to charitable, educational and scientific purposes, while sections 6 and 7 set out the Trust's primary and secondary activities. These sections, together with section 9, provide important limits on the use to which the resources of the Trust can be put. Without these limits, conferral of charitable status would be unlikely. The primary activity is to support: the administration of the Trust; management of the PIPA; and the limitation of exploitation of the PIPA's resources (through payment of compensation for lost revenue referred to above). Where funds permit, the Trust's assets can also be utilised to support other undertakings under section 7, but approval for this requires a special majority vote. Part III provides for:
* the composition of the Trust's Board of Directors (section 10);
* the Directors' term of office (section 11);
* the role of the Chairman, Vice-Chairman and Treasurer (section 12);
* the functions and responsibilities of the Executive Director (section 13);
* the Board's powers and duties (section 15);
* the duty of care owed by each of the Directors to the Trust (section 16);
* limited liability for Directors and officers of the Trust, together with (in certain circumstances) the founder members section 17);
* conflicts of interest (section 18); and
* removal and remuneration of Directors (sections 19 and 20).
Part IV deals with some of the formalities of the finances of the Trust. Section 21(1) reiterates the restrictions on the uses to which the assets of the Trust might be put, while sub-section (2) provides for where the monies of the Trust might be kept. Any payment out of the Trust's assets must be authorised by the Board (section 21(3)). Section 22 sets out from where the revenues of the Trust might come, but also allows the Board to reject an offer of funds where acceptance of those funds would be contrary to the best interests of the Trust. …