Nauru hosted some 120 refugees at the end of 2002. The vast majority were Afghans and Iraqis. All had been brought to Nauru by the Australian government as part of an Australian policy toward asylum seekers initiated in September 2001 and often referred to as the "Pacific Solution."

The Pacific island nation of Nauru is one of the world's smallest republics. Just 25 miles (41 km) south of the equator, Nauru has a population of less than 12,000 and a landmass of 12.6 square miles, much of which is dedicated to phosphate mining, the country's major industry.

In August 2001, in a break with previous policy, Australia refused to allow the entry of more than 400 persons, mostly Afghans, aboard a Norwegian freighter, the Tampa, that had rescued the group at sea and attempted to bring them to Australia's Christmas Island.

Days later, Nauru offered to house the asylum seekers while their refugee claims were being processed, and Australia agreed.

Nauru, which is not a party to the UN Refugee Convention, asked the UN High Commissioner for Refugees (UNHCR) to screen the asylum seekers taken there, and the agency eventually agreed. Australia said it would meet all of Nauru's costs for transportation and housing. Papua New Guinea later joined Nauru as an offshore processing site for Australia, and thus the Pacific Solution was born.

Australia provided Nauru with an initial aid package worth the equivalent of $10 million ($20 million Australian) in return for serving as an offshore processing center for the Tampa asylum seekers and others subsequently brought to Nauru. The asylum seekers were housed in a makeshift refugee camp built by Australian troops in Nauru's barren interior.

UNHCR, which had only reluctantly agreed to process the first group of asylum seekers brought to Nauru, said it would not process later groups, noting that Australia's new policy of intercepting and relocating asylum seekers was "inappropriate and inconsistent with the edifice of asylum that's been built up over years." Australia sent its own immigration officials to screen the new arrivals – under the minimal requirements of the UN Refugee Convention, rather than under Australian law.

At the end of 2001, some 800 asylum seekers remained on Nauru. Nauru and Australia amended their agreement to increase the number of asylum seekers there, in exchange for additional aid.

In the early days of 2002, Australia transferred another 300 asylum seekers to Nauru from Christmas Island. Subsequently, another 40 arrived, also from Christmas Island, bringing the total there to more than 1,100.

By year's end, Australia and UNHCR had finalized the refugee claims of all asylum seekers on Nauru. Australia screened some 650 persons, approving more than 170 as refugees and denying about 470, with 6 claims otherwise finalized. UNHCR screened more than 510 persons, approving about 270 and denying more than 210, with 27 claims otherwise resolved.

Of those approved as refugees, more than 250 had been resettled in other countries, including Australia, New Zealand, Sweden, and Canada. At year's end, some 120 refugees remained on Nauru pending resettlement.

On May 16, Australia signed an agreement with Afghanistan's then-interim government providing for the voluntary return and reintegration of Afghans – including those on Nauru – who had either failed to qualify as refugees or were still in the process of having their claims adjudicated. Australia would provide Afghans in either group with $1,100 each ($2,000 Australian) or up to $5,600 per family ($10,000 Australian), as well as airfare and support services, if they accepted the offer within 28 days of being denied refugee status.

By year's end, more than 270 Afghans on Nauru had accepted the offer and returned to Afghanistan.

Nauru and Australia extended their agreement in December, despite statements in June by Nauru President Rene Harris that "The Pacific Solution, as it has been named, has somehow become a bit of a Pacific nightmare for us." Harris was referring to the uncertainty over the asylum seekers' departure and the delay in the receipt of promised aid from Australia.

A month before, the head of Australia's detention advisory group told an Australian Senate inquiry that the facility on Nauru was by far the worst detention center being used by Australia. Lack of fresh water and frequent power outages were among the deficiencies noted. Human Rights Watch characterized the situation in Australia's Pacific camps as "arbitrary detention, lack of due process in asylum procedures, and denial of family reunification."

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