Nauru is a republic with a parliamentary system of government. The president is both the head of state and of government. An 18-member unicameral parliament is elected every three years. The parliament elects a President from its members, and the President appoints a cabinet of five to six members. Nauru does not have any formal structure for political parties. Candidates typically stand for office as independents. Fifteen of the 18 members of the current Parliament are independents, and alliances within the government are often formed on the basis of extended family ties. Three parties that have sometimes been active in Nauruan politics are the Democratic Party, Nauru First, and the Centre Party.
Since 1992, local government has been the responsibility of the Nauru Island Council (NIC). The NIC has limited powers, and it functions as an advisor to the national government on local matters. The role of the NIC is to concentrate its efforts on local activities relevant to Nauruans. An elected member of the Nauru Island Council cannot simultaneously be a member of parliament. Land tenure on Nauru is unusual: all Nauruans have certain rights to all land on the island, which is owned by individuals and family groups. Government and corporate entities do not own any land, and they must enter into a lease arrangement with the landowners to use land. Non-Nauruans cannot own land here.
Nauru had 17 changes of administration between 1989 and 2003. Between 1999 and 2003, a series of no-confidence votes and elections resulted in two people, René Harris and Bernard Dowiyogo, leading the country for alternating periods. Dowiyogo died in office in March 2003 and Ludwig Scotty was elected as the President. Scotty was re-elected to serve a full term in October 2004. Following a vote of "no confidence" by Parliament against President Scotty on 19 December 2007, Marcus Stephen became the President.
Nauru has a complex legal system. Its Supreme Court, headed by the Chief Justice, is paramount on constitutional issues. Other cases can be appealed to the two-judge Appellate Court. Parliament cannot overturn court decisions, but Appellate Court rulings can be appealed to the High Court of Australia. However, in practice, this rarely happens. Lower courts consist of the District Court and the Family Court, both of which are headed by a Resident Magistrate, who also is the Registrar of the Supreme Court. Finally, there also are two quasi-courts: the Public Service Appeal Board and the Police Appeal Board, both of which are presided over by the Chief Justice. Nauru with its small population has no armed forces. Under an informal agreement, its defense is the responsibility of Australia. There is a small police force under civilian control.
Nauru is divided into fourteen administrative districts which are grouped into eight electoral constituencies. The districts are:
Following independence in 1968, Nauru joined the Commonwealth of Nations as a Special Member, and it became a full member in 2000. Nauru was admitted to the Asian Development Bank in 1991 and to the United Nations in 1999. Nauru is a member of the Pacific Islands Forum, the South Pacific Regional Environmental Program, the South Pacific Commission, and the South Pacific Applied Geoscience Commission. The American Atmospheric Radiation Measurement Program operates a climate-monitoring facility on Nauru.
Nauru and Australia have close diplomatic ties. In addition to the informal defense arrangements, the September 2005 Memorandum of Understanding between the two countries provides Nauru with financial aid and technical assistance, including a Secretary of Finance to prepare Nauru's budget, and advisers on health and education. This aid is in return for Nauru's housing of asylum seekers while their applications for entry into Australia are processed. Nauru uses the Australian dollar as its official currency.
Nauru has used its position as a member of the United Nations to gain financial support from both the Republic of China (ROC) and the People's Republic of China (PRC) by changing its position on the political status of Taiwan. During 2002, Nauru signed an agreement to establish diplomatic relations with the PRC on 21 July. This move followed Premier Zhu Rongji's promise to provide more than 60 million American dollars in aid. In response, the ROC severed diplomatic relations with Nauru two days later. Nauru later re-established links with the ROC on 14 May 2005, and diplomatic ties with the PRC were officially severed on 31 May 2005. However, the PRC continues to maintain a diplomatic presence (a consulate?) on Nauru. In recent times, a significant portion of Nauru's income has been in the form of aid from Australia. In 2001, the MV Tampa, a Norwegian ship that had rescued 433 refugees (from various countries including Afghanistan) from a stranded 20-meter-long boat and was seeking to dock in Australia, was diverted to Nauru as part of the Pacific Solution. Nauru operated the detention center in exchange for Australian aid. By November 2005, only two refugees, Mohammed Sagar and Muhammad Faisal, remained on Nauru from those first sent there in 2001, with Sagar finally resettling in early 2007. The Australian government sent further groups of asylum-seekers to Nauru in late 2006 and early 2007. In late January 2008, following Australia's decision to close the processing center, Nauru announced that they will request a new aid deal to ease the resulting blow to the economy.