FSM and U.S. Officials Lift Suspension on Compact Public Infrastructure Grant Funding

Pave Way to Release $150 Million for Infrastructure Projects across Micronesia  

News Release from US DoI, June 30, 2017

HONOLULU, HI (June 30, 2017) – Delegations representing the Federated States of Micronesia (FSM) and the United States of America (U.S.) reached an agreement that enables $150 million of public infrastructure assistance to be used for projects across the four FSM states of Chuuk, Pohnpei, Yap, and Kosrae, as provided for under U.S. Public Law 108-188 or the Compact of Free Association, as amended.

The delegations met in Honolulu, Hawaii on June 28 – 29, 2017, to discuss issues related to the provision of public infrastructure grant assistance provided to the FSM under the Amended Compact of Free Association between the two governments.  The meeting was held to address and resolve concerns that led to the U.S. Government’s April 27, 2017, suspension of Compact infrastructure sector grants.

“It is fair to say that both the FSM and the U.S. delegates are eager to see the FSM move forward and utilize this funding” said Interior Acting Assistant Secretary for Insular Areas Nikolao Pula. “As Compact grant funding was intended to provide a very real and tangible benefit for the people of the Federated States of Micronesia, we don’t want to see any further delay.”

“I am pleased to have led discussions for the FSM on behalf of President Peter Christian as well as our State government leadership,” said FSM Vice President Yosiwo George. “There are critical infrastructure needs in the FSM that we can now begin to address.  The assistance provided for under the terms of the Compact of Free Association provides for the socio-economic development of our people and the mutual benefit of our peoples.”

The FSM and the U.S. have agreed to the following:

1.  The United States will immediately lift the temporary suspension of public infrastructure grant assistance to the FSM.

2. The FSM will terminate the current private contractor managing its Project Management Unit as soon as practicable.

3. The FSM will engage the U.S. Army Corps of Engineers (ACE) on a transitional basis to provide technical advice and assistance managing and implementing infrastructure projects, consistent with the FSM Infrastructure Development Plan and relevant provisions of FSM law, funded under the Amended Compact.

4. The FSM will periodically review the involvement of the ACE and make adjustments as appropriate, including ultimately transitioning away from ACE.

The specific terms of this engagement and related costs will be developed in the coming weeks between the government of the FSM and the U.S. Army Corps of Engineers on mutually agreed terms.

In April, Acting Deputy Secretary of the Interior Jim Cason, as Delegated Authority, had temporarily suspended the public infrastructure funds under the Compact until the FSM and the U.S. could mutually agree upon a process for the management and implementation of the funds. The Department of the Interior is the agency authorized by the U.S. Congress to administer grant funding under the Compact of Free Association to the Federated States of Micronesia.

The FSM delegation led by Vice President Yosiwo George, included the FSM Ambassador to the United States Akillino Susaia, Secretary of Foreign Affairs Lorin Robert, officials of the FSM National Government as well as the State Governments and five members of the FSM Congress who attended as Observers.  The U.S. delegation led by Interior Acting Assistant Secretary for Insular Areas Nikolao Pula, included U.S. Ambassador to the FSM Robert Riley, III, State Director of East Asia, New Zealand and Pacific Island Affairs Nicholas Dean, and other State and Interior officials.

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The Secretary of the Interior is responsible for coordinating federal policy with respect to the territories of the U.S. Virgin Islands, American Samoa, Guam, and the Commonwealth of the Northern Mariana Islands, and administering and overseeing U.S. federal assistance provided to the freely associated states of the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau under the Compacts of Free Association. The Assistant Secretary for Insular Areas and the Office of Insular Affairs (OIA) executes these responsibilities.  OIA’s mission is to foster economic opportunities, promote government efficiency, and improve the quality of life for the people of the insular areas.

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