Volcano Diplomacy: The Nakamal Agreement and the Future of Pacific Partnerships

By Jessica Huang

Cover Image Attribute: At the summit of Mount Yasur on August 13, 2025, senior ministers from Australia and Vanuatu placed their initials on the Nakamal Agreement. / Source: ABC

On a volcanic ridge atop Mount Yasur in Vanuatu, senior Australian ministers and their Vanuatu counterparts met to mark the signing of the Nakamal Agreement, a deal expected to reshape relations between the two nations. The ceremony took place against the dramatic backdrop of Tanna's active volcano, symbolizing a commitment to a decade-long partnership, supported by Australia's pledge of $500 million. The strategic vision behind this agreement, which aims to address climate resilience and economic development, raises essential questions about its scope and potential effects, given the lack of detailed public information about its content. This article looks at the Nakamal Agreement, relying solely on the provided news texts to assess its significance, motivations, and challenges in a geopolitically sensitive Pacific region.
The Nakamal Agreement comes from a complex history of diplomatic engagement between Australia and Vanuatu. It replaces a 2022 bilateral security agreement that Vanuatu's Prime Minister Jotham Napat effectively rejected upon taking office in early 2025. He cited its failure to meet his country's priorities, particularly regarding climate change and labor mobility. The new pact, which Australian officials describe as transformational, aims to address these issues while strengthening ties in various areas. Deputy Prime Minister Richard Marles highlighted the close relationship between the two nations, saying, "What this agreement really does is, for the first time, acknowledge what has always been the truth, and that is that as two nations, we are family and that our future is very much bound together." Prime Minister Napat agreed, calling the deal a win-win that offers great benefits in security, economic transformation, labor mobility, and financial support. For Vanuatu's citizens, this could mean improved job opportunities in Australia's labor market and increased financial support for the country's development. This focus on potential benefits inspires optimism about its impact on the region.
Australia's financial commitment is significant, planning to invest $500 million over ten years in areas like climate resilience, infrastructure, security, labor mobility, and budget support. This investment shows Australia's aim to strengthen its role as Vanuatu's leading partner in a region marked by increasing geopolitical competition, especially with China. Vanuatu's deepening ties with Beijing, reflected in China's funding for a $31 million presidential palace and the presence of Chinese police training teams, have made Australia eager to maintain its influence. These connections with China could alter the balance of power in the region, emphasizing the need for Australia to reinforce its relationship with Vanuatu. Notably, the Nakamal Agreement does not give Australia veto rights over Vanuatu's security partnerships with other countries, unlike similar agreements with Nauru and Tuvalu. This suggests a practical recognition of Vanuatu's sovereignty and its interest in keeping flexibility in international relations.
One of the most debated issues regarding the agreement is the matter of visa-free travel for Ni-Vanuatu citizens to Australia. Prime Minister Napat made this a non-negotiable condition, declaring he would not sign the pact without progress on this issue. This matter is deeply significant for Napat, as Tess Newton Cain from the Griffith Asia Institute observed: "He has said that this is a 'must have' as far as he is concerned and he knows that if it doesn't happen, it will reflect badly on him." However, reports indicate that Australia has not agreed to visa-free access, a policy it has never applied to any Pacific island nation. Discussions about "liberalizing broader travel requirements" are still ongoing, with Napat suggesting that visa-free travel is an agenda item and that Australia "would get back to us on that." This uncertainty highlights the difficulties in aligning the priorities of a small Pacific nation with Australia's strict immigration policies. Adding to the complexity is Vanuatu's 'Golden Passports' scheme, which offers citizenship for a fee and raises security issues. The scheme, which has been criticized for potential abuse and lack of transparency, could complicate the negotiations further.
The broader significance of the Nakamal Agreement lies in its attempt to address Vanuatu's priorities while navigating the strategic needs of the Pacific. Climate resilience, a crucial concern for a country vulnerable to rising sea levels and extreme weather, is a key focus of the pact. Economic development and labor mobility are also critical, as Vanuatu tries to find job opportunities for its citizens in Australia's labor market. The agreement's focus on these areas indicates a move beyond a narrow security framework, unlike the 2022 agreement, which stalled in Vanuatu's parliament and was ultimately discarded. Newton Cain pointed out the strong procedural backing for the new pact, stating, "The process is the main difference — this has been signed off by both the National Security Council and the Council of Ministers, which did not happen in 2022." This broader support within Vanuatu may increase the agreement's chances of success, addressing a key weakness exposed by the collapse of the earlier deal.
However, the lack of transparency regarding the agreement's details raises concerns about its viability and how the public will receive it. The decision to announce the pact's signing with significant fanfare, featuring a high-level delegation that included Foreign Minister Penny Wong, Deputy Prime Minister Marles, and Pacific Minister Pat Conroy, while withholding details, is notable. Marles described the agreement as "significant" and stressed its acknowledgment of a "shared economic connection" along with Australia's commitment to Vanuatu's "human development." This 'shared economic connection' likely points to the trade and investment benefits both nations could gain from the agreement. The commitment to Vanuatu's "human development" might involve support for education, healthcare, and other social services. Yet, without specific details, these statements may seem empty. The secrecy could stem from last-minute negotiations to finalize the agreement, with Vanuatu officials confirming that both sides made concessions. This suggests a delicate compromise, but the lack of clarity raises doubts about whether the pact will fulfill its ambitious goals. Moreover, the potential challenges in implementing the agreement, such as ensuring the $ 500 million investment is used effectively and addressing the concerns about Vanuatu's 'Golden Passports' scheme, could also affect its success.
The geopolitical context adds further complexity to the agreement's future. The Australian investment is a direct response to China's increasing influence in Vanuatu, which has expanded its presence through infrastructure projects and security cooperation. Napat's choice to cancel the 2022 agreement and demand concessions, such as visa-free travel, shows Vanuatu's ability to exert significant influence in this competitive landscape. News reports describe Napat's strategy as a deliberate effort to "rewrite the rules – and the checks – on their terms," highlighting the power of small Pacific states in shaping regional dynamics. This influence is heightened by Vanuatu's lively parliamentary system, where internal political shifts can quickly change foreign policy. Australia's experience with the failure of the 2022 agreement highlights the fragility of such arrangements amidst Vanuatu's internal politics.
The Nakamal Agreement also affects the broader Pacific region. Other nations are keenly watching the outcome of the visa-free travel discussions. As Newton Cain noted, "If, and it's a big if, Australia does grant some degree of visa-free access, for example, for Vanuatu officials, it will be very significant because we would expect to see pressure from other Pacific island countries for the same." Setting such a precedent could put strain on Australia's immigration policies and regional relationships, as it deals with various Pacific partners' demands. Therefore, the agreement's success depends not just on its bilateral execution but also on its potential effects across the region.
When evaluating the agreement, it is essential to consider both its potential benefits and limitations. The pact signifies a significant financial and diplomatic commitment from Australia, intended to create a partnership based on shared interests and mutual respect. Napat's view of the agreement as a "win-win" reflects hope regarding its advantages, particularly in addressing Vanuatu's urgent needs in climate resilience and economic development. Nevertheless, the unresolved issue of visa-free travel, the lack of detailed public information, and the absence of veto rights over Vanuatu's security partnerships with other nations introduce uncertainties. Australia's portrayal of a familial bond, as explained by Marles, aims to present the relationship as one of solidarity. Yet, the high costs and geopolitical stakes indicate a more pragmatic approach.
The ceremony atop Mount Yasur, rich with symbolism, encapsulates the ambition of the Nakamal Agreement to build a lasting partnership. Yet, the volcanic setting also highlights the underlying tensions between sovereignty and influence, transparency and diplomacy, and local priorities versus regional strategy. As Australia and Vanuatu prepare to formalize the agreement in September, likely at the Pacific Islands Forum Leaders Meeting in Honiara, the upcoming weeks will be crucial in clarifying its terms and evaluating its feasibility. For now, the agreement stands as a testament to the complexities of Pacific diplomacy, where small states hold significant sway, and major powers must find a careful balance of cooperation and competition. Whether this pact will truly be "transformational," as Australian officials assert, or merely a costly gesture in a crowded geopolitical landscape, remains an open question.
With reporting by the Australian Broadcasting Corporation and The Interpreter.

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