Nauru's environment has been devastated by 100 years of phosphate mining. Mining of Nauru’s phosphate deposits began in earnest after the First World War under a joint Australian-New Zealand-British venture, the British Phosphate Commission. This mining was carried out with no regard for future rehabilitation and on terms that deprived the Nauruan people of reasonable returns for the sale of its phosphate in world markets.

In 1987-1988 the government of Nauru held a Commission of Inquiry into the rehabilitation of its worked-out phosphate lands. In 1988 the Commission published a 10 volume report which concluded that the island's former administrators - Australia, New Zealand and the United Kingdom - were responsible for the rehabilitation of worked out areas of the island mined during the period of the Mandate and Trust.

After several unsuccessful requests to the Australian government for financial assistance, Nauru took the findings of its Commission of Inquiry to the International Court of Justice which admitted a case against Australia. The case aroused much interest and controversy with Nauru receiving vocal support from world-wide environmental groups. A Compact of Settlement was reached in 1993 before the substantive hearing took place in the International Court in which Australia agreed to pay the Republic of Nauru a cash payment of AU$57 million and AU$2.5 million annually for 20 years. This money was to be used on development projects. New Zealand and the United Kingdom each agreed to contribute AU$12 million ex gratia towards the Australian out-of-court settlement

Transcript of proceedings, as follows:
Open Sittings, Days 1-33, 35-36, 39-52, pp.1-4191, 23 Feb 1987-30 Jan 1988.
Closed Sittings, Days 25, 30, 33, 34, 37 & 38, pp.1-591, 23 Nov-11 Dec 1987.
See Finding aids for details.