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  • AUSTRALIA MONGOLIA EXTRACTIVES PROGRAM (AMEP) AN AUSTRALIAN AID FUNDED ACTIVITY

    This Investment Design Document (IDD) details the rationale and implementation arrangements for new activities under the Australia Mongolia Extractives Program for up to four (4) years to June 2018.

    VERSION 9.0 FINAL 4 APRIL 2014

  • AUSTRALIA MONGOLIA EXTRACTIVES PROGRAM- AN AUSTRALIAN FUNDED ACTIVITY

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    Document: Investment Design Document

    Version: 9.0 (April 2014) (Final)

    Program: Australia Mongolia Extractives Program (AMEP)

    Program owner: Geoff Bowan, Counsellor (Beijing)

    Agency: Department of Foreign Affairs and Trade (DFAT)

    Start/End Dates For up to four (4) years from FY 2014/15 to FY 2017/18

    Proposed Funding

    $AUD10.5m in direct grant support comprising:

    • $7m (over four years) for new Partnership Agreements; and

    • $3.5m (over four years) for the AMEP Facility

    The program will also comprise oversight, management and operational costs.

    Investment Concept (IC) approved by

    Andrew Cumpston (Chair), A/g ADG Asia Strategies and Partnerships Branch

    Quality Assurance (QA)

    7 June 2013: Draft submitted 7 July 2013: Final Draft submitted

    7-22 July 2013: QAE Appraisals by Jonathan Pell (External); David Osborne and Kate Thelander (DFAT)

    22 July 2013: Peer Review – Robert Quiggin (Chair)

    Design Team:

    David Swete Kelly - Team Leader and Design Specialist Dr Chuluunbaatar Enkhzaya - Mongolia Development Specialist

    Dr Catherine Macdonald - Mining social impacts and gender specialist Robin Evans - Mining Specialist

    Dr Paul Crawford - Monitoring and evaluation specialist James Roop - Environment specialist (DFAT)

    Andrew Shepherd - Governance economist (DFAT)

    Date: April 2014

    The views expressed in this document, and proposed funding allocations, are those of the Design Team and do not necessarily reflect the views of the Australian Government or DFAT. Funding is subject to Australian Government annual budget appropriations. This document is the property of the DFAT. It is not permissible to copy or use any of the material in this report without the expressed permission of DFAT.

    © DFAT 2014

  • AUSTRALIA MONGOLIA EXTRACTIVES PROGRAM- AN AUSTRALIAN FUNDED ACTIVITY

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    MAP OF MONGOLIA AND ÖMNÖGOVI AIMAG (PROVINCE)1

    Figure 1: Map of Mongolia showing Aimags and major centres. Activities under Outcome 1: ‘Mining- related Administration and Policy Development’ of the Australia Mongolia Extractives Program will operate nationally.

    Figure 2: Focal Sums (districts) (starred) within Ömnögovi Aimag2. Activities under Outcome2: ‘Community Engagement’, of the Australia Mongolia Extractives Program will operate in these areas, with lessons learned applied nationally.

    1 Mongolia Map: http://www.mapsopensource.com/mongolia-political-map.html 2 Ömnögovi Aimag: http://en.wikipedia.org/wiki/File:Mongolia_Omnogovi_sum_map.png - user Bogomolov.PL

    http://www.mapsopensource.com/mongolia-political-map.html http://en.wikipedia.org/wiki/File:Mongolia_Omnogovi_sum_map.png

  • AUSTRALIA MONGOLIA EXTRACTIVES PROGRAM- AN AUSTRALIAN FUNDED ACTIVITY

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    ACRONYMS Acronym Meaning ADB Asian Development Bank ADRAS Australian Development Research Awards Scheme AIA AMEP Intervention Assessment ALAF Australian Leadership Award Fellowships AMEP Australia Mongolia Extractives Program ATVET Agency for Technical and Vocational Education and Training (Mongolia) BCM Business Council of Mongolia

    BGR Bundesantalt für Geowissenschaften Rohstoffe (German Federal Institute for Geosciences and National Resources)

    BMZ Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung (German Federal Ministry for Economic Cooperation and Development) CBO Community Based Organisations CIDA Canadian International Development Agency CSR Corporate Social Responsibility DDRAS DFAT Development Research Awards Scheme DFAT Departmental of Foreign Affairs and Trade EBRD European Bank for Reconstruction and Development EC European Community EITI Extractive Industries Transparency Initiative EMP Environmental Management Plans ERI Economic Research Institute ESEC Engaging Stakeholders for Environmental Conservation GA Geoscience Australia GASI General Agency for Specialized Inspections GDP Gross Domestic Product GDT General Department of Taxation

    GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (German Enterprise for International Cooperation) GoM Government of Mongolia GPF Governance Partnership Facility HDF Human Development Fund HDR Human Development Report HSES Household Socio-Economic Survey ISP Implementation Service Provider IBRD International Bank for Reconstruction and Development IDD Investment Design Document IFC International Finance Corporation ILO International Labour Organisation IMF International Monetary Fund IM4DC International Mining for Development Centre MASP Mongolia Australia Scholarships Program MCC Millennium Challenge Corporation MDG Millennium Development Goal MDTF Multi Donor Trust Fund (World Bank) MECS Ministry of Education Culture and Science MED Ministry of Economic Development MEGD Ministry of Environment and Green Development MNMA Mongolia National Mining Association MRAM Mineral Resources Authority of Mongolia

  • AUSTRALIA MONGOLIA EXTRACTIVES PROGRAM- AN AUSTRALIAN FUNDED ACTIVITY

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    Acronym Meaning MoM Ministry of Mining MRTCUD Ministry of Road, Transportation, Construction and Urban Development MRAM Mining Resources Authority of Mongolia MSISTAP Mining Sector Institutional Strengthening Technical Assistance Project MSTAP Multi-Sectoral Technical Assistance Project MSWL Ministry of Social Welfare and Labour MUST Mongolia University of Science and Technology M4D Mining for Development NEA Nuclear Energy Agency (Mongolia) NGO Non-Government Organisation NVTMC National Vocational and Training Methodology Centre (Mongolia) OSF Open Society Forum OT Oyu Tolgoi PPP Public Private Partnerships PWYP Publish What You Pay SDC Swiss Development Cooperation SESA Strategic Environmental and Social Assessment PM Prime Minister PPPs Public Private Partnerships PSLP Public Sector Linkages Program SCS Swiss Cooperation Strategy SESA Strategic Environmental and Social Assessment SME Small and Medium Enterprise TBC To be confirmed TOR Terms of Reference TT Tavan Tolgoi TAFE Technical and Further Education (Australia) TVET Technical and Vocational Education and Training UB Ulaanbaatar UNDAF United Nations Development Assistance Framework UNDP United Nations Development Program UNEP United Nations Environment Programme UNFPA United Nations Population Fund WB World Bank WHO World Health Organisation WoG Whole of Government

  • AUSTRALIA MONGOLIA EXTRACTIVES PROGRAM- AN AUSTRALIAN FUNDED ACTIVITY

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    TABLE OF CONTENTS

    Executive Summary ......................................................................................................................................... ix 1 Introduction ............................................................................................................................. 14 2 Analysis and Strategic Context .......................................................................................... 16

    2.1 Country and Sector Issues 16 2.2 Mining for Development - Problems and Issues 17 2.2.1 Mining related Policy ....................................................................................................................... 18 2.2.2 Public Administration of Mining ................................................................................................. 20 2.2.3 Social and Gender Impacts of Mining ........................................................................................ 21 2.2.4 Environmental Impacts of Mining .............................................................................................. 23

    2.3 Lessons Learned 24 2.3.1 comparison of mining impacts in developing countries ................................................... 24 2.3.2 Lessons from similar “Mining for Development” Facilities in Mongolia. ................... 25 2.3.3 Other Lessons ...................................................................................................................................... 25

    2.4 Consistency with Australian and other Donor Programs 26 2.4.1 Australia’s Engagement .................................................................................................................. 26 2.4.2 Other Donor Engagement .............................................................................................................. 28 2.4.3 Australia’s Comparative Advantage ........................................................................................... 30

    2.5 Rationale for DFAT Involvement 31 2.5.1 Strategic Focus .................................................................................................................................... 31 2.5.2 Delivery Mechanisms and Partnerships .................................................................................. 34

    3 Investment Description ....................................................................................................... 37 3.1 Design Logic 37 3.1.1 Goal ...........................