sen gel ma a - governance of extractive industries in sea_oxfam

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Extractive Industries Transparency Initiative Extractive Industries Transparency Initiative and Publish What You Pay (PWYP) civil and Publish What You Pay (PWYP) civil

society coalition insociety coalition inMongoliaMongolia

D. SengelmaaD. SengelmaaCoordinatorCoordinator

Open Society ForumOpen Society Forum

“Governance of Extractive Industries in Southeast Asia”Managing resources for Regional Prosperity 30 March – 1 April, 2010Grand Mekong, Sunway Hotel, Phnom Penh, Cambodia

Mongolian economic outlook and Mineral sectorMongolian economic outlook and Mineral sector

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Extractive industry’s impact to economy, 2007

Minerals export Other exports

Extractive industry outputOther industry output

Minerals production in GDP Other production in GDP

Minerals Other

Strong growth, a robust budget butcontinuing high poverty rates

International experience has demonstrated that there is no automatic link between growth and poverty reduction and that expansion of decent work – the creation of more and better jobs – is the key channel by which rapid growth can lead to strong reductions in poverty. Mongolia, only falling very slightly, to 32.2 percent of the population, as of 2006, with rural poverty of 37 percent a particularly serious challenge. According to statistics compiled by the labour and social welfare offices, unemployment has remained stable at around 3.5 percent for the last five years. However, according to internationalstandards and participatory survey, unemployment rates reported as high as 30 percent.

In the decade following WTO accession in 1997, total trade has grown four-fold, from US$919.8 million to US$4.1billion in 2007. There has been a dramatic shift in the structure and pattern of trade. In 1989, Mongolianexports consisted of mineral products (42 percent), other raw materials (20.4 percent), food products (8percent) and manufactured consumer goods (18 percent). In recent years, copper concentrate, gold andother minerals and cashmere products have accounted for more than 90 percent of exports. The economy isthus more susceptible to both the booms and busts in the world commodities market.

The mining sector is now the driving force of Mongolia’s economy and accounts for around 30 percent ofGDP and 78 percent of export income. On the other hand, it accounts for less than 5 percent of totalemployment (many employees are foreigners). An informal, artisanal mining sector has emerged, whichprovides livelihoods for many poor people. However, such mining often takes place under hazardousconditions, degrades the surrounding environment and involves an unacceptably high degree of childlabour. With the decline of agriculture and industry, services have become a key sector in the Mongolianeconomy employing half the work force in 2007.

The mining industry accounts for 55 percent of industrial output and generates 33 percent of government revenues. In 2006 revenues from the mining sector accounted for roughly 14 percent of the country's GDP. Mongolia is a major exporter of copper and is growing in importance as a source for gold and molybdenum. Mongolia also has an estimated 100 billion tons of coal reserves. The country's annual coal production has significantly increased in the past two years as several state-owned mines were privatized and Chinese demand for coal has risen. With the Oyu Tolgoi mine underway and the recent cancellation of a windfall tax law passed in 2006, there is a provisional expectation of the country's copper and gold output breaking into global rankings.

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Mongolian HDI ranks 114 out of 177 countries, among the group of with medium Human development indicators. In 2007, Mongolia was estimated to have more than 171’220 herder households. They are among the poorest and most vulnerable groups in the society with poverty incidence rate of 39.2 percent.

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Extractive Industries Transparency Initiative (EITI) at Extractive Industries Transparency Initiative (EITI) at national level and Publish What You Pay (PWYP) civil national level and Publish What You Pay (PWYP) civil

society coalition society coalition 1. In October, 2005 a joint session of budget and economic

standing committees of the Parliament (State Great Khural) supported Mongolia’s potential adherence to the Extractive Industries Transparency Initiative, and recommended the Government to join this Initiative.

2. The Government has approved adherence to EITI at its Cabinet meeting, on January 4th, 2006 and passed a resolution.

Tripartite Memorandum of Understanding is signed insuring equal representation of the government, companies operating in extractive industries, and civil society members.

2. In October, 17 independent NGOs including Open Society Forum (OSF) established PWYP coalition and its members extended up to 23 NGOs by March 2010. One of the key goals of the coalition is to provide support for implementation of EITI in Mongolia.

3. Since Jan 2006, PWYP coalition started to establish contact and collaboration with international and regional civil society organization.

4. Since the establishment of EITI multi-stakeholder National Council, which is headed by the Prime Minister and multi-stakeholder Working Group, PWYP coalition has been actively collaborated and it has 4 representatives in the National Council and 5 representatives in the Working Group. Thus, tripartite equal representation is in place by Jan 2010.

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EITI at national level and Publish What You Pay EITI at national level and Publish What You Pay (PWYP) civil society coalition (PWYP) civil society coalition

The Minerals Law of Mongolia (Article 48.10 of the Amended law, 2006-10-30) ensures transparency and accountability of the activities of mining companies“48.10. A license holder shall report to the public the amount of its product sales for the year and the amount of taxes and payments paid to the State and local budget during the first (1st) quarter of the following year. ”

Mongolian Government resolution No.80 approved in 2007, specifies what functions State administrative organizations bear in relation to implementation of EITI in Mongolia

Joint order No. 42/116 dated March 19, 2008 of National Statistical Committee and Minister of Finance, on endorsing template 1,2, and 3 and their respective guidance (amendment to the previous Joint order No. 49/96 of 2007)

Mineral Resources and Petroleum Authorities introduced template No. 4, in which produced and sold products of the mining companies holding licenses in extractive industries are consolidated and publicized in 2007

There are two EITI annual reconciliation and audit reports are produced, in which 25 companies included in 2006 and 38 companies in 2007 fiscal year reconciled audit. Including these companies, which met with minimum threshold of 200 million tugrug tax payment per annum for EITI report, there are total of 64 companies delivered their 2006 fiscal year report, 102 companies in 2007 fiscal year, whereas, the government delivered their report by 134 companies in 2006, 186 companies in 2007 fiscal year.

During 2007-2009, members of PWYP coalition organized seminar, conference, training and multi-stakeholder meetings in Umnugovi, Sukhbaatar, Dornod, Bayankhongor, Selenge, Khentii, Dundgovi, Khuvsgul provinces and advocated EITI implementation at local level.

PWYP coalition members including OSF collaborated with PWYP International network, EITI supportive NGOs in Central EuroAsian countries, South East Asian countries, and RWI.

NGOs in Mongolia including OSF supported an establishment of Citizens’ Oversight of Budget civil society network to strengthen monitoring over budget expenditure, which is mainly generated from extractive industry.

Validation of EITI Mongolia is undertaken by a consortium led by Coffey International Development Ltd, in association with Dalaivan Audit LLC.before the validation deadline, March 2010

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““Publish What You Pay” civil society coalition Publish What You Pay” civil society coalition (PWYP) representation in EITI National Council (PWYP) representation in EITI National Council

and Working Groupand Working Group

Multi-stakeholders National Council for coordinating and monitoring

Mongolia EITI

Multi-stakeholders Working group for implementing

Mongolia EITI

1. Executive director of Open society Forum2.Head of Center for Human Rights and

development3. Director of Steps Without Borders4. Manager of Open society Forum

1. Manager of Open Society Forum2. Head of Transparency Foundation3. Executive director of Inform Center4. Executive Director of Land of My

Mongolia Movement

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Extractive Industries Transparency InitiativeExtractive Industries Transparency Initiative 1 1stst and 2 and 2ndnd Reconciliation report, Mongolia Reconciliation report, Mongolia

Brief IndicatorsFirst Reconciliation report of 2006 tax year

The process of Second Reconciliation report of 2007 tax year

1Year of the report publication

Jan 2008 2009 (ongoing)

2The threshold of minimum level of materiality of company payments during the tax year

200 000 000 = $US 138 888

200 000 000 = $US 138 888

3The companies met above threshold requirements

25 38

4Number of mining companies, which are reported by the Government (Ministry of Finance)

137 186

5Number of mining companies delivered their reports

64 102

6 Independent Auditing companyCrane White & Associates of Australia

Ernst & Young Mongolia Audit LLC and Ernst & Young Malaysia (Ernst & Young)

7Unresolved Discrepanciesby tugrug / US$

25 094 153 000 tugrug= $US 17.2 million

775 000 000 tugrug= $US 538 194

Government bodies’ involved in EITI report 2007Government bodies’ involved in EITI report 2007

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Extractive Industries Transparency InitiativeExtractive Industries Transparency Initiative 2 2ndnd Reconciliation report, Mongolia Reconciliation report, Mongolia


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The threshold of minimum level of materiality of company payments during the tax year was200 000 000 tugurg or $US 138 888


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25 Mining companies included in Mongolia EITI Reconciliation and report 2007

No. Mineral type Number of companies

Name of the companies

1 Gold 12 Boroo Gold LLC, Shijir Alt SCH, Ulz Gol Cooperative, Jump LLC, Cold Gold Mongol LLC, Erdes Holding LLC, Datsan Trade LLC, Altan Dornod Mongol LLC, Gatsuurt LLC, Adamas Mining LLC, Buurgent LLC, Eltrana LLC, Gurvan Tuhum LLC, Khan Shijir SCH, Mon Dulaan Trade LLC, Monpolimet LLC, Sonor Trade LLC, Tethys Mining LLC

2 Coal 6 Shariin Gol LLC, Baganuur SO, Chinhua MAK LLC, Tavantolgoi LLC, Shive Ovoo SCH, Gobi Coal and Energy LLC,

3 Copper molybdenum 4 Erdenet Mining Corporation LLC, Ivanhoe Mines Mongolia Inc. LLC (currently Oyutolgoi JV), Shim Technology LLC, Erdmin LLC

Iron ore 2 Bold Tumur Eruu Gol LLC, Tun Shen LLC, 4 fluoride 3 Mongolrostsvetmet LLC, Mongol-Czech Metal

SPIE, Bud Invest LLC, 5 Crude oil 1 Petro-China Daguing Tamsag LLC6 Zinc 2 Tsairt Minerals LLC, Shanlun LLC7 Polimetal 1 Shin Shin LLC

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EITI 2EITI 2ndnd Reconciliation report, Mongolia Reconciliation report, Mongolia


Note: This initial discrepancies does include 10’792’934 tugrug of unresolved discrepancies relevant to Altan Dornod Mongol LLC and Tun Shen LLC


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Members of PWYP civil society Members of PWYP civil society coalitioncoalition

1. Ariun Suvarga Movement 2. Movement for protecting Buir Lake, Khalkh gol, Numrug basin areas3. Hangai Han Regional Network for regional environmental protection5. Right reflection6. Il Tod Baidal Foundation 7. Inforum Center 8. Land of My Mongolia Movement 9. Environmental Protection Association 10. Fund for Mother nature salvation 11. Taimen Protection Association 12. Federation of Mongolian Trade Unions 13. Open Society Forum14. Onon-Ulz River Movement 15. Mongolian Young Scientists’ Association of Technology and Innovation 16. Uuguul Movement17. Association for the protection of Khan –Khentii father and Khatan – Onon mother 18. Responsible Mining Initiative for Sustainable Development 19. Steps without Borders 20. Call of Hongor Land 21. Patrons of Khuvsgul Lake22. Center for Human Right and Development 23. Alumni Association of Irkutsk Economic

• Association of Environmental assesment • Monmin Society of Small and Medium Miners • Green movement network

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Map of mining exploration and mining license Map of mining exploration and mining license issued in Mongoliaissued in Mongolia

Exploration and mining licenses had been issued for a total territory of 49.4 million hectares, accounting for approximately 31 percent of Mongolia’s total territory. As of January 2, 2009, a total of 5,202 licenses were issued and valid in the mining sector.

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GDP, state budget versus local budgetGDP, state budget versus local budget

33.4

37.2 37.9 36.9 36.3 36.734.5

39.4

43.7

6.5 7.6 8.4

3.2 3.1 3.1 2.3 2.8 2.8

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101520253035404550

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20

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20

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08

Sh

are

in G

DP

by

%

Year

Comparison of State budget revenue and Local budget revenue shares in GDP

State budget revenue

Local budget revenue

Local government revenue share in GDP and total expenditure, 2000-2008

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Provincial (aimag) tax and payment composition or Provincial (aimag) tax and payment composition or share in total revenue of aimag and citiesshare in total revenue of aimag and cities

In May, 2009, total of 5187 licenses were valid, of which 1104 were mining licenses.In Mar-Apr 2009, total of 118 licenses were newly issued, yet 31 licenses were invalidated, 57 licenses were passed extension deadline, and 39 licenses were returned back to the government. Therefore total valid number of licenses were decreased by 9. Source: Minerals Authority of Mongolia

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Sub-national Level EITI in Mongolia and PWYPSub-national Level EITI in Mongolia and PWYP

No. EITI Sub-national councils in provinces (aimag)

Deputy Governors of provinces are the Chairmen of Sub-national councils

Provinces where PWYP civil society coalition members advocated necessity of joint collaboration on EITI (since 2006)

1 Arkhangai Arkhangai

2 Bayankhongor Bayankhongor (capital)

3 Bayan-Ulgii Uvurkhangai (Multi-stakeholder conference in Uyanga)

4 Bulgan Refer No.6

5 Capital (Ulaanbaatar) Capital (Ulaanbaatar)

6 Darkhan-Uul Darkhan-Uul, Bulgan, Orkhon – 3 provinces’ delegates met in Selenge province for regional conference

7 Dornogovi Dornod, (Dashbalbar, Bayandun)

8 Zavkhan Dundgovi (Mandalgovi)

9 Khentii Khentii (Batshireet, Norovlin)

10 Tuv Tuv (capital)

11 Umnugovi Umnugovi

12 Uvs Sukhbaatar

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Highlight of PWYP Coalition members’ activityHighlight of PWYP Coalition members’ activity

OSF, License watch # 11Western Prospector’s uranium exploration licenses suspended at the time it attempts to sell its shares to a Chinese companyOn March 25, 2009, Western made a statement about CNNC International’s offer to buy all of the common shares of Western for the price that was considerably higher than the market one. China National Nuclear Cooperation holds 74% of the outstanding shares of CNNC International. The company got an offer of C$0.56 per share in cash while the share was valued at C$ 0.37 per share as of March 24, valuing Western's equity at approximately C$31 million and thus Western’s Board of Directors supported this profitable offer. “Khan Resources" LLC illegally issued 54 million, “Western Prospector Limited Group" LLC 50 million shares.

Deposit name Minerals type Location Total Reserve

Mardai Uranium Dornod, Dashbalbar 924.6 thous./ton 0.119% U3O8

Dornot Uranium Dornod, Dashbalbar 16467 thous./ton

0.175% U3O8

First civic petition case demanding compensation cost for environmental reclamation / rehabilitation

Success in First Instance Court in 2008-Sep Petitioner or Plaintiff:-Citizens’ Representatives of Bayandun soum of Dornod aimag, Technical facilitation of Legal representative by:-Center for Human Right and Development, Onon-Ulz River MovementDefendant:-Mongol Gazar LLCDeclined at Appellation court due to Bayandun’s CRM’s withdrawal from their petition. Mongol Gazar LLC appealed at Supreme Court

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Environmental protectionSeveral Mongolian NGOs including Onon-Ulz river movement, Call of khongor land, Angir nuden munduukhui made significant effort on initiating, formulating, advocating and eventually making the draft "Law on prohibiting exploration and mining activities in river stream, water basin protective areas, and forest areas" possible to be passed by the Parliament.

EITI + (License watch, investment or sustainability agreements in mining sector)PWYP members including OSF paid attention on monitoring over license issuance, investment or sustainability contracts in mining sector. It addressed two times of written notice to the respective Ministers by demanding agreements and negotiations made in respect to Oyutolgoi and Tavantolgoi deposits disclosed and made publically available. After the second inquiry published in daily newspapers, the governemnt uploaded the Oyutolgoi Investment Agreement in its website, which was unique case. Furthermore, respective three sustainability agreements are acquired from the Minister of Finance, which was a result of PWYP coalition's inquiries. Similar inquiry is addressed to the oil sector but the product sharing agreement is not allowed to be disclosed to public due to "classified as a secret and impossible to show".

In general, there are so far three sustainability agreements established with the government in Mongolian mining sector and all of them are now publically disclosed.

Contribution to legal environment PWYP members contributed to the formulation of an amendment made to Minerals Law, and tripartite agreement now can be established among the local government, mining companies, and local citizens to ensure local level mining sector revenue transparency.

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As of January 2, 2009, the highest number of issued licenses in Selenge province (aimag) is held by Canadian invested Boroogold LLC company (joint interest with Cameco>>Centerragold Inc), one of the four companies said to have formed stability contracts with the Mongolian Government. The company stated that it has paid 3-4 times more tax including corporate income tax and royalty payment than it should be.

However, PWYP members including CHRD, Land of My Mongolia movement, and Il Tod Foundation along with 110 national and international NGOs including “Asian Farmers’ Association” based in Philippines had signed the Statement expressing their condemnation against Boroo Gold LLC administers’ decision to fire 630 Mongolian employees, when its 198A licenses got suspended . Because the company breached its Sustainability Agreement established with the government and finalized its mining activities within 6 years instead of 15 years. During this tax concession period, the company extracted 41 tons of gold, earned 963 billion togrog ($664.1 million usd), and enjoyed 220 billion togrog (151.7 million usd) of tax concession.

NGOs also demanded accountability and punishment for the government officials who neglected potential possibilities and profitability options during the past and present negotiations.

Deposit name Minerals type Location Total Reserve

Boroo Gold Selenge, Bayangol 24.523 thous./ton 1.6 gram/ton Au

Protection of employees’ right

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Ордын нэр Ашигт малтмалын төрөл Байршил Нөөц

Tavan tolgoi Чулуун нүүрс Өмнөговь,Цогтцэций 6420 сая/тонн

Nariin Sukhait Нүүрс Өмнөговь, Гурвантэс 125.5 сая/тонн

Baganuur Хүрэн нүүрс Улаанбаатар, Багануур 600 сая/тонн

Shivee Ovoo Хүрэн нүүрс Говьсүмбэр, Шивээговь 646.2 сая/тонн

Mardai Уран Дорнод, Дашбалбар 924.6 мян/тонн 0.119% U3O8

Dornot Уран Дорнод, Дашбалбар 16467 мян/тонн 0.175% U3O8

Gurvanbulag Уран Дорнод, Дашбалбар 10560 мян/тонн

Tumurtoi Төмрийн хүдэр Сэлэнгэ Хүдэр 229.3 сая/тонн 51.15% Fe

Oyu Tolgoi Зэс,молибдени Өмнөговь, Ханбогд 2300 сая/тонн1.16% Cu 0.35 г/тонн Au

Tsagaan Suvarga Зэс,молибдени Дорноговь, Мандах

10.64 сая/тонн оксидын 0.42% Cu, 0.011% Mo240.1 сая/тонн сульфатын 0.53% Cu, 0.018% Mo

Эрдэнэт Зэс,молибдени Орхон, Баян-Өндөр 1200 сая/тонн 0.51% Cu, 0.012% Mo

Бүрэнхаан Фосфорит Хөвсгөл, Алаг-Эрдэнэ 192.24 сая/тонн

Бороо Алт Сэлэнгэ, Баянгол 24.523 мян/тонн 1.6 г/тонн Au

Төмөртэйн Цайр, хар тугалга Сүхбаатар, Сүхбаатар 7689.4 мян/тонн11.5% Zn

Асгат Мөнгө Баян-Өлгий, Ногооннуур 6402.6 мян/тонн 351.08 г/тонн Ag

Issues to be reflected in Oyutolgoi Investment Agreement, OSF Mongolia

•Not substituting the windfall profit tax blocks the possibility of Mongolian part to earn more from the profit

•Even though it is true that Mongolian part would receive 34% of common shares of the project implementing company and thus 34% of windfall profit, it is also critical to accept the provision where the dividend of 34% of common share is dependent to the investors

•Adding mining sector in the list of sectors, which can have concessionary tax of investment, indeed contradicts with the policy to diversify economy and keep the mining impact at suitable level.

•Mongolian part’s profit is delayed in time wise due to:

• Provisions including losses incurred to be deducted from taxable income and transferred into future •Providing tax concession for investment •Issuing shares with preferential right only to Ivanhoe Mines and its respective interest account, and dividend accounted for the common share but only a Board Council or Ivanhoe assigned to make decision in case if more than 50% of overall profit to be allotted

Federation of Mongolian Trade UnionsFMTU made comprehensive analysis and delivered its comments to the Parliament Speaker and Parliament Members. In relation to an initiation of “Motherland grace share” proposed by the Parliament, FMTU presented its comments and had its comments on ways of efficiently distributing incomes generated from mining sector reflected in 2010-2011 labor and social aspect negotiation. Center for Human Rights and Development“Two Tolgoi (Oyutolgoi and Tavantolgoi) civil society council” is established and CHRD developed comprehensive comments and provided impact in terms of reflecting environmental protection, ensuring local communities participation, alleviating negative impact on local social, cultural aspects, and increasing possibility of local communities employment opportunity. This comment are presented to a Working Group of the government and Ivanhoe Mines company on January 28th 2009.

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Highlight of PWYP Coalition members’ role ofHighlight of PWYP Coalition members’ role oftransparency in Sustainability agreementstransparency in Sustainability agreements

Oyutolgoi Deposit Reserve and Resource estimation 2006.06.01Umnugovi province, Khanbogd sub-province

Resource gradeCopper cut-off grade(%)

Ore reserve Mill. ton

Average grade Reserve

Cupper,(%)

Gold,(gram / ton)

Cupper,Mill. Ton

Gold,ton

Measured Resource/ Proved reserve>0.60

101,9 0,64 1,1 0,652 112,1

Indicated Resource/ Probable reserve>0.60

1047,5 1,33 0,42 13,9 439,9

Inferred Resource>0,60

1160,1 1,02 0,23 11,8 266,8

Total Amount 2309,3 1,14 0,35 26,3 818,8

In 2005, Mongolia was accounted for around 1 percent of world output of copper and gold. It ranked ninth in the production of molybdenum (the world output was nearly two million tons).It is expected that the minerals sector output will account for 41 per cent of GDP in 2011, rising to 65 percent by 2021, when the Oyutolgoi copper gold deposit is in full production.

Realization of this potential is primarily dependent on bringing theOyutolgoi and Tavantolgoi deposits into production by 2010, as 40 percent of the net GDP growth for the period of 2004-2021 will be provided solely by the metallurgical complex of the Oyutolgoi deposit. The projections assume prices of US$500/ounce for gold and $3400/lb for copper based on average price for the previous 10 years.

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Civil engagement

Start - Mining companies identify areas to be explored

and start researching

Mining companies submit application form requesting license permission

Application of requesting exploration license is submitted to Mineral Resources Authority of Mongolia (MRAM)

Applications notified to the Governors of capital, provinces and sub-provinces must have them discussed/ reviewed by Citizens’ Representatives Meeting and get their comments

MRAM should receive the Governors’ response/comment within 30 days and if this 30 days of deadline is passed, the licenses are automatically permitted to be issued

MRAM reviews the applications according to its criteria

If the application meets the criteria, MRAM send notification to the capital and/or provincial governors, who should then asks permission of local Citizens’ Representatives Meeting where exploration could take place

Governors finalize the application review and send their evaluation note to MRAM

Permission Decline

Mining company should pay 1st year payment within 10 days and MRAM should issue

exploration license valid for 3 years of period

Initiate again

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Civil engagement

Start - Mining company with valid exploration license and explored economically

profitable ferrous/non ferrous mineral deposit

Mining company should get Environmental impact assessment done according to Minerals Law of Mongolia

Application of requesting mining license is submitted to Mineral Resources Authority of Mongolia (MRAM)

Civil society engagement/participation in the process of Environmental impact assessment is important

MRAM reviews the applications according to its criteria where the companies’ past exploration record ensuring environmental protection and Environmental impact assessment are judged.

Mining companies should pay 1st year payment within 10 days and acquire mining license valid for 30 years of period

Permission

Decline

MRAM should make decision within 20 days

Initiate again

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Key criteria of the identification of legal issuance of license

1 Exploration license Mining license2 Check if a license is overlapped with specially protected

areas or areas reserved for local use where any mining activities prohibited

Check if a license is overlapped with specially protected areas or areas reserved for local use where any mining activities prohibited

3 Check if exploration area is under 25-400 000 hectare land Check if minerals reserve is compatible for compensating ecological damage due to mining activity

4 Check if provincial governor yielded permission Check if reclamation /rehabilitation works were done during its exploration period

5 Check if a provincial (aimag) governor’s comment is based on sub-provincial (soum) Citizens’ Representatives Meeting and Citizens’ Representatives’ comments

Check if mining area is inside its exploration boundaries

6 Check if respective comments were made within 30 days Check if an Environmental impact’s detailed assessment is approved by the Ministry of Nature and Environment

7 Check if an exploration license issuance has taken a provincial governor’s comment

Check if the process of Environmental impact’s detailed assessment has included Citizens’ Meeting of the smallest administrative unit (under sub-province) and photographed documentation in order to acquire local communities’ comments

8 Check if the First year payment is made within 10 days Check if the Ministry of Nature and Environment has taken citizens’ comments while it approves an Environmental impact ‘s detailed assessment

9 Check if Geology, Mining and Cadastre Authority made public announcement, 30 days prior to its issuance of exploration license, through bidding selection on the area where a previous license had been cancelled

Check if the First year payment is paid within 10 days since the date of decision was made

10 Check the record of the number of license applications received in proper chronological order

Check if a land and water utilization permission is taken from a sub-provincial governor and check if an agreement was made

11 Check if a selection of a successor has been in compliance with rules and procedures passed by the government

Check if it has acquired an evaluation of Professional Inspection Authority of a province

12 Check if bidding selection has been conducted in proper order, in case if license ownership right is allotted through bidding

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Deposit name Mineral type Location Total reserve

Burenkhaan phosphate Khuvsgul, Alagerdene

192.24 mil./ ton

ТАН эвслийн гишүүд Хөвсгөл аймаг, Бүрэнтогтох сум

140 licenses as of 2009.09.03/ Mining -15, Exploration -125/

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1

2

1

2

1

0

1

2

3

4

5

6

7

8

9

Бүрэнтогтох

Мөрөн

Ренчинлхүмбэ

Түнэл

Цэцэрлэг

Шинэ-Идэр

Mining licenses issued in Khuvsgul Mining licenses issued in Khuvsgul provinceprovince Exploration licenses issued in Khuvsgul

PWYP members in Khuvsgul provincePWYP members in Khuvsgul province

Phosphorus is important component of fertilization, which is needed ever more than before as population increases followed with increased intensive agriculture and urbanization but...

Mississippi river end basin , Dead-zone due to phosphorus waste causes excessive and uncontrolled bloom of cyanobacteria, also known as blue-green algae (colored in green, which was visible to observe from night satellite)

PWYP members in Khuvsgul provincePWYP members in Khuvsgul province

World phosphate reserve - %

PWYP members in Dornod and Khentii, the eastern PWYP members in Dornod and Khentii, the eastern provinces of Mongolia provinces of Mongolia

Local communities' knowledge about the transnational corporations' M & A is low,legal environment is weak, access to global financial market is limited

Overview of country progress towards Overview of country progress towards ValidationValidation

EITI Policy Note 3 requires Candidate countries to “complete” a Validation within the two year period. A “complete” Validation is defined as:

a) The Validation report is agreed and endorsed by the multi-stakeholder group, the government and the EITI Board;

b) The report has been published and is publicly available; c) Payment of the Validator has been completed. To date, only 2 of the 22 countries with a Validation deadline of March 9 th, 2010 have

completed Validation (Azerbaijan and Liberia).

The following 8 countries have currently produced draft Validation reports: Mongolia, Gabon, Timor-Leste, Kazakhstan, Cameroon, Kyrgyzstan, Ghana and Nigeria. (Information as of 25 February 2010)

Mongolia: The Validation Committee reviewed Mongolia’s draft report in late December, found a

number of weaknesses and issues that needed clarification, and sent it back to the MSG in Mongolia. The Validator has revised the report and presented it to the MSG.

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PROGRESS AGAINST VALIDATION INDICATORSSIGN-UP

Has the government issued an unequivocal public statement of its intention to implement EITI?

Indicator met

Has the government committed to work with civil society and companieson EITI implementation?

Indicator met

Has the government appointed a senior individual to lead on EITI implementation?

Indicator met

Has a fully costed workplan been published and made widely available, containing measurable targets, a timetable for implementation and anassessment of capacity constraints (gov., private sector and civil society)?

Indicator met

Has the government established a multi-stakeholder group to oversee EITI implementation?

Indicator met

Is civil society engaged in the process? Indicator met

Are companies engaged in the process? Indicator met

Did the government remove any obstacles to EITI implementation? Indicator met

Have reporting templates been agreed? Indicator met

Is the multi stakeholder committee content with the organization appointed to reconcile figures?

Indicator met

Has the government ensured all companies will report? Indicator not met

Has the government ensured that company reports are based on audited accounts to international standards?

Indicator not met

Has the government ensured that government reports are based on audited accounts to international standards?

Indicator not met

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DISCLOSURE

14 Were all material oil, gas and mining payments by companies to government (“payments”) disclosed to the organisation contracted to reconcile figures and produce the EITI report?

Indicator not met

15 Were all material oil, gas and mining revenues received by the government (“revenues”) disclosed to the organisation contracted to reconcile figures and produce the EITI report?

Indicator not met

16 Was the multi stakeholder group content that the organization contracted to reconcile the company and government figures did so satisfactorily?

Indicator met

17 Did the EITI report identify discrepancies and make recommendations for actions to be taken?

Indicator met

DISSEMINATION

18 Was the EITI report made publicly available in a way that was: publicly accessible, comprehensive, and comprehensible?

Indicator met

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Survey on Access to InformationSurvey on Access to Information Not sufficient legislative environment on access to information and Not sufficient legislative environment on access to information and information dissemination information dissemination List of state secrecy is too broad List of state secrecy is too broad The companies set its secrecy on discretionary basis The companies set its secrecy on discretionary basis No integrated and synchronized information and data network No integrated and synchronized information and data network No mechanism of free access to information No mechanism of free access to information

Survey on Access to InformationSurvey on Access to Information Not sufficient legislative environment on access to information and Not sufficient legislative environment on access to information and information dissemination information dissemination List of state secrecy is too broad List of state secrecy is too broad The companies set its secrecy on discretionary basis The companies set its secrecy on discretionary basis No integrated and synchronized information and data network No integrated and synchronized information and data network No mechanism of free access to information No mechanism of free access to information

How do you assess possibility of accessing information about the government activities?How do you assess possibility of accessing information about the government activities?

Excellent Excellent GoodGood SufficientSufficient Not sufficient Not sufficient PoorPoor

Citizens Citizens 1,71,7 13,313,3 47,047,0 17,017,0 21,021,0

Public servants Public servants 3,23,2 8,68,6 64,264,2 12,012,0 15,015,0

Are decisions made by governor of the smallest administrative unit (bag) delivered to local households? (Dundgovi province)Are decisions made by governor of the smallest administrative unit (bag) delivered to local households? (Dundgovi province)

%% ProblemsProblems

YesYes 33,833,8 Governors of a smallest administrative units do not Governors of a smallest administrative units do not further distribute information to local communities. further distribute information to local communities. Few active citizens solicit after this information. Few active citizens solicit after this information. NoNo 66,166,1

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View of Scientists of Geographical development in respectprospective to Mongolia’s Infrastructure platform

View of the former Ministry of Road, transportation, and tourism in View of the former Ministry of Road, transportation, and tourism in respect to prospective of Mongolia’s Infrastructure platform respect to prospective of Mongolia’s Infrastructure platform

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View of the former Ministry of Road, transportation, and tourism integrated with View of the former Ministry of Road, transportation, and tourism integrated with private companies’ interest of “extract and ship to near southern neighbor” private companies’ interest of “extract and ship to near southern neighbor” instead of “extract, process, value add and export to many importing countries”instead of “extract, process, value add and export to many importing countries”

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View of the current Ministry of Road, transportation, construction and View of the current Ministry of Road, transportation, construction and urban development of “Building an Industrial park in Sainshand”, which urban development of “Building an Industrial park in Sainshand”, which is focused on “Processing and export” to many importing countriesis focused on “Processing and export” to many importing countries

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Thank you for your attention

http://www.eiti.mnhttp://www.eitimongolia.mn

sen gel ma a - governance of extractive industries in sea_oxfam

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