UBC Outreach Event: CIRDI’s IMAGinE Mongolia Activities

Thursday, February 4, 2016, 15-16:30h
Institute of Asian Research, University of British Columbia
1855 West Mall, Room 120
Vancouver

IMAGinE Mongolia Outreach

You are invited to learn about the “Integrated Management and Governance in Extractives (IMAGinE) Mongolia” project from the Canadian International Resources and Development Institute (CIRDI).

Project lead, Dr. Julian Dierkes (Institute of Asian Research, UBC), will introduce the planned activities and invite collaboration from graduate students and colleagues who are focused on governance, policy and education related to mining; landlockedness; and Mongolia.

IMAGinE Mongolia is a multi-year project that supports provincial and local administrations in Mongolia with increased information so they can fully participate in the sustainable management of Mongolia’s extractive resources.

CIRDI’s mission: To improve, in a measurable way, the ability of developing countries to manage and benefit from their extractive sectors in order to catalyze sustainable economic growth and reduce poverty.

Posted in Aimags, Canada, CIRDI, Development, Environment, Governance, Inequality, Mining, Mining, Mining Governance, Research on Mongolia | 1 Comment

Mining Governance: Tavan Tolgoi

Tavan Tolgoi was a costly test for the Mongolia’s mining governance.  It tested the resilience of the revised mining governance under the 2006 Minerals Law, checked the unity of political elites, especially of two major parties, and examined the resolve of the state bureaucracy to implement new mining policies.  Apparently, all didn’t pass the test an even failed to capitalize the favorable momentum of the global commodity market.  But, most importantly, did we learn from our mistakes?  Did we take measures to enhance the institutional resilience of the mining governance, to unite political forces on a major (mega) project, and to insulate bureaucrats from political, economic, and social pressures? In this blog post, I will lay out the government intentions during the favorable period for mining  governance (esp., 2008-2012) and then discuss some factors that complicated the decision-making process over the Tavan Tolgoi coking coal deposit.

Intentions were clear during the coalition government of 2008 – 2012.  Under the revised 2006 mining law, licenses of the Tavan Tolgoi deposit were taken back to the state from private license holders because the deposit was discovered with state funds in the 1960s. Then the government also delegated its authority to the state-owned enterprise (SOE), Erdenes Mongol, to manage the tender process for permitting foreign mining operators while also allowing it to establish its sister SOE, Erdenes Tavan Tolgoi, to mine and export the coal.  Furthermore, the government decided to issue stock shares to its citizens (1072 shares per person) and to allow Mongolian companies to operate some parts of the deposit.  Moreover, the government hinted its ‘mining diplomacy’ by rewarding the operating licenses of Tavan Tolgoi to US Peabody Energy, China’s Shenhua and a Russian-Mongolian consortium.

In retrospect, politicians and bureaucrats in power complied to the mining governance rules. First, Tavan Tolgoi was included in the list of mineral deposits with strategic importance. Second, the SOE was established to govern the process of operating on the largest coking coal deposit.  Third, it created ways to allocate the mining benefits to the public.  Finally, it attempted to balance interests of Russia, China as well as newly found third neighbors. These decisions were approved and endorsed by the parliament, the coalition cabinet, bureaucracies, political parties, and the public.  But, these decisions were not implemented. If these intentions were formulated as a result of the formal politics, the implementation process became blurry for all actors – maybe except those in power.  The role of the informal politics has dominated the formal rules, procedures, and mechanisms; thus makes everything suspicious and non-transparent.

Seemingly, three factors, (1) competitive interests of transnational corporations, (2) dynamics of the competitive elections, and (3) interests of domestic business entrepreneurs and groups, have overwhelmed the Mongolia’s weak mining governance.

First, Mongolia now interacts with influential, experienced, and wealthy transnational corporations, including Western multinationals, Chinese state-owned enterprises, and Russian state-affiliated magnates. All are experienced negotiators and lobbyists at their respective capitals and financial centers.  The result of the first Tavan Tolgoi tendering process left Japanese and South Korean corporations unhappy while the latest made Americans and Russians disappointed.  These players have different interests and leverages over Mongolia.  Russia, a traditional ally, wants to keep its influence in mining and infrastructure, especially, the railroad. It is the only source of Mongolia’s fuel.  China, a new strategic partner, desires to secure the closest resource deposit and to link Mongolia into its regional rail network.  China is Mongolia’s only market and its infrastructure offers the closest link to the East Asian market.  Japan, the most proximate third neighbor, longs to get access into Mongolia’s mineral resources.  The US companies also make attempts to operate in new economic frontiers.  Both Japan and the US are vital partners for Mongolia’s sovereignty and international visibility. As all these Great Powers began to back up their corporations, Mongolia fails to impose its rules for foreign investors.

Second, the election logic presented another major challenge for politicians and bureaucrats because political parties in power need to win hearts and minds of their supporters and the population.  Prior to the parliamentary election of 2012, Prime Minister Batbold’s cabinet loaned 350M USD from the Chinese SOE Chalco and distributed it as cash-transfers to the public fulfilling the party’s campaign promise of mining revenue benefits.  A new cabinet of Prime Minister Altankhuyag cancelled the loan contract with the Chalco, but his action resulted in a debt because of the falling coal price.  The 2012 government revoked all major decisions in regards with Tavan Tolgoi mostly in order to discredit previous politicians who were in power, its opponent party (i.e., Mongolian People’s Party), and the coalition cabinet of 2008-2012.  Also, the newly-established SOEs, Erdenes Mongol and Erdenes Tavan Tolgoi, now follow the examples of former SOEs such as the Erdenet copper and molybdenum factory in generating funds for politicians and political parties in power as well as serving as an administration to post party officials and affiliated supporters. In 2013-2014, executives of these SOEs were investigated and fired mostly because of their political party affiliations. As a result, bureaucrats, especially at the senior level, have a little courage and autonomy to implement new policies, to uphold business principles, and even to take initiatives.  Therefore, structurally, all politicians come under pressure of safeguarding the party’s interests in winning elections and feeding its clientelistic network.

The domestic business groups and entrepreneurs appeared to be a major challenge for  effective mining governance. The railroad is a good example.  With the mining boom in Mongolia, the railroad became the most attractive business as it generates funds to do multiple feasibility studies, especially in Mongolia’s case (mainly for money-laundering), to construct the railroads, and later to own the infrastructure as well as to operate the trains.  To win these funds, domestic business entrepreneurs, corporations, and political-business factions successfully geo-politicized the railroad projects because Mongolia falls into the Russian broad gauge 1520mm infrastructure while Chinese narrow gauge sits next to its major mineral deposits.  Despite costly feasibility studies and alleged corruption investigations against these interest groups, factions, and individuals, the Tavan Tolgoi deposit remains unlinked to any rail networks. While the railroad decisions were politicized, there are a number of Mongolian companies still making fortunes from their small mining operations at some parts of Tavan Tolgoi.  These companies also have strong political representations at key political institutions, for example, the parliament.  Also, Tavan Tolgoi presents the case of the labor union’s interests.  For instance, a self-immolation of the union leader of Erdenes Tavan Tolgoi truckers at the press conference in November, 2015 caused quick action from the SOE Erdenes Mongol to revisit its contracts with foreign operators. Mongolian truckers opposed the Chinese company’s take-over of the coal trucking business because it will leave them unemployed. Clearly, the transportation of coal by either by Mongolian or Chinese trucks have been causing substantial negative impacts on the environment, health and livelihood of locals, but the government is still unable to enforce its decisions of efficient, environmentally sound mining governance.

Tavan Tolgoi is going to remain a failed case of Mongolian mining governance unless the parliamentary election of 2016 or the next commodity boom changes conditions.  It may continue to fail unless politicians unite to provide autonomy for bureaucrats and professionals and to increase the institutional resilience of Mongolian mining governance.  Because none of the political parties could solve this deep-seated institutional problem alone and enforce the decisions, political parties must insulate major projects like Tavan Tolgoi from the election timeline and business interests.  The populist type of pleasing all – external actors, domestic business groups, and the population – politics could not be a solution, but ‘making sacrifices for a long-term benefits’ seems to be the right solution for a small state in complicated geopolitical and economic scenario. Therefore, all players, especially politicians, must make a sound, timely decision and then provide an environment for the decision to live at all cost.

Posted in CIRDI, Mining, Mining Governance, Politics | Tagged | Leave a comment

The Many Habits of Successful Mongolian Digital Diplomats

I wrote “The Way Forward for Canadian Digital Diplomacy” for Canada’s The Embassy on November 18, 2015. I followed this up with a list of more specific about steps that Global Affairs Canada might take in developing Twiplomacy if this direction were to be embraced. Another version of this came as “Five Rules to Guide the Future of Canadian Digital Diplomacy“, and then I mused about criteria by which the Canadian government might decide which digital diplomacy strategies to go ahead with. Below is a revision of my list of “Many Habits of Successful Digital Diplomats” for Mongolia.

What is Digital Diplomacy?

Much has been written about Digital Diplomacy (or Twiplomacy, or Diplomacy 2.0), but at its most basic level such a strategy aims to harness the power of new electronic and information technology tools to further the interests of a country. Most prominent in the Twiplomacy toolbox are networked social media, but various big data-driven initiatives are also included in this overall category. While notions of Digital Diplomacy originated in North America, it has spread much beyond, including to Northeast Asia.

Design by Cameron Tulk

Why Mongolian Digital Diplomacy?

It’s worth mentioning why Digital Diplomacy might be of particular interest to the Mongolian government.

  1. Mongolians have become active and natural digital communicators;
  2. the 3rd neighbour policy (I’m trying to establish #3NP) targets virtual neighbours already;
  3. Mongolia’s strongest case for its relevance is its status as Asia’s post-state socialist democracy, a claim that can be reinforced through a concerted Digital Diplomacy strategy and leverages the democratic instincts of online communication;
  4. digital diplomacy can be relatively cost-effective at a time of state budgets under pressure;
  5. Mongolians in general and Mongolian diplomats in particular are polyglot, so they are able to address audiences in many different languages.

In his analysis of the network of Twitter links between ministries of foreign affairs, Oxford University’s Ilan Manor has found the Twitter account of Mongolia’s MFA to be somewhat isolated.

Network Analysis of MFA Twitter Accounts by Ilan Manor. [Graph appears by Permission]

Note that Mongolia appears in the bottom left corner here. As you can see all the links at the time of Manor’s analysis were in-bound, i.e. other MFAs linked to Mongolia’s, but the Mongolian MFA didn’t link to other MFAs.

As Mongolia’s missions have recently made a big push to create Twitter accounts, this lack of strategic linking by the HQ account is certainly a missed opportunity.

So, here is my revisions of the “The Many Habits of Successful Canadian Digital Diplomats” for Mongolia’s Ministry of Foreign Affairs.

The Many Habits of Successful Mongolian Digital Diplomats

Process and Management

  • firmly distinguish broadcast use from engagement, identify channels by use;
  • select areas of engagement strategically, building on overall foreign policy;
  • think, write, engage, review, repeat;
  • learn qualitatively and quantitatively from communicating;
  • remain platform agnostic, but include different formats. Current standard formats would include micro-blogging and blogging.

People

  • embrace facility with vernacular languages as engagement is more likely (though not exclusive to) vernacular languages;
  • digital diplomacy should be run by diplomats not social media specialists;
  • emphasize work-life balance, engagement cannot lead to expectation of 24/7 communications;
  • recognize distinctions between individuals’ and institutional presence (e.g, ambassadors vs. embassies), as they can mutually reinforce visibility, but also detract from strategic objectives;
  • engagement requires passion;
  • diplomacy has always been social and always involved networks! Actively engage foreign diplomats, most active stakeholders;
  • integrate Digital Diplomacy into job descriptions, hiring decisions, evaluations, and promotions, but not in a punitive way. Not all positions require Digital Diplomacy skills and lots of contributions will continue to be made by analog diplomats;
  • empower, support and coordinate the efforts of experimenters and pioneers.

Substance

  • all digital diplomacy activities are rooted in substance, no communication/engagement for communication’s sake;
  • obvious choices for engagement: overarching thematic priorities for foreign policy; aspects of foreign policies aimed squarely at digital matters, e.g. membership in Freedom Online Coalition, Community of Democracies, Land-Locked Developing Countries, etc.;
  • embrace the reflective nature of communication and the opportunities this offers;
  • not all countries are equally well-suited for engagement, nor is it needed or likely to be beneficial everywhere;
  • lots of subject matter is neither suited for engagement, nor should it be. The weighing of foreign policy options is sometimes conducted in private and that is how it should be;
  • stakeholders’ expectations have to be managed through forthright statements on their impact. Some engagement will not change policy, some policy decisions will contradict a consensus among stakeholders.

Mongolian

  • build on Mongolian foreign policy by developing a strategy built around democratization;
  • seek, use, nurture Mongolian format innovations, perhaps through the International Cooperation Fund of the Min of Foreign Affairs;
  • seek, use, nurture Mongolian technology/business innovations through an office/division that focuses on tech adoption. Given the vibrancy of the social media scene in Mongolia, there’s no reason why one of the next innovations might not come from here;
  • embrace polyglot talents of Mongolian(s) diplomats;
  • Digital Diplomacy is appropriate to a small power, particularly when resources at Mongolian ministries are tight.

Suggestions for Possible Themes to Build Digital Diplomacy Around

  • democratization;
  • impact of climate change;
  • resources and experiences with global investment from vantage point of developing country/resource economy;
  • Northeast Asia, including Ulaanbaatar Forum
  • Mongolian leadership
    • ASEM 2016 (Twitter account exists, but very much in broadcast mode, not engagement)
    • UN Security Council candidacy for 2022: making a case for presentation of land-locked developing countries, democratized countries, small countries, etc.
Posted in Digital Diplomacy, Foreign Policy, International Relations, Mongolia and ..., Social Media | Tagged | 1 Comment

Mining Governance: Weak Institutions and Greedy Politicians

Despite seemingly clear codified decision-making procedures that exist on the paper, the majority of the mining governance related decisions has been non-transparent and becoming more difficult to understand the politics behind them. Laws, standards, and regulations are passed today, but will be changed tomorrow.  Some of them never enforced while others are selectively enforced.  Then, politicians, bureaucrats, and private sectors blame each other before the election. Ministries, agencies, local governments sign ceremonial documents to implement these laws, standards, and regulations afterwards.  Even though the constitution stipulates the powers and responsibilities of the president, speaker, prime minister, and parliament members, all launch destructive campaigns (through media, and through their personal twitters) renouncing and denouncing mining governance related decisions.

So, for a small, landlocked state, these public relations competitions of the 100 individuals in power as well as the hundreds of others who are planning to compete for power will lead to turmoil by weakening the state institutions – which would ensure the implementation of wonderful ideas of entrepreneurial, competitive politicians. Without strong institutions, politicians can not restrain their greed for mining rents, including bonds, loans, kickbacks, royalties. They continue to use currencies (i.e., money and populism) for the political power and then use their political power to enrich their clientelistic network, to marginalize their opponents, and to hide their wrongdoings.  These politicians just  want to keep the state institutions (i.e., the bureaucratic and administrative power) as weak as possible; otherwise, the strong state institutions could constrain their parochial interests and greedy behaviors.  As a result of the instability, state institutions become vulnerable to pressures of domestic groups, external actors, and/or combination.

This is becoming the case of Mongolia.  The political power is well-dispersed and hard to pinpoint, especially, if we follow the mining-related decisions.  Who has political power? Maybe the power is too well dispersed among these actors; therefore, state institutions are weak and agents are not-willing to enforce decisions.

(1) President, Parliament Members, Ministers, Governors, Citizens’ Khural Members;

(2) Political parties, factions, individual politicians;

(3) Homeland Associations, horse-racers’ associations, business associations; ninja miners;

(4) Activists, environmental and social movements; and,

(5) External actors.

Inargueably, the power is not in the state – administrative and bureaucratic institutions; therefore, any institutions of Mongolia are weak and dependent from the political atmosphere.  Provincial administrations are vulnerable to local and also national politics.  Public servants at ministries and agencies feel insecure because of frequent changes of ministers, secretaries, and departmental chiefs.  For their job security, public servants either remain silent, inactive or seek protections from prominent figures, political parties or provincial homeland associations (e.g., prominent ones are Uvs and Khovd). Because of apparent political mingling by politicians, wealthy businesspeople, and political parties, people seem to lost their trust in judicial and law-enforcement agencies.  As the state institutions began to lose the faith of their own employees and public, they also lose their institutional capacity and coherence to enforce laws, standards, and regulations – even if they have assisted with various international institutional capacity building projects and instructed with many new directives of their newly-elected politicians.  At the end, these weak institutions would turn into simple tools for greedy politicians, factions, and groups to fulfill their parochial interests.  Therefore, the most apparent way of fixing the messy field of mining governance is to strengthen state institutions – by insulating them from the dirty politics of politicians and factions.  Only a strong state institution could enforce good ideas (i.e., laws, standards, regulations) and constrain greedy politicians.  The strong institution provides stability and certainty for investors rather than individual politicians, parties, and factions.

 

 

 

Posted in CIRDI, Mining, Mining Governance, Otgonbaayar Byambaa | Tagged | Leave a comment

Mining Governance in Mongolia: A Messy Field

This is a brief, possibly too simple title of my field research in Mongolia.  The mining governance is an interesting subject for anyone studying Mongolian politics because it links Mongolia with the world, triggers rent-seeking competition among politicians, and upsets the local community, who are affected by irresponsible mining activities.  But, the interesting question for a political science grad student is how to simplify this messy field in order to understand the politics, as Harold Lasswell puts it, “who gets what, when, and how” in Mongolia.  With this ‘mining governance’ series, I would like to share my reflections of the mining governance in Mongolia – a small (not from territorial or historical perspectives) and landlocked democracy.

A few concepts need to be clarified because there are many definitions for different purposes as well as perspectives.  For the purpose of this blog series, ‘mining governance’ means a governing process, which includes decision-making and implementing, concerning the usage of the mineral resource.  The ‘institution’ is defined as a rule, but institutionalization means to create structures and to provide resources (e.g., political will, human and material resources) to enforce the rule.  The institution has two faces – formal (codified ones) as well as informal (non-codified ones).

So, how we can examine the mining governance of Mongolia? Here are three caveats that should be highlighted before discussing the present mining governance.

Firstly, the mining governance is not entirely new to Mongolia. Since 1911, Mongolian political elites have been longing to use its mineral resources while foreigners were also exploring mining opportunities in Mongolia.  The governance could be divided roughly into three periods: pre-1960s, 1960s-80s, and post-1990.  Despite substantial differences, each period has experienced the challenges of landlockedness, dealing with Great Powers, and influential transnational players.

Secondly, the Soviet-style mining governance still has a strong influence on the current mining governance.  Its institutional structure serves as a foundation for all aspects of mining, ranging from ministries to schools and to operations.  People from the Soviet-style mining period still dominate most senior and mid-level management posts in politics, bureaucracy, and industry.  Furthermore, the majority of the public view the mining through Soviet-style mining lenses because all operational mines were built and run by Soviet-style.

Thirdly, Mongolia, like many other small, democratic, developing, and resource-based economies, face three major factors: the dynamics of the commodity market, the geopolitics of Great Powers, and the results of domestic elections.  All these factors are beyond the control of foreign investors, state officials, and the public.

With these factors (i.e., landlockedness, geopolitics, commodity markets, domestic elections, and legacy of the Soviet mining) in mind, I would like to identify the key actors – WHO are fighting over the mining rents (WHAT) and trying to change the institutions (HOW).

External actors are the transnational (multinational) corporations trying to extract natural resources, following the simple business principle ‘the maximum benefit at minimum cost’.  However, they are powerful players with support from their respective governments, international financial institutions, and investors.  Then, there are the opportunity seekers – who are mostly junior companies and mining/mining supply entrepreuners.

Domestic actors are the most-complicated to categorize.  However, they could be divided into three major groups.  One is the political/bureaucratic actors, including those affilliated to political parties and state bureaucracies. The second group is the business community, those who are engaged in mining-related business activities.  The last group is the public, or civil society; this includes people who are directly-affected by the mining activities and those unaffected by the mining.

Even though all these actors involved in the mining governance process (i.e., the decision-making and implementing process of using mining resources), the political and bureaucratic actors have the political power to set the rule (institution) and to enforce (to institutionalize) the rule.  If all other actors are fighting to get the ‘rents’ of mining, the political and bureaucratic actors are given the mandate to regulate this competition in fair, transparent, and sustainable ways.  This generates trust among all actors and reduces the uncertainty.  But, if political and bureaucratic actors themselves engage in the rentseeking game, it creates a messy field for all.  Therefore, ‘WHEN’ becomes the most important factor for these actors to change the rule and to disrupt the institutionalization process.

This framework will be used in the next blog posts – to examine Mongolian mining governance from a political perspective – to grasp the dynamics of power politics.

 

 

Posted in CIRDI, Governance, Mining, Mining Governance | Tagged | Leave a comment

Bloggin’ 2015

Happy new year!

This has been the fifth year of our blogging (we started in July 2011). Most of the writing has passed to Mendee and I, though Byamba and Brandon have continued to chip in. We’ve managed to post at least once for every month of the existence of the blog.

We wrote 39 posts this year, roughly three per month.

Over the year we’ve had 14,000+ readers looking at over 36,000 pages. On average, readers stay 1′:45″ to read 1.7 pages which has been fairly consistent over the years (2′ and 1.8 over existence of the blog. Over the existence of the blog, we’ve had 68,000 users.

The most-read post (at 560+ times) was the March 2 post about the arbitration award to Khan Resources, followed by the Jan 30 post about PM Saikhabileg’s SMS poll, and the June 2 post about policy failures (both still with 500+ readers).

Cumulatively the most-read post has been an attempt to understand Mongolia’s Transparency International ranking in 2012 with nearly 1,500 reads.

No 2015 post was read less than 40 times.

The most popular page has consistently been our listing of non-Mongolian mining companies (viewed nearly 5,000 times), though this remains in some need of updating given the departure of numerous companies over the past several years.

The greatest number of sessions originated in Mongolia (21%), followed by the U.S. (20%), and Canada (13%). The most surprising among the top 10 source countries (to me at least) is Denmark with 2% of users. Somewhat surprisingly, China doesn’t crack the top 10 users coming in at 15th. The visit of Prime Minister Modi may have catapulted India into the top 10 (8th with over 2% of users), but two India-focused posts mat have also contributed to that interest. Only single sessions originated from Rwanda, Uruguay and Samoa (among others).

Roughly half of all sessions started via an organic search, 9% via Twitter. Twitter referrals account for nearly 70% of all social network-sourced users. According to Twitter Analytics my monthly “top tweet” that directly linked to a blog post in 2015 was an October 2015 tweet about Pres. Elbegdorj’s proposal of seeking permanent neutrality for Mongolia. This post received over 2,500 impressions, was re-tweeted 11 times, and the link to the blog post was clicked on 15 times.

Mobile users are creeping up on nearly 20% of readers.

Posted in Social Media | Tagged | Leave a comment

New to Ulaanbaatar in late 2015

I’ve been keeping a list of things that are arriving to/disappearing from central Ulaanbaatar: May 2015May 2014October 2013.

I’ve copied the 2014 and 2015 lists here and am adding to it. New items since previous posts appear in italics.

What has arrived?

  • sadly, Louis Vuitton, KFC, Burberry Kids and Ugg
  • Mini, Bentley
  • child seats
  • sidewalks
  • parks
  • farmers’ markets
  • yoga
  • dogs on leashes
  • Sunday morning joggers and bikers
  • coffee culture
  • river walkway along the Dund River (under construction in May 2015 but looking very promising)
  • city park along the Tuul
  • sports cars
  • organic shopping

#Organic retail has established itself in #Mongolia

A photo posted by Julian Dierkes (@jbdierkes) on

What has disappeared, or at least nearly?

  • stationary 80s-office-phone-looking old-granny cell phone booth
  • for-pay scales (actually, they seem to be hanging on)
  • free WiFi on Sukhbaatar, er Chinggis Khaan, er, Sukhbaatar Square
  • Sukhbaatar Square, er, Chinggis Khaan Square
  • open gullys/missing manholes
  • street kids
  • packs of dogs
  • smoking
  • the sixth-floor souvenir shop at the State Department Store (though perhaps seasonal)
  • oversized sunglasses for women that were so popular across Asia (?) some years ago
  • Nescafé (see above on coffee culture)

What will appear in the future

  • navigation systems
  • wheelchair accessibility
  • bike lanes
  • new airport (apparently)
  • subway (really, I wish they had selected light rail instead)
  • Harley-Davidson
  • urban renewal and historical restorations embracing district north of government house (National University of Mongolia, German embassy, etc.)
  • road signs in the countryside (and not just the very random, very occasional ones that can be found now)
  • street names and signs in the city
  • network of cross-country riding trails (though not in central Ulaanbaatar)
  • parking (meters)
  • Combined Heat and Power Plant #5 (yeah, right!)
  • hipsters discovering УАЗ (minivan and jeep)
  • Canada Goose, Arc’teryx.

What will disappear in the near future

I’m going out on a predictive limb here… 2-3 years is what I mean by “near future”.

  • stray dogs
  • stretched-out hand to signal for a car ride
  • that awkward extra half-step on most stairs
  • whitening make-up.

What will disappear in the medium-term future

I mean around 7 years or so.

  • new (to Mongolia) cars that are right-hand drive
  • the neo-classical Ministry of Foreign Affairs building, with its Stalinist (if that’s an architectural style) spire
  • deels in the city
  • some of the downtown university campuses
  • buildings of 4 floors or less in the urban core
  • Russian minivans (УАЗ452) but see above.
Posted in Curios, Social Change, Ulaanbaatar | Tagged | Leave a comment

Learning about Development Policy in Uvs Aimag

I just visited Uvs province in Western Mongolia for the first time and had the chance to meet with stakeholder representatives from government, civil society, small businesses, and the corporate sector to learn about their development policy.

One of the aspects that makes Uvs interesting is that the mining industry is merely beginning to be considered for diversification beyond agriculture, especially the famous, nutritious and delicious seabuckthorn. Generally, Uvs seems to be doing fairly well economically on the basis of its agricultural sector.

Seabuckthorn field from above near Ulaangom, #Mongolia A photo posted by Julian Dierkes (@jbdierkes) on

Hopes for mining development are focused on coal, gold, iron ore, oil, rare earths, and salt. A significant number of exploration licenses have been granted recently (75% of applications are being granted, 190 exploration licenses, 48 “A” licenses issued, ) and exploration at a number of projects appear to be underway. The development of a mining industry is seen as a main pillar for overall economic development.

It is clear that at some point as these projects rev up and might lead to production of some kind, demands for regulatory and inspection frameworks on the aimag government will increase significantly.

Fear the Ninja

The element that makes mining regulation a central concern for the administration as well as civil society is the arrival of artisanal and small-scale miners in Uvs, primarily prospecting for gold on the border with Khovd aimag. It’s not that the presence of ninja miners is entirely new, but the suspicion in the population towards ninja mining has grown significantly to be quite hostile now. And that even though many of the ninja miners appear to be local and not migrant miners from other regions as had been the case in several previous round of gold rushes throughout Mongolia.

Even though a number of the ninja projects have been formalized under the recent legislation that allows cooperatives of ninja miners to formalize mining rights, the administration is quite wary of ninja mining as it is an ongoing process rather than a finite business. With formal and mechanized mining, there comes a point in the project when it is finished. In contrast, at least in the view of stakeholders in Uvs ninja miners will abandon a location, but others will then move in to continue mining there leading to continuous and messy (in the absence of any rehabilitation) sites.

Related to this challenge is the observation that others across Mongolia have also made, that projects that are purportedly rehabilitating mining sites are really actually engaged in additional mining.

The fear of the impact of ninja mining leads to some of the sense of urgency in addressing mining regulation in Uvs where a formal mining industry of a significant scale is merely on the horizon

Desperate for information and education

The clearest message from all stakeholder representatives regarding needs in addressing mining was that information and education of all involved is most urgently needed. All discussions agreed that citizens at the local level have almost no understanding of the mining industry and of the impacts as well as the benefits that development might bring.

Basic introductions to industrial mining as well as a deeper understanding of the life cycle of a mining project (including the ebb and flow of investments, construction activities, employment, profits, (planning for closure) is needed at all levels in Uvs, from herders in the countryside to civil society centred on the aimag capital, Ulaangom, to local state authorities and inspectors, and the aimag administration. By all accounts, this need precedes all further technical education that is also deemed necessary particularly for the various inspectors.

In discussions of the optimal way to deliver such knowledge and training, many civil society representatives emphasized the need for in-person training, ideally by going from ail to ail on the basis of written materials that can then be explained by trainers. There are also some possibilities to target younger audiences through social media.

It was surprising to hear that there currently does not appear to be any organized environmental movement/NGO in Uvs.

Mine rehabilitation a recurring challenge

Another strong message was that mine closure is one of the most difficult topics for officials as well as residents to grapple with. It is unclear to most residents what exactly successful rehabilitation might look like and the financial tools that would make this possible also remain very murky. This even though mine closure is a topic that has been addressed by several development projects, including some targeting of Uvs. A very interesting suggestion from a civil society representative was the notion of involving herders in reclamation projects.

Transparency

Concerns about transparency of licensing and mining operations also centred on a lack of education. Without a deeper understanding of the workings of a mining industry, civil society representatives mentioned that attempts to press government officials for information have almost inevitably been blocked in part because the lack of precision in questions, and a lack of understanding of parts of government officials why transparency is an element in more inclusive and sustainable development. Civil society and business representatives in particular lamented the lack of willingness to provide information on the part of provincial and local officials.

Thanks to Oyun-Erdene Ch. and Damdinnyam G. for sharing their impressions of our visit.

An Aside: Social Media

You know that the world is run by social media when you notice that the middle-aged ladies representing civil society in a far western province of Mongolia are checking Twitter during the coffee break! I wonder if any of them follow me or if I follow them.

Posted in CIRDI, Civil Society, Countryside, Development, Mining, Policy, Policy, Regulation, Social Issues, Social Movements, Water | Tagged | 2 Comments

Contract transparency in Mongolian Mining

 Unbundling contract transparency in the extractive industry: the case of Mongolia – Part I

Contract transparency is crucial in ensuring deals in the extractive industry deliver better outcomes for the host nation and community. Civil society has long campaigned for contract transparency in ‘first and third world’ traditional mining countries. Except Australia, however, contracts are not common in ‘first world’ mining countries. Instead, we find in these countries a mature licensing system embedded in a well-developed legal system.

History of Contracts in Mongolia

Contracts in the extractive industry are often a highly contested political issue in emerging mining countries like Mongolia. Here, contracts with project proponents are a preferred way to grant mineral rights—particularly for large-scale projects. The Mongolian government has established many contracts with mineral resource developers since the country adopted a market-based economy in 1990. Product-sharing agreements between the Government of Mongolia and Soco Tamsag Mongol, a USA-registered oil company, in the early 1990s and a Stability Agreement with Boroo Gold LLC, a subsidiary of Canadian registered Centerra Gold LLC in the late 1990s were among the earliest contracts. By 2015, the Government of Mongolia has established two Investment Agreements, four Stability Agreements, 24 Product Sharing Agreements, and three Concession Agreements. The number of local level agreements between local governments and project proponents is not known. Moreover, the Government of Mongolia has developed model templates for establishing Product Sharing Agreement and Concession Agreement.

Stability Agreements established since 1998 were not disclosed until public discontent mounted due to some unfavourable contract terms. Three of them are available online. However, this type of contract was replaced by Investment Agreements under the Investment Law of Mongolia in 2013.

The Oyu Tolgoi Investment Agreement established in 2009 is available online. The Investment Agreements that Mongolian Gold or MAK LLC established with the Government of Mongolia in October 2015 are not publicly disclosed though it has been widely discussed in the media and parliament.

Under the Law on Concession enacted in 2010, several infrastructure concession contracts such as a concession agreement for the Erdenet-to-Ovoot railway with Northern Railways, a Mongolian subsidiary Australia-based Aspire Mining have been published online by government.

Full documents of Product Sharing Agreements of oil companies are not available in Mongolia. Surprisingly, the Open Oil, an international repository of oil contracts, contains three Product Sharing Contracts established in Mongolia.

Most local level agreements (as discussed in my recent GOXI post) are not publicly disclosed yet.

Discourse on Contracts in General

Contract transparency narratives in Mongolia are about these concrete agreements and potential agreements in the future such as a long-waited Tavan Tolgoi Investment Agreement. Surprisingly, the narratives are overgeneralized. Contracts in the extractive industry are often bundled as a general term that contains different types of contracts and agreement but the very nature and specifics of each type of contracts and corresponding financial and political significance for the country are not made clear. This approach to contract transparency seems common in other countries and international policy documents, except a focus on oil contracts.

A goal of contract transparency initiatives is to publicly disclose all contracts and agreements, especially through mandatory legal requirements. This goal has been achieved in very few countries. In many countries, contract transparency initiatives have often hit a brick wall of arguments for maintaining commercially sensitive information of investors and companies. Unless there is significant societal demand expressed through broad-based political and social discontent, the disclosure of contracts—particularly large-scale projects—has rarely been encouraged by governments and companies. Often such a ‘singled out’ discontent and discussion have led to better access to information and more disclosure of contracts. Similarly, discussions that single out a type of contract such as Product Sharing Agreements and Local Level Agreements or unbundle the general narrative of contract transparency may deliver better net results.

Posted in Corruption, International Agreements, Mining, Oyu Tolgoi, Social Movements | Tagged | 3 Comments

Methodology as a Methodology

As exhausting as all-day meetings with stakeholders can be (with a bit of jetlag, multiple languages and instant coffee thrown into the mix), I am always fascinated by how individuals present themselves, what they are looking for, and how questions and desires are framed, particularly regarding the terminology that is used.

With long stretches of untranslated Mongolian discussion that forces me to listen very carefully (as long as I am able to concentrate), I often notice many aspects of Mongolian social relations and am fascinated by these opportunities.

During recent Ulaangom meetings I noticed in particular how often the word “methodology” is used by Mongolians (арга зуй). In my experience, methodology is a word that is very rarely used outside of academic circles and universities in Canada. Why is it so common in Mongolian discussions?

Obviously I am delving into the realm of speculation here, but I hope I can stay clear of the stereotyping I often associate with discussions of “mentality” (Mongolian word for national identity or culture, worth a discussion in its own right).

It does seem to me, however, that the focus on methodology is rooted in a desire for scientific approaches with precise and definite answers that certainly was a strong element in theoretical socialism, but also in state-planning, as fake as this precision may often have been. The desire to know about a methodology might also reflect a concern about policy that may or may not be rooted in a methodology.

Of course, if the hunch that the frequent use of “methodology” is rooted in socialist discourse, it might also imply the expectation of guidance “from above” and the general respect that policy-makers of all kinds certainly command in the countryside.

No “best practice” on offer here

Stakeholder representatives are thus not at all shy about asking for instruction in a way that many audiences or interlocutors in Canada and elsewhere might be. A Canadian audience or stakeholder might be much more insistent on the process that leads to decisions whereas Mongolians are often keen on results and instructions, as long as the process by which these results are obtained is a scientific or trustworthy one.

When it comes to mining policy, this is an expectation that doesn’t match Canadian practices well. In discussions of the mining industry, we often emphasize that Canadian experiences don’t necessarily offer solutions to Mongolian challenges. This response and attitude is rooted in recognition that much has gone wrong in mining policy over many years in Canada and continues to go wrong, while some other aspects may be counted as successes. Even projects that seem to be successful by whatever yardstick they are measured don’t necessarily offer clear implications for other projects. This way of thinking regards notions of “best practice” as hubris and instead tries to offer suggestions on policy directions to avoid and some discussion of “good practice”, but always in a context that requires adaptation for local conditions, needs, and processes.

Implications for Understanding Rio Tinto Operations?

A topic that has been an almost continuous source of puzzles for me over the years has been the nature in which Rio Tinto/Oyu Tolgoi and before them Ivanhoe Mines has operated in Mongolia. It has always struck me, and most discussions have confirmed this, though some Oyu Tolgoi interlocutors have claimed otherwise, that OT is essentially run by a spreadsheet that Rio Tinto sees equally applicable to mining projects all over the world. That spreadsheet does not seem to have a lot of columns – if any – for local context, local needs, and local politics at the very local as well as the national Mongolian level. While I am generally critical of this perspective for increasing the risks of a loss of social license for a project that is so central to Mongolia’s development, I have also wondered whether this is actually not a reasonable way to run a multi-decade project on this skale. The operation-by-spreadsheet suggests a perception of local politics as “noise”, i.e. variability that cannot be controlled or addressed in an effective manner. My observations of the politics of Mongolian policy-making would actually agree with elements of such a perspective. Still, I cannot help but feel that a more concerted effort at adapting a project to local circumstances would solidify social license.

The above discussion of “methodology” now has me wondering whether the focus on some scientific precision that I think is implied in this word, is not actually well-suited to an operation-by-spreadsheet approach.

Unfortunately, as is the case for most musings about mentality, prevailing patterns of responses to questions, etc., these are questions that are very difficult to address when they involve highly complex humans and social interactions. Such questions face huge methodological hurdles to social scientists and the depth of data available for Mongolia doesn’t really make specific answers possible.

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Guest Post: Mongolia 2016 – Will there be light at the end of the tunnel?

By Stefan Hanselmann

If the development of the last quarter of 2015 can serve as an indicator, we can eventually expect for next year some real light at the end of the tunnel. Unfortunately, Mongolia had to learn the hard way that trust and a good reputation within the public domain is hard earned but easily lost. Whether it is Mongolian citizens or international investors – in the end both were equally disenchanted and somewhat at a loss over the question why Mongolian politicians found it so hard to rally for the common cause of keeping Mongolia´s investment story alive.

Improved economic outlook

Chances are good that 2016 will be a turning point. For one, there is the recovery of the inter­na­tional copper market. Projections for 2016 done by the International Copper Study Group indicate that the market should see a small deficit of around 130,000 metric tons as demand growth outpaces production growth. This reflects changes in market conditions over the course of 2015. After all, global production cuts are starting to turn the table in favor of the supply side. Secondly, Rio Tinto announced in December 2015 that it could secure the financing for the development of its underground mine. Although the effect on the Mongolian economy won´t be immediate and certainly not as staggering as the years 2010 to 2012, the US$2.5b USD that will be invested in the country from 2016 onwards will stabilize the economy, ease tensions on the labor market and create additional employment not only with the Oyu Tolgoi company, but also with domestic suppliers of goods and services. Projections for the labor market estimate that by 2018 at least 40,000 additional technical staff will be required in Mongolia’s mineral resource sector and in the upstream and downstream industries, particularly in electrical, construction, and mechanical occupations. However, the training market is currently unable to satisfy this need – neither in terms of quality nor quantity. Given all the construction and industrial projects the government plans to implement, it will be of utmost importance to have Mongolian experts engineer the projects and operate the machines. But creating value within the country starts with a proper education of future generations.

As some of the urgently needed foreign direct investment will return to the country, 2016 will see an improved balance of payment situation. With disputes over seized licenses settled and new exploration licenses issued, the government will continue to send a strong message that it is open for business. The inflow of foreign capital will also help to prop up the Mongolian currency, so that the Central Bank can ease its interventions on the currency market in order to keep the Mongolian Tugrik below the politically and psychologically important rate of 2000 MNT to the US Dollar.

Economic diversification

The government will continue to pay close attention to the diversification of the Mongolian economy and improved competitiveness of the agricultural and meat sector. More agreements with additional meat processing plants in export markets such as Russia and China can be expected. This will help to promote private investment for agriculture and the dairy and meat industry. More importantly, it will help to expand and diversify the labor market that, like the economy as a whole, overly depends on the mining industry. In this regard it will be also very interesting so see if and how the Chinese “New Silk Road Initiative” will be incorporated into the Mongolian economic diversification strategy. And of course, which economic potential can be unlocked in Mongolia´s western region once the new road connecting Mongolia´s Bayan Ulgii and Hovd aimags with Urumqui in China and Bysk in Russia will be completed.

Political change is looming – once again

So, will everything be good next year? Like so often in Mongolia, the answer will wholly depend on the political process which will once again be shaped by parliamentary elections in June 2016. Much is at stake for the established political parties. Having seen 13 governments come and go within 23 years, the electorate is acutely aware of the need for political stability. So are foreign investors. The next government will be once again a coalition, hopefully born from a true spirit of national unity. The people of Mongolia deserve it, the country needs it.

About Stefan Hanselmann

Dr. Hanselmann is director of the German development assistance program Integrated Mineral Resource Initiative. The program advises on sustainable social and economic development on a national as well as regional level. He works in Ulaanbaatar since 2008. His special areas of interest are development of resource-driven economies and regional economic integration.

Posted in Bilateral Aid, Business, Development, Economics, Foreign Investment, Ikh Khural 2016, Inflation, Mining, Oyu Tolgoi, Policy, Politics, Stefan Hanselmann | Leave a comment

EITI in Mongolia at the Tipping Point

The EITI (Extractive Industries Transparency Initiative) is no longer a stranger in the Mongolian resource governance discourses as witnessed at the First National Forum and 5th National Corporate Social Responsibility Forum, both organized in November, 2015.  The debate now focuses on how legalize this international initiative (a norm) and how to make it simpler, useful for media and general public.

A tiny office, funded by the EITI, has made substantial contribution to localizing the initiative with enthusiastic support from the Ministry of Mining and more importantly, a numerous mining-focused civil society organizations along their funders like the Open Society Forum and Natural Resource Governance Institute.

The national council, chaired by the Prime Minister, was established, the memorandum of understanding with government, private, and civil society organizations was concluded, and the standard operating procedures for the national council, local council, and secretariat were developed.  The EITI is now reflected in the State Policy in Mineral Resource Sector until 2025 and other executive directives. The secretariat of 3 staff coordinates with the Prime Minister’s Office, government agencies, provincial authorities, mining companies, and about 30 non-governmental organizations (i.e., Publish What You Pay network, Civil Council of Natural Environment).  The other important task of the EITI is the data collected and validated by the independent auditor for discrepancies from 2006.  By 2015, about 1800 companies provided their data for the public usage.  From this perspective, it might be safe to conclude that the EITI norm for transparency has arrived at the tipping point to become a local norm.  However, there are numerous challenges remain for passing the tipping point.

First, the EITI lacked support from the parliament and senior bureaucrats in the government. Despite the endorsement letter and ceremonial type of appearing of Prime Minister’s senior advisor, who are the secretary of the National Council and Mining Minister, the EITI has lacked a strong political will and support from the parliament, especially those members in favor of responsible, transparent mining.  Even though the bill on extractive industry transparency submitted to the parliament, the working group has not even submitted to the respective standing committee.  The main debate at the working is whether to keep EITI as a voluntary standard or mandatory one.  Given the political upheaval and upcoming elections, it is unlikely that MPs devote their efforts and resource to the EITI bill.

Second challenge is what would happen if the international funding from the World Bank, Open Society Forum, and limited funds from the government stops.  This is the most critical challenge for localizing the EITI.  Unless the government somehow finds ways to fund the EITI and its secretariat (or some other forms), the EITI would lose the momentum and remain only on the paper.

Despite these pessimistic observations, some companies, especially Western or Western-oriented Mongolian companies look at the EITI as a tool to increase their credibility in terms of responsible, transparent mining companies.  In the similar line, the Ministry of Mining and some government officials also understand its benefits of positive signalling to foreign investors and domestic audiences.  Once the Ministry of Mining and mining associations endorses this initiative, Chinese, Russian-Mongolian joint, and Mongolian state-owned enterprises submit their reports regularly, if not enthusiastically.  And, importantly, civil society actors and interested public now begin to ask how to use this new tool effectively.  Of course, this puzzle is not only occurring in Mongolia, but in all states joined in the international initiative.

 

 

Posted in Corruption, EITI, Mining, Mining Governance, Politics, Social Issues | Tagged | Leave a comment

UN Human Rights Council

I recently wrote about President Elbegdorj’s address to the UN General Assembly this September and his statement that he is seeking UN recognition for Mongolia’s status as “permanently neutral”. Elbegdorj ended this speech with a call for support from other UN members for Mongolia’s candidature for membership in the UN Human Rights Council.

On Oct 28 172 (of 192) UN members voted Mongolia onto the Human Rights Council with the highest number of votes for any candidate in the Asia/Pacific region where the election was actually competitive with seven countries vying for five spots.

There are two aspects that make this interesting: a) what does election onto the HRC mean for Mongolia’s foreign relations?, b) what does this mean in terms of Mongolia’s human rights record and substantive engagement with a human rights agenda?

Mongolia’s Foreign Policy and the UN

I argued that the claim for “permanent neutrality” was a natural outgrowth of Mongolia’s overall foreign policy, particularly the Third Neighbour Policy.

[Perhaps I should start referring to the Third Neigbour Policy as “3NP” since I write about it fairly regularly. That offers the possibility of establishing #3NP as a more specific hashtag alternative to the generic #MGLfp.]

Likewise, election to the human rights council is a measure of the success of Mongolia’s attempt to engage the rest of the world beyond Third Neigbours and specifically to engage the UN.

Leaving aside speculation about Elbegdorj’s post-presidential-retirement planning and whether that may involve a UN position, the UN has been a focus of various Mongolian initiatives.

  • UN peacekeeping: According to UN Statistics, there are currently (30 Sept 2015) 933 troops and 14 military experts from Mongolia involved in peace-keeping operations. That puts Mongolia ahead of populous countries like France (866 troops) or Japan (272 troops)
  • UNEP: Mongolian MP S Oyun serves as the president of the UN Environment Assembly, and Mongolia hosted World Environment Day in 2013
  • Security Council acceptance of Mongolia’s status as a nuclear-free power
  • I recently had a chance to learn more about the International Think Tank for Landlocked Developing Countries which is being established in Ulaanbaatar

What does Mongolia gain from all of these activities? Most significantly, a prominence in international affairs that belies Mongolia’s population or economic significance.

Does that prominence translate into material benefits? Possibly. Mongolia, after all, has been the recipient of generous donor activities by various development programmes. But the 3NP is ultimately meant to balance the somewhat overbearing influence that Mongolia’s two neighbours have or might chose to exercise more directly at some point.

In this area, I would note that election to the Human Rights Council is a milestone for the 3NP and for Mongolian visibility on the world stage.

This election is also a stepping stone to a successful run for membership in the UN Security Council for 2022 as mentioned in Elbegdorj’s address to the UN General Assembly in 2014.

Human Rights in Mongolia

The question of the human rights situation in Mongolia is a difficult one. There are two aspects to this question: a) what has Mongolia committed to (in part in the context of its HRC candidacy), b) what is the actual situation.

Commitments

Mongolia’s commitments have been detailed in its statement ahead of the HRC election. This lists various conventions that Mongolia has signed up for (too numerous to list here, particularly since I lack the UNology background to be able to say much about the relative significance of these), but also includes action items derived from the human rights report. These recommendations appear on p. 4 of the document and include:

1. Abolition of the death penalty;
2. Measures against torture and other cruel, inhuman and degrading treatment or punishment;
3. Protection of the rights and interests of vulnerable groups, including children, women, the elderly and persons with disabilities;
4. Increasing women’s participation at the decision-making level;
5. Combating domestic violence;
6. Protection of the rights of the child;
7. Combating human trafficking;
8. Ensuring full respect of the right to freedom of expression;
9. Accession to international treaties and reflecting them in domestic legislation, and the improving of reporting on the implementation of those treaties;
10. Strengthening the mandate of the National Human Rights Commission;
11. Organizing trainings on the application of international human rights treaties, and others.

Voluntary pledges and commitments (pp. 5-6) include:

International

  • principles of non-selectivity, universality and indivisibility of human rights
  • continued support the United Nations High Commissioner for
  • strive to promote non-discrimination, gender equality and women’s empowerment and the rights
    of persons with disabilities, combat violence against women and children, fight human trafficking in all its forms,
    protect freedom of opinion and expression, freedom of religion and belief, and freedom of assembly and association, and promote the protection of human rights defenders.
  • consider ratifying the Kampala Amendments to the Rome Statute of the International Criminal Court, and consider making a declaration under article 22 of the Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment. It will also consider accession to the Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters.
  • support international efforts towards the elaboration of a legally binding instrument to regulate, in international human rights law, the activities of transnational corporations and other business enterprises.

National

  • pursue the comprehensive implementation of its international obligations on human rights and enhance the promotion and protection of human rights at the national level through expanded collaboration with all stakeholders.
  • ongoing legal reform covers an extensive list of rights to justice and due process of law, including the rights of suspects, accused, defendants, advocates, victims and witnesses.
  • strengthen its ongoing efforts to promote human rights education, gender equality and the empowerment of women, including in rural areas, implement measures to ensure the protection of the rights of the child, of the elderly and of people with disabilities and to address violence and discrimination against women, and intensify its fight against trafficking in persons and its prevention.
  • will implement measures directed at protecting the rights of nomadic people with regard to the use of land and traditional natural resources and at ensuring a conducive legal framework for the protection of human rights defenders.
  • values people’s participation as a key element of human rights and democracy and to this end, if elected, will work closely with national civil society organizations in relation to its deliberations as a member of the Council.

[My selection of total number of commitments listed.]

As one might expect in a candidate’s statement, the rhetoric is flowery and dripping with aspirations, “Respect for human rights and fundamental freedoms, justice and equality are at the heart of all policies pursued by the Government of Mongolia.” (p. 7)

Actual Situation

The two areas where questions about the human rights situation in Mongolia are raised most commonly are a) arbitrary detention and violence in policy custody and prisons, and b) the alleged existence of North Korean labour camps.

For both of these topics, I have found it very difficult to find concrete evidence over the years.

To most Mongolians, it does seem very plausible that detention can be somewhat arbitrary and possibly at the behest of a powerful person. There do seem to be a number of cases that many people interpret as a form of political harassment where the Anti-Corruption Agency in particular seems to be instrumentalized through its investigative powers. That would be arbitrary detention in the case of relatively prominent, visible victims.

When it comes to more anonymous “regular” Mongolians, the allegations of arbitrary detention and some violence also seem plausible. This is an area where I’ve been asked to offer an expert opinion in various asylum procedures in North America and Europe. Some of these claims centre on the asylum applicant’s conflict with some powerful person who is then able to mobilize the police to harass the claimant. This, as well, seems entirely plausible, though I am never able to speak to the specifics of a case, more to the general plausibility.

Arbitrary detention is thus a regular entry in international human rights reports, such as those by Amnesty International.

The second issue that keeps being mentioned and that I also receive somewhat regular questions about by journalists is the alleged existence of labour camps filled with North Korean forced labour. The plausibility of this allegation rests on the historically close links between North Korea and Mongolia that are rooted in the Korean War and the safe-keeping of a large number of Korean children in Mongolia during this time. A situation where the North Korean government proposes the contract employment of North Koreans in significant numbers, presumably in construction, is thus entirely imaginable, and the assertion that a number of these North Koreans may be forced into this role, is also plausible. This allegation appears to be rooted in a 2008 Human Rights Watch report. As far as I can tell, this allegation has been recycled/resurrected periodically by journalists. I am not aware of more concrete evidence for this situation.

Other human rights issues that are mentioned periodically are violence against women, some ethnic groups (most frequently, ethnic Chinese), and LGBT discrimination. Again, when these are mentioned as potential problems, there is a certain face validity to that, but allegations of actual cases of abuses remain unsubstantiated to my knowledge.

In discussions of these allegations there are always international and domestic perspectives. Internally, some Mongolians get quite frustrated with the flowery rhetoric of human rights and democracy from their government when they are also aware of violations or at least overly flexible interpretations of some laws. But when comparing Mongolia to many other countries in the world, the extent and nature of abuses seems somewhat reduced in significance. In the case of the UN HRC it is very clear that there are and have been MANY members of the Council that have significantly worse human rights records than Mongolia does, so I would certainly not for a moment suggest to question the legitimacy of Mongolia’s participation in this UN forum.

Posted in Human Rights, International Relations, Mongolia and ..., UN | Tagged | Leave a comment

Thoughts on Constitutional Reform

I am not a constitutional scholar. My observations on the constitutional reform proposals that are being considered by the Mongolian parliament are thus based on my understanding of Mongolian politics on the one hand, and my experience of living as an informed and engaged citizen under different constitutional regimes (parliamentary democracies of sorts Germany, Japan, UK, Canada; presidential democracy U.S.).

Reforms in Principle

I do think there is a good case for pursuing reforms in Mongolia. That case rests primarily on the observation that the hybrid presidential-parliamentary system continues to raise practical challenges for Mongolian politics, and that successive prime ministers have felt somewhat hamstrung by competing for power with presidents, but also by not having full control over their cabinet, even when they are backed by solid majorities.

25 years after the establishment of democracy and 23 years after the promulgation of the constitution seems like a fine moment to review provisions in the constitution that do need a review and a reconfiguration of the system to rebalance the powers of the president and prime ministers.

On the other hand, it is also important to remember that constitutions everywhere have been framed to make them durable and to make constitutional changes very rare. The basic structure of the U.S. constitution has thus been in place for over 220 years and has only been changed in some details (though of course it, like many other constitutions, has been reinterpreted during this history).

While some of the proposals that are circulating now in Mongolia are rooted in long-standing questions about the overall balance of power, other proposals seem more recent in nature and I would be concerned about a process that seems potentially hasty as it may be unfolding now.

On the positive side, the proposals do not seem to have a specific partisan slant to them, i.e. they do not seem to be designed to expressly benefit one party over another. Yes, the MPP may be more likely to emerge from the parliamentary elections in 2016 as a winner and thus the next MPP PM might benefit from the proposed changes, but there does not seem to be anything in these proposals that benefits the MPP or any other party permanently.

Size of Parliament and the “Double Deel”

Some of the challenges that some Mongolian observers associate with the constitution are not obvious to me as a foreign observer. The simmering “double deel” debate is one of those elements. In Canada and Germany, for example, all ministers wear the double mantle of being members of parliament and serving in cabinet. Yes, the relatively small number of parliamentarians in the Mongolian State Great Khural does pose some challenges, but is not far from the numbers one would find in state legislatures of more populous countries. Here, in the Canadian province of British Columbia, for example, a population of 4.6mio is represented by 85 MLAs (Members of the Legislative Assembly), and cabinet includes 21 members, all of whom are MLAs. With a roughly comparable population, that is a comparable number of members of parliament, and a significantly larger number of members of cabinet compared to Mongolia. This has not led to questions about parliamentary accountability or the manageability of cabinet.

In Germany, the state of Schleswig-Holstein with 2.8mio is closest in population to Mongolia. The Landtag in Schleswig Holstein has 69 members. Including the premier, the cabinet has 8 members, all of whom are members of parliament.

Yes, clearly a provincial or state legislature does not have some tasks and powers that a nation does (defense and foreign affairs, most notably), but Canadian and German federalism means that provinces and Bundesländer do have significant powers, so the comparison seems at least informative.

Election of the President

In my interpretation of the proposal for an election of the Mongolian president, this looks similar to the German Bundespräsident as s/he is elected by the Bundesversammlung. That federal assembly is only called for the election of the president. It is composed half by members of the federal parliament and half by elected members of state legislatures. Why? Because this is yet another important element in a federal structure that safeguards regional rights. Other prominent elements in this federalism are the balance of power between parliament (Bundestag) and the federal council (Bundesrat) that includes the state premiers, and certain areas of policy-making that are expressly left to the states’ decision-making, like education. This federalism is rooted in a desire for regional balance, but also for checks and balances against national power that results from Germany’s historical constitutional experience.

By contrast, Mongolia is not a federal state, but fairly centralized with a state-socialist heritage that is also more unitary than federalist. There are few areas of policy-making that are expressly assigned to the aimags, though recent initiatives are devolving more decision-making power to the aimags. The exception to this general pattern could be the rights accorded to Kazakhs in particular, as they dominate the population of Bayan-Olgii.

An assembly to elect the Mongolian president that would include representatives of aimag khurals would thus be a step toward federalism without a clear argument (that I am aware of) for why this step should be taken.

By contrast, the proposal to have aimag governors nominated by the prime minister rather than letting aimag khurals elect their governor is a weakening of the regions.

Countries that are similar to Mongolia with its 21 aimags include Japan with its 47 prefectures and France with its 96 départements in France propoer. But the 知事 in Japan is directly elected as a governor of a prefecture. The French department is presided over by departmental councils that elect a president. While the French and Japanese administrative units might thus seem closer to an aimag than a German state or a Canadian province, they are governed by directly or indirectly elected officials.

Strengthen the regions in the election of a president, but weaken them in their day-to-day decision-making? Why?

Also note that many German citizens would be hard pressed to explain the nature and composition of the Bundesversammlung if stopped on the street. While the limited powers of the German president mean that democratic legitimacy may not be at a premium, why create an election that is difficult to understand for Mongolians when they previously were able to elect a president directly and in a very clear manner?

Implications of a Symbolic Presidency

Foreign policy is one of the areas where confusion between presidential and parliamentary/prime ministerial powers has been a challenge. It would seem that the proposals under discussion would resolve this challenge by relegating the president to a ceremonial and symbolic role.

In its aims to balance the importance of its two immediate geographic neighbours, Mongolia has long pursued its Third Neighbour Policy. Beyond relations with China and Russia, this policy has been very successful at raising Mongolia’s profile internationally and the country thus plays a more visibly role on the world stage than it might based simply on its population, economic or geostrategic importance. Some of this success is due to the efforts of Mongolia’s presidents. For recent successes at the UN, for example, this has been an era of particular entrepreneurialism by Pres. Elbegdorj and has met with some success.

Even an activist prime minister with foreign policy decision-making power would not be able to replicate that success, I think. A head of state who also holds executive functions is a more likely summit partner than a symbolic president, or a powerful prime minister. [I wonder if there’s any empirical evidence for this, i.e. are prime minister representing parliamentary systems less likely to be invited on state visits than presidents in presidential systems?] By transforming the presidency into a largely ceremonial role and adding powers to the prime minister’s portfolio, the constitutional reforms envisioned might thus be reducing Mongolia’s potential impact and visibility on the international stage.

Posted in Aimags, Constitution, Democracy, Foreign Policy, Governance, Politics | Tagged | 3 Comments

Constitutional Revision

It appears that all of a sudden the push for constitutional revision is alive and becoming more concrete with a multi-party submission of a draft in parliament that appears to have the support of 60% of MPs.

It appears that some of the proponents are hoping to organize a referendum (based on proposed revisions to the law on referenda) on changes to the constitution in time to be able to make these changes before the six-month deadline for the election law, as well as a provision in the constitution that changes have to be enacted at least six months before the next election.

Below is my quick summary of proposals for constitutional change based on the parliamentary draft as summarized by news website ikon.mn.

  1. 1/3 of the members of cabinet can be “double deel”, i.e. MPs and serve in cabinet
  2. president to be elected by a combined vote of heads of provincial assemblies (amaig khural) and parliament members. This appears to be similar to the German Bundesversammlung that elects the (largely ceremonial) federal president (who just visited Mongolia recently).
  3. The government is made up of nine ministries: finance, interior & justice, foreign affairs, nature & development, defense, education, health & social development, agriculture, and infrastructure.
  4. The prime minister can name an additional three ministers without portfolio to cabinet.
  5. The prime minister would name cabinet, but ministers would not be subject to parliamentary approval.
  6. Darkhan and Erdenet would be given special status as cities different from aimags.
  7. The State Great Khural would be expanded to 99 members from the current 76.
  8. The State Great Khural would serve for five years (rather than the current four).

There are additional specifics in the parliamentary draft pertaining to the PM’s involvement in appointing judges and the state attorneys, and the governors of aimags and soums.

Comments

These proposals appear to address some of the long-standing challenges built into Mongolian democracy, especially the unclear status of presidential vs parliamentary power, and would turn Mongolia into more of a parliamentary democracy, rather than keeping elements of a presidential system.

That clarification would most likely be useful and productive. The president would be reduced to a largely symbolic role as heads of state have it in Westminster democracies or some continental European versions (such as the Federal Republic of Germany).

Some of the proposals speak to issues that have captivated Mongolian debates, even though it is not always clear to observers why these issues are so important. An example would be the “double deel” concern that has animated political discussions for the past two years.

Other proposals may just take the occasion of constitutional change to also implement an update, for example recognizing the growing role of Darkhan and Erdenet as cities.

These revisions strengthen the prime minister’s position quite significantly and it is not clear to me, for example, why appointment of aimag governors should shift from the aimag assemblies to the prime minister.

Surely, many of these specifics will be debated in parliament in coming weeks.

As the draft has been submitted by a multi-party group of parliamentarians, it seems like it should be taken seriously as an initiative toward constitutional revision.

Also, since Pres. Elbegdorj is on his second and thus final term as president, he has little to loose personally from a reduction of presidential power. Under other scenarios a sitting president might be unlikely to support a shift towards a parliamentary democracy. If the changes were to be enacted as proposed, Elbegdorj, will have been the last powerful president.

Constitutional Revision

The constitution (according to its Chapter 6) can be changed either by a 3/4 majority of all members of parliament (i.e. 57 MPs), or by a 2/3 majority a popular referendum can be initiated. If a majority of eligible Mongolians participates, and a simple majority of those participating approves the changes, these changes are enacted directly (Art. 25).

Comments Please!

This post was written somewhat hastily as I could make sense of some of the drafts with some help, so I’m sure I’ve missed or misunderstood aspects of the proposals and would welcome all information in the comments below!

Posted in Aimags, Constitution, Democracy, Governance, International Relations, Judiciary, Politics | Tagged | 1 Comment