Local Level Agreements in Mongolia: A Need for Government Leadership and Policy Clarity

By Byambajav D

Before any mineral exploration and mining can take place in Mongolia, the country’s 2006 Minerals Law requires that the host local government and license holders sign a “local level agreement” (LLA). LLAs typically include commitments and obligations that help enhance environmental protection, local content and infrastructure investments.

And yet the implementation of the law has been inconsistent, and local governments and mining companies alike have pled for clarification around LLAs’ objectives and scopes. With this in mind, the Natural Resource Governance Institute (NRGI) and the Open Society Forum (OSF) have worked together to improve the legal frameworks for LLAs as well as improve practices on the ground. We do this in various ways: establishing the independent monitoring of LLAs via civil society organizations; presenting research-informed policy recommendations; and facilitating regional capacity building workshops for all relevant actors.

There is now growing momentum to define the core objectives and principles of LLAs. But in order to attain true clarity around this issue, the national government itself must do a better job of facilitating a national dialogue. Below, I outline the main reasons why this is necessary, and suggest how the government can take the lead in improving LLAs.

Government-issued model agreement has caused more confusion

Mongolia’s national government showed a commitment to improving the uptake of LLAs when it issued a model for LLAs in 2016­­, called the “Model Agreement on Protecting the Environment, Developing Infrastructure related to Mine Operation and Plant Construction, and Creating Jobs.” Unfortunately, this five-page document did not provide much help to either local governments or mining companies—at best, it has been used as a reference, but most actors ignore it entirely because of its narrow scope and ambiguity about the model’s legal power. In fact, participants in regional workshops have said that the model has led to more confusion than clarity.

For it to become useful, the Ministry of Mining and Heavy Industry (MMHI) should revise the model agreement and define it as a hybrid document that consists of a) a mandatory framework that defines the core elements of an LLA and b) a non-binding guidance document for potential agreement processes and content that local governments and mining companies can adjust to their respective contexts and needs.

Mining-affected communities are marginalized in the current subnational revenue sharing system

In 2015, the national government took an important step when it increased the share of mining revenues for host areas: the budget law was amended to transfer 30 percent of royalty payments of non-mega-projects and 50 percent of license fees to host provinces and districts. However, that 30 percent figure was reduced to 10 percent by the end of 2016. Worse, in 2017 the revenue-sharing scheme was suspended entirely until 2020. LLAs are perceived by local governments and communities as the main mechanism through which they gain benefits from resource projects, and such unpredictable shifts in the revenues to which they are entitled creates both confusion and frustration. To remedy this, the national government––especially the Ministry of Finance and the MMHI­­––should urgently foster clarity around its sub-national revenue sharing policy and which financial flows should be included in LLAs.

State-owned enterprises (SOEs) should play by the same rules as private companies

All license holders should obey the LLAs requirement in the Minerals Law. However, EITI Mongolia reports show that SOEs do not establish LLAs in Mongolia. (The Erdenet Mining Corporation was the only SOE to establish an LLA, for three years beginning in 2013.) The lack of transparency and accountability of SOEs needs to be remedied if the overall governance of the country`s extractive sector is to improve. Local governments and mining-affected communities are increasingly frustrated by the weak performance of SOEs on environmental and social obligations—making these enterprises comply with the LLAs requirement can help improve their relations with local communities, as well as increase their contributions to local sustainable development.

Both the national government and donor-support civil society should adopt a collaborative and scaled-up approach

Mongolia’s civil society organizations (with support from donor organizations) are most concerned about ensuring consistent and effective implementation of the legal mandate around LLAs. They have developed toolkits and sourcebooks, provided capacity building, and directly engaged in agreement-making on this subject. But the impact of these sporadic efforts has largely been localized and subject to the changing winds of local political dynamics. The national government must take the lead in helping to consolidate these efforts into a larger, national push that can make a real difference.

The way forward for LLAs

Despite the inconsistent implementation of the LLA requirement in the Minerals Law, local governments and mining companies have established at least 100 LLAs in the past decade, and there are examples of good and bad practice. The lessons learned from these LLAs can help improve the existing regulatory framework and agreement-making on the ground. The government can reaffirm its commitment to promoting LLAs by leading a national dialogue on the core principles of legal and policy frameworks for LLAs in Mongolia, collaborating with donor organizations, and facilitating multi-stakeholder deliberation.

Note: This post first appeared on the blog of the Natural Resource Governance Institute on 17 April 2018.

Posted in Governance, Mining, Mining Governance, Public Policy | Tagged | Leave a comment

Guest Post: Flooding in Mongolia

By Jangar Ts

Recent floods in Mongolia have brought about a lot of discussions. Continuous heavy rains all over the country quickly resulted in multiple floods, destroying communication lines, affecting some villages and infrastructure. In the northern part of the country, where Ulaanbaatar is located, heavy rains resulted in flooding rivers and occasional submergence of some ger district areas or basements of certain buildings by raised water table. Most of the interest, however, is continuous and heavy rains in the Gobi Desert regions, unseen for more than 3 decades.

Flooded desert

In the past, semi-arid and arid zones of the Gobi desert had small populations dispersed over a vast area. However, the development of the mining industry increased human activity in this region. Paved roads, and thus an even more extended, dense network of dirt roads, and growing soum centres and mining towns increased the possibility to be hit by disasters such as heavy rain. There were multiple reports of damage to paved roads caused by flooding road, or recent accident in Airag soum, when locomotive with several cars run off the rails, fortunately without fatalities.

Whom to blame?

Partially, floods can be explained by global warming; according to Science Magazine summer temperatures are rising higher than winter temperatures especially in Mongolia. But, no lesser than important cause is human activity. Pasture management and a dense network of the dirt roads should be carefully planned and managed. The first one is commonly known; the number of livestock grows continuously for decades. The vegetative cover is heavily grazed and the soil beneath is compacted simultaneously. Another reason is a dense network of unpaved or earth roads that acts as an extended channel, delivering substantial amount of rain-water to the nearby river or area with lower elevation causing floods. This was clearly seen from a photo of Airag Soum flood in the picture taken by Mr. Zorigt Munkhchuluun. Compacted soil hardly saturates, and when heavy rain even for the short period of time falls in area, it causes so called Hortonian overflow. Many herders, nowadays, are using cars and motorcycles; adding more roads; I even have seen nomads herding on the car!

Nature “works”

Overgrazed pastures, with dense network of roads, fire suppression that breaks natural way of vegetative growth and climate change with other multiple factors will generate disasters such as a desertification, volatile wildfire or flooding. I am not saying that flooding or other disaster is something unseen in Mongolia, these are types of abiotic disasters typical and required to sustain our ecosystem. But increase of occurrences, when every extensive rain becomes a disaster regardless of its location is evident and based on our activities.

About Jangar

Jangar Tsembel was born in Ulaanbaatar, Mongolia (1974). After graduation from the School of Foreign Services of the National University of Mongolia (1996), Jangar worked as an interpreter in ongoing development projects in Mongolia and since 2000 was employed in consulting companies such as PCI and CTI Engineering International, as acting resident representative of company in Mongolia until 2014. Currently he is a graduate student in the Faculty of Forestry, University of British Columbia.

 

Posted in Countryside, Environment, Flooding, Gobi, Grassland, Jangar Tsembel, Natural Disaster, Ulaanbaatar | Leave a comment

Rose-Tinted Views: My Optimist View of Mongolia

By Julian Dierkes

Had a really interesting conversation! Wow, what a network of worldly, interesting Mongolians, Bataa has assembled!

A number of his friends were kind enough to mention that they read the blog and it turned out that I had actually interacted with a number of them online.

Am I too Easy on Mongolia in my Analyses?

I have heard this comment before. The blog focuses on vaguely positive aspects of developments in Mongolia. I look for the good side of people/programs/events.

Yes, I think that’s true.

Here’s why:

  1. evidence
  2. comparative perspective
  3. long-term trajectory
  4. respect

1. Evidence

For many analyses of current developments in Mongolia, evidence is hard to come by. Take my strong sense that corruption really has become paralyzing for Mongolia over the last several years and that from the perspective of Mongolians I interact with, there are virtually no political leaders whom they don’t suspect of being massively corrupt (i.e. putting their personal, often financial, gains ahead of the good of the country). There, I’ve said it. But, note that I’ve said, “from the perspective of Mongolians I interact with” that is a big caveat. A. I’m not reporting on any kind of systematic research of popular opinion. B. There’s a lot of hedging in that statement.

So, why don’t I come straight out and say, “Politician X is corrupt and should be removed from politics” to stay with the corruption example?

Well, one of the most unfortunate aspects of Mongolian politics in my mind is that it is dominated by allegations, hearsay, and conspiracy theories. Those are not helpful factors in a democracy. If there are allegations of corruption or other malfeasance, they need to be investigated or dropped! In every election that I’ve observed, voters and party officials have told me that rampant vote-buying, etc. is going on. But since there is never any solid evidence offered, I have no time for such allegations.

I do not want to make allegations that I cannot back up with evidence.

For anyone who actually follows through on allegations by collecting evidence, presenting that to the public and demanding prosecution where needed, I have the deepest respect and strong belief that they are the people that will save Mongolian democracy. There are not enough people like that, but I am not one of those people.

2. Comparative Perspetive

As much as I wish I was, I am not Mongolian. I know this comes as a surprise to some of you. ????

I write about Mongolia from a foreign perspective and I think about Mongolia very often in comparative terms. Sometimes those comparisons are explicit (i.e. mining regulation in Mongolia compared with Australia, Canada, Kyrgyzstan, etc.), more often implicit (my German, Canadian, sometimes Japanese, Western or whatever biases).

Most of our readers are not located in Mongolia. Over the seven years of our blogging, approximately one quarter of our over 108,000 thousand readers are located in Mongolia. Note that I say, “located in Mongolia” not “Mongolian” as that’s what’s reported by Google Analytics. Many of those readers located outside of Mongolia will be interested in Mongolia in a comparative perspective, i.e. not “Is Mongolia democratic?” (of course it is!), but “What elements of democracy are strong in Mongolia compared to …?”.

If I focus on two of the main areas that we cover in the blog, democracy and mining policy, Mongolia looks like a great success in an international context.

When I speak to Mongolians about politics, I discuss many flaws in Mongolian democracy. When I speak to Russians, Chinese, or even Americans about democracy, Mongolian politics look wonderful!

Of course there are challenges related to the emergence of a mining economy in Mongolia, but some ten years into the second coming of that industry (the first being Erdenet), I would have to summarize that Mongolia is not cursed by its resources, but blessed, at a very high level of generalization, obviously, especially compared to many other cases.

3. Long-term Trajectory

I believe that Mongolia is on a positive long-term trajectory. While I do have some romantic attachments to country living or nomadic pastoralism (though, somewhat typically, more for others than for me, or more during vacation that otherwise), I do believe that Mongolians are better off today than 150, 50, 10 years ago because they have greater freedom to choose their fate, and they have more resources to act on these choices. I do recognize that economic growth does not lead to spiritual happiness and that the days of necessary de-growth may be upon us sooner than we anticipated, but even in that, there will be a greater quality of life, I believe. Democracy and freedom is good for Mongolia, and Mongolians are good at it. There are many young(er) Mongolians who are very well-educated, and very well-intentioned. Their future and thus the country’s future is bright.

And, at the end of June 2020, vote for Julian, candidate of the Canadian-German Party. Just kidding.

4. Respect

My role is not to praise Mongolia or Mongolian decision-makers, but it is also not to criticize. My role is to offer research-informed analyses! I do so with respect for the sovereignty of Mongolians over their affairs, their responsibility for these affairs, but also with a great appreciation for the hospitality I enjoy in Mongolia and with Mongolians.

Yes, I’m Guilty of Optimism

So, yes, I am guilty of optimism and will continue to focus on good news about Mongolia, to raise Mongolia’s profile in the world for positive reasons, and to believe that Mongolia’s future is bright.

Those of you who read our analyses regularly know about that biases and can make up your own mind whether even unsubstantiated criticism and talk of corruption allegations and conspiracies are more powerful explanations of current developments. I hope that you will continue to call me out, perhaps even more often, when my goggles are too rose-tinted.

For very occasional readers, be aware of my fundamental optimism, but do not reject it simply because there are a plethora of negative voices around.

Posted in Corruption, Media and Press, Politics, Reflection | Tagged | Leave a comment

Guest Post: Grappling with Wrestling Titles

By Zorigtkhuu B

Puntsagdorj.T (Т.Пунцагдорж Аймгийн заан) “Naadam” 2018 Seattle, USA

National wrestling is considered a Mongolian precious cultural heritage. It holds the Guinness World Record that involved 6,002 wrestlers during the largest Mongolian wrestling tournament which was organized  on 17th September. 2011. Wrestlers have been entertaining the audience during all national holidays and ceremonies. The biggest ceremony is “Naadam” which is organized between the 10th and 13th of July every year. It has also been inscribed as an intangible heritage of humanity by UNESCO.

Only during Naadam wrestlers are awarded state titles based on their achievements, starting from the round 5 out of 9 (10 rounds sometimes). A few of the titles which represent some powerful birds and animals have been awarded since 13th century. However, some changes were made for the law of national “Naadam” ceremony with regards of state titles in 2005.

Puntsagdorj.T (Т.Пунцагдорж Аймгийн заан) “Naadam” 2018 Seattle, USA.

State titles are classified as follows:

1st round No title is awarded
2nd round No title is awarded
3rd round No title is awarded
4th round No title is awarded
After the result of 5th round Nachin Начин
After the result of 6th round Khartsaga Харцага
After the result of 7th round Zaan Заан
After the result of 8th round Garid Гарьд
After the result of 9th round Arslan Арслан The Naadam with 9 rounds takes place every year with 512 wrestlers
After the result of 10th round Champion Аварга The Naadam with 10 rounds (1024 wrestlers) usually takes place 2 times in a decade when there is a special state anniversary.

The highest two state titles are awarded immediately for a wrestler who wins round 9 or 10 no matter what kind of title he previously holds.

State Titles and Military Ranks

In recent years, a bizarre practice has been occurring in Mongolian national wrestling culture. A wrestler who wins the “Naadam” wrestling tournament is awarded either the second highest state title (Арслан) or the highest (Аварга) depending on his current title, the wrestler is also given a higher rank of military title (like a bonus) such as lieutenant-colonel or colonel by the law enforcement authorities if he belongs to one of the sport clubs that are run by any law enforcement authority. This practice divides the audience into two sides. Many criticize that military titles should not be awarded as prizes, especially for the wrestlers who do not have any experience in the military while real military officers who work 20-30 years for the military sector retire without these titles. Others justify that reaching a higher level of state title is challenging, so they deserve it. Although there is a long list of names of wrestlers who have been awarded both military and wrestling titles at the same time in recent years, the sensation was not as serious as this year’s result.

Surprisingly, N.Batsuuri, the  of this year’s “Naadam” stirred a huge discussion among the audience. He was awarded the highest state title along with a lieutenant-colonel by the National Emergency Management Agency (NEMA) because he belongs to its sport club. Most critics blame Batsuuri rather than “NEMA”. If someone must be blamed, the target should be either a legal gap or the authority of the law enforcement authorities instead of an individual. Obviously, he did not award that military title for himself.

Ethnic Divisions

Many claim that the only reason why Batsuuri is being blamed and criticized by many people is that he was born and raised in the western part of Mongolia, in Uvs aimag where about 3% of Mongolian population hails from. Discriminating each other by ethnicity is regretfully common in Mongolia, in all arenas including politics and sports.

It is uncertain that when and who is going to eliminate the attitude among the citizens of Mongolia to discriminate each other by his or her ethnicity that has been continuing since 14th century. It is regretful and painful to see such an ethnic discrimination in a small country.

Other Challenges in Organizing Wrestling

The problematic practices in wrestling do not end with these issues of military titles and ethnic discrimination are not only the things that have to be resolved. There are other serious things such as buying/selling state titles of wrestling, prevalence of doping and associational rivalry which lead by politicians (former champions) between an old association (Үндэсний бөхийн холбоо) which ruled roughly 28 years and newly stablished association. Buying/selling the titles has become very common, especially it can be clearly seen during the round 5 for the lowest state title. Also, the two associations often announce that their purpose is to eliminate the negative images of national wrestling. However, associational rivalry is suspected that their main goal is merely to own the “Wrestling Palace” under the pretence of reform.

Although, Mongolians would never get rid of national wrestling, all the negative images should be reformed as people enjoy any sport when there is no cheating. If the reform could be done as soon as possible, I strongly believe that the audience is not only measured by Mongolians, it has the power to attract international audience, like Sumo in Japan.

PS: Every Mongolian is looking forward to Naadam. Every man of all generation wrestles as a kid for fun and play. I (accidentally) won the wrestling championship of the BC Mongolians Community Naadam this year (4 rounds only and no title was awarded). This is to say that wrestling is a part of a cultural identity, therefore the matter of where it is heading is of a great concern to me.

About the author:

Bat-Erdene ZORIGTKHUU currently lives in Vancouver, Canada. He graduated from MUST and is aiming to complete a Master’s degree at Norman B. Keevil Institute of Mining Engineering of the University of British Columbia. Zorigtkhuu’ research will focus on Mining Local Procurement (Local Content) in Mongolia.

Professional background: Zorigtkhuu worked for the biggest coal mining company (Energy-Resources) in Mongolia and an “International Medical Center (Intermed Hospital)” project that was jointly commissioned by MCS group in Mongolia.

Posted in Naadam, Wrestling, Zorigtkhuu Bat-Erdene | Leave a comment

IAAC: To Change Directors or Strengthen the Institutions?

By Mendee Jargalsaikhan and Julian Dierkes

In a previous post, we discussed the joint efforts of President Kh Battulga, MP L Oyun-Erdene (MPP), and concerned citizen O Darkhanbaatar, regarding the current leadership of the IAAC.  The most publicized reason for the removal of Director Kh Enkhjargal and Deputy Director Ts Nyamdorj is their unwillingness to investigate and resolve the ’60 billion tugrug’ case, which is closely linked to M Enkhbold, Chairman of the State Ikh Khural. For many, this is a valid point, but we wonder if the change of IAAC leaders will be a cure for the country’s endemic corruption. Instead, all senior leaders need to strengthen the existing institution by staying out of corruption investigations and letting corrupt individuals be prosecuted lawfully.  This would help the nation develop its economy, political parties getting rid of the gradually-evolving cartel-type structures, and politicians gaining public trust and support.

Is anti-corruption a new effort?

The fight against corruption is not a new effort, it is rather an interrupted one. Historically, besides the communist party investigation commission (Намын Хянан Шалгах Хороо), there was the People’s Committee for Control and Investigation (Ардын Хянан Шалгах Хороо), which reported to the Presidium of the People’s Great Khural. The main duty of the committee was to investigate complaints and potential corruption cases (mostly misuse of the public office and state property), and then to transfer to law enforcement organizations and judiciary for further investigation and prosecution. Under the Law on People’s Control and Investigation (1980), the People’s Committee for Control and Investigation had a main office (50 permanent staff), branches in all provinces, major cities and districts (90 permanent staff), and was supported by 1027-2683 control groups in state industries and organizations as well as 1930-2487 control posts in agricultural units. 26-30,000 people were elected to these control groups and posts.

We are not making a nostalgic argument that the People’s Committee for Control and Investigation was effective and efficient. But there are several points we would like to highlight: First, both corruption and efforts to fight against corruption have existed during any periods of Mongolian history just like in other countries. However, the fight against corruption requires institutionalization. The institutionalization process needs a time and endorsement from top leaders.  For example, Mongolian political leaders gave such efforts in the period of 1972-1990.

Second, it is an interrupted effort. The People’s Committee for Control and Investigation was de-commissioned in 1990 resulting in a loss of all experienced professionals,   dismantling of institutions, and dismissal of cases under investigation. In 1995, parliament established a weak State Control and Investigation Committee; however, leaders and staff were constantly changed following the elections. It was understaffed and non-operational body. Then, another body, the State Auditing Agency, was established in 2003, but remained less influential and dependent on the politics. So, Mongolia had 15 years for corruption to gain its institutional strength while anti-corruption efforts lost their institutional champion.

Just as the communist party was regenerated (re-born), if the People’s Committee for Control and Investigation had been regenerated into new political and economic circumstances, the country could have at least expertise in place, rules and laws were valid and enough evidence could have been archived. Hence, political leaders, including those at the decision-making bodies, must refrain any efforts to make the IAAC a merely political tool, but rather to strengthen the institutions.

If the IAAC is a political tool, do we need it?

If this current effort is just directed at strengthening one’s position vis-a-vis other political opponents (e.g. Battulga & Khurelsukh versus M Enkhbold) or to control this key institution for their own political/economic gains (e.g., elections, major economic projects), we should begin to question the very existence of the IAAC, which is, indeed, an additional financial burden on tax-payers.

We have seen political competition around appointments of the IAAC leadership before. No past IAAC directors fully served their six-year tenure, which extends beyond the four-year electoral cycles (parliamentary and presidential elections). In December 2007, the first director, B Dangaasuren (judge), was mysteriously found dead in Australia after serving just one year.  The second director, Ch Sangaragchaa (police), was nominated by President Enkhbayar and approved by an equally divided parliament in 2007.  From 2009 on, he was pressured by members of the Public Council  newly appointed to this body of civilian oversight by President Elbegdorj, and then sentenced for misusing his investigative authority in 2011. The second director lasted almost four years. The third director, N Ganbold (police), was nominated by President Elbegdorj and approved by parliament in November 2011, but requested an early release from his duty just prior to the 2016 parliamentary election. Then, the current director, Kh Enkhjargal (police) was nominated by President Elbegdorj in May 2016 and the MPP-dominated parliament approved his appointment in July.  Now he is under pressure from the new president. Because the appointment process of the IAAC director and deputy director becomes heavily dependent on the power dynamics of political competitions (instead of the professional merits), they seem to care more about safe-play or navigation on the shaky political landscape than going after major corruption cases.

Apparently, for any political leader, it is important to have control, if not, influence over law enforcement and judicial institutions. First, with the control of the IAAC, you could eliminate your opponents. At least, you could marginalize your opponents by not resolving the case completely, rather using for blackmailing purposes. Second, the IAAC could provide protection from any investigations simply by not pursuing it, delaying it, or even destroying evidences. Therefore, if top-politicians consider the IAAC as an political instrument to advance and protect their parochial interests, it is not fair for tax-payers to fund this costly, ineffective endeavour of fighting against the corruption.

If IAAC is a tool of justice, we need to strengthen it

Instead of sacking leaders of the IAAC, who are already constrained by political pressures, the country’s top politicians should strengthen the institutions fighting against corruption.

It would take at least 15-20 years for any effort to become fully institutionalized – meaning rules, regulation, and procedures to become norms, organizations to be established and become operational, and activities to gain legitimacy and support from the society. In order words, the war (or battle) against corruption is not a job only for the IAAC.

Politicians, especially those involved in law-making and decision-making processes, should make all necessary changes in the legal framework to enable judiciary and law-enforcement organizations to investigate and prosecute corruption cases. This has been repeatedly and publicly requested by IAAC Directors. For instance, several directors explained any high-profile cases were dropped by the decision of the Chief Prosecutor’s Office (even at the district level). Both Ganbold and Enkhjargal asked for a change in the law to pursue off-shore accounts. These requests were simply ignored. Therefore, politicians need to make decisions and stick to their decisions for anti-corruption efforts to succeed. For their own and public interests, politicians could not judge or demand whether one or two cases are investigated and prosecuted.

It is also important to provide the necessary resources (human and material) for all organizations involved in the anti-corruption efforts. The development of professionals (e.g., training, expertise, experience), setting the legal framework for drawing a clear line between organizations, and streamlining inter-agency procedures would require more time and patience. For instance, it would take at least 15 years for any new detectives to gain expertise and experience to lead the anti-corruption agency. Since all organizations, especially those – judiciary, police, intelligence, tax, are usually in constant turf war over resources (e.g., professionals, budgets), it would require at least 10 years to figure out their co-existence and collaboration. Any policy needs to have a lifetime.  Finally, anti-corruption efforts would need time to gain legitimacy and support from the society.

Conclusion

From time to time, it has been quite surprising to hear influential politicians ask and talk about the importance of the IAAC investing into more efforts into the enlightment and education of anti-corruption. Each new president wants to replace the leaders of the anti-corruption agency and it is becoming the pattern since 2007. But, we would argue that politicians need to strengthen and support the institutions – by asking what main obstacles for the overall efforts against corruption and importantly, by presenting themselves as a role model of not-interferring in the investigation process. Since mostly literate and educated public knows what corruption is; therefore, politicians should not demand the IAAC to be an educational organization rather than an investigative agency.

Posted in Corruption, Governance, Judiciary, Politics | Tagged , | Leave a comment

Akçay Mobilization

By Julian Dierkes

The late July apparent attempt to kidnap a Gülen-affiliated educator in Mongolia is still animating a lot of discussions one week later. The most pressing questions still surround the cooperation that some Mongolian authorities must have given to Turkish efforts, but no revelations around that topic have come and judging by past similar events, we may not ever quite know who might have been involved.

But here, I want to look at the mobilization in “defence” of Veysel Akçay.

International Perceptions

The international perception of what happened on August 27 reinforced perceptions of Mongolia as a “scrappy democracy in a tough neighbourhood”.

[I almost wonder if we need an acronym here? SDiaTN? Any other suggestions? #гэнээ]

Journalists and other observers (including myself) saw the fact that the abduction was prevented as a triumph of either the rule of law, or civil society, or both. Matthias Müller (Beijing correspondent of the Swiss Neue Zürcher Zeitung) thus entitled his article “Mongolian Rule of Law Denies Turkish Arbitrariness” (Der mongolische Rechtsstaat trotzt türkischer Willkür) for example.

Similar, Niels Hegewisch (country manager for the German Friedrich-Ebert-Foundation) subtitled his report “How the abduction of a Turkish teacher from Mongolia was defeated by resistance of civil society” (Weshalb die Entführung eines türkischen Lehrers aus der Mongolei am Widerstand der Zivilgesellschaft scheiterte)

Who Protested?

Protesters could perhaps be grouped into three categories: 1. people close to Akçay, 2. current and former students, 3. officials and other voices that amplified initial protests.

1. Protesters with direct ties to Akçay

Two people in particular spoke directly to the Mongolian public through social media channels, Ganbat, a colleague of Akçay, and Meryem Akçay, Akçay’s wife. Both were eloquent in their appeal, but their involvement is not very surprising as they were personally and directly effected.

2. Mobilizing current and former students

There are five Turkish-Mongolian high schools in Mongolia. [Of course, technically, these are no longer Turkish-Mongolian schools but operated out of Germany under the “Empathy” brand, but most people seem to continue to refer to them as Turkish schools.] They were started in 1994, their alumni are thus all under 40 years old.

According to a number of alumni that I was able to ask, these students were mobilized through direct, person-to-person contacts via social media. It does not appear to have been the case that there was any kind of quasi-universal appeal for help, but instead A told B what was happening and how to protest, B passed this on to C, etc.

Alumni of the schools do not seem to be particularly well-organized or unusually loyal to their schools or to Turkey. They seem to continue to appreciate the strong English and STEM curriculum at the schools, but connections to Turkey are remote for high school students. Many of the students and their families do not seem to be aware of the political battle between the Erdoğan government and the Gülen-movement, nor is there much of an indication from the former students I corresponded with that the schools are obvious conduits for Gülen ideology.

There is also no strong sense of the perspective of the many Mongolians who have studied in Turkish universities. Many of them have received scholarships, but for many of them, that interaction might have been before the Erdoğan-era, but there seems to be very little mobilization protesting changes in Turkey or supporting these among these alumni.

Instead, people who protested themselves emphasized that they protested on behalf of Akçay in recognition of his status as a charismatic and beloved teacher who has been teaching in Mongolia for a long time. Put bluntly, these protesters might not have mobilized to defend the rule of law if Akçay had been a recently-arrived minor figure at one of the schools.

3. Other voices amplifying protests

After this initial mobilization that was focused directly on Akçay himself, other voices amplified the protests, and these voices emphasized the rule of law and the importance of preserving Mongolian sovereignty more explicitly. Two prominent examples of such voices would be MP Lu Bold who drove to the airport to observe and film the private jet, but also NUM legal scholar O Munkhsaikhan. Bold has frequently spoken about human rights in the past and thus lent the considerable weight of his long time in politics to such causes. Munkhsaikhan has also been a frequent academic voice on rule of law questions.

Another MP, O Baasankhuu also spoke up, but he does not have much of a history of activism on human rights or rule of law.

Their support of the thrust of protests, i.e. to prevent the departure of the private jet with Akçay on board, is more directly linked to the perception of a defence of rule of law. It may have also been the prominence of these voices that forced other parts of the Mongolian government to respond to the initial mobilization.

4. Some Voices that We Did not Hear From

While these were some of the groups that made themselves quite conspicuous in the events, there are a number of actors that might have reacted, but did not.

The relative youth of graduates of the Turkish-Mongolian schools means that few of them have moved into positions of influence, yet. The only MP who has such a link is T Ayursaikhan who graduated from a Turkish university with a BA. However, he is a first-time populist Ulaanbaatar MPP member of parliament who has not even bothered to fill out the template for his parliamentary website (note the conspicuous and telling “your name here” at the top of the page and the photo of M Enkhbold as a placeholder). He does not appear to have commented on the events in the past week.

Other civil society groups like Amnesty International did not seem to join the fray on this particular issue, though AI did issue a statement on the evening of the 27th.

The Turkish embassy obviously remained silent during this time, but other embassies also did not weigh in. For many Western embassies, the fact that Turkey under Erdoğan remains a member of NATO continues to make confrontation problematic and the murkiness of the Gülen-movement and its political and religious status surely also keeps many countries from taking a position.

Conclusion

Yes, it does seem like civil society mobilization may have saved Akçay from abduction. But it seems like that mobilization occurred more spontaneously and centred on him as a person, rather than larger political issues surrounding the rule of law.

Posted in Civil Society, Primary and Secondary Education, Protest, Security Apparatus, Turkey | Tagged | Leave a comment

Study Tours, Policy Implementation and Necessary Context

By Julian Dierkes

Over the years I have been – mostly peripherally, though not for lack of trying – involved in various attempts to describe good practices from other countries to Mongolian policy makers in the hopes of seeing elements of it adopted in Mongolia.

The amount of learning among Mongolians has been amazing, especially considering the on-going hurdle that staff turn-over linked to the lack of independence of the bureaucracy represents.

For example, it seems fair to me to say that Mongolia is an example of a generation of emerging resource economies that is well-aware of the dangers that rapid development of non-renewables might bring with it. Sometimes it seems like all the attention to various aspects of the “resource curse” is overwhelming attention to even more fundamental necessities like an independent civil service, for example, or the fight against corruption.

Policies Failing in Implementation

All the attention to international best practice seems to have brought many well-intentioned and up-to-date plans, agendas, strategic plans, etc. with it, but in observing all of these plans, it is obvious that many of them fail because of a lack of implementation. Often, there seems to be a disconnect between the strategic planning, legislation and the actual resourcing and implementation of these plans and laws. This is something that Mendee wrote about in his 2015 series on policy failures already.

Over the years we have hosted many government delegations at UBC on study tours.

It is very noticeable that these tours have become more and more professional over the years. While early tours (around 2010) still always ran a risk of a significant number of participants not showing up, over the past several years, these tours have been taken much more seriously by participants. This has to be something that the organizations that fund such tours are pleased with. I do recognize that much can be learned on such tours. The fact that Mongolian policy-makers are entirely conversant with many policy paradigms that have been developed in OECD countries over some decades attests to the impact that such study tours can have as an element in the sharing of good practices.

However, I also wonder about some aspects of these tours.

(Budget) Scale

Much of today’s discussions, hosted by UBC’s Faculty of Forestry, focused on the British Columbia context, in large part because forestry management is largely practiced at the provincial level. And that is a useful context to Mongolian policy-makers, I think. Mongolia is 1 1/2 times as large as BC (1.5m sqkm vs 940k sqkm) and BC’s population is 1 1/2 times as large as Mongolia’s (4.6m vs 3m). Obviously, BC has much more forest than Mongolia as forested areas are restricted to the North and West of Mongolia whereas almost all of BC is forested. On the whole, some comparisons between Mongolia and BC thus seem useful.

However, there are some elements to policy-making and, more importantly, perhaps, policy-implementation that are VERY different between BC and Mongolia. These were evident in presentations that were made to the Mongolian delegation (consisting of four MPs, including the Min of Environment and Tourism, and forestry professionals).

Take a different scale then geographic area and population, i.e. finances. The dean of the Faculty of Forestry, John Innes, talked in some detail about the changes that forestry is undergoing as a discipline, as an industry, and as a policy field. Fascinating because I am much more familiar with the changes the mining industry is undergoing and there seem to be many parallels. For example, “social license” or “sustainability” terminology as it comes up and the notion of a field/industry really undergoing a major transformation. Of course, forestry remains focused on a renewable resource unlike mining. This all struck me as potentially very useful to a Mongolian delegation.

John Innes also highlighted some of the research and projects housed in his faculty. He noted, for example, that the Faculty of Forestry acquired around $11m in funding last year (I forget the exact figure, I guess I should have taken a photo of the slide like so many people are doing now). In discussions during the break, I learned that the budget for the Ministry of Environment and Tourism is on the order of $30m!

In another presentation, on fire management in BC, we learned that the province spent roughly $500m on fire fighting last year (an unusually active year, but on the scale of what we may be seeing regularly in the future). That is not the budget of the BC Ministry of Forests, Lands, Natural Resource Operations and Rural Development, just emergency fire-fighting. Last year’s fire-fighting budget thus represents something like two decades’ worth of cumulative budgets for Mongolia’s Ministry of Environment and Tourism.

When financial means are thus on different orders of magnitude, what chance does knowledge that is gained have of being implemented on return of a study tour?

Would More Context Enable More Implementable Knowledge?

As I was listening to presentations, I was trying to think of a way to make these presentations more praxis-oriented for the participants in the study tour. This particular study tour is actually quite applied in all the terrific meetings that have been set up, but is the knowledge applicable?

All the research that is done at UBC’s faculty of forestry and contributes to the development of the field as well as of policy, happens in an elaborate context of higher education, provincial and federal research funding, recognition of the contributions and perspectives of academia, but also of industry, civil society and the media. There is an entire system of high-level stakeholders in this that does not exist in the same way in Mongolia.

Take universities as an example that I know well. UBC operates in a very different way from the national universities in Mongolia. Yes, as a provincial university we have a strong mandate to educate the BC population. But there is also an expectation from the BC population that we do basic and applied research that will ultimately, sometimes more, sometimes less directly, benefit the province (and often also the country and the world). Funding and governance systems have thus been designed to enable independent research. On the whole, faculty (associate and full professors) cannot be fired for the type of research they do or the conclusions they reach. Note that I have written about this in making the case for why Mongolian readers might be interested in my writings on this blog.

Research funding in turn relies on peer review and other quality-of-research indicators to distribute funding from the federal government in particular in an independent manner. The federal government is aware that it may be funding research that directly examines government policies and thus might find that these are not working, for example. This might even benefit an opposition party in the next election. But, the system of research funding has been created to ensure independence for research because there is a consensus that, ultimately, Canada and British Columbia will benefit.

All of this could be outlined in a 30min presentation on higher education/research funding, for example. After such a presentation, a study tour might think differently about a piece of information like the annual amount of research funding acquired by a faculty at UBC.

But context would also be useful in the other direction. It was only in a response to the 2nd or 3rd presentation that the Minister mentioned that they are looking especially to build industry capacity. Some presentations could have focused more on that, if that’s what the delegation was looking for.

Conclusions

I imagine that many development professionals plan to provide similar context for study tours. Yet, listening to the presentation was a good reminder to me that the implementation of policy may well depend on a whole system of support mechanisms, including independent voices that comment on proposed policy. Perhaps, some populations, including Mongolians, would be better-served if these fundamental/systemic challenges were addressed before specific solutions are adopted in the form of un-implemented strategic plans.

Posted in Bilateral Aid, Canada, Development, Environment, Public Policy, Public Service | Tagged | 1 Comment

Turkish Attempt to Abduct Educator in Ulaanbaatar

By Julian Dierkes and Mendee Jargalsaikhan

More than just a curious spy story, this might turn into a full diplomatic crisis between Mongolia and Turkey, a relationship that has been active and vibrant for some years.

Note that it is still unclear what exactly happened and the timeline below is simply what we have been able to put together from Mongolian reports that we have not been able to corroborate. We’re thus dealing with speculation and allegations here.

Note also that we do not have any particular insights into the international aims and role of the Gülen movement. This is a big debate in many countries, including Germany, for example where we have no particular expertise. Instead, we’re focused on events/implications in Mongolia here.

Sequence of Events

Timeline as reconstructed from Mongolian sources (Ulaanbaatar) :

0930  (4-5) strangers kidnapped Veysel Akçay outside of his apartment

1100 Family reported to the police that he was missing

1300 Ganbat, Mongolian co-director of school – spoke to the public (Facebook video)

1500 Veysel Akçay was brought to the airport

Relevant Government Agencies: Ministry of Road and Transportation, Civil Aviation Authority, Border Authority, Customs Authority – are inspecting if the Turkish airplane of the Special Ambassador – is connected or not.

People protested at the airport – around 1600 (news.mn photo)

MPs Baasankhuu raised concern, Lu Bold arrived at the airport

Deputy Foreign Minister Battsetseg B – summoned the Turkish Charge de Affair

1700 NSC members – Speaker, President, and Prime Minister directed not to allow the Turkish plane take off until the investigation is complete.

1800 The attorney for Akçay –announced that the police is conducting the investigation and General Prosecutor’s office is controlling the process.

1900 Ganbat, Mongolian co-director, reported that Mr. Akçay talked with him over phone.

2125 – Deputy Minister of Road and Transportation tweeted ‘there was no additional passengers in the special plane, which took off’

2300 – The Police Department reported – Mr. Veysel Akçay is at the police for additional questioning

0222 – After a medical exam, Mr. Akçay is home

On the morning of July 27 (local time), Mongolian foreign minister D Tsogtbaatar hurriedly left from a visit to Washington DC to return to Ulaanbaatar. The day before, Tsogtbaatar had attended a ministerial conference to advance freedom of religion around the world!

Questions

  • Was the Turkish embassy involved in any way?
  • Did any parts of the Mongolian security apparatus collaborate/assist Turkish agencies?
  • Why was the plane allowed to depart? If there was an abduction and if there is a suspicion that the passengers who ultimately left on that plane were involved, why were they not held? Apparently, passengers of the plane had diplomatic immunity and the plane never opened its door, so the occupants could not have been involved directly in the abduction, but may have been awaiting “delivery” of an extra passenger.

Implications

If the events today turn into a major diplomatic crisis (the potential is clearly there) what will implications be?

Turkey-Mongolia

Turkey has been increasingly active in its relationship with Mongolia (Moğolistan in Turkish) for the past ten years or so.

There’s an Ankara Street in Ulaanbaatar, TICA (Turkey’s international aid agency) has been undertaken many projects in Mongolia, many Mongolian students have studied at Turkish universities, including many that benefitted from scholarships.

Much of the development of the Mongolian relationship occurred in the context of Turkish democracy and Turkey’s continued move towards Europe. All that has changed with Turkey’s increasingly authoritarian turn under Pres. Erdogan, of course.

If reporting has been right that the Mongolian government essentially prevented this kidnapping, this reinforces the country’s image as a “scrappy democracy in a tough neighbourhood”. It might also seriously damage Mongolian-Turkish relations with implications for Mongolian students and continued funding of Turkish development projects in Mongolia.

But what will Central Asian countries think about a Turkish government that apparently disregards sovereignty in its pursuit of authoritarian government aims? Much of Central Asia is dominated by authoritarian regimes of various stripes, but any democracy movements will be significantly less keen on Turkish activities in Central Asia given this kind of behaviour.

China?

What does China have to do with anything?

Well, Turkey’s persecution of the Gülen movement does resemble Chinese persecution of Uighurs in some ways, and this parallel could be extended to Inner Mongolian activists. What were to happen if Mongolia at some point refused to return an Inner Mongolian and Chinese security services attempted an abduction?

We’ll try to keep an eye on any Chinese reporting/comments on this event in coming days.

Third Neighbours

Unless the crisis somehow boils over with some kind of diplomatic confrontation, detention of Turkish agents in Mongolia, or actual abduction of Mr. Akçay, it seems unlikely that other countries will involve themselves. Obviously, EU embassies could share some of the experience of Turkish security service activities against the Gülen movement in Europe, but in all likelihood that would happen very quietly.

Khurts

I have to note, of course, that the Mongolian intelligence services are no strangers to the abduction of nationals abroad. This is part of the notoriety of B Khurts, erstwhile Mongolian spy, who was involved in the abduction of a Mongolian from Paris via Berlin in 2003, events that ultimately nearly derailed the visit of German chancellor A Merkel to Mongolia in 2011. It’s not clear whether the Turkish abduction attempt will lead to a reexamination of that history, particularly in light of Khurts’ display of blatant disrespect for parliament in the Fall.

Posted in Foreign Policy, Security Apparatus, Turkey | Tagged | 1 Comment

Joint Calls for Special Sessions to Removal of IAAC Leadership

by Mendee Jargalsaikhan & Julian Dierkes

In May, we wrote a primer on the Independent Authority against Corruption. The АТГ has been back in the news recently, partly because of on-going investigations against former politicians, but also because of battles between various politicians over a prominent corruption charge, the so-called ₮60b case, but also about the appointment of the agency’s leadership.

Below, we offer a brief recounting of the sequence of recent events involving the executive, legislative and judiciary with their various angles of jurisdiction over the IAAC.

Appointing the IAAC Leadership: The Executive

On July 17, 2018, President Kh Battulga sent a letter to M Enkhbold, Chairman of the State Ikh Khural, to call a special session of parliament to change the Independent Authority Against Corruption leaders, who, in the president’s view, are not making any efforts investigating and resolving the ’60 billion tugrug’ case.  Again, yesterday (July 25), President Battulga delivered another letter to M Enkhbold demanding to have the special session on July 30 with the ultimatum of responding within the next two days. The Chairman’s response to the President’s initial letter (on July 19) stated that parliament should wait for the decision of its relevant standing committee.

During the parliamentary election campaign in 2016, conversations of then-MPP leader Enkhbold and other party officials to trade public posts were leaked. Since then, Kh Battulga and his campaign managers have been nudging law enforcement agencies, especially the IAAC, to investigate this case. Also, apparently, a change in the leadership of the IAAC has been a priority for Battulga’s team. Earlier this year, the presidential office tried to appoint new director and deputy director using their self-devised social media nomination process, which has been refused by the parliament.

Leading the Charge in the Legislative: Oyun-Erdene

In his letter, President Battulga mentioned 26 MPs who are supporting the request for a special session to have public hearing on the 60 billion tugrug case, and cc-ed MP Oyun-Erdene. Recently, MP Oyun-Erdene has become quite vociferous on the 60 billion tugrug case. First, he requested an update from the IAAC on June 18, filed a motion for a public hearing on June 29 (along with 19 members), and then requested a special session on July 10 with support from 25 members. Based on consultations with the Chief Prosecutor’s Office and a response from the IAAC, the Chairman of the Judiciary Standing Committee decided not to conduct a public hearing.  According to Oyun-Erdene, the current director of the IAAC should explain the investigation of the ’60 billion tugrug’ and several ongoing cases, especially related to the 51 percent of the Erdenet mine.

Getting the Judiciary Involved: Darkhanbaatar

Relatedly or not, in June 28, Mr. O Darkhanbaatar filed a complaint to the Constitutional Court that parliament is not changing the current director and vice director of the IAAC since both have served the remainder of terms of previous Director Ganbold and Deputy Director Khurts, both appointed on November 17, 2011.  Mr. Ganbold was relieved upon his request in April 2015 and current director Enkhjargal was appointed in June 2015. Deputy Director Nyamdorj was appointed in 2015 following Khurts’ resignation. When President Battulga wanted to replace these directors by the social-media candidates, the parliament ruled out the justification arguing that current leaders must serve the legally-mandated 6 year terms. The Constitutional Court hasn’t responded to Darkhanbaatar’s complaint.

 

Posted in Corruption, Governance, Ikh Khural 2016, Judiciary, Politics, Public Service, Security Apparatus | Tagged | Leave a comment

Rio Tinto in Mongolia

By Julian Dierkes

Recently, Bulgan B and I pointed out that there have been as many CEOs at Oyu Tolgoi over the past ten years as there have been PMs of Mongolia.

I also appeared on a live BBC radio show from Oyu Tolgoi (I was patched in from the CBC’s studio in Vancouver), “Business Matters”.

So, Oyu Tolgoi has been on my mind, as it always looms large in discussions of contemporary Mongolia.

When a Twitter follower pointed me to an interview with Rio Tinto CEO JS Jacques (previously overseeing Oyu Tolgoi as part of Rio Tinto’s copper group), I was keen to check it out.

Resource Nationalism

I was disappointed to see this discussion of “resource nationalism”. Apparently, Jacques talked about this “topic” at a Miami conference in May, but I haven’t been able to locate a recording/retelling of that speech.

I have previously attempted to examine the claims made that Mongolia is falling victim, home to rising, [pick your verb] resource nationalism. Jacques seems to fall entirely into the category of using this term as a way to scare the world about governments that are asking for a greater share of profits, dividends, business in large mining projects. Apparently, Jacques even called for a UN of the mining industry to counter this “threat”. He also seems to have mentioned Mongolia/Oyu Tolgoi in this context.

In the interview that appears in the video above, Jacques talks about this around 11′. He talks about governments wanting a greater share. However, that is the constitutional duty of any government so if Jacques and Rio Tinto want to “counter” this, good luck! Mongolian resources belong to the people and the state acts as a caretaker of this property. This is the same in Australia, Canada, the DRC and elsewhere. As the owner of this resource, every people or the government that acts on the people’s behalf, should absolutely strive to maximize the benefits from granting a private investor the right to explore/mine this resource. Obviously, this investor has every right to negotiate about the distribution of benefits. However, there is no political ideology, movement or anything that I recognize in how Jacques describes “resource nationalism”, nor do I understand how this could be “on the rise”.

Rio Tinto in Mongolia

Interestingly, Jacques stated that “we [Rio Tinto] don’t do politics as a matter of principle” (around 7′). To me this is problematic and this is where the frequent turnover of Rio Tinto-sent executives to Oyu Tolgoi is problematic. Just like politics can’t be kept out of sports (the World Cup or other events), so it is silly to pretend that a company that is involved in a project that will at some point account for 1/3 of a country’s GDP “does not do politics”.

In Jacques’ terms, I think that Rio Tinto is not doing very well at the “B2P business”, the business-to-people business in Mongolia. One of the reasons may be executive turnover or the type of executives that have been sent to Oyu Tolgoi, but for many Mongolians I interact with, the contributions that Oyu Tolgoi makes to their material well-being are not clear, even though I see many such contributions. That is a challenge to Rio Tinto/Oyu Tolgoi and the claim that an executive who has spent time at Oyu Tolgoi that he doesn’t do politics does not give me much reason to expect that Oyu Tolgoi will be successful in creating more stable regulatory environment for itself in Mongolia until the B2P business is taken more seriously and the company engages the concerns, understanding and aspirations of the Mongolian people more directly. Note that I would not suggest that Oyu Tolgoi meet all these expectations which can be somewhat outlandish at times, but that it engage in a discussion about them.

Yes, as Jacques points out, Rio Tinto has been a transparency leader by disclosing contracts, including the Oyu Tolgoi Investment Agreement, but it has been lagging in helping Mongolians understand this agreement and in engaging them in discussions about this agreement.

One example of this also showed up in this video. Jacques discussed the importance of technological innovation, AI, etc. for Rio Tinto (around 25′). Later on he also mentioned the large proportion of Mongolians on Oyu Tolgoi’s workforce. Many Mongolians look at employment as a central element of benefits that project will provide. So, here’s Rio Tinto priding itself in providing employment, but also selling itself to investors as striving to reduce the number of employees. That, I think, requires some more discussion in the Mongolian context.

Posted in Foreign Investment, International Agreements, Mining, Mining, Mining Governance, Nationalism, Oyu Tolgoi, Policy | Leave a comment

Job Rotation in the Mongolian Cabinet, at Turquoise Hill and at Oyu Tolgoi

By Julian Dierkes and Bulgan B

Any observer would agree that the development of Oyu Tolgoi has been a winding and meandering path. In the foreign press and from an international investor perspective, mentions of the frequent turnover of Mongolian prime ministers are almost as frequent as the totemic invocation of the vacuous “resource nationalism” label. While those observations are correct in pointing to frequent turnover in Mongolian prime ministers, they rarely note the matter that CEOs of Oyu Tolgoi – ultimately appointed by Rio Tinto – have been almost as numerous as Mongolian prime ministers. In fact, since 2007, there have been an equal number of PMs as Oyu Tolgoi CEOs!

Prime Ministers

Nov 2007 – Oct 2009: S Bayar
Oct 2009 – Aug 2012: Su Batbold
Aug 2012 – Nov 2014: N Altankhuyag
Nov 2014 – July 2016: Ch Saikhanbileg
July 2016 – Oct 2017: J Erdenebat
Oct 2017 – present: U Khurelsukh

Note that we’ve excluded the very brief “acting PM” interlude of D Terbishdagva in 2014.

Oyu Tolgoi CEOs

Keith Marshall: Feb 2008 – Dec 2010
Cameron McCrae: Dec 2010 – Oct 2013
Craig Kinnell: Oct 2013 – Oct 14
Andrew Woodley: Nov 2014 – Sept 2016
Stephen Jones (Acting CEO): Sept 2016 – May 2017
Armando Torres: May 2017 – present

Turquoise Hill CEOs

Robert Friedland: founder – Apr 2012
Kay Priestley: May 2012 – Nov 2014 [July 2012 name change from Ivanhoe Mines to Turquoise Hill Resources]
Jeff Tygesen: Dec 2014 – June 2018
Luke Colton (acting): July 2018 – present

Significance

While the turnover in government executive is rooted in a) electoral politics, and b) factional politics, why have there been so many Oyu Tolgoi executives?

Much has been written about turnover in the Mongolian government, but less attention has focused on turnover that is initiated by an investment partner like Rio Tinto. In their recent open letters, SailingStone Capital has criticized the lack of independence of Turquoise Hill management vis-a-vis Rio Tinto, but a similar argument could surely be made regarding Oyu Tolgoi management.

All OT CEOs have been placed in their positions from previous roles within the Rio Tinto organization. Their appointments have often come with claims that they bring specific skills to the job that are well-suited to the context that OT is operating in, like a focus on construction and development or a specific kind of operation.

That may well be the case, but it means that there is very little continuity among the OT leadership. Rio Tinto has repeatedly claimed that their financial investment is matched by a commitment to Mongolia as a location for its investment, but executive turnover is one aspect among several that casts some doubt on that commitment.

It is fair to criticize the Mongolian government for several kinds of lack of continuity (changes in taxation, governance requirements, etc.), some of those discontinuities are a natural and, ultimately, desirable aspect of democracy, i.e. this lack of continuity represents expressions of Mongolians’ political will.

But in businesses like Rio Tinto, Turquoise Hill, and Oyu Tolgoi, turnover is not induced by democratic processes, or external actors (at least not typically). So, it is difficult to fend off the impression that Oyu Tolgoi is often treated by Rio Tinto as a business unit that does not exist in a particular social and political context.

Presumably, Rio Tinto is planning to operate Oyu Tolgoi for many decades. Mongolians certainly are counting on a mine life of many decades for Oyu Tolgoi. Given that longterm relationship and the acute need for social license to operate for mining operations around the world, more continuity in the management personnel sent by Rio Tinto could not only signal commitment but allow the company to engage with Mongolia as a social and political context more seriously than they have in the past. Yes, the company is hiring Mongolians, of course, as specified by the Investment Agreement, but also to reduce costs. Yes, important agreements have been reached with the population of South Gobi. But the turnover in executives has added to the impression that Rio Tinto has resisted treating Oyu Tolgoi as anything other than a specific column in a global spreadsheet, without personality and without locally specific expectations.

Posted in Business, Mining, Mining, Mining Governance, Oyu Tolgoi | Tagged | Leave a comment

The UB Dialogue at the Crossroads

By Mendee Jargalsaikhan

The designation of Singapore for the historic summit of US President Donald Trump and DPRK Chairman Kim Jong-Un probably relieved Mongolian government officials, security personnel, and capital city residents. It would not add any financial pressures like hosting the ASEM summit, which is still the under close auditing investigation. Instead of running the annual Khaan Quest peacekeeping exercise, the Mongolian military and security personnel would be mobilized for the additional security tasks for the summit. And, city residents would be distressed because of road blocks and increased traffic delays. Therefore, Mongolians, especially those in UB, are happy to be recognized as the only neutral destination for belligerent parties in North East Asia and watching the historic meeting in Singapore just before the much-awaited World Cup in Russia. Indeed, the Mongolia’s bid for hosting the summit caused many to search Mongolia on the map and to wonder “why Mongolia?” Frankly, if the summit had scheduled in Mongolia, Mongolia’s steadfast, modest initiative, which is known the “Ulaanbaatar Dialogue,” could be interrupted for this year. Since we’re having another UB Dialogue at the interesting moment of International Relations, Mongolia needs to nurture its very own creation for the multilateral dialogue mechanism. [Earlier, Julian and I raised a similar point.] A gradual, sustained, small effort would make contribution to the regional cooperation.

A Brief History of the UB Dialogue

In 2008, the Mongolian Institute for Strategic Studies along with the George Marshall Centre for European Security Studies organized a conference, titled “Ulaanbaatar as Helsinki?” The concept paper of conference (written by O Mashbat) drew an interesting analogy between Helsinki effort and potential Ulaanbaatar initiative.

After multiple failed attempts at creating a bridging dialogue between Western Europe and Eastern Europe, including the Soviet Union in the 1950s and 60s, the Finnish government offered Helsinki as a venue for conference for such purpose. As a result of a series of negotiations, 35 nations of divided Europe signed the Final Act for the Conference for Security and Cooperation in Europe (CSCE) in 1975. Later, this conference was transformed into the Organization for Security and Cooperation in Europe (OSCE), which operates in Vienna, Austria. Why did Finland make such an offer? First, Finland, because of its troubled relations with its two powerful, populous neighbours (Sweden and Russia), had always attempted to be a part of the larger European region. Second, Finland maintained a policy of neutrality to any issues and conflicts between Western Europe and Communist Bloc. Therefore, the neutrality and dream of regional integration had resulted in an innovative policy of hosting multilateral dialogue.

Like Finland, Mongolia is a small state between two powerful, populous, and nuclear powers. This ‘regionless’ fate pushes Mongolia to reach out countries in the closest region, which is North East Asia. At the same time, Mongolia has avoided to be a part of conflicts between two neighbours as well as proximate region. This requires the country pursue neutral, friendly foreign policy. Probably, with this logic in mind, several small workshops and discussions were followed. In 2013, the President endorsed the ‘venue for multilateral dialogue’ idea and coined the UB Dialogue – as a part the wider foreign policy initiatives to engage all Northeast Asian countries, including those in tenuous relations.

Why Is Mongolia So Eager to be the Host?

For one, the geographical fate dictates its foreign policy move to increase its international and regional visibility. This is quite self-explanatory. The other important reason is historic. From 1911 to the present, Mongolia always made efforts to reach out to states in Asia Pacific in general, Northeast Asia, in particular. [Here is also a link for more detailed post on historical perspective.] Its attempts had often hindered by geopolitical competitions and behaviours of Great Powers. However, Mongolia was a part the Asian community of communist countries in 1950s. It invited many newly independent small states of the Asia Pacific Region in 1960s-70s to share its experience of the CMEA-aided economic development. It was a hub for the Asian Buddhist Conference for Peace.  In 1980s, it pursued a quite aggressive policy for offering itself as a dialogue venue for peace and cooperation in Asia. Regretfully, its attempt to advance itself as the North East Asian Dialogue venue in 1989, at the 50th anniversary of Khalkhyn Gol Battle (Nomonhan), was failed as the country experience domestic political turmoil and economic crisis. Nevertheless, Mongolia’s desire to be the host for multilateral dialogue recharged from the early 2000. Therefore, Mongolia’s multilateral approach to North East Asia is recurrent.

Tangible Results?

Capitalizing on its successful foreign policies and neutrality, Mongolia facilitated bilateral talks between hostile parties of North East Asia. On May 23, 2014, Mongolia first-ever hosted the track 1.5 meetings between the United States and DPRK. This event was attended quite senior level officials from both governments along with scholars. And, of course, Mongolia was shortlisted and recognized the most neutral country for the US and DPRK summit in North East Asia. Similarly, like Vietnam, Malaysia, and China, Mongolia provided the venues for the Japan – DPRK intergovernmental meetings twice (2007 and 2012).

Besides hosting the bilateral talks, Mongolia became the only place which welcomes military personnels of China, Japan, South Korea, and United States for an annual peacekeeping exercise, Khaan Quest. At the Five Hills Peacekeeping Training Centre, these militaries join for the UN peacekeeping spirit and collaborate through the command post and tactical exercise and humanitarian drills. More interestingly, North East Asian countries, excluding North Korea, have been supporting the Mongolian military’s peacekeeping capacity building efforts. For example, Russia provides armoured vehicles, China renovates the recreational facility for peacekeepers and provides equipment for the engineering units, and the United States gives funding for the development of the peacekeeping training centre, training and education, deployable hospitals, and other necessary equipment. Moreover, Japanese Self Defense Force engineers build roads for the peacekeeping training centre whereas South Korean companies built some training facilities. This makes the peacekeeping is one of the most tangible results of Mongolia’s multilateral cooperation with North East Asia.

What’s Next for the UB Dialogue?

The UB dialogue is arriving at the crossroads – whether it would continue or disappear like many other multilateral initiatives. Even though unlikely, major powers would transform the six party talk as a new regional security dialogue mechanism or re-energize the Asian Regional Forum. Or, trilateral forms (e.g., Russia – North and South Koreas, China – North and South Koreas) emerge. Most of regional players want to be visible and agenda-setters. Within this larger, competitive regional security dialogue initiatives, the UBD must find its place and continue its modest contribution. Because of the geographical pressure (‘regionless’ fate) and foreign policy patterns of projecting itself as a multilateral dialogue venue would never disappear. It may wane at one point, but recur quite often. Therefore, Mongolia needs to set a vision, roadmap, and plan for longer term beyond the presidential and parliamentary elections. In that way, the UB dialogue would represent the country’s foreign policy continuity and attempts to be a part of the North East Asian region. This requires a sustained modest funding and resources to take an complete ownership and agenda-setting either alone or with partners. With a lead agency (i.e., Institute for Strategic Studies and Ministry of Foreign Affairs), the UB dialogue could pursue a specific niche topic or theme and seek partners to collaborate over 3 or 5 years. For instance, the recent decision of the de-nuclearization process of the Korean peninsula opens an interesting area for the academic cooperation on the nuclear weapon free zone – stretching from Mongolia to Korean Peninsula to Japan. This dialogue on North East Asian nuclear weapon zone discussions could be rotated between the UB dialogue and potentially, Pyongyang Dialogue. Or, Mongolia further expands its UN peacekeeping experience by inviting the Korean People’s Army for the dialogue and research – which would eventually result in KPA peacekeeping deployments or even establishing North East Asian peacekeeping standby force. Similarly, building on Mongolia’s current disaster-relief exercise, Gobi Wolf, which already have international participants, Mongolia should welcome and share experience with North East Asian partners. All these themes could be discussed, investigated, and developed at the UB dialogues. Therefore, the UB dialogue could present modest contribution for bringing Mongolia together with North East Asia and North East Asian states closer to UB.

Posted in Canada, Foreign Policy, Germany, Japan, North Korea, Russia, South Korea, Ulaanbaatar Dialogue, United States | Tagged | Leave a comment

Mongolia doesn’t need to join the SCO

By Mendee Jargalsaikhan and Julian Dierkes

Like Switzerland for NATO, Mongolia’s absence in the Shanghai Cooperation Organization (SCO) creates a neutral spot in the Chinese-led regional grouping. But, Mongolia neither hinders any dreams of the creators nor presents any benefits to the SCO.  We argue that Mongolia shouldn’t attempt to seek a membership in the SCO for three reasons:

For one, the SCO and agendas of its members are irrelevant to Mongolia.  For China, the SCO is a multilateral framework to combat the ‘three evils’ (i.e., terrorism, separatism, and religious extremism) and a forum to secure access to natural resources, especially oil and gas. For SCO members, it is a venue to seek endorsements for their authoritarian rule and to accommodate differing priorities of Russia and China. Although sharing Chinese concerns over religious extremism, Russia assertively defends its geopolitical privileges in the former Soviet republics against rising Chinese interests. Mongolia neither possesses oil/gas nor does it experience religious extremism.

Second, the institutional structure of the SCO are still not clear to Mongolia. Decision-making processes and financial aspects are not transparent. Clearly, Beijing and Moscow have more agenda-setting power than all other Central Asian states with the regional leadership rivalry between Astana and Tashkent challenging to collaboration of the SCO members. Mongolia’s entry to the SCO would create more complexity for the country’s foreign policy objectives. Like 2005, Moscow and Beijing are seeking ways to deal with the United States; thus requires all other peripheral states to serve the Sino-Russian agenda.

Third, the SCO is still considered an ‘’authoritarian club” (except for India) and new aspirant members – Turkey, Afghanistan, and Iran – all would strengthen this authoritarian club image. Mongolia is the only democratic state in the periphery of Russia and China. All human rights, importantly political and religious freedoms, have been upheld and protected. The state hasn’t used any violence (with exception of July 1, 2008) against its population.

Therefore, joining in the SCO would bring less benefit to Mongolia, rather than constraining its space for foreign policy maneuvers and darkening the image of democracy – if one understood as a process of reaching consensus without violence and respecting human rights.  A neutral, domestically stable, and economically prosperous Mongolia has been the interests of Sino-Russia. Mongolia’s economic link to Central Asia is very unrealistic than Mongolia’s outreach to North East and Southeast Asia. 

Posted in China, Foreign Policy, International Relations, Mongolia and ..., SCO | Tagged | Leave a comment

Present and Past of Mongolia: 15 Years of Changes as Observed by a Civil Engineer

By Kenji Maruoka
Translated from Japanese by Ts Jangar
Originally published as 「谷川, 聡. (Tanigawa Satoru).(2017). モンゴルの今と昔2000 年から土木技術者として見てきた15 年の変遷~. KON BAINA UUNo16

It was my first visit of Ulaanbaatar, Mongolia, where I came to work for Japan’s ODA program in the early May of 2000. It was snowing, when I went for morning walk. There I saw a kid, going to school and eating an ice-cream. I realized an astonishing difference with the sense of cold.

Ruts before construction of interstate road.

Same location with single paved road.

The center of the city was compact; few cars on the street made it easy to drive. Since we came to implement a Ulaanbaatar City road maintenance project, we visited various places in the city and noticed that streets in urban areas, other than the centre of the city, were paved poorly, had a lot of potholes and shattered sidewalks, and there was a surprisingly high number of unpaved gravel roads.

Urbanized area of Ulaanbaatar in 2000.

Urbanized area of Ulaanbaatar in 2015

In addition, paved roads in the rural suburbs were quite limited, few ruts in the prairie appeared to be a national road, promising time-consuming travel with a high risk of getting lost.

East end of the former Teeverchid road (2000).

East end of Narny Zam in 2007.

The construction of standard highway, instead of these dusty ruts, would increase the travel speed, reduce the risk of getting lost in the winter and no risk of endangering lives.

The population of Ulaanbaatar increased from 780,000 in 2000 to 1.4 million in 2015 at a galloping annual rate of 3.9%. Meanwhile, the number of cars increased from 42,000 to 331,000, an increase by eight times. Urbanization in 15 years is significant but the pace of change is hardly remembered.

Social Change over 15 Years

15 years is long enough to make a 15-year old girl become a 30-year old woman. In this period of time the number of cars and people increased, but the number of drunk people and street children living in manholes has decreased. The fashion outfits of people walking the streets significantly improved. The variety of foods on menus has been enriched as well as quality of goods in the stores has improved.

A two-lane road with no buildings along road, changed to four lanes. It is one of the visible results of development effect.

A two-lane road with no buildings along road, changed to four lanes. It is one of the visible results of development effect.

Life expectancy has improved for women from 65.9 to 74.2 and for men from 60.1 to 65.6. The social changes that took place were partially the result of urban development and improvement of infrastructure such as roads.

On the other hand, a decade-long migration of people from rural area and concentration of them in Ulaanbaatar from 2003 to 2013 (in the 2009 increase by 11.7%), raised urban problems such as air pollution and traffic congestions. Considering the current state of infrastructure development, which is a premise for everyday life, it is important to pursue convenience and increase an effect of development in terms of the quality of life.

In my opinion infrastructure development, such as a road construction, as a part of the public projects, had a development-inducing effect within 15 years of changes.

Development inducing effect has a great potential for a developing country such as Mongolia, supporting not only the growth of the city and the people who live there, but also supporting environment and improve the landscape, aiming to become a green city.

Peace bridge area in 2000.

Narny Zam and Peace bridge area in 2007.

Narny Zam near Peace bridge in 2017, using bridge pierce we were able to construct four lane road. Improvement of road dragged many businesses alongside of the road.

The pursuit of the convenience of a car society gave negative results such as traffic congestion, air pollution, parking problems, and increased traffic accidents due to ignorance of traffic law and poor driving manners. These reduce all positive effects of development.

I think, in order to maintain comfort in the city, while preserving the natural environment, we should not forget the circumstances that brought us from 15 years ago to present. And it’s also important to look 5 to 10 years ahead and not neglect efforts that derived the effect of development.

West side of central railway station in 2000.

West side of Narny Zam in 2007.

West end of Narny Zam in 2017. West end of Narny Zam in 2017. The dusty gravel road with impassable mud after rain transformed into four-lane all-weather road irrelevant to dust

Narni Zam (the road named after Japan as “road of Sun”), three main intersections (Eastern intersection, Western intersection, and intersection at the Geser temple), and Narni guur (Bridge of Sun, named after Japan) have became a part of Ulaanbaatar urban life and common objects of everyday use. But as someone who participated in the realization of these projects, as well someone who constantly was involved in infrastructure development since 1978 throughout South-East Asia, such problems tend to be solved when society becomes wealthier.

Infrastructure development never goes smoothly; there is always a sense of certain trade-off when society gains but at the same time loses something. Moreover, this lost part is always left behind and never experiences an efficacy of development.

I would like to believe that generation raised in society under wealth and prosperity will eliminate these negative losses.

About Kenji Maruoka

Born in Tokyo in 1949, Mr. Maruoka is a graduate of Hokkaido University, Faculty of Civil Engineering (1973). He became a construction consultant and since 1978, for 40 years was engaged in overseas projects, particularly in Asian countries. Since 2000 Mr. Maruoka is involved in road and other development projects in Mongolia.

His long-standing achievement in Mongolia was recognized and the Order of the “Polar Star” (video news) was awarded by the Mongolian government in December 2017.

About Ts Jangar

Mr. Jangar Tsembel was born in Ulaanbaatar, Mongolia (1974). After graduation from the School of Foreign Services of the National University of Mongolia (1996), Jangar worked as an interpreter in ongoing development projects in Mongolia and since 2000 was employed in a consulting company as assistant of Mr. Maruoka until 2014. Currently he is graduating from the program of Natural Resources Conservation, Faculty of Forestry, UBC and planning to continue for a master degree in the same faculty.

Posted in Bilateral Aid, Change, Development, Infrastructure, Social Change, Ulaanbaatar | Leave a comment

Virtual Nomination of Anti-Corruption Leaders: Political Innovations?

By Mendee Jargalsaikhan and Julian Dierkes

The role of social media continues to be something that we are watching closely. The most notable example of social-mediated democracy was Ch Saikhanbileg’s 2015 SMS poll. But, despite Mongolian politicians’ early embrace of social media (see my list of current MPs on Twitter as an example), we’ve also noted that the influence of social media in the 2016 parliamentary election, for example, was limited.

Social Media Polling for Anti-Corruption Appointments?

On April 24, the President’s Chief of Staff Z Enkhbold officially announced President Battulga’s “unique” decision of sharing his responsibility of nominating Chief and Deputy Chief for the Independent Authority Against Corruption with the public. According to Enkhbold, citizens would nominate their candidates for Chief and Deputy Chief separately through the presidential office website (sanal@president.mn). For more on the general structure of the IIAC see our previous blog post.

After a week, on May 2, the presidential website noted that 6,405 people responded to the nomination.  6,382 people nominated 179 candidates for the post of Chief while 5,657 people nominated 317 candidates for the post of Deputy Chief.

The top ten nominees included five former police colonels and others, including Z Enkhbold, “Buyan” Jargalsaikhan, Chairman of the Mongolian Republican Party, and G Baasan, a civil society activist, as the only women among these most-nominated individuals. Since the Anti-Corruption Law requires a minimum of years of public service experience (i.e., 15 years of public service experience for the Chief’s nomination and 10 years for Deputy Chief), legal training, and not holding political posts for 5 years prior to the nomination, only police officers seemed to meet the requirements.

On May 4 the President submitted the nominations of D Davaa-Ochir (police colonel) as Chief and J Batsaikhan (police colonel) as Deputy Chief to parliament. Davaa-Ochir is a former Deputy Chief of the Authority for Implementation of Court Decision (the marshal service) and Chief of the Secretariat for the National Security Council, which falls under the President’s portfolio. Batsaikhan used to work as a Chief of the Department of IAAC in 2007-2016 and Deputy Chief of the marshal service afterwards.

Social Media Democracy?

Following the presidential submission of candidates, on May 8, the parliamentary Standing Committee on Justice voted in favour of not discussing the presidential nominations because the president had violated the prescribed nomination procedures for senior leaders of the IAAC.

This seems an odd response since the President seems to have only solicited nominations. He did not put these nominations to an SMS or Twitter poll popular vote, but let himself be inspired by the list of individuals suggested by citizens. Were Davaa-Ochir and Batsaikhan on any short list that might have been prepared in the President’s office prior to the call for nominations? We don’t know.

It seems like anti-corruption agencies are a particularly thorny governance challenge. They need maximal independence from incumbent politicians to be credible in investigating government-linked corruption, but there is also a sense of “who watches the watchers” and a need for democratic legitimation for anti-corruption activities. The nomination poll is a very minor step toward a reimagining anti-corruption governance, but it seems worth further consideration.

Posted in Corruption, Judiciary, Public Service, Security Apparatus, Social Media | Tagged | Leave a comment