A Panel Analysis of Current Options for a Renewed Oyu Tolgoi Agreement

By Julian Dierkes

Since the Dec 13 announcement of a RioTinto offer to write off government debt, relatively little discussion has followed in the Mongolian public. As I mentioned in a previous post, the MPP response has been almost enthusiastic. What I do not see so far is a deeper analysis of what this offer implies, what is the government conceding in return for this debt write-off?

Since then, Turquoise Hill investors might also be having second thoughts.

It seems to me that a thorough analysis and understanding of what this offer would mean is necessary for any chance of breaking through the cycle of agreement – rising vague dissatisfaction with agreement – political calls for renegotiation – RioTinto concession – agreement. Why should either side strive to break this cycle? In part because it creates uncertainty which makes borrowing more expensive and thus reduces revenues. On the other hand, the Mongolian public is still building up analytical capacity, so, perhaps, repeated cycles of negotiation will lead to a better-understood and thus better agreement.

If the RioTinto offer is accepted through further negotiations, but without much more discussion in Mongolia, I would expect generalized dissatisfaction with the agreement to be on the rise again in a few years. Yes, it allows PM Oyun-Erdene to claim that the agreement has been improved and it allows the project to move forward, but an agreement without public understanding would not build social license to operate, I would suggest.

Proposal for Panel Analysis

A Mongolia observer can dream, can’t he?

Here are elements of a panel analysis that I think would have a significant chance at providing the kind of understanding for the Mongolian public that would solidify not only the OT agreement, but policy making on the mining sector more generally.

  • Panel that is large enough to include different perspectives, but small enough to be workable
  • Membership primarily Mongolian though empowered (and resourced) to solicit additional expertise
  • Members selected for proven expertise. Significant representation of academics likely, though not exclusive. I have my list of candidates. Appointment would be made by convenor(s).
  • Panel members paid for contributions, but full transparency on these payments and on members’ financial conflict of interest, if any
  • Public meetings for panel discussions and extensive documentation of sources used, calculations made, and approaches considered
  • Focus on graphic representation of different scenarios and their implications
  • List of unanswered questions along with recommendations on specificities of current offer
  • Open media partnerships pursued from beginning of deliberations
  • Resources available to hire social media presence to explain aspects of analyses in different forms
  • Credible institution as funder, convenor and host to panel. To me, the World Bank would be such a credible institution, but so would the Open Society Forum. Perhaps a consortium of institutions would be best.
  • Relative lull of other activities in December-Tsagaan Sar makes this a period when a panel could be mobilized.
  • Parties involved in negotiations (RioTinto, TRQ, but also minority shareholders in TRQ, government, lenders, etc.) might choose to present their own analyses to the public, let the public judge differences in these

Sure, such a process might not be cheap. But, this kind of transparent analysis would ultimately be in the interests of all involved parties, if they agree that it might produce more durable agreement. There would be numerous side benefits such as active engagement of the population, baseline for future conversations about agreement/negotiations, experiment of a different practice that might lead to good practice for other jurisdictions.

 

View this post on Instagram

 

A post shared by Julian Dierkes (@jbdierkes)

By the way, I personally do not have the required financial expertise for this kind of analysis, so I am not angling to be placed on this panel. But, I am a director of (and thus have a financial interest in) the Mongolian Institute for Innovative Policies, and this would strike me as an innovative approach. With colleagues, I would certainly be delighted to contribute to convening such a panel analysis.

About Julian Dierkes

Julian Dierkes is a sociologist by training (PhD Princeton Univ) and a Mongolist by choice and passion since around 2005. He teaches in the Master of Public Policy and Global Affairs at the University of British Columbia in Vancouver, Canada. He tweets @jdierkes
This entry was posted in Erdenes Mongol, Mining, Mining, Mining Governance, Oyu Tolgoi, Oyu Tolgoi, Public Opinion, Public Policy, Research on Mongolia, Taxes and tagged . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *