When the dust settles: How an iron ore mine threatens nomadic herders’ livelihoods in Mongolia

December 14, 2014 Posted by otwatchweb

A multimedia report by Bankwatch about the local impacts of the Tayan Nuur iron mine in Gobi Altai.

Available here

Imagining the mineral nation: contested nation-building in Mongolia

December 14, 2014 Posted by otwatchweb

By Sara L. Jackson

Nationalities Papers

Link to full text here

Abstract

The development of the Oyu Tolgoi copper–gold mine, located in Mongolia’s South Gobi province, promises to rebuild the nation after two decades of economic and social instabilities following the 1990 revolution. While the company promotes the mine as the teleological solution to Mongolia’s development, the state and public remain ambivalent, as concerns about a resource curse and Dutch Disease loom. In this paper, I argue that Oyu Tolgoi remains contested due to tensions between corporate and state actors as well as public concerns about the potential negative political, economic, and environmental effects of mining. Debates over the Oyu Tolgoi investment agreement negotiations and the immediate repercussions of the agreement signing reveal how the dual teleologies of building mineral nations crystallize in the neologism “Mine-golia.” This paper begins to fill a gap in the literature on mineral nations which privileges the role of the state, leaving how corporations engage in nation-building underexamined.

BIC Report on Oyu Tolgoi: Breaking Ground, Breaking Trust

November 20, 2014 Posted by otwatchweb

March 2013

For the full report follow this link Breaking Ground, Breaking Trust

 

The Oyu Tolgoi (OT) copper/gold mine in southern Mongolia is one of the largest copper mines in the world, and is jointly owned by the government of Mongolia and Turquoise Hill Resources (Canada) through the subsidiary company Oyu Tolgoi LLC. Rio Tinto (UK) assumed full management of the mining operations in 2010 after obtaining a majority of shares in Turquoise Hill Resources. As the project is anticipated by many to increase the Mongolian GDP by 30% when operations begin in the first half of 2013, several international financial institutions such as the International Finance Corporation (IFC), European Bank on Reconstruction and Development (EBRD), the US Export-Import Bank, and the Export Finance and Insurance Corporation (Australia) have expressed an interest in supporting the project.
The following report is based on a field trip undertaken in Khanbogd, Mongolia by a staff member from the Bank Information Center (BIC) in early December 2012 in order to gain an on-the-ground perspective of the impacts of the Oyu Tolgoi project on the local community. OT Watch, a Mongolian NGO based in Ulaanbaatar dedicated to monitoring the project for compliance with international environmental and human rights standards, provided in-country support for this trip. They helped arrange the activities which fed into this report, including conversations with members of Gobi Soil, a civil society organization in Khanbogd founded by local herders in response to OT; a guided tour around the Oyu Tolgoi mine license area and the Gunii Hooloi pipeline infrastructure corridor; and a consultation between a CAO assessment team and roughly 50 impacted herders. In order to capture the various complaints of the local community, impacts have been organized around six main areas: politics, lack of promised compensation, access to water, herder livelihoods, community health, and access to energy.
The one thing that became abundantly clear during our limited stay in Khanbogd was the deep sense of frustration, anger, and distrust felt by the community towards Oyu Tolgoi LLC. Much of this is related to the great advantage the company has over civil society and the local community based on its relationship to the central government. Some feel that the company is abusing their power by not listening to the needs of the community, and as a result, many of the herders and other residents of Khanbogd are pessimistic of the benefits the mine will supposedly bring when production starts later this year. The purpose of this report is to foster an open dialogue on the most pressing issues facing the herders of Khanbogd today by highlighting these frustrations.

Massive Mongolian mine endangers nomads’ water, way of life

October 12, 2014 Posted by otwatchweb

From: https://beta.cironline.org/reports/massive-mongolian-mine-endangers-nomads-water-way-of-life/

This story was published with GlobalPost.

KHANBOGD, Mongolia – Ichinkhorloo Buya scooped fresh water into the camels’ trough and waited for them to return. The whooshing water always beckoned the animals, with their sharp sense of hearing, home.

But this time, they were nowhere to be found. Her children raced off across the bumpy moonscape of the Gobi Desert on motorbikes in a frantic search. They eventually found the camels huddled around an old rusty well. There was no reason the camels should congregate there.

But they heard something the men didn’t – an underground flow of fresh, cold water.

That sound meant something had gone awfully wrong: The precious underground water that sustains the herders’ fragile existence was flowing down into the brackish aquifer controlled by a booming copper and gold mine that’s rapidly changing daily life in Mongolia’s Gobi Desert.

This land of nomads boasts one of the world’s fastest-growing economies, thanks in part to that massive Oyu Tolgoi mine. It alone is expected to account for up to one-third of the country’s gross domestic product and deliver much-needed infrastructure and good jobs.

But as the mine scales up, the operation that’s now led by mining giant Rio Tinto has struggled to live up to its promises of world-class environmental standards. The mine pledged, for example, to leave herders’ scarce water sources untouched.

While company officials say the problems haven’t had a major impact on locals’ water, herders say that since the company built the wells, the land and their own wells have gotten drier.

Brian White, a senior adviser at Oyu Tolgoi, said the company continues to strive to meet or exceed both Mongolian and international standards.

“We have demonstrated progression toward meeting the commitments we have set,” he said in an email.

The mine has put itself directly at odds with a traditional way of life that’s already facing the strains of drought and climate change. Mongolia has warmed more than any other country in the last century, nearly 4 degrees Fahrenheit in 70 years.

Grazing land is disappearing. Wells are drying up. Plants that survived years of drought now are withering. Herds of camels are dying. The changes have altered basic life here, sparking an exodus of traditional herders from the dry, dusty plains to the shantytowns of the capital city, Ulan Bator.

“I would say this is the beginning of a disaster,” said Ravdaudorj Khayandorj, a south Gobi herder near the mine. “Not many people are left. They’re all fleeing to the north.”

About a quarter of the country’s nearly 3 million people live at the edges of the capital in yurts they brought with them from the increasingly uninhabitable countryside. The former herders have no running water or sewage system. But they do have a view. On days when the air isn’t choked with coal smoke, they watch tract housing and office space spring up amid the last generation’s severe Soviet housing blocs. They count the cranes on the horizon. They hope for construction work.

Oyu Tolgoi’s pit mine in Mongolia’s Gobi Desert is set to expand several times its current size.

Credit: Jargal Byambasuren for CIR

 

Nomads are increasingly abandoning the countryside for a stationary life in yurts at the edges of the capital, Ulan Bator.

Credit: Rachael Bale/CIR

 

Danzanshadov Enkhsaikhan, an activist and chemical engineer, checks one of Oyu Tolgoi’s cascading wells.

Credit: Rachael Bale/CIR

 

An investment firm valued Oyu Tolgoi’s mineral deposits at $300 billion.

Credit: Jargal Byambasuren for CIR

 

Growing demand for copper

Before it was a thriving mine, Oyu Tolgoi was little more than a hill in the vast desert.

Bits of green copper glinted in exposed rock, and the herds of nearly a dozen nomadic families grazed on grass and drank from a natural spring. The families relied on the milk, meat and hair of the camel to scratch out a living.

More than a decade ago, geologists realized the mineral deposits could be worth billions. One investment firm valued them at $300 billion. But to get the metals, a mining company would need massive amounts of water.

Neighboring China’s booming construction industry has fueled the demand for copper, in particular, which is used in everything from electrical wiring to plumbing and telecommunications. It’s also a key component in green energy products like hybrid cars and solar panels.

Water is not easy to come by in the Gobi. With as little as 2 inches of rain a year, an ephemeral river and hand-dug wells, the nomads couldn’t afford to share their water.

The mining company needed to find its own water. For that, it drilled exploration wells hundreds of meters deep.

The company had to build wells carefully to ensure the shallow water, so vital to the herders and already in short supply, would be protected. To get rights to the water it hoped to discover, the company in charge of the mine promised to uphold international environmental policies and first-rate development standards.

For example, in order to get financing from the European Bank for Reconstruction and Development, the company pledged to abide by the lender’s policies. One of its water standards includes demonstrating that the mine’s water supply wouldn’t have a negative impact on the water upon which locals depend.

In 2003, hydrogeologists made the discovery that made the mine possible – a perfect aquifer named Gunii Hooloi. It was far too deep for locals to access and too salty to be drinkable even if they could.

By 2009, Rio Tinto was about to take control of Oyu Tolgoi. Before it did, though, it needed to sign an investment agreement with the Mongolian government. Facing a $6 billion price tag to build the mine, investors wanted assurances that regulations and taxes would remain stable.

Negotiations, which had been going on for years, were just months away from concluding when word first surfaced of the leaking water in the desert. Oyu Tolgoi made no public statements on the wells. Several nomads said Oyu Tolgoi told them everything was fine. The government and Rio Tinto signed the agreement in October 2009.

Then in 2010, Oyu Tolgoi was preparing for a press event to show off its facilities. A local leader and chemical engineer named Danzanshadov Enkhsaikhan emailed the company. He threatened to bring reporters to hear the water cascading down the well shaft.

The response he got included an internal note, suggesting the company was as concerned about bad press as it was about water supplies.

In a note to staff, Samand Sanjdorj, Oyu Tolgoi’s vice president, proposed plugging the wells with concrete. It wouldn’t stop the cascading completely, but it would curtail the leakage significantly, he wrote.

Plus, “at least no one will hear that some water is leaking down with a noise,” Sanjdorj wrote. “I can imagine that if the press media comes to the bore and hear the cascading noise we will be in very bad situation.”

Improperly built wells

An hour’s drive from the small village that’s the herders’ central meeting place, a rusty tube sticks out of the desert’s sandy dirt. Nearby, a taller rusty pipe with a concrete base keeps watch like a miniature lighthouse.

Every nomad in these parts seems to know how to find these little tubes. Nomads have masterful orientation skills. They use the trajectory of the sun and the mountains in the distance to navigate a landscape with few visible roads and no landmarks other than clumps of brittle brush every few feet.

The tubes became a famous point of interest once word spread that the wells were making noise.

On a scorching hot day in July, Enkhsaikhan knelt down next to the tube. It wasn’t making any noise. But that wasn’t a good sign, he said. It suggested the shallow water the herders rely on was gone.

The tube touches several aquifers at different levels as it descends hundreds of meters into the sandstone and clay.

When companies build exploration wells that touch different water sources, like those outside Oyu Tolgoi, they must be sealed with impermeable material. This ensures water from a shallower source cannot cascade into a deeper one.

The contractor didn’t build those seals at Oyu Tolgoi’s wells. The construction plan shows only gravel where an impermeable barrier should be.

A “technological mistake,” Oyu Tolgoi’s vice president called it.

At least five other wells were cascading, too, a specialist brought in by the government later confirmed. Rio Tinto blames its drilling contractor, RPS Aquaterra, saying the company constructed the wells incorrectly.

But Rio Tinto should have been able to adequately oversee the work of its contractors, said mining expert Paul Robinson of the Southwest Research and Information Center, a New Mexico-based nonprofit focused on natural resource protection.

“What they did completely defeats the purpose of what was committed to and agreed to,” he said. “It is really bad performance.”

Bruce Harvey, a consultant for Rio Tinto, said the water loss is minimal. He compared it to “the width of the hair on your head compared to the size of this room,” during an interview in a mine classroom that would fit about 40 people in desks.

There are no public scientific studies or data that show how much water was lost.

White pointed to a company report that says the cascading does not have a “measurable impact” on the shallow aquifers upon which the herders rely.

Even so, the shallow and deep aquifers now appear to be connected, according to an independent 2013 audit. That can cause the contamination of the freshwater aquifer if the cascade reverses, a problem that’s potentially as serious as water loss.

Herders like Khayandorj said that since the exploration wells went in, plants that had survived years of drought have died.

“Yes, there were two to three years of severe drought,” he said, sitting in his yurt over bowls of salty milk tea. “But right after they set up those wells, families had to move away because of changes in the grass.”

Two wells he once used now are dry. He told Oyu Tolgoi, which has promised to find a new water source for any herder with a dry well. The company has dug several new, deeper wells for other herders. But in his case, the efforts didn’t work.

“They came. They dug with their machinery,” he said. “Nothing. It’s dry.”

Khayandorj and his family spent the entire summer, usually a time of rest for nomads, setting up temporary camp, constantly on the move for sufficient grass and water for their herds.

The nomads have suffered other affronts during Rio Tinto’s mine development. The company replaced a natural spring that was a place of worship with what looks like a man-made drainage ditch. It also dug up sacred elm trees, according to the U.S. Agency for International Development.

Lkhamdoorov Battsengel’s family, along with 10 others, used to live and graze their herds on pastureland of the Turquoise Hill, as the area is known. His family alone had 600 sheep and goats, 100 camels and dozens of horses and cows. When the mining company fenced in its land, it forced the families to relocate.

The land where Battsengel resettled couldn’t sustain his herds. He is down to 100 animals in total.

He’s now started a nonprofit environmental organization called Gobi Soil to influence Oyu Tolgoi’s environmental policies. It has banded with bigger nonprofits to file formal complaints with the International Finance Corporation, which is considering a $1.4 billion financing package to develop the mine further.

“We still have time to turn things back,” he said.

Battsengel now supports his family by collecting trash for Oyu Tolgoi.

Frontline Defenders: World Cup 2014 Campaign – Sukhgerel Dugersuren

June 17, 2014 Posted by otwatchweb

OT Watch executive director, Sukhgerel Dugersuren named a ‘Frontline Defender’

Front Line Defenders launches World Cup campaign in Brazil and Worldwide

See also: http://frontlinedefenders.org/node/26175

 

Representing Australia in our #HumanRightsCup World Cup 2014 campaign is Sukhgerel Dugersuren, a human rights defender (HRD) in Mongolia, who fights for the rights of nomadic herders against foreign mining companies, including companies from Australia.

Sukhgerel Dugersuren is the Executive Director of OT Watch, a Mongolian NGO established to monitor compliance of Rio Tinto with the international environmental and human rights standards. OT Watch monitors compliance of Mongolia’s largest mining project at Oyu Tolgoi in the Gobi Desert in collaboration with herder NGOs, environmental activists as well as international and national CSO networks.

After the July 2008 post-election demonstrations and arrests of protesters leading to a declaration of a state of emergency in the country she acted as co-coordinator of “July 1” coalition of CSOs defending the rights of arrested protesters. Research of political and civil tensions of the time pointed to the public and especially rural citizens’ disagreement with the government’s policy to allow extensive foreign investment in the mining sector.

Foreign mining corporations and investors do not recognize the right of nomadic herders to their pastures and water wells. Defending nomadic herders’ rights to natural resources critical for their subsistence is a key focus of her activity.

To show your support for the important work that Sukhgerel Dugersuren carries out in Mongolia, please join us in writing a message of solidarity. Your support is hugely appreciated by human rights defenders, who often work in isolated and dangerous conditions to achieve better rights for others.

You can write a message of solidarity here.

Be sure to share the campaign with your networks and help us make the biggest impact we can. You can follow the campaign on Twitter. Make sure to Tweet with #HumanRightsCup.

– See more at: http://frontlinedefenders.org/node/26175#sthash.BQcjbnsr.dpuf

Representing Australia in our #HumanRightsCup World Cup 2014 campaign is Sukhgerel Dugersuren, a human rights defender (HRD) in Mongolia, who fights for the rights of nomadic herders against foreign mining companies, including companies from Australia. Sukhgerel Dugersuren is the Executive Director of OT Watch, a Mongolian NGO established to monitor compliance of Rio Tinto with the international environmental and human rights standards. OT Watch monitors compliance of Mongolia’s largest mining project at Oyu Tolgoi in the Gobi Desert in collaboration with herder NGOs, environmental activists as well as international and national CSO networks. After the July 2008 post-election demonstrations and arrests of protesters leading to a declaration of a state of emergency in the country she acted as co-coordinator of “July 1” coalition of CSOs defending the rights of arrested protesters. Research of political and civil tensions of the time pointed to the public and especially rural citizens’ disagreement with the government’s policy to allow extensive foreign investment in the mining sector. Foreign mining corporations and investors do not recognize the right of nomadic herders to their pastures and water wells. Defending nomadic herders’ rights to natural resources critical for their subsistence is a key focus of her activity. To show your support for the important work that Sukhgerel Dugersuren carries out in Mongolia, please join us in writing a message of solidarity. Your support is hugely appreciated by human rights defenders, who often work in isolated and dangerous conditions to achieve better rights for others. You can write a message of solidarity here. Be sure to share the campaign with your networks and help us make the biggest impact we can. You can follow the campaign on Twitter. Make sure to Tweet with #HumanRightsCup. – See more at: http://frontlinedefenders.org/node/26175#sthash.BQcjbnsr.dpuf

Representing Australia in our #HumanRightsCup World Cup 2014 campaign is Sukhgerel Dugersuren, a human rights defender (HRD) in Mongolia, who fights for the rights of nomadic herders against foreign mining companies, including companies from Australia.

Sukhgerel Dugersuren is the Executive Director of OT Watch, a Mongolian NGO established to monitor compliance of Rio Tinto with the international environmental and human rights standards. OT Watch monitors compliance of Mongolia’s largest mining project at Oyu Tolgoi in the Gobi Desert in collaboration with herder NGOs, environmental activists as well as international and national CSO networks.

After the July 2008 post-election demonstrations and arrests of protesters leading to a declaration of a state of emergency in the country she acted as co-coordinator of “July 1” coalition of CSOs defending the rights of arrested protesters. Research of political and civil tensions of the time pointed to the public and especially rural citizens’ disagreement with the government’s policy to allow extensive foreign investment in the mining sector.

Foreign mining corporations and investors do not recognize the right of nomadic herders to their pastures and water wells. Defending nomadic herders’ rights to natural resources critical for their subsistence is a key focus of her activity.

To show your support for the important work that Sukhgerel Dugersuren carries out in Mongolia, please join us in writing a message of solidarity. Your support is hugely appreciated by human rights defenders, who often work in isolated and dangerous conditions to achieve better rights for others.

You can write a message of solidarity here.

Be sure to share the campaign with your networks and help us make the biggest impact we can. You can follow the campaign on Twitter. Make sure to Tweet with #HumanRightsCup.

– See more at: http://frontlinedefenders.org/node/26175#sthash.BQcjbnsr.dpuf

Representing Australia in our #HumanRightsCup World Cup 2014 campaign is Sukhgerel Dugersuren, a human rights defender (HRD) in Mongolia, who fights for the rights of nomadic herders against foreign mining companies, including companies from Australia.

Sukhgerel Dugersuren is the Executive Director of OT Watch, a Mongolian NGO established to monitor compliance of Rio Tinto with the international environmental and human rights standards. OT Watch monitors compliance of Mongolia’s largest mining project at Oyu Tolgoi in the Gobi Desert in collaboration with herder NGOs, environmental activists as well as international and national CSO networks.

After the July 2008 post-election demonstrations and arrests of protesters leading to a declaration of a state of emergency in the country she acted as co-coordinator of “July 1” coalition of CSOs defending the rights of arrested protesters. Research of political and civil tensions of the time pointed to the public and especially rural citizens’ disagreement with the government’s policy to allow extensive foreign investment in the mining sector.

Foreign mining corporations and investors do not recognize the right of nomadic herders to their pastures and water wells. Defending nomadic herders’ rights to natural resources critical for their subsistence is a key focus of her activity.

To show your support for the important work that Sukhgerel Dugersuren carries out in Mongolia, please join us in writing a message of solidarity. Your support is hugely appreciated by human rights defenders, who often work in isolated and dangerous conditions to achieve better rights for others.

You can write a message of solidarity here.

Be sure to share the campaign with your networks and help us make the biggest impact we can. You can follow the campaign on Twitter. Make sure to Tweet with #HumanRightsCup.

– See more at: http://frontlinedefenders.org/node/26175#sthash.BQcjbnsr.dpuf

Foreign Mining, State Corruption and Human Rigths in Mongolia

June 10, 2014 Posted by otwatchweb

Global Research report on Foreign Mining, State Corruption and Human Rights in Mongolia

Report by Keith Harmon Snow, Global Reach

“Packed with distortions and outright lies, Mongolia’s privatized former state media
called them the ‘enemies of Mongolia’. On 16 September 2013, the leaders of
Mongolia’s Fire Nation (Gal Undesten in Mongolian), an environment and human rights
coalition, organized a mass protest in front of the Mongolian Parliament.
Decades of grassroots organizing to establish environmental protections were at risk:
on September 16 the Great State Khural (State Parliament) gathered with intentions to
dismantle the so-called ‘Law With A Long Name’ (LLN).”

Project Complaint Mechanism (PCM) Letter

May 13, 2014 Posted by otwatchweb

April 22, 2014

 

Dear Namsrai, Sukhgerel and herder Complainants from Khanbodg and Manlai soums,

 

We are writing to update you on the status of the Complaint you submitted to the PCM in 2013.

 

As you may know, PCM received a new submission from Complainants dated 1 April 2014 that provided further justification and clarification to supplement Complainants’ request for a Compliance Review. The submission has been registered as an addition to the original complaint, and was posted on the PCM website on 15 April 2014. The submission is now part of the official complaint, along with the two road complaints filed by herders of Khanbogd and Manlai soums in 2013.

 

The supplement references a broader range of issues than was provided in the original complaint. Consequently, according to the PCM Rules of Procedure, the Management and the Clients (Oyu Tolgoi and Energy Resources) will be required to revise their previous responses to the Complaint, considering both the original submission and the information contained in the supplemental letter. The PCM will then be able to finalise the Eligibility Assessment Report accordingly, taking into account the additional information provided by the Complainants and the responses from Bank management and the Clients.

 

PCM has asked the Bank and the Clients to submit their official revised responses to PCM by May 30, 2014. PCM will then consider these responses in addition to the supplement submitted by Complainants and finalise the Eligibility Assessment Report by the end of June.

 

We recognize the eligibility determination has taken much longer than expected and very much appreciate your patience through this lengthy assessment process.

 

Kind regards,

Anoush and Susan

OT Watch statement on the environmental, social, and economic impacts that Oyu Tolgoi Poses to local residents

May 7, 2014 Posted by otwatchweb

A major reassessment of the investment in the health, livelihood and
natural resources of the people living around OT is needed to insure
that they are not victims of OT’s impacts but survive those impacts
and sustain their community beyond the life of the mine.

Tayan Nuur Iron Ore Project

April 29, 2014 Posted by otwatchweb

Lake Tayan Iron Ore project Summary of a forthcoming report

Summary of a forthcoming report
TAYAN NUUR (LAKE TAYAN) IRON ORE PROJECT
March 6 – 11, 2014
OT Watch
Ulaanbaatar
Beginning of 2012 EBRD agreed debt financing of up to 30 mio. US$ and equity financing of up to 25 mio. US$ for the Mongolian mining company Altain Khuder LLC for the development for the Tayan Nuur iron ore mine. The project was environmentally categorized as “B” project under the assumption that environmental and social risks can be mitigated through appropriate commitment to good environmental and social practices. Part of the justification for the financing is that this is part of a broad approach in support of the sustainable development of the Mongolian mining sector and that it will improve standards, such as transparency and disclosure as well as corporate, environmental and social management practices.1
In March 2014 a team, consisting of OT Watch, Lawyers for Environment and the Council of Natives of Tseel Soum, visited Tseel Soum of Gobi Altai Aimag2 in Mongolia in order to
a) verify complaints of violations of human rights by Altain Khuder LLC in its Tayan Nuur project area;
b) carry out a survey of mining affected local community’s knowledge and awareness of the EBRD standards and policies;
c) respond to the request of Lawyers for Environment to provide information on the EBRD safeguards policies and the PCM mechanism to the local government and affected households of Tseel soum.
1 http://www.ebrd.com/english/pages/project/psd/2011/39581.shtml
2 Aimag – province, Soum – small town, Bagh – smallest administrative territorial unit
This is the executive summary of a forthcoming report presenting the findings of this March 6-11, 2014 initial fact-finding mission.
The mission included visits to the Gobi-Altai Aimag capital Altai, Tseel Soum and Derstei Bagh. The team held individual interviews as well as group briefings and survey taking meetings with the Aimag governor, chairs of Aimag, Soum and Bagh representatives, residents of Tseel, herders in Derstei and Bayangol, Tseel Soum doctor and customs, environment, land and specialized inspection inspectors.
The mission found that the project is violating several of EBRD’s safeguards:
 PR 1: Environmental and Social Appraisal and Management – The EBRD is financing a company, whose environmental impact assessment report was found inadequate in terms of meeting international standards, including EBRD’s own requirements. The “Environmental and Social Review and Action Plan” for the Tayan Nuur Iron Ore Mine carried out by ERM (Environmental Resources Management) states: “The EIAs do not meet EBRDs Performance Requirements with respect to:
• Ecological impact assessment;
• Disclosure of project information and consultation is not documented;
• Assessment of the impacts of the project’s water use and measures to minimise water use.
• Social impact assessment.”3
 Local administration institutions have limited to no capacity to ensure environmental protection, enforcement of law and transparent participatory decision-making. Residents and local administration expressed feelings of marginalization in decision-making on this project. The local administration has no power over a company that has not implemented the environmental protection plan, not built the promised black-top road or local development projects. Any attempt to enforce requirements ended with a lawsuit filed by the company against local government offices, public officials and individual residents.
 PR 2: Labour and Working Conditions – Local administration reports frequent fatal accidents at the mine. The Governor reports 10 deaths at the mine in the past year and half. The 2013 Aimag Police reports contains only three cases of fatal accidents, which led to investigation.
 PR 3: Pollution Prevention and Abatement – According to the reports of local administration and herding community, the only pollution prevention they are aware of – which was observed by this mission – is halting production in anticipation of any inspection as a way to pretend there is no pollution. The company stops production several days ahead of any inspection, clears waste around the mine site and disburses dust suppressants. When the mine is in operation people reported that they do not see the sky or anything around to that matter. There is black dust from the mine and road dust from their trucks transporting the ore. The trucks not only drive off road damaging the soil cover creating more dust but also do not have covers over the ore. This is largely affecting visibility, causing traffic accidents and contaminates soil and water.
o Snow around the mine area is heavily contaminated with fine black dust, which penetrates into soil when it melts. Herders fear that this process of melted snow in the soil could be contaminating shallow aquifers from which they drink. Approximately 30 households, who have lost access to water from the community well, are currently drinking melted snow. See Photo below.
o This mission has brought samples of snow and melted water for laboratory testing. As of writing this summary we are waiting for the results.
PR 4: Community Health, Safety and Security – There is little to no expertise and awareness among local community or Soum administration officials about the health impacts from the air, soil and water contamination by an iron ore extraction project or a mining projects in general. The mission found already severe air, soil and water contamination.
 PR 5: Land Acquisition, Involuntary Resettlement and Economic Displacement – Mining projects in Mongolia’s less watched remote areas are advancing without adequate assessment of possible environmental and social impacts, with little to no mitigation measures put in place for the safety of local communities. For example mining displaces and resettles local nomadic communities paying a nominal fee as compensation without replacement of land and water access.
o Physical displacement: Altogether 22 herding households have been moved off their winter camps under the so-called “resettlement program”. No land has been provided for resettlement. Herders are living on the land of relatives without official title to use of such land.
3 Environmental and Social Review & Action Plan, ERM, p.4 https://docs.google.com/file/d/0B4fCEp0znFy1cUpmNE9hM3dHRXc/edit?pli=1
o Economic displacement: An unspecified number of herding households has lost access to pasture and water resources. More are threatened to be moved off. No assessment of impact on community pasture and water resources has been done. Altain Khuder LLC has bulldozed some winter camps and threatens to do so with other camps if herders continue complaining about the quality of pasture and water. The discussion with local government made it clear that they have no information on how to handle a relocation situation. They were not aware of any responsibility and EBRD standard requirements to safeguard sustainability of living space and livelihoods of their residents.
 PR 7: Indigenous Peoples4: Nomadic herders are mobile, land-based people dependent on the pastures as key production and livelihood natural resource. They are carriers of this old traditional way of life seemingly engaged in a subsistence level economic activity. However, the livestock sector is composed of these nomadic herders, which is counted and reported in official statistics as representing 30% of the country workforce. Lack of protection of their rights to pasture drives thousands of herders out of business and straight into a category we now define as domestically displaced persons. Herders should had therefore been classified as IP and treated accordingly.
 PR 8: Cultural Heritage: As stated in the ESIA report for EBRD, Altain Khuder and the EBRD due diligence team decided that there was no cultural heritage affected by the project. The local community argues that the company trucks drive off road causing serious damage to their traditional Naadam festival horse race range, which is a loss of opportunity to enjoy and preserve cultural heritage.
o This mission argues that loss of access to pasture – the principal production asset of nomadic pastoralists is a loss of opportunity to live the traditional way of life and pass on this cultural heritage to the next generation of nomadic herders.
 PR 10: Information Disclosure and Stakeholder Engagement – A survey among 50 respondents and discussions with all people met reveals a complete lack of knowledge at the Aimag and Soum levels about the EBRD and its safeguards policies. The local administration and community had no knowledge about the EBRD financing Altain Khuder LLC and the Performance Requirements, which the company is required to implement in project operations. This includes a lack of awareness about the objective of the Bank to assist its clients in achieving adequate performance standards.
o Threat of use of force and intimidation: Interviews showed that there is no understanding of the purpose and process of stakeholder engagement. It was reported that the company does ask what the needs are but then turns around and files lawsuits claiming that anything the company had to supply to the community was forced out of them. The amount of fear and hopelessness among local community members was a feature not present in other mining affected communities in the country.
o Use of law enforcement to intimidate local community: Altain Khuder exercises a form of intimidation and harassment that is not only distressing but also time and resource consuming: The criminal lawsuits filed against people who complained or provided information to any institution involve criminal investigations which force the charged individuals to travel to Ulaanbaatar for frequent interrogations at their own cost. Currently there are seven individuals who were under investigation and now are being acquitted by the prosecution. Four of the seven people are local public officers in charge of Soum public health, education, Bagh administration and a cooperative. It isn’t clear what the next steps are in this case as there were several such acquittals in the past and the company kept taking them back to court. Official documents of these lawsuits are available in Mongolian language at the Lawyers for Environment. The Prosecution has turned down the claims for lack of substance.
o Disclosure of information: While the company website contains the “Environmental and Social Review and Action Plan” which includes some harsh criticism on the environmental impact assessment and proposes corrective action, the website remains silent on the fulfillment of these corrective action. Further, additional information on the extraction technology employed, mine development plan, operations management plans, environmental and social protection programs or reports of any kind are missing.5 There is also no information on the company management, members of BoD, owners or investors.
4 32. Indigenous Peoples are often closely tied to their customary lands and its forests, water, wildlife, and other natural resources, and therefore special considerations apply if the project affects such ties. While these lands
may not be under legal ownership pursuant to national law, use of these lands, including seasonal or cyclical use, by communities of Indigenous Peoples for their livelihoods, or cultural, ceremonial, or spiritual purposes that define their identity and community, can often be substantiated and documented.
5 http://www.altainkhuder.mn/?langid=2
All information available in the local community is that this is an open pit iron ore mine, which process ore at the mine in its 5 concentrators and exports to China via the border port at Burgastai. The most current information on the production capacity states that Altain Khuder LLC plans to build a sixth concentrator but has no ESIA or approvals for this action. The report of the Aimag Environmental Inspector on the company’s 2013 Report on Environmental Protection Program includes a list of activities not implemented but reported as implemented and a recommendation to formalize the process of building a 6th concentrator. According to the inspector this is an activity the company is planning but has not submitted any technical documents or impact evaluation reports. However, local herders state that the construction has already begun.
The findings of the FFM suggest that the objective of EBRD to contribute to sustainable mining in Mongolia hasn’t been reached so far and that the mitigation of environmental and social problems hasn’t been especially successful so far. Nor does it seem that committing Altain Khuder as company to good environmental and social practices has worked out yet very well. We therefore make the following
RECOMMENDATIONS
1. Carry out an assessment of the Altain Khuder LLC’s relocation program and its implementation. Assist with re-design of the program and its implementation.
2. Follow up on the petition from Tseel soum herders to EBRD requesting assistance with regaining access to water. The petition was delivered by OT Watch to EBRD Resident Representative on March 15, 2014.
3. Provide technical assistance to the local government, herding families in the EBRD relocation policies and standards leading to development and implementation of a satisfactory relocation and livelihood monitoring scheme. Support the local government in monitoring the companies activities to prevent them from causing the environmental harm on water, air and soil that it does apparently now.
4. Use EBRD’s influence to stop the company from harassing, suing and intimidating people trying to claim their rights.
5. Make sure that the information about EBRD’s involvement and the following rights for affected people is broadly publicized in the Mongolian language.
6. Apparently the categorization as “B” project, with environmental and social impacts that can easily be mitigated was over-optimistic, as the various problems raised in the report show. The categorization should thus be reviewed. This is a large size iron ore open pit mine, which should fall under item 14 of Annex A describing “open pit mining of large amounts of metal ores or coal”.
7. Inquire of EBRD about action taken to ensure that the customer knows its regulations and has developed a capacity to implement them. Recommend that EBRD develop and implement policies to this end.
General view of the Tayan Nuur iron ore mine.
General view of Tseel soum
A deep trench encloses a huge area of over 2.000 hectares around the mine and cuts off pasture land.
Black ore dust in the pan of melted water.
The Tayan Nuur company well is fenced in and guarded facility.

Environment Pays Price for Infrastructure Inefficiencies

March 23, 2014 Posted by otwatchweb

Originally published by EurasiaNet.org

Reposted from: http://www.eurasianet.org/node/66014

October 5, 2012
By Pearly Jacob

Mirage-like, a slinky piece of asphalt appears on the horizon after hours of driving across the dusty Gobi Desert. What’s coming into sight is the only paved surface for miles around. Yet many trucks are driving alongside the new highway, not on it.

In southern Mongolia’s mineral-rich hills, mining companies – foreign-run and local alike – are having trouble sharing something that should be a no-brainer: the roads. Despite the region’s remoteness, now two more roads are being built parallel to the new highway. They’re within spitting distance of each other – all heading through the same valleys and over the same hills towards China. And it’s the local nomadic herders paying the price.

Energy Resources, a private Mongolian firm, built the one existing road from its coal mine in Tavan Tolgoi – the world’s largest untapped coking coal deposit – some 245 kilometers to the Chinese border at Gashuun Sukhait. When it opened in 2011, herders in the vicinity welcomed the promised relief from dust stirred up by the constant traffic of coal trucks to the border. But with so many trucks still running on the bare earth, and construction seemingly nonstop alongside the new road, the air is just getting worse, residents and environmentalists complain.

That road was built on a 10-year build-operate-transfer concession agreement with the government, permitting Energy Resources to charge tolls on third-party users until handing the rights over to the state in 2021. But drivers working for neighboring mines say the toll of 180,000 tugriks (about $130) per load is exorbitant. One driver explains why he can’t afford to drive on the road: “We’re given 200,000 tugriks to deliver our load to the border and come back. If we pay the toll, there’s nothing left for us,” he said. To evade the toll, he drives on dirt tracks parallel to the new paved road.

A spokesperson from Energy Resources would not discuss the toll rate. In an email exchange, however, he defended the toll scheme and said the paved road still saves other companies money on fuel, time, and vehicle wear. Energy Resources has also recently signed an agreement with the government to build a railroad along the same route.

Running parallel to the Energy Resources road is a yet-unpaved road being built by a subsidiary of a private Mongolian company called Ajnai Corporation. A 2011 report published by USAID, Washington’s aid arm, raised concerns about Ajnai’s intention to build the road to avoid the Energy Resources toll. One problem, the report said, is that “local governments have the authority to construct their own roads, so there is no coordination.”

One hundred kilometers further south, the Oyu Tolgoi copper mine — a joint venture between Canada’s Ivanhoe Mines, British-Australian-owned Rio Tinto and the Mongolian government — is building yet another road, which will run alongside the Energy Resources road to the same border checkpoint at Gashuun Sukhait. The three roads crisscross each other at times but mostly run parallel. If all three are paved, this will mean over 500 kilometers of surfaced roads on this single, sparsely populated route. By comparison, in 2010, according to UN figures, Mongolia – a country roughly the size of Western Europe – had less than 2,600 kilometers of paved roads in total.

These routes bisect wildlife corridors between two adjacent national parks, the Small Gobi Special Protected Areas.

“Counting the proposed railroad, this will mean four parallel roads. Wildlife in this region, particularly the khulan [Mongolian wild ass] and gazelle, have already been affected by mining activities. When the roads are built, their migration routes will be cut off by not just one, but four dangerous crossings,” said Batsukh Choijonst, an ecologist at the park headquarters in Khanbogd. He said he asked government officials to find a way to limit the number of roads, but never got a response.

When asked if there was a way to collaborate with Energy Resources to improve the capacity of the existing paved road and share it, an Oyu Tolgoi spokesman said building a new road was part of its promise to the government.

Watchdogs feel the government is not doing enough to promote infrastructure efficiency. “We think it’s the government’s responsibility to fix its policies. You cannot allow every mine to have its own road. … It’s ridiculous,” said Sukhgerel Dugersuren, director of Oyu Tolgoi Watch, a non-governmental watchdog group.

Experts working on transportation development in other parts of the country also admit concern. “In building any linear infrastructure one would want to ensure there’s rational planning to avoid duplication of routes to minimize impact on the environment,” said Shane Rosenthal, deputy country director of the Asian Development Bank.

For herders affected by the dust, paved roads are petty compensation. At a camp site about two kilometers from the Oyu Tolgoi road construction, a local goat and camel herder, Dambadorj Mukhbayar, noted that the roads are fragmenting pastures and creating unnecessary dangers for his animals: ” Oyu Tolgoi is starting to pave the road now, after bringing in heavy equipment on dirt roads all these years. How can the new roads compensate for the damage already done?”