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Statements Special Procedures

End-of-mission statement by the Independent Expert on the effects of foreign debt - Visit Mongolia

11 September 2019

Mongolian version

Independent Expert on the effects of foreign debt and other related international financial obligations of States on the full enjoyment of all human rights, particularly economic, social and cultural rights, Juan Pablo Bohoslavsky, to his visit to Mongolia (2-11 September 2019)

Ulaanbaatar, Mongolia, 11 September 2019

The visit

My official country visit to Mongolia, which started on 2 September, is ending today.  Over the last 10 days, I had the opportunity to hold open and frank discussions with a range of high level governmental officials, state owned enterprises, representatives of the private sector, international partners, scholars and civil society organizations.
I wish to express my sincere gratitude to the Government of Mongolia for its cooperation before and during the visit. I would also like to thank the UN Country team for their assistance in the logistical preparations of this visit. 

My mission had four main objectives: a) to examine debt and macroeconomic policies from a human rights perspective  and  b) to understand to what extent mineral rents are translated into inclusive and comprehensive social and environmental policies, contributing to the progressive realisation of human rights and to sustainable development, b) to assess some efforts deployed by the Government to prevent and combat  illicit financial flows and their impact on human rights and; c) to look into lending for infrastructure and mining projects and other foreign direct investments from a human rights perspective. 

From the outset, I wish to highlight that all States ability to devote the maximum of their resources to the progressive realization of economic, social and cultural rights is directly linked to their debt burden, tax revenues, social policies in place and the environmental conditions. 

However, overreliance on natural resource extraction has proven to be both an economic opportunity and a challenge for many States around the world. Studies have demonstrated that while of significant potential, mining exploitation needs to meet a number of conditions in order to translate into sustainable growth. Resource abundance can be a blessing, but also a curse as it has been associated to hampering growth through reinforcement of structural, monetary and policy constraints in the development process.3

Mineral-rich countries that have succeeded in consolidating sustainable growth provide incentives for productive investment and economic diversification, safeguard macroeconomic stability, are able to bridge consensus among social and economic groups, and invest in comprehensive social policies.4

Macroeconomics, debt and social policies

Mongolia’s growth rate reached significant peaks over the past years. The country also registers considerable progress on the human development index going from 0.697 in 2010 to 0.741 in 2017.5 However, the economy was also repeatedly affected by mineral price cycles and economic downturns, including 3 periods of  low GDP growth (below 2.5%), in 1996, 2000 and 2009,  the most considerable having been – 1.269% in 2009. 

At the beginning of the 2010s, Mongolia economy registered, impressive growth rates, culminating at 17% of the GDP in 2015. Due to the sharp fall of mineral prices between 2015 and 2016 Mongolian’s economy was deeply affected and this was translated into negative consequences for its population. During this period, maternal mortality ratio almost doubled (going from 26 in 2015 to 48,6 in 2016), a raise was also observed in the ratio of under-five and infant mortality, economic inequality and poverty rate despite having been on a downward trend over the last decade.6 More specifically, while the poverty rate was of 21.4% in 2014, it rose drastically to 29.6%  in 2016.7 In addition, while child malnutrition was on a downward trend from 2010 to 2013, the rate then stabilised in the following years. In parallel, economic growth rate fell down by 16 points to 1.2% of GDP in 2016 while public debt accounted for 87% of GDP for the same year.
In this downturn context, Mongolia entered in a three-year arrangement of $425 million with the International Monetary Fund (IMF) under the Extended Fund Facility (EFF) on May 24 2017. 8 As part of a 5,5 billion multidonor financing package, comprising from loans by a range financial intuitions, including the World Bank, Asian Development Bank, Japan, and Korea,9 this arrangement was accompanied by an economic recovery plan aiming at restoring economic stability and  confidence, as well as supporting economic recovery. This plan included a range of measures from fiscal consolidation to better targeting of the “Child Money Programme”, a public-sector wage freeze through 2018, the suspension of civil servants’ grade advancement through 2019, and restriction on hiring through 2019, as well as a raise of the retirement age with potential impacts on the human rights of children, older persons and women, often working in the public sector (in education and health sector for instance). 

Of particular concern is the fact that, as a result of the expansion of the “Child Money Programme” the IMF indicated that one of the two current poverty programme would be eliminated (e.g. the Poverty benefit programme).10 While well targeted social programs and more efficiency in the social policy sector are vital factors, the principle of universal coverage of social protection should always be the ultimate objective in this area.  

I would like to highlight the efforts deployed by the Government with the view of insuring sustainable and inclusive growth through the adoption of the Mongolia’s Sustainable Development Vision 2030. In this regard, I encourage the Government to pursue its efforts to align the implementation of the Sustainable Development Vision 2030 (SDV) with the realisation of the 2030 Sustainable Development Goals and to ensure systematic monitoring of the SDV. I also recommend the Government to develop a National Human Rights Plan and ensure that the Sustainable Development Vision explicitly refers to Mongolia’s international human rights law commitments.

While, on average, almost a third of the population currently live in poverty, I am particularly concerned by the fact that, in some regions, almost half of the population is living under the poverty line.11 The budget allocated to social sectors has been quite stable over the last years even with fiscal consolidation, primary, secondary and high school enrolment were all above 98.6% in 2017-18.12 , with around 18% of the budget allocated to education over recent years. When it comes to the health sector, while I note that 1,8 billion MNT were recently allocated for family planning supplies in 2018, a reduction in the budget from 2010-2017 resulted in an important raise in the rate of abortion due to the inability of the health sector to match the demand and needs of the population on family planning. 

While the proportion of women graduating from secondary and higher-level education is greater than that of men’s, women however are over represented in low paid jobs.  Besides occupational segregation, wage gaps remain significant, with men earning in average 11.4% more than women13 In addition, women’s asymmetric unpaid care workload is exorbitant and yet often neglected consideration in the design of public policies and national accounts.  

Over the last years Mongolia’s Government has implemented important economic reforms. A number of them were recommended by the IMF with the aim of restoring macroeconomic stability and fiscal discipline. Orthodox monetary policies normally mean bad news for human rights.14  Yet, a human rights impact assessment of such reforms has not been a common practice in the State, either in the judiciary nor executive branch. It needs to be highlighted that in March 2019 the United Nations Human Rights Council considered and voted the Guiding Principles on Human Rights Impact Assessments of Economic Reforms [hereafter Guiding Principles hereafter].  

Human rights impact assessments are processes that enable us to identify and assess potential or actual adverse effects of economic reform policies on the human rights of a given population. These economic reform policies might be, for example, fiscal consolidation, structural adjustment reforms, privatization of public services, deregulation of financial and labour markets, or changes in taxation and environmental protection, whether in times of economic crisis or boom. 

The Guiding Principles can help address questions such as: do these policy prescriptions and advice take into account repercussions on the human rights of the people, whether they are rights to fair wages, adequate housing, a decent living and dignity? Do these “growth friendly” measures genuinely enhance the quality of life for all and empower them to realize their human rights? Will the economic reform proposals disproportionally impact on women’s shoulders? The Guiding Principles also provide for policy coherence to ensure that all governmental departments, agencies and other State-based institutions take part in and/or shape economic reform policies from a human rights perspective when fulfilling their respective mandates, in the short-, medium- and long-term in order to protect all human rights.15

Human rights impact assessments provide population, policymakers, international financial institutions, multilateral development banks, creditors, lenders, civil society organizations and others with a framework to ensure that economic reforms benefit all, instead of only few. They should be a mandatory component of economic policymaking, in order to ensure that economic reform measures proposed or undertaken are evidence-based, demonstrably least restrictive of human rights in comparison with other policy options, and fulfil at all times the essential levels of economic, social and cultural rights. 

Who should conduct such analysis in Mongolia is a sovereign decision. The Guiding Principles only highlights that assessments of economic reform policies should be independent, robust, and credible and gender responsive.  One possibility could be, for example, the National Human Rights Commission. The effective set up of the “Policy Planning Institute” could also possibly contribute, ensuring its independence

The Mongolian 2016 Law on Legislation already provides the undertaking of economic, social and regulatory impact assessment of policy reforms. However, this exercise is not regularly carried out. I was told by a number of interlocutors that lack of sufficient desegregated data and technical capacity explain why this impact assessment is not common practice as mandated. Those obstacles are not insurmountable as other countries’ experiences in this field show. I recommend the Government to improve the data and the technical capacity of the relevant bodies so that impact assessments can be systematically conducted.

While Mongolia’s external debt currently amounts to 220% the GDP, public reaches 58.9% of the GDP. The remaining being private debt is high as it amounts to half of it domestic debt (mortgages, consumption and companies) and the other 50% external debt (mainly mining corporations). Debt sustainability analysis should incorporate a human rights dimension so that the implications of debt levels on these rights are duly taken into account by the relevant financial authorities.16

The very high level of private debt poses systemic risks to the economy which need to be prudently managed.  The Guiding Principles provide that States should have a transparent and democratically discussed bailout and interest rate formation regime established by law. States should use a mix of tools to ensure appropriate global and domestic financial market regulation with the aim of curbing excessive credit growth. This mix should include measures of prudential regulation, debt sustainability analysis and capital controls. 

Economic diversification is long overdue. I take good note of Mongolia’s commitment to diversifying its economy while increasing competitiveness,17 and would like to encourage the State to deploy additional efforts on the matter. However, what appears to be  missing in the country is concrete steps to implement the “Industrial Policy” adopted in 2015 and ensure policy coherence. In addition,  industrial policy should include investment in research, technology and innovation.18 As of today, only a very small share of Mongolia’s GDP is invested in research, technology and innovation with, for instance only 0.2% of GDP19 being allocated for this purpose  in 2017. 

I commend the Government of Mongolia for establishing the Fiscal Stabilization Fund and the Future Heritage Fund, which can play a key role as instruments of macroeconomic stabilization and intergenerational equity respectively. In line with Mongolia’s acknowledgement of its need to “to build up buffers during good times”,20 it is however of paramount importance that, in the meantime, public revenues from the mining sector and other domestic revenues such as taxation and social insurance contributions are mobilized to create sustainable intergenerational and interclass linkages. 

Tax and illicit financial flows

In Mongolia, the tax rate for business income up to 3 billion MNT is of 10% and of 25% thereafter. The Government is currently considering raising the threshold to 6 billion MNT, allowing a greater number of enterprises to benefit from the 10% rate. 

While “fiscal over performance” was registered by the IMF in 2018, it is of concern that Mongolia’s individual income tax system is solely based on a 10% flat rate, complemented by a 0.6% to 1.0% real estate tax. In this regard, I would like to highlight the importance of domestic resource mobilization, which can be a tool to ensure the realization of human rights and promote inclusive growth; increasing government revenue more directly depends on robust redistributive and progressive taxation regimes22

Some of my interlocutors brought to my attention the considerable share of Mongolia’s shadow economy. The Government should consider conducting a study on the matter in order to assess the importance of untapped fiscal revenue, to ensure a better tax mobilisation and collection while ensuring potential accountability.

I commend the Government of Mongolia for having joined the Global Forum on  Transparency and Exchange of Information for Tax Purposes in 201823 and the Inclusive Framework on Base Erosion and Profit shifting 24 Nevertheless, I am concerned about the recent amendment to the status of limitation of tax crimes, now being reduced from 5 to  4 years as well as the recurrent adoption of tax amnesty laws and the fact that information on taxes and taxpayers who received an amnesty is not publically available. 

In addition, while Mongolia’s rank on the Transparency International Index has significantly improved in the last year, going from the 103rd place in 2017 to the 93rd place in 2018, many mentioned concerns about corruption, and potential impact of this economic crime on public revenue and development. Furthermore, a number of my interlocutors also highlighted the high prevalence of corruption in the business sector.

When it comes to Mongolia’s effort to prevent and fight corruption there are gaps to be addressed. Effective regulation is needed to tackle (a) conflict of interest, ensuring that legislation is shaped by all relevant principles applicable in the field, such as separation of powers, legality, publicity of administrative acts, fairness and efficiency, and that this law is effectively implemented, (b) lobbying of various sectors and (c) more robust protection of whistle-blowers in line with international human rights standards.

Ensuring the independence of the judicial system is key for effectively prevent and combat corruption. In this regard, I would like to highlight that the Special Rapporteur on the situation of human rights defenders and the Special Rapporteur on the independence of judges and lawyers recently expressed their concerns to the Government about the March 2019 amendments to the Law on the Legal Status of Judges and the Law on Public Prosecutor’s Office, introducing a new procedure for the dismissal of judges and heads of the prosecution service on the basis of a recommendation from the National Security Council of Mongolia.25

When it comes to taxes, transfer pricing in the mining sector given the size and complexities of the business and the multinational players involved is an issue of paramount importance. On this matter I recommend that the State ensures clear and concise laws and regulations that make it illegal to intentionally incorrectly or inaccurately state the price, quantity, quality or other aspect of trade in goods and services in order to move capital or profits to another jurisdiction or to manipulate, evade or avoid any form of taxation, including customs and excise duties. I also recommend the Government to require their customs officials to use available databases of information about comparable pricing of world trade in goods to analyse imports and exports and identify transactions that require additional scrutiny.26

Tax agreements, such as the one included in the investment agreement concluded to develop the Oyu Tolgoi mine between the government and the company Rio Tinto in 2009, have paramount tax implications for the country. For instance, this agreement included a tax stabilization clause for 30 years, meaning that the tax rate agreed upon 2009 would remain valid for the following 3 decades. Furthermore, there have been controversies regarding whether extraordinary and non-expected profits could be taxed or not.  

In my view, this tax stabilization clause can be read from at least two perspectives. First, as inclusive growth was one of the explicit goals of this mining project, it is hard to argue that the full private appropriation of these profits -which are produced at expense of the natural resources of Mongolia- is socially and politically legitimate. Second, from an international legal perspective, if certain profits were not envisaged when the stabilization clause was included, a fundamental change of circumstances (such as windfall profits) may be argued to allow distributing them between State and investor.

Probably, one way to solve this controversy is renegotiating the contract and implementing a floating royalty system which rate evolves according to the market price. This system is currently used with success in a number of mining businesses in Mongolia. It should not be forgotten that development is not only about shared economic growth but also about shared losses for society. 

Mining, environment and human rights

It was also brought to my attention that measures in place to ensure a fair share of mining activities’ are invested to adequately compensate local communities for the use of their traditional land such as “Community Development Agreements”, are not always fully implemented or do not result in concrete benefits for local populations and those particularly affected by mining activities. In this regard, I share the concerns of the Committee on Economic Social and Cultural Rights relating to the impact of extractive industries on herders communities’ economic social and cultural rights and in particular on their right to pasture, hay land and water resources.27   

In a country where the economy is highly dependent on the mining sector the importance of the environmental impact assessments cannot be overestimated. By law, there is an obligation to conduct such assessment before mining licenses are granted. In addition, a monitoring system to assess the impact during the operations and once they have stopped is also included in Mongolian’s legislation. These assessments go beyond environmental issues, including –even partially- social and economic dimensions, but are not comparable to the comprehensive report on “Impact assessment on coal mining and transportation of Tavan Tolgoi coal deposit" undertaken by the National Human Rights Impact Assessment in May 2019.  It was brought to my attention that following the impact assessment the government has tackled some of its recommendations by addressing gaps in infrastructure. 

However, what I find worrisome is the inner conflict of interest in the environmental impact assessment system. The mining corporations will identify, contact, contract and pay the private consultancy firm that will prepare the environmental impact assessment to be submitted to the State. The principle of independence of the evaluator from the evaluated is not fulfilled. In any case, the State’s delegation of a private corporation or third party does not, in any way, free the State from any of its obligations under international human rights law nor the private actor from applying all legal substantive and procedural standards enumerated in the present principles. 

The Government needs to develop a domestic, professional and independent policy analysis capacity within the public sector to avoid dependence on private consultancy firms that in turn are paid by the mining corporations that request the licenses to operate in the country.  Also, the Government needs to take further steps to support the ability of affected communities and civil society at large to provide parallel information to assessment processes.

I would like to highlight the progress made since the visit of the Special Rapporteur on human rights and the environment in 2017,28 who recommended to the Ministry of Environment to provide the environmental license audit department with further staff. Nevertheless, as of today, a team of only seven people in the Ministry of Environment and Tourism is in charge of revising the environmental assessments of all mining projects in the country: I see an obvious and immediate need to invest more human resources in this key responsibility, giving the importance of mining activities for Mongolia and the scale of their potential impact on the environment and human rights. 

I had the opportunity to visit Oyu Tolgoi mine, the biggest mining project in Mongolia. I would like thank the company for arranging the visit and granting full access to its facilities and for providing the information requested. 

Oyu Tolgoi mine is located in the Southern part of the Gobi desert where nomadic herder’s communities have been living for generations sustaining their livelihood on the region’s pasture land and making the best of the desert’s scarce water resources. 

Last year’s sales revenue of Oyu Tolgoi amounted to 1,180 million USD, taxes fees and other payments to the Government being of 200 million USD29 The mining project currently employing thousands of people includes an open pit phase and a future underground mining phase, which is expected to start its operations in 2021. While phase 1 of the project is already of considerable importance, 80% of Oyu Tolgoi’s value is estimated to be located underground30 In 2017, 157,400 tones of coper concentrated in mineral extraction, 114,000 ounces of gold and 974,000 ounces of silver were extracted from the open pit mine. 34% of Oyu Tolgoi’s shares are owned by the Government (Erdenes Oyu Tolgoi)  and the remaining part by Turquoise Hill Resources Ltd, Rio Tinto being its major shareholder This project was made possible due the investment of Rio Tinto, engagement of the Government and the contributions of a range of public and private lenders, including EBRD and the World Bank Group.

Its adherence to high standards in safety within the industry is notable. In addition, the efforts it makes to create jobs in the region and support local businesses through its procurement policy, with 95% of the workforce being Mongolian in 2018. There is also a commitment to promote gender equality among employees and create more equal opportunities for women. These efforts should also be integrated with targeted policies to balance the structural asymmetric distribution of unpaid care work responsibilities among men and women.

In 2012 and 2013, a group of local herders submitted complaints to the World Bank Group’s Compliance Advisor Ombudsman about the mine’s resettlement plan of 2004 and the 2011 economic displacement compensation program.31 Their complaints outline specific concerns related to the mine’s operation on future water source depletion, pasture deterioration and threat to the community’s spiritual practice. They also alleged that they were inadequately compensated. In 2017, after years of mediation, an agreement was reached between Oyu Tolgoi, local authorities and herder communities. I would like to salute the engagement of all three parties in the mediation process and commend that an agreement was reached after years of dialogue and taking into account the intrinsic power imbalances among parties implicated. 

Oyu Tolgoi is water intensive, even when it recycles more than 80% of the water used a water source is sought from underground. Herders, local communities and local government in Khanbogd expressed their deep concerns about how wells have been gradually drying up since Oyu Tolgoi started its operations. Obviously, for nomadic communities accessing to water in the Gobi desert is what separates life from death and the base of their livelihood. Megaprojects can have a range of impacts on the human right to water in terms of availability, accessibility and quality. Other rights can also be affected such as the right to adequate housing and health.32

As a result, Oyu Tolgoi has put in place a program to help herders to pump water from deeper streams. However, this solution comes with complications. First, it does not prevent pastures from drying out, with irreversible consequences for the biodiversity in the Gobi desert. Second, it requires that herders have and use water pumping machines in the middle of the desert. Not all of them are able to pump water and this fact obviously has affected their livestock. Underground waters in deserts are particularly sensitive and with very low or zero renovation rate, so a run to the deep can only make access to water more and more difficult. And third, the increasing difficulties to access to water is altering how herders and their animals move around as many of the millennial water holes do not exist anymore. Ancestral practices are being changed. 

The underground, biggest phase of the project is yet to come and I urge to conduct a human rights and social impact assessment (in particular on herders) of the underground mining operation and to ensure the prevention of its impacts and to mitigate and remedy potential consequences. This impact assessment should have been conducted a long time ago already. I would also like to highlight the role and responsibility of lenders in this regard.33

In the short term I strongly encourage Oyu Tolgoi to continue its conversations with local communities until a satisfactory solution to all parties is reached in line with international human rights standards, or consider other alternative water sources for the continuation of the project. I also recommend the Government to establish a permanent multi-stakeholders  platform to channel discussions between mining corporations operating in the country and potential affected communities. Mining, environmental and human rights authorities, along with corporations and those affected, should be part of these discussions. 

Human rights to access to water, land, food, livelihood, housing and cultural practices and heritage are at stake. In this regard, I would like to highlight that article 14 of ILO Convention 169 on Indigenous and Tribal Peoples Convention, provides that “The rights of ownership and possession of the peoples concerned over the lands which they traditionally occupy shall be recognized. In addition, measures shall be taken in appropriate cases to safeguard the right of the peoples concerned to use lands not exclusively occupied by them, but to which they have traditionally had access for their subsistence and traditional activities.” In this context, the Convention states that special attention should be paid to nomadic people. This has also  been considered by the Committee on Economic, Social and Rights in several of its general comments and observations, such as in its General Comment no. 15 to ensure that “nomadic and traveller communities have access to adequate water at traditional and designated halting site”34

Besides the multibillion Oyu Tolgoi project, a range of mining activities of various scales and natures are taking place all over the country. Due to mining activities, the degradation of 27, 078.0 hectares of land was registered in 2016.35 Mining activities have been associated with serious adverse human rights impacts, including on the right to health, housing, and water and sanitation. Pasture land is public property, thus when herder families have to relocate, specific challenges may ensue having to coordinate with local communities and other herders families already using the same land for animal grazing. Mining activities also can have specific adverse health implications for workers, as they can suffer from cardiovascular, respiratory and neurological diseases.
Health assessments of the impact of mining on miners, mobile supporting staff and surrounding populations are not systematically conducted, especially in small mines. In this regard, I recommend close monitoring to ensure that they are effectively undertaken and their conclusions are taken into consideration. The establishing of a joint agency with relevant ministries, including the Ministry of Health for this purpose could be considered to ensure close follow up and that environmental impact assessment are conducted in parallel and both evaluations are mutually informed.  

The legislation on procedures of resettlement and compensation does not include non-urban resettlements. I advise the Government to close this gap by adopting, after broad consultation with relevant stakeholders, a robust and consolidated relevant legislation on the basis of existing international human rights norms and standards. Improving transparency, consultation and participation of potentially affected people is essential.

Infrastructure projects 

The goal of a number of investments and loans is to enhance the country’s economic development so that it is important that projects truly benefit the population. In the context of Ulaanbaatar Urban Redevelopment Plan, various projects are currently conducted including some of them supported by the ADB. For instance, the bank is currently implementing its Ulaanbaatar Urban Services and Ger Areas Development Investment Program with the aim of “helping Mongolia upgrade basic infrastructure and services in “ger” or peri-urban areas of Ulaanbaatar, where majority of the capital city’s poor residents live”. The project intends to develop roads and water infrastructure social services. 

In Selbe, a number of residents have been (and will be) relocated with serious impact on a number of their rights, particularly on their right to housing. Complaints were submitted to the Bank mechanism highlighting many deficiencies in the development of this project including when it comes to informed consultation and compensation36 While a recent report states that many of the residents were satisfied with the outcomes of the resolution of one complaint, other important aspects still need to be addressed such as adequate compensation for those who were not satisfied.37 In addition, the implementation of such projects can result in important issues related to the right to adequate housing such as homelessness, land issues, involuntary resettlement and the right to information.38 In this context, I urge those implementing the project to offer adequate compensation that allow people to access to an alternative housing, and ensure informed consultations (and transparent updates) in the future.  

Over various discussions, international lenders and development partners have highlighted their respective safeguards and environmental, social and gender impact assessment (if any), however, I recommend international financial partners in their various projects be it related to mining activities, energy, roads and infrastructure to establish more robust frameworks to assess the human rights implications of the projects, covering both substantive and procedural rights.

Financial sector

Finally, the banking and financial sectors should start implementing without delay the United Nations Guiding Principles on Business and Human Rights. The National Action Plan currently being developed, should consider this issue as one of its priorities. 

While banks are legally limited on the interest rate (still high) they can charge to their borrowers, there is no such limit in the non-banking financial system. It has been reported that these financial institutions charge, in particular through microloans, up to 200% interest rate in their financial contracts, some times on a daily basis. Charging such exorbitant interest to individuals can put them at risk of not having resources to ensure their most basic social and economic rights, such as the right to food and housing. Urgent governmental intervention is needed to impose limits to these financial institutions and ensure that usurious microcredits are void (or voidable).

Concluding remarks

To conclude, the mining sector should play a truly transformative role in Mongolia and serve as a catalyst to spur social and economic development, which should be intergenerational, more equitable and respectful of the environment. This requires deploying consistent macroeconomic, monetary, regulatory, social, environmental and industrial policies. Capture, management and sharing of mineral revenue should pay tribute to this goal. 39 This rights-based approach goes well beyond mitigating the negative social, economic and environmental impacts of the mining sector, as most international financial institutions seem to assume. The fact that none of their safeguards even mentions “human rights” is revealing.40

Information about the visit  

I would like to express my gratitude to the Government of Mongolia for its excellent cooperation and for the opportunity to hold meeting with the Minister of Foreign Affairs, the Deputy Minister of Justice and Home Affairs and with high-level officials of the Ministry of Education, Ministry of Environment and Tourism, the Ministry of Finance, Ministry of Health, Ministry of Labor and Social Protection, Ministry of Mining, among others. Additionally, I have met with the National Audit, Prosecutor General’s Office, the Central Bank, the General Department on Taxation, the Independent Authority Against Corruption, , Financial Regulatory Commission, Mongolian and Development Bank and the National Development Agency. 

My programme also included meetings with Members of Parliament, representatives from the International Monetary Fund, the World Bank, the Asian Development Bank, Mongolia National Human Rights Commission, cooperation agencies, diplomatic community as well as civil society, the private sector, state owned enterprises and academics. I also had the opportunity to visit Oyu Tolgoi mining site and hold meeting with Oyu Tolgoi LLC officials, Erdenes Oyu Tolgoi, the local Governor of Khanbogd Soum, and community members. 

I would like to express my gratitude to all interlocutors for taking the time to meet with me and for our open and frank dialogue.


1/ Central Bank of Mongolia, Annual Report 2017, p. 16.

2/ World Bank, Growing-without-Undue-Borrowing-Enhancing-Efficiency-of-Spending-and-Revenue, p. 43.

3/ Katja Hujo “ Introduction and Overview: blessing or curse? Financing Social Policies in Mineral Rich-Countries”, Palgrave, 2012, pp. 3-25.


6/ World Bamk, GNI per capita World Bank (atlas method), available at:

7/ Voluntary review, p. 19.

8/ Imf, Fifth Review Under The Extended Fund Facility Arrangement And Request For Modification And Waiver Of Applicability Of Performance Criteria, October 2018, P.1.

9/ And the People’s Bank of China has agreed to extend its swap line with the Bank of Mongolia

10/ IMF, Fifth Review, p. 7.

11/ Mongolia Voluntary National Review Report 2019

12/ Mongolia Voluntary National Review Report 2019, p.21.

13/ SDG review, p. 22.

14/ A/74/178.

15/ A/HRC/40/57, Principle 11.

16/ A/HRC/40/57, Principle 12.

17/ Government of Mongolia, Letter of Intent, 13 April 2017.

18/ UNCTAD, Trade and Development Report 2016.


20/ Government of Mongolia, Letter of intent, 13 April 2017.

21/ Unrisd, cit.

22/ A/HRC/40/57, para 11.2.



26/ A/HRC/31/61.


28/ A/HRC/37/58/Add.2, para. 31.

29/ Oyu Tolgoi,” Year in review-2018,” p. 18-19.

30/ Oyu Tolgoi, “Past, present and future, summary version,” August 2018, p. 16.


32/ A/74/197; see also A/HRC/39/55/Add.2.

33/ A/74/197, para. 69.

34/ E/C.12/2002/11.

35/ National Human Rights Commission of Mongolia, 17th Status Report on Human Rights and Freedoms in Mongolia, Ulaanbaatar, 2018, p. 20.



38/ Amnesty International, Falling Short the Right to Adequate Housing in Ulaanbaatar, 2015.

39/ See Pascale Hatcher et al., “The Political Economy of Enhancing Children’s Rights through Mineral Rents. The Case of Mongolia,” Unrisd, Working Paper 2016–7, at

40/ Amnesty International, Falling short, p. 7.