Events
Stakeholders discuss local development, want stronger cooperation
2016-03-10
The Mongolian Mining Journal, Feb.2016 /087/
G. Iderkhangai
The theme of this year’s Mineral Resources 2025, an annual event organized by the Ministry of Mining, was integrated local/community development-partnership. It was held at Corporate Hotel on 15 February, and was co-sponsored by the Integrated Mineral Resources Initiative (IMRI), a programme run by GIZ, the German organisation for international cooperation, and the National Council for Sustainable Development and Social Responsibility.
R. Jigjid, Minister of Mining, D. Gankhuyag, MP, and Stefan Hanselmann, IMRI Director, attended the opening session and welcomed participants in the planned discussion to suggest ways to improve relations and strengthen the cooperation between the Government, local administrations and special licence owners,.
In his speech, Minister Jigjid recalled that his Ministry approved the State Policy on Minerals in 2015 and made a number of legal reforms, including amendments to the Minerals Law and the Nuclear Energy Law. All these, he said, helped to create “a long-term sustainable legal environment in the geology and mining sector”.
Hanselmann said the IMRI programme had been cooperating with partner ministries and stakeholders for the last three years. “Integrated local development-partnership is becoming an essential feature of organized and multilateral cooperation and is being implemented in phases in the four aimags of Bayankhongor, Uvurkhangai, Selenge and Uvs,” he said, adding, “Our programme has made good progress, and we need to work together for further achievements.”
B. Batkhuu, Director of the Department for Coordination of Policy Implementation in the Ministry of Mining, delivered the keynote speech, while O. Batbold, Deputy Director of the IMRI programme, explained the concept of four-sided integrated local development partnership projects.
In his speech, Batkhuu said the Ministry “always asks for a local government’s approval” when issuing a new exploration licence, and that since January 2015, one-third of such requests have been refused. The local administrations justify their stand by “claiming that they see no real benefit for the regions from the licensed activities, while the extractive work would leave the soil damaged”. On reviewing the situation, the Ministry decided to amend provisions of the Human Development Fund Law and the Budget Law. The changes allow a certain share of the revenue generated from the mining sector to be disbursed for the development of aimags and soums where mines operate.
The new system came into force in January, and Batkhuu estimated that 50% of the special licence fees paid by geological, and mining exploration and extraction companies, and 30% of the royalty payments accruing in the state budget will now be distributed among eligible aimags and soums from the local development fund. Furthermore, the model agreement on cooperation with the community, prepared with World Bank assistance, is ready to be discussed by the Government. The Ministry of Mining plans to seek the views of local communities on the agreement, Batkhuu said.
According to reports prepared by Ministry officials and quoted by Batkhuu, 24.1 million tons of coal, 14.6 tons of gold, and 1.2 million tons of oil were extracted in 2015, while exports accounted for 1,477,800 tons of copper concentrate, 5.1 million tons of iron ore, and 14.5 million tons of coal. The Mineral Resource Authority deposited MNT49.6 billion and the Petroleum Authority MNT164.6 billion to the state budget.
Batbold revealed that IMRI projects running in the four aimags would continue until 31 July 2017. The earlier practice of such cooperation matters being discussed only by the regional and local communities has now given way to the local administration and mining companies coming together to take joint decisions after discussion. According to him, this “cooperative approach” helps “issues to be resolved amicably, throws up new ideas, encourages innovations, and better utilises opportunities by allowing parties to learn from each other”.
Among those who took part in the discussion were B. Saran, Senior Officer in the Environmental and Natural Resources Management Department of the Ministry of Environment, Green Development and Tourism, Ts. Gerelchimeg, Specialist in the Fiscal Revenue Division of the Fiscal Policy Department in the Ministry of Finance, and B. Alimaa, Director of Labour Relations Policy and Coordination in the Ministry of Labour.
Gerelchimeg detailed how local budgets were getting more and more money, following changes in the way revenue was distributed. Their total income in 2015 was MNT20-30 billion or three times more than in 2014, and is expected to increase by another MNT30 billion in 2016.
Alimaa presented figures prepared by the State Professional Inspection Agency showing that of the 510 casualties in workplace accidents in the mining sector in 2015, 49 had become permanently disabled. The Ministry of Labour urged all employers to strictly enforce safety guidelines and recommendations.
Several participants in the discussion criticized the present system of issuing special exploration licences and wanted to know what changes were being considered. B. Baatartsogt, Director of Geology Policy Department in the Ministry of Mining, said a working group is preparing new rules that would ascertain the views of a local administration before proceeding with licence applications in any given area.
Replying to a question from a local community representative, a Ministry of Mining official said the proposed future heritage fund is planned as an improved version of the Human Development Fund. However, the draft is yet to be submitted to the parliament.
Discussions continued after the lunch break. J. Chantsaldulam, a trainer at the NGO Women for Social Progress, offered some operational suggestions for better working of the four-sided integrated local development partnership projects in the aimags where IMRI is implementing them. P. Erdenechimeg of Erdene Mongol described the company’s experience of cooperation with local organizations and communities in Bayankhongor aimag. G, Erdenebat of Andyn Temuulel LLC, spoke on the company’s participation in the development partnership project. G. Otgontuya, Chairperson of the National Council for Sustainable Development and Social Responsibility, emphasised the need to strengthen the capacity of local mining companies and to get them more involved in partnership projects.
Several representatives of local governments emphasized the importance of stakeholders collaborating and exchanging information and wanted a more active role for mining companies in the partnership. D. Batnasan, head of the Khongor Nutag council in Bayankhongor aimag, said they wished to monitor the companies’ work only to ensure that licence holders fulfilled their legal obligations. “It is a matter of satisfaction that in the last three years, mining companies in our aimag have invested more than MNT500 million in the local community,” he said.
Ministry of Mining officials gave the results of an online survey of how local people felt about the share of the deposit of mining sector taxes and fees in the local development fund. Some 83% of the respondents found the share ‘insufficient’. Later, separate discussions were held on how each of the four aimags could improve and expand the scope of their development programme. Many participants felt each stakeholder in integrated local partnership showed a lack of consistency in their approach and work and called for stronger cooperation between them. A review meeting of all parties once in a quarter was found very necessary.