“No real transparency without people’s involvement”

17th of 8, 2015

Clare Short, International EITI Chair, was recently in Mongolia at the invitation of the Government’s Cabinet Secretariat. She spoke to G.Iderkhangai of the MMJ on the sidelines of an EITI event in Bayangol soum, Selenge aimag.

What brings you to Mongolia for your second visit?
I regularly travel to many countries in the EITI and am nowhere to hear local views and opinions and to get a first-hand idea of how the extractive industry is running in Mongolia.
Just writing reports is not enough, the main thing for EITI is to reach people in a simple and comprehensive manner.This open day in Bayangol will, on the one hand, give people acorrect understanding of and information about EITI work, and, on the other, allowus to hear their opinion, which enriches the report and throws up ideas about how to improve operations of the extractive industry.

What does EITI see as Mongolia’s accomplishments?
The Mongolian EITI report is known for its thickness. It is replete with information but some wonder ifordinary people can absorb it all, or if they are all useful or usefully presented. We have taken measures to see that our reports make more sense to people. We have divided information about the extractive industry into categories, made our presentation simpler, and put all reports online.
Our accessible electronic data base will be of great help to journalists, researchers, policymakers -- everybody. In terms of opening up information, the EITI Mongolia website is a big step.

Proper implementation of EITI principles is possible only when there is trust between the state,the private sector and the public. How far is such partnership seen in  Mongolia?
The Mongolian Government is very interested in cooperating with EITI Mongolia. So is the civil society. The mood is not upbeat, with mineral products prices falling, but this has not affected the general commitment to EITI.
EITI has a global reach, and Mongolia is among approximately 50 countries that are actively supporting the initiative. Minerals are gifts to a country from Nature or Earth. So many things in our daily life and use are from extracted minerals that it is not so correct to say, “I don’t like mining”.

While there are good companies,operating responsibly and paying taxes fairly, there are also companies whose practices upset people. In earlier days, mining sector operations were generally closed to community scrutiny. People did not know much about how the industry worked and hence did not concern themselves with what licences companies held, what taxes they paid, how their extraction work was done, and many such things. Things began to change when people realised that much money was being made behind the mystery.

EITI was established to replace the mystery of the extractive industry with transparency.Success in this is possible only if the major stakeholders -- the civil society, the government and the private sector-- participate and cooperate in the exercise.

What are the results EITI hopes for with such cooperation and participation?
First, correct and reliable information will be accessible. Second, mining operations will be run in a fair manner. Third, ordinary people will benefit from their country’s natural resources. It is indeed heartening that countries where the EITI is being implemented have shown positive changes and results. People are starting to understand the initiative.

We initiate the implementation process of EITI in a country, but changes happen only after the parties begin to cooperate in reforming and improving the mining sector. To help in this, we give necessary information and support to the target groups.

The first five annual reports of EITI Mongolia mostly offered copies of the companies’ balance sheets and government accounts of taxes received. We were also working towards bringing together representatives of the government, companies and the civil society for open exchange of  information, to allay misunderstandings based on  rumours and wrong perception. This was the first move from EITI in Mongolia.

EITI is to change its reporting norms and focus from October 1. How are you preparing for this in Mongolia?
Representatives from EITI implementing countries decided at the 2013 global conference in Sydney, Australia, that our reports would go beyond balance sheets and cover other areas of the operation of both state and private mining companies. Our aim is to show that proper management of mining operations entails transparency in disclosing terms of contract, conditions governing any licence, manner of operation practised by state-owned companies, total revenue allotted to the local government, how mining revenue is spent,how the country plans itseconomic growth policy after its mineral resources are exhausted and such.

All this will apply in Mongolia. A UN convention says local citizens have to be treated the same as aboriginal people when seeking their approval of a mining project. In Mongolia, however, there is no clarity onif local communities can be considered in the same way.

What has interested you the most at the EITIevent in Bayangol?
There was a complaint that companies get their mine rehabilitation plan approved by the Environment Ministry, without reference to the local community. This needs change. The local government must have the right to review any such plan. There can be no real transparency without people’s involvement.

The same is true of mining revenue. Mining activity can support local development and improve people’s lives,but at the same time, it can also encourage corruption, seen in the big black hole left behind at mine closure. EITI wants to ensure that mining profits are shared with the local people.

You said people’s involvement is important for the success of EITI.But in Mongolia, many do not have adequate knowledge and understanding of working in mining, which leads them to reject employment in the sector.
Of course nobody wants their children to become lifelong artisanal gold miners. Mining must be developed in a focused and sustainable manner, which we do not see at present in artisanal gold mining.

In the Philippines, they are using EITI to address issues faced by their artisanal miners. In Mongolia, too, the report can be prepared with an eye on how artisanal mining can be organised more efficiently and how it could be sustainably developed. The EITI secretariat team can study the Philippines’ experience and how its results can be applied in Mongolia.

During the event here, I was struck by how strong and established democratic sentiments are in  Mongolia. I was very happy to see people express their opinions and suggestions openly and without any fear and how the government respects and discusses these with them.  I hope that more opportunity will come to adopt initiatives fromlocal citizens, once an EITI subcommittee is established in Bayangol soum.

Why is Norway taken as one of the better examples where natural resources revenue is spent prudently?
Norway is indeed a good example but it has the advantage of being a developed country, which means it already has money, and can use its natural resources in a planned way and spend the revenue, without any immediate pressure. Less prosperous countries do not have that luxury, as lack of disposable funds forces them to earn money from mining as fast and as early a possible and then to spend it to meet various short-term demands. Mining itself is not a sustainable sector, but mining revenue can be used for sustainable development. We have to be careful that we look to long-term benefits, and do not spend all on immediate needs.
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