Mining for Sustainable Development: Mineral Licensing Corruption Risk Assessment Mongolia www.transparency.mn

Transparency International Mongolia is one of 20 national chapters participating in Transparency International’s global Mining for Sustainable Development (M4SD) Programme. The Programme is coordinated by TI Australia. The M4SD Programme complements existing efforts to improve transparency and accountability in the extractive industries by focussing specifically on the start of the mining decision chain: the point at which governments grant and award mineral licenses.

The first phase of the Programme (2016-2017) focused on understanding the problem. A corruption risk assessment was undertaken which identified a total of 14 risks, stemming from 52 systemic, regulatory and institutional vulnerabilities to corruption in awarding mineral licenses. With an understanding of the nature and causes of corruption risks, national chapters will develop and implement solutions to tackle priority corruption risks in Phase 2 (2018-2020). The chapters will work with key stakeholders from government, the mining industry, civil society and affected communities to improve transparency, accountability and integrity in the decision-making related to the approval of mining projects.

The participation of Transparency International Mongolia in the Programme is supported by the Australian Department of Foreign Affairs and Trade (ADFAT). Globally, the M4SD Programme is also funded by the BHP Billiton Foundation.

The report

The main focus of the study was the analysis of the three License Allocation Mechanisms utilized in Mongolia. The key principle, no license applicant should be discriminated against or favoured, is neglected in several points in the design of the main modes of license allocation in Mongolia, First-Come-First-Served for exploration licenses (suspended since the end of 2015) and the license tender (in practice since 2014). As a result, weak spots in these systems can be exploited in corrupt schemes and - arguably more severely – lead to uncertainties which deter quality investment. No corruption risks were identified regarding the right-of-first refusal mechanism by which exploration licence holders have a priority right to convert an exploration license into a mining license.

The report further elaborates on the three most important licence applicants’ obligations. The Detailed Environmental Impact Assessment is the key document to specify all environmental obligations and the Final Exploration Report is the main source for the development of the geological information system. To ensure accuracy, Mongolia relies on a system of third-party assessor companies compiling information and specialized councils evaluating them, but conflict of interest and limited accountability result in opportunities for corruption in return for approvals. No enforcement for inclusion of affected communities and non-disclosure of agreements significantly increase the risk of collusion and jeopardize potentialyields for affected communities from the negotiation of Community Development Agreements.

Capacity constraints to govern approximately 3,700 exploration and mining licenses emphasize the importance of a robust Governance Framework in the form of due diligence, data management, the license cadastre. While impact of corruption is moderate in these systems, shortcomings may jeopardize the efficiency of the overall governance framework, with very severe and long-lasting implications for the sector.

Finally, the report elaborates on the Prevention of Speculation. Speculation, the application for exploration licenses with the intention of selling them later, and, without investing in exploration impedes the development of the mining sector and increases the risk of corruption. Existing measures for Prevention of License Stockpiling remain largely inefficient and certain license holder rights regarding license transfers facilitate speculation. The disclosure of beneficial owners is another important mechanism which could constrain speculation and many other forms of corruption and financial crimes, but is not enforced in Mongolia.

Transparency International Mongolia will be launching the report on Tuesday 29 August amongst key stakeholders. If you would like further information about the report or Mining for Sustainability Programme, please contact Transparency International Mongolia.

Please review the full report on the link http://resource3.sodonvision.com/transparency/file/2017/8/5d1luucd6wb73n00nfpsg9col/report%20final%202017.08.24.pdf 

Meeting with President of Mongolia Khaltmaagiin Battulga www.kremlin.ru

As part of his visit to Hungary, Vladimir Putin met with President of Mongolia Khaltmaagiin Battulga.

50.8 percent of young people work in service www.montsame.mn

Ulaanbaatar /MONTSAME/ The National Statistical Office presented some interesting figures about Mongolia’s younger generation on August 25 which is observed as Youth Day in Mongolia.

Transit flights increase by 11 percent www.montsame.mn

Ulaanbaatar /MONTSAME/ Ministry of Road and Transport Development informs, transit flights increased by 11 percent, showing positive impact on the economy.

QVARTZ drives ambulance from Denmark to Mongolia for charity www.consultancy.uk

Scandinavian consultancy QVARTZ has donated £1,000 and an ambulance to the people of Mongolia, following a successful journey as part of the Mongolia Charity Rally. The Rally, in support of NGO Go Help, seeks to help provide improved healthcare and education to people living in the large, isolated Asian country.

The Mongolia Charity Rally sees teams of drivers from companies all over Europe travelling to the remote Asian nation in order to boost health and education infrastructure in the region. This year, professional services providers QVARTZ participated, launching the QVARTZbulance – an ambulance decorated in company colours – with a dedicated two-man crew consisting of Christian Østerbye and Rolf Andersen from Denmark. The Nordic top-tier management consulting firm has offices in Copenhagen, Hamburg, New York City, Oslo and Stockholm, and has been expanding operations in Scandinavia in recent years as the consulting sector continues to grow in the region.

The Rally officially launched on July 1st, in Brussels, though teams could set out from anywhere, and Team QVARTZ were waved off by the occupants of their Copenhagen office as they set out on July 7th. Teams for the event could be made up of up to four members, with either multiple drivers in one vehicle or two riders on two motorcycles. Completing their 15,000-kilometre trip after a full month on the road, the QVARTZbulance reached its final destination in mid-August, and as participants, Østerbye and Andersen had driven over mountains, across deserts, through rivers and around pot-holes in the process, in order to reach the rugged expanses of the ancient Mongol empire.

Upon arrival, the first £1,000 raised by the Herculean efforts of Quartz’ two man team was donated to Go Help, a UK registered charity which functions as a Non-Governmental Organisation (NGO) in Mongolia, with any extra donations going to charities of the firm’s choice. Go Help focuses largely on healthcare and education, hence QVARTZ’ unconventional choice of cross-country vehicle, which they will also donate upon arrival. The organisation was founded around an effort to launch and operate ambulance services in third world countries, but their cause has since expanded to include a children’s activity centre or ‘Book House’, a university scholarship programme and a mobile library, which works to reach out to isolated communities in Mongolia.

Commenting on the achievement of the two drivers in the name of such a worthy cause, Hans Henrik Beck, a Managing Director at QVARTZ, said, “QVARTZ is a civilisation of privileged people, and being privileged comes with an obligation to do good for people who need a helping hand. Donating the QVARTZbulance is a small but important part of this equation. Also, in QVARTZ, we cherish and collect iconic moments. Following this intriguing journey has been iconic for me, and it will undoubtedly also be at the top of both Rolf Andersen's and Christian Østerbye's mental iconicity wall for a very long time.”

Going the extra mile
QVARTZ are not the only consulting firm to have spent the summer going the extra mile for charity meanwhile. In June, Big Four consultancy PwC employees took part in a bicycle relay tour of the British Isles, while in celebration of their 50th birthday, Capgemini challenged employees to each walk, run, cycle or swim for a sponsored kilometre worth €1, with the aim of raising a total of €100,000 for three selected charities. Mazars also got in on the act, participating in a Strictly Come Dancing-style event that saw businesses bring in a total of £4,500 for charities.

China's Alibaba, IOC to build 'Olympic cloud' for young fans www.chinadaily.com.cn

HANGZHOU - Heads of Chinese e-commerce titan Alibaba and the International Olympic Committee (IOC) met in Hangzhou to discuss ways of using cloud services to engage young fans around the globe.

Memory athletes set world record at Asia Open Memory Championships www.montsame.mn

Ulaanbaatar /MONTSAME/ The 2nd Asia Open Memory Championships 2017 took place in Hong Kong between August 26 and 27. Memory athletes from Mongolian Intellectual Academy brought home 18 medals from the tournament as of August 26.

Cargo ship suddenly splits in half right in the middle of the sea www.metro.co.uk

One of the main jobs of a ship is to stay in one piece.

But this Mongolian cargo ship (flag carreer) couldn’t manage that – as it split right in two while in the Black Sea. Fortunately, the 11-man crew that was on board was quickly rescued by Turkish authorities.
The Leonardo, a 114-metre-long dry cargo ship, was anchored near Istanbul at the time.
However, it suddenly buckled and broke clean in two.
Tugboats came along to pull away half of the ship to shore, while the other half was left to sink. Turkish media reported that, at 42 years old, the ship was pretty much on its last legs. It was sailing to Istanbul’s Tuzla dockyard – ironically, for repairs. Turkey’s General Directorate of Coastal Safety sent eight ships, including search and rescue towboats, to the scene. All crew members were then taken to the hospital to be looked over, and are believed to be safe.

Gulf of Mexico oil production down by a quarter after Hurricane Harvey www.rt.com

The passage of Tropical Storm Harvey over the Gulf of Mexico resulted in about 22 percent of all US offshore oil production there being offline on Saturday, a rise of three percentage points since Friday.

The shortfall equates to roughly 377,117 barrels of oil per day fewer than the usual figure of roughly 1.75 million bpd pumped from the Gulf, according to the US Department of the Interior’s Bureau of Safety and Environmental Enforcement (BSEE).
About 23 percent of natural gas production in the gas, or about 748 million cubic feet per day, was also offline, the report said.
Operators evacuated 86 Gulf offshore platforms in preparation for Hurricane Harvey, compared to 737 manned platforms currently producing oil and gas in the area. Personnel were also pulled out from four out of the 10 mobile seabed-moored rigs operating in the Gulf while one dynamically-positioned rig was instead moved out of the storm’s path.
Earlier reports by BSEE suggested that the shortfall equated to 428,568 barrels of oil per day, or 25 percent of the total US offshore oil production in the region. Some 26 percent of the Gulf natural gas production went offline because of the hurricane, according to the same report, which amounts to about 835 million cubic feet per day.
The number of evacuated offshore platforms was initially put at 112.
Harvey was downgraded from a hurricane to a tropical storm by the NHC late on Saturday. The largest storm to hit the United States since the disastrous Hurricane Katrina in 2005 has so far claimed three lives.

China to shut 6,000 non-coal mines by 2020 to improve safety www.reuters.com

BEIJING (Reuters) – China will shut 6,000 non-coal mines in an effort to reduce mining accidents and deaths by 2020, the State Administration of Work Safety said in a five-year plan.