Overview

The Story

Traditional livestock herding has been the main economic activity in Mongolia’s South Gobi for countless generations. Always a precarious livelihood in this harsh desert landscape, herding became even harder when the Oyu Tolgoi copper and gold mine began building its vast network of infrastructure on one of the world’s largest copper deposits. Suddenly in competition for pasture and water resources, in a rapidly changing economic and physical landscape, herders quickly began to feel the impacts on their traditional livelihoods.

In 2012 and 2013, herders in Khanbogd Soum filed complaints to an accountability office tied to the World Bank Group, which invested in the Oyu Tolgoi mine. The accountability office, called the Office of the Compliance Advisor/Ombudsman ("CAO"), facilitated a mediation process, which led the parties to establish the Tripartite Council (TPC), a freestanding body of representatives from the mine, herders and the local government to resolve issues related to herders, water and pasture.

In May 2017, after years of negotiation, the TPC reached two final agreements to resolve herders’ complaints. Together, these agreements contain 60 separate commitments to address issues related to pasture and water resources, monitoring of impacts and community relations, compensation for lost livelihoods, and the mine’s disruption of the Undai River and sacred Bor Ovoo spring.

The TPC has made commendable progress on moving forward an expansive set of commitments--it has completed roughly one-third of all commitments, and another one-third are in progress. But the TPC continues to face challenges implementing some of the most important commitments to herders: increasing access to water and pasture and connecting herders to markets. With some of the most important commitments still pending, herders continue to express fears about whether they can continue to engage in traditional livestock herding in their changed environment.

Achievements to Date

The agreements are an important achievement, but unless they are carried out effectively, they may amount to little more than words on paper. Turning the agreements into reality requires dedicated work by all parties, and that work is far from over.

Challenges Ahead

Lack of Transparency
Transparency around implementation and the mine’s ongoing operations is important for building trust with the herding community. Herders have expressed anxiety and frustration at not knowing the status of important commitments and not having clear timelines when commitments will be completed. Setting up an independent monitoring body can bring transparency and accountability to the process and build trust with the herding community. The TPC has recently re-committed to take this step in the near future, and we encourage them to realize this goal. Transparency in the implementation of specific commitments is also important and has been raised about the participatory environmental monitoring reporting and tailings storage facility.
Raising Complaints
While OT has completed its obligation to improve its grievance mechanism on paper, more must be done to ensure the process is accessible and understood by the herders. For many, when and how complaints should be brought directly to OT versus to the broader TPC remains unclear.
Management of Projects
Decisions regarding who will own and control certain projects have been difficult, given that these decisions may impact whether final projects succeed in meeting herders' needs. Herders have argued at length about the ownership and management of the herders’ market and slaughterline, which have a goal to benefit herders broadly. A recent herder vote decided that these two major projects would be managed by a large cooperative comprising smaller cooperatives from each bagh, but questions still remain as the cooperatives have not yet been selected. Other projects, such as well maintenance, still have not begun to resolve the question of who will implement the project.
Narrow Interpretations
At times, commitments have been interpreted in a way that falls short of meeting the underlying goals of the Agreement. For example, the agreement calls for re-establishing a grazing system to adjust for lost pasture. The Khanbogd government developed a plan, but it was largely rejected by herders and no new plan has been proposed. Despite this failure to actually implement a plan that addresses pasture scarcity, the TPC had previously marked this commitment as complete. However, the TPC has recently reopened this commitment and is now looking at alternative approaches to implement it. Narrow interpretations of commitments has also been an issue with construction of new wells.
Unrealistic Commitments
Implicit assumptions baked into some commitments have not been realized, leading to uncertainty on the path forward to complete those commitments. For example, the agreement provides for a fodder planting project, but the TPC later realized that it was cost-prohibitive to plant fodder in the Soum. The TPC has been open to receiving an alternative plan to the fodder planting project, but received no submissions. We encourage the TPC to take a more proactive role in seeking input from herders and experts to replace this commitment with an equivalent benefit to the herder community.
Need to Prioritize Water
For herders, there is nothing more vital to the future of herding than water. Some of most important commitments in the Agreements include building new wells and placing them in strategic areas to open new pastures. The TPC wrapped well building into a larger, Aimag-wide project that had other competing priorities. As a result, only 12 wells have been built so far instead of the 75+ recommended by an independent study. The commitment to build wells on reserve pastures has not even begun. The TPC should prioritize water commitments and approach them in a way that meets the underlying need: sufficient access to water for all herders to continue their traditional livelihoods.
Resource Constraints
Capacity and resource constraints in the government can lead to further delays in commitments. As a result of these constraints commitments where the Soum government is the responsible party, such as the animal laboratory, have been delayed, and the government has not been able to fully staff its pasture management unit.

In February 2019, Accountability Counsel published a report analyzing progress in the first 18 months of agreement implementation. The report found that some of the most important commitments still required significant work, with successful implementation far from guaranteed. This website builds on that report and provides an update of findings and recommendations as of May 2020.

As advisors to herders, we develop these reports to monitor progress on implementation and bring transparency to the process while also advocating for agreement implementation that leads to the greatest benefit for herders.

Three years after the agreements were reached, we reflect on what is working, what is not, and what can be improved. Since our last report, the TPC has made real progress by the numbers: it has completed 8 additional commitments and is making progress on an additional 11 commitments. Where last year more than half of all commitments were delayed or not started, now two-thirds of commitments are completed or making progress towards completion. This is a commendable achievement.

But in some ways, the hardest work has only just begun. Many of the additional completed achievements involve commitments impacting only a handful of herder households. The most important commitments to herders meant to benefit the community at large and provide the means to sustain their livelihoods, such as building new wells across the soum, opening new pastures, and connecting herders to markets, have either not started or only just begun. These commitments are complex and will not be easy to implement well. Their success will require not only sustained effort, but ongoing consultation with the herder community to make sure each commitment brings the intended benefits.

The TPC’s work has begun to sow real benefits but it remains far from clear whether the agreements will fulfill their promise of supporting herders to continue their traditional way of life while living next to a world class mine. One thing is clear: rapid and effective progress is needed.

Status of Commitments

*Note: Commitment #34 requires fully implementing the Khanbogd Soum Animal Husbandry Sector Development Program through 2024. This is a significant commitment with several components to it. We have identified 13 components within this Development Program that are not captured by other commitments and are now individually tracking these components as separate sub-commitments. Consequently, this year’s total commitments we are tracking includes 72 commitments versus the 60 we tracked last year.

Recommendations

  • Increase transparency and improve communication with the local herding community, including through regular updates on implementation status and expected timelines. Without improvement, poor information flow leads to suspicion and confusion and may prevent the most vulnerable herders from sharing in Agreement benefits.
  • Establish a robust, independent monitoring and review mechanism, to ensure the TPC remains accountable and carries out the Agreement commitments in full. Monitoring should focus on whether implementation of each commitment has achieved its intended purpose and include recommendations to help TPC overcome obstacles.
  • Ensure that all Agreement commitments are implemented in line with their agreed purpose and intent, even where unforeseen challenges may require modifications. If herding is to be sustained, pasture and water commitments should be prioritized with a focus on meeting herders’ needs
  • Closely monitor and maintain control over commitments funded or carried out by third parties, to avoid the risk of projects drifting from their intended purpose, timeline and scope.
  • Continue to improve the capacity and commitment of TPC representatives, considering that newly elected TPC members may benefit from training on TPC duties and practices and that 2020 is a local election year which may introduce influences that distract all local stakeholders from the TPC’s agenda.
Commitments