New Research Shows Mongolia Forced to Give Up Control Over Natural Resources

Centre for Research on Multinational Corporations (SOMO) – Oyu Tolgoi Watch

Leaked documents show hijacking of Mongolian development agenda

(Amsterdam) New research by SOMO and OT Watch shows how one of the world’s largest copper mine, Oyu Tolgoi in Mongolia, was negotiated at the expense of the Mongolian people. Leaked documents expose how mining companies Rio Tinto and Turquoise Hill Resources, the US embassy, the IMF and the World Bank compelled the Mongolian government into offering generous corporate incentives that leave the country with debt, environmental damage and a loss of democratic control over their natural resources.

“Just as the economy was beginning to stabilise and grow, the World Bank decided to push the Mongolian economy towards growth based on mineral extraction. This made Mongolia fully dependent on a single industry and a single market,” says Sukhgerel Dugersuren of OT Watch.

Members of parliament and civil society organizations have questioned the Oyu Tolgoi Investment agreement since negotiations began in 2003. In November 2019, the Mongolian parliament unanimously passed a resolution instructing the Mongolian government to review and take measures to ensure that all the agreements related to the Oyu Tolgoi Project comply with the country’s legislation for the benefit of the Mongolian people.

The report ‘Undermining Mongolia’ analyses how the choreography of political, corporate and financial actors around a mining agreement shape Mongolia’s politics and legislation. SOMO and OT Watch argue that this is not a unique case but representative for mineral rich countries’ development trajectory hijacked by  corporate interests of the global extractives industry.

Rhodante Ahlers of SOMO says, “Globally legitimized looting by multinationals must stop. ‘Good governance’ and ‘rule of law’ need to be stripped from corporate interest and profit seeking and redefined towards a healthy planet for the benefit of all.”

This report is a sequel to the 2018 report Mining Taxes that described Rio Tinto’s tax schemes that lead to nearly $700 million tax revenue losses for Canada and Mongolia.

Download the report in English here and in Mongolian here.

About SOMO
The Centre for Research on Multinational Corporations (SOMO) is a critical, independent, not-for-profit knowledge centre on multinationals. Since 1973 we have investigated multinational corporations and the impact of their activities on people and the environment. We provide custom-made services (research, consulting and training) to non-profit organisations and the public sector. We strengthen collaboration between civil society organisations through our worldwide network. In these three ways, we contribute to social, environmental and economic sustainability.

About OT Watch
Oyu Tolgoi Watch (OT Watch) is a non-profit, nongovernmental organization established in 2009 to monitor Oyu Tolgoi project’s compliance with the international environmental and human rights norms and standards. OT Watch was established by a group of CSOs which have actively engaged with government and protested against signing the unfair investment agreement. Since its establishment, OT Watch has been working in partnership with national, international civil society networks in advocating for fair and accountable mining and investment practices respectful of human rights in the development process.