Social responsibility in mining in Mongolia

In the distance, the variety of colorful flowers adorning the valley can be clearly seen. In the background, mountain ranges like the blue ranges in Mongolia. The peaceful and harmonic life of animals enhances the beauty of the scenery. This is the picturesque description of the Wyoming city’s Powder River valley of the State of Denver, USA. When several of us, reporters, listen to the Peobody Company’s officer explaining to us that the natural resources underneath the valley had already been extracted, we could not help but gasp with amazement. The thought came over me that, if after mineral resources are excavated, the nature is restored to its original state in a case similar to this one, then there will definitely be no complaints or regrets. Of course, this does not simply happen. Mongolians who have inherited from their ancestors a variety of broad natural resources have been devastating the land with the pretext of using its mineral wealth, leaving the nature destroyed as if a powerful bomb had exploded. The Peabody Company’s officer continued saying “we are able to restore their land, if not 100 percent, then at least 90 percent back to its original state after mining”. But can Mongolians be successful in restoring their land at least 90 percent back to its original state, or even 50 percent?

In recent years, due to the rapidly developing mining sector in Mongolia, discussions on socially responsible mining practices have increased. This is a progress, no doubt. An NGO called “Socially Responsible Mining Initiative towards Sustainable Development” has even been established. But social responsibility in mining does not touch upon nature alone.
Socially responsible mining is defined as the comprehensive set of practices respecting all participants’ rights, especially those of local residents, without negative consequences for local environment and people’s health. It is based on the best international experiences, abides by the rules in vigor, and promotes transparency in the mining sector, a sector which yields regular profits to Mongolia. However, it would not be, an exaggeration to state that such a definition is not consistent with past years’ mining practices in Mongolia. It is not a secret that due to inappropriate mining practices, many aimags’ lands have been destroyed and people left devastated. Not long ago, issues arose becuase local residents created significant obstacles to mining companies operations, putting pressure and demanding money from them. After what local administration did not grant mining authorizations. Business entrepreneurs in the mining sectors quite often complained to the relevant authorities about these issues. Meanwhile, the list of other issues, such as mining companies not implementing environmental management practices, issuing false balance-sheets, displaying weak rates of accountability, disregarding environmental protection, and carrying out questionable dealings with inspectors through deceitful paperwork, has become extensive. For its part, the Government poorly performed when it came to improve mining laws and legislation, monitoring their observance, and raising the accountability rate of mining companies. Today a fine of MNT50 to MNT250 thousand tugrug represents a laughable amount for mining companies. The damages they inflict to the environment far exceed this amount.  

Mr. David Brereton, Director of the Center for Social Responsibility in Mining, Sustainable Minerals Institute, Queensland University, Australia, states “According to the principles of socially responsible mining, more success is guaranteed if the multiparty stakeholders’ involvement is provided. Understanding and support for one another should be cultivated from the very beginning.” In other words, if prior to launching their operations the mining companies conduct detailed assessment of the local environment, cooperate with the Government as well as maintain good communication with local residents, there will not be any major obstacles. Environmental experts also point out that if the Government defines the participation of local residents like, for example, legalizing the extent of their role in monitoring mining operations and their participation in restoration activities, then there will be less anxiety over this issue. In countries where the mining sector is highly developed and where people have a good knowledge on the minerals industry, there are no complaints. Of course, companies operate in a transparent manner and openly inform the public of their activities from the very beginning.   

In addition, in other countries, all mining companies, and this disregarding of their size, employ environmental experts and run environmental assessment divisions. It is world practice for such expert to draft a specific environmental action plan and obtains the required budget from their organization. Even companies in Mongolia have recently started to employ environmental experts, and the larger companies started to operate entire environmental divisions. With the purpose of answering to the equal interests of the participants, the “Socially Responsible Mining Initiative towards Sustainable Development” NGO has drafted eight point criteria for socially responsible mining. They are already conducting tests among four mining companies. Once they have identified the advantages and disadvantages of these principles, they will draft a proposal to the Government for consideration. Internationally, companies conduct environmentally-friendly operations under the motto of sustainable development and transparent initiative. Therefore, as there are no similar representative organizations that protect the interests of the three parties in other countries, foreign experts are very keen to introduce this NGO’s experiences based on the success of their outcome. The organization of a first convention with local residents and two trainings in cooperation with the University of Queensland, Australia, were also significant in demonstrating to other companies ways of raising their responsibility in mining.

It is worth emphasizing that, as well as resolving the issue of how to use dividends from the mining sector’s rapid expansion to raise people’s living standard and contribute to the country’s development, the role of socially responsible mining participants in assessing the future effects of mining on the enviroment and conducting appropriate policies is extremely vital.