Oyu Tolgoi behind on promises to local herders

In the conflict between Rio Tinto's massive Oyu Tolgoi (OT) mine and nomadic herders, the future of herding and the traditional way of life in Umnugovi, Mongolia hangs in the balance. Some progress has been made thanks to historic agreements negotiated by the herders, the mining company, and local government. However, many of the promises have not yet been meaningfully delivered upon, leaving herders’ livelihoods immediately at stake.

In the Gobi Desert, nomadic herders fought for years to protect their traditional livelihoods while living in the shadow of the Rio Tintobacked OT copper and gold mine before finally reaching historic agreements three years ago. These agreements were reached through a unique dialogue process in which the herders negotiated solutions directly with the mining company and government officials. While a significant step forward, the signing of these agreements is merely the beginning in the long road to remedy.

While OT has made significant progress in some areas, the most important commitments to restore and maintain traditional livestock herding practices in the long-term have yet to be carried out, according to Accountability Counsel’s recent report titled “From Paper to Progress”.

The 2017 agreements include over 60 separate commitments to address water and pasture scarcity, promote new livelihood opportunities, and make traditional herding practices more profitable and sustainable to withstand impacts from the mine. OT has so far distributed 1.2 million USD in individual compensation packages. However, herders know that sustaining their livelihoods will require longerterm measures: their top priorities are ensuring adequate water and pasture for their herds, and access to outside markets for their animal products. Many of these commitments have run into challenges and are hugely delayed or falling short of meeting their intended goals, says Accountability Counsel, a global legal organization that amplifies the voices of communities to defend their rights and environment.

Herders used an innovative model to reach the agreements, filing complaints to the accountability office of the International Finance Corporation (IFC), one of the mine's major investors. That office facilitated a dialogue that had herders negotiate directly with the mine to defend their rights.

Accountability Counsel says that if the spirit of the agreements are met, this case could be remembered as a model for communities around the world suffering impacts from other mines. But first OT needs to make sure the commitments are fully realized.

Communities Associate at Accountability Counsel Megumi Tsutsui spoke to The UB Post regarding the implementation of OT’s commitment to herders in Umnugovi Province.

Tell us about the agreements between herders, OT, and the local government? Which specific promises have not been fulfilled as of yet? And how are these impacting herders' livelihoods?

Based on our methodology and assessment of all the commitments, only 35 percent of commitments have been completed. Some of the key commitments that we would highlight that have yet to be completed are commitments to build wells to meet the water needs of herders, commitments to address pasture overcrowding, and commitments to connect herders to markets. The specific commitments include:

• Building wells to meet the water needs of herders

o There is perhaps nothing more concerning to local herders than water. Herders who filed the complaint blamed OT for drops in water levels in their wells.

o The commitments on water were based on an independent joint fact finding report which recommended that over 75 hand wells would be needed to address herders’ water needs. Only 12 wells have been built and it’s unclear how many more will be built and where. It is unclear what process will be used to determine herders’ water needs and how to build wells to meet that need. These questions need to be addressed to fulfill the commitments on water.

• Implementing pasture commitments to address overcrowding and overgrazing

o The mine displaced herders from 50,000 acres of pastureland, which contributed to overcrowding and overgrazing on available pastureland.

o The pasture commitments are meant to develop a plan to reduce overgrazing and pasture crowding, rehabilitate pastures impacted by OT mine activity and also open additional pastures to replace that lost through construction of the mine.

o OT has made progress on rehabilitating certain specific land areas that were formerly used for mining activities, but there has been almost no progress made on commitments meant to reduce pasture crowding more generally.

• Connecting herders to markets

o As part of OT's commitment to ensure that herders indirectly impacted by the mine have access to collective compensation, OT agreed to establish several projects to provide increased income streams to herders. Two of these projects include establishing a slaughter line and a herders’ market. These are really big projects that require careful planning to be implemented well and in a way that will benefit all herders in the soum. Although the Tripartite Council (TPC) successfully completed an important step to vote on the management structure of these projects, there are many more steps that have to be taken before herders can start to benefit from these projects.

How many herders are impacted by OT?

We are not able to provide a specific number, but it is in the hundreds. To some extent, all herders

in Khanbogd soum are impacted by the mine because the mine has taken 50,000 acres of pastureland, which has impacted pasture crowding; because the mine uses significant amounts of water, which several herders claim has impacted water levels of wells; and because infrastructure has been built around the mine that impacts herding. For example, roads that cut across pastures.

We do have specific numbers for herder households who were physically displaced by the mine and received compensation packages as a form of remedy. According to the TPC, it has approved compensation packages for 157 households. These numbers refer to households and not to the number of individuals included in the household.

OT does a lot of community outreach -- trainings, scholarships, and such. But these are not meant to support herding but to encourage herders to obtain education and skills in other fields. If herders continue taking compensation from OT, it serves them in the short term but is detrimental to their livelihood in the long run. If they continue to complain, OT can tell them they've already compensated them.

It is true that OT has been most successful in providing compensation packages, trainings, scholarships, and a few other areas.

The agreements make OT responsible for doing the above and also supporting herders to continue their livelihoods herding animals. This way, herders would have a choice between continuing herding livelihoods or taking up new jobs or business opportunities. OT has a responsibility to implement the agreements related to water, pasture, and connecting herders to markets, which I highlight above. These commitments are meant to help support herders in the long-term to continue their livelihoods as herders. OT and the TPC have not made much progress on these commitments yet, and we think it is incredibly important that they start to make progress on these commitments.

What are the vulnerable groups doing specifically to hold accountability and ensure that OT is making good on their commitments? Who's supporting them and how?

All local herders have a role to play in ensuring that OT meets its responsibilities in the agreements. One of the main goals of our report is to provide transparent information to herders in Khanbogd soum, which they can use to hold OT accountable to their commitments. The Mongolian NGO OT Watch and local NGO Gobi Soil have also been deeply involved in supporting vulnerable herders to raise their voices and hold OT accountable.

Other stakeholders also have a responsibility to ensure that OT fulfills

its responsibilities to carry out the agreements. These include investors of OT, such as the IFC and Multilateral Investment Guarantee Agency (MIGA), which are part of the World Bank Group.

Has OT acknowledged that they're not fulfilling their commitments to herders?

I believe that all of the parties, including OT, would agree that there is still a lot of work left to be done to fulfill all of the commitments. I also believe all parties recognize that fulfilling the commitments is a challenging process. However, we may disagree in just how much work is left, and what changes are needed to ensure success.

What's Accountability Counsel's role in this effort? Did herders or communities representing them reach out to you? How did Accountability Counsel get involved?

Our local partner, OT Watch, first connected with herders on a fact-finding mission to the mine area to better understand the environmental impacts of the mine. OT Watch is based in Ulaanbaatar and has connections with many international organizations who partner with us and made the connection between our two organizations.

We have been advising herders since 2012 -- first on the complaint, then on the dialogue that led to the agreements, and now on implementation of the agreements.

What were the key findings of the From Paper to Progress report, and what is the main goal of the report?

Some of the key findings of our report include:

• 35 percent of commitments are complete, which means progress has been made but there is still a lot of work to be done

• OT has made significant progress carrying out some commitments, including distributing 1.2 million USD in compensation packages to herder families.

• However, herders are still waiting for some of the most important parts of the agreement that are meant to address existential threats to their livelihoods: ensuring adequate water and pasture for their herds and access to outside markets for their animal products. Many of these commitments have run into challenges and are hugely delayed or falling short of meeting their intended goals.

This report is intended to bring transparency to the implementation process of the agreements, to recognize the achievements of the parties, and to create urgency around key commitments that still need to be implemented.

You say if the spirit of the agreements are met, it will be historic for the world. How likely is this outcome?

Our hope is that these agreements will be implemented well and will provide a model for communities around the world suffering impacts from other mines.

There is much to give us hope, most importantly the commitment of all the parties to work together to implement the agreements fully. However, we recognize that only 35 percent of commitments have been completed, and lots of challenges still need to be overcome to ensure that the most important commitments are successfully implemented. A full, meaningful implementation is absolutely possible, but it will require the TPC to make some changes, particularly where it has run into challenges.

Does OT have a specific time frame in which they are obliged to implement their commitments?

When the TPC signed the agreements in 2017, all the parties committed to try to implement the commitments within a certain time frame. It differs for each commitment. Though many of the commitments are behind schedule, the parties continue to work together on moving the commitments forward.

How can herders and their supporters hold accountability if OT fails to deliver on their promises?

Right now, herders are able to work with OT to make progress on implementation of the agreements, mostly within the TPC. However, if local herders felt that they could no longer work with OT to make progress on implementation, they could try less formal and more formal ways to hold OT accountable. A less formal path would involve reaching out to the Office of the Compliance Advisor Ombudsman (CAO) of the World Bank Group for assistance. The CAO is the accountability mechanism that helped facilitate the agreements. The CAO may be able to use other tools to try to get the implementation process back on track (short of any formal enforcement). For example, they could facilitate conversations between the parties and/ or with the IFC project team. Since the IFC is a major investor in the OT mine (and its partner institution MIGA is a major guarantor), they continue to have an interest in seeing community grievances resolved.

A more formal approach would involve contractual enforcement of the agreements. After looking into this question at the international level, we have found that the standard practice is for agreements reached through mediation to be treated as contracts between the parties, meaning that they would create the same legal obligations and enforceability as any contract. That being said, we are not Mongolian lawyers and have not sought a formal legal opinion on this question regarding the OT agreements in particular.

Is the Accountability Counsel working with any other herder groups to achieve a similar goal and forge similar agreements with mines besides OT?

We are not currently working with any other groups being impacted by other mines besides OT. One of our local partners, OT Watch, works with groups across Mongolia on other mining issues and might be able to address your other question about this type of agreement being able to successfully deliver benefits to local communities.

In our experience, being able to reach such an expansive agreement in a mediated process is extremely rare.