New research by the Centre for Research on Multinational Corporations (SOMO) and Oyu Tolgoi (OT) Watch shows how one of the world’s largest copper mines, 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, alongside the US embassy, the International Monetary Fund and the World Bank manoeuvred the Mongolian government into offering generous corporate incentives that have left 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 Executive Director of OTWatch, a Mongolian non-profit organisation.
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 relating to the Oyu Tolgoi Project should comply with the country’s legislation for the benefit of the Mongolian people.
The new report ‘Undermining Mongolia’ analyses how the choreography of political, corporate and financial actors around a mining agreement have shaped Mongolia’s politics and legislation. SOMO and OTWatch argue that this is not a unique case but it reflects the development trajectory of mineral rich countries, which are often hijacked by the 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 which revealed Rio Tinto’s tax schemes that lead to nearly $700 million in tax revenue losses for Canada and Mongolia.