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Law and Policy on Mineral Resources in Mongolia: Seeking Inescapable Stability

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Emerging Issues in Sustainable Development

Part of the book series: Economics, Law, and Institutions in Asia Pacific ((ELIAP))

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Abstract

This chapter addresses the issue of the development of mineral law and policy of Mongolia. Within this framework uniqueness of Mongolia and its legal system discussed, further looking at the historical aspect of law and policy of natural resources. Then current major state policy documents of Mongolia and export control approach is mentioned while touching major mining projects in modern Mongolia and its public perception. Also the chapter addresses current issues of mineral policy and law and concludes. This chapter does not address petroleum and nuclear energy related aspect of laws in Mongolia.

An early version of this paper was contributed by Dr. Idesh and the content of this publication does not reflect the official opinion of any government body. Responsibility for the information and views expressed here lies entirely with the author.

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Notes

  1. 1.

    MOHГOЛ УЛCЫH HИЙГЭM, ЭДИЙH ЗACГИЙH БAЙДAЛ, MУ-ын Улcын бүpтгэл, cтaтиcтикийн epөнxий гaзap [Social and Economic State of Mongolia] (2015) p. 13. Available at http://ubseg.gov.mn/content/1236#.VxTKZkdm5GI

  2. 2.

    Moнгoл Улcын нийгэм, эдийн зacгийн бaйдaл, MУ-ын Улcын бүpтгэл, cтaтиcтикийн epөнxий гaзap [Social and Economic State of Mongolia] (2015) p. 14. There are about 217 thousand households herding livestock. Available at http://ubseg.gov.mn/content/1236#.VxTKZkdm5GI

  3. 3.

    Moнгoл Улcын нийгэм, эдийн зacгийн бaйдaл, MУ-ын Улcын бүpтгэл, cтaтиcтикийн epөнxий гaзap [Social and Economic State of Mongolia] (2015) p. 11. Available at http://ubseg.gov.mn/content/1236#.VxTKZkdm5GI

  4. 4.

    Constitution of Mongolia (1992) art. 25.1.1 and 25.1.2.

  5. 5.

    According to Mongolia’s Population Census of 2011, 98.3 % of population is literate. See MONGOLIAN STATISTICAL YEARBOOK 2011, p. 31. Available at www.nso.mn and www.1212.mn (Unified Statistical Data System of Mongolia).

  6. 6.

    For list of countries see http://www.mfa.gov.mn/ last visited on March 30, 2016.

  7. 7.

    For general discussion of Mongolian legal system in English see S. NARANGEREL, LEGAL SYSTEM OF MONGOLIA, 2004.

  8. 8.

    For detailed discussion see “ЭPX ЗҮЙH ШИHЭTГЭЛ БA ҮHДЭCHИЙ ЭPX ЗҮЙH TOГTOЛЦOO” OЛOH УЛCЫH CИMПOЗИУMЫH ЭMXTГЭЛ (Legal Reform and National Legal System” International Symposium Proceedings), Hanns Zeidel Foundation, 2000; Batbold Amarsanaa, XAPЬЦУУЛCAH ЭPX ЗҮЙ CУДЛAЛ [Comparative legal studies], 2nd ed., 2014.

  9. 9.

    For the sample list of legal instruments around 1974 see БҮГД HAЙPAMДAX MOHГOЛ APД УЛCЫH ҮHДCЭH XУУЛЬ ТҮҮНД XOЛБOГДOX AКTЫH ЭMXTГЭЛ [Compilation of acts related to the Constitution of Peoples’s Republic of Mongolia], (1974).

  10. 10.

    Бүгд Haйpaмдax Moнгoл Apд Улcын Үндcэн xууль түүнд xoлбoгдox aктын эмxтгэл [Compilation of acts related to the Constitution of Peoples’s Republic of Mongolia], (1974).

  11. 11.

    For details see MINERALS LAWS OF MONGOLIA (1910–2010), compilation by B. Ulziibayar and B. Tsetsenbileg, 2010, pp. 6–10.

  12. 12.

    Art. 1 and 2 Mining Regulations of People’s Government of Mongolia (1923), in MINERALS LAWS OF MONGOLIA (1910–2010), compilation by B. Ulziibayar and B. Tsetsenbileg, 2010, p. 12.

  13. 13.

    Minerals Laws of Mongolia (1910–2010), compilation by B. Ulziibayar and B. Tsetsenbileg, 2010, p. 19.

  14. 14.

    Art. 5.4 Law on Minerals (1994) in Minerals Laws of Mongolia (1910–2010), compilation by B. Ulziibayar and B. Tsetsenbileg, 2010, p. 41.

  15. 15.

    For example, the Foreign Investment Law was adopted in 1993. For an overview of the development of the Mongolian foreign investment law see I.Idesh ‘’Impact of International Law on the Development of the Mongolian Investment Legislation and Its Legal Consequences” (2012), INTERNATIONAL WORKSHOP PROCEEDINGS TRENDS OF THE DEVELOPMENT OF INTERNATIONAL LAW IN MONGOLIA, School of Foreign Service of the National University of Mongolia, National Intelligence Academy, National Legal Institute of Mongolia, Ulaanbaatar.

  16. 16.

    ЭPДЭC БAЯЛГИЙH ЭPX ЗҮЙH TOЙM (Introduction to Mineral Resources Law) (2012), National Legal Institute of Mongolia, Anand Batzaya advocates, Ulaanbaatar, pp. 14–19.

  17. 17.

    Kohn, Michael. “Mongolia Ends Moratorium on Issuing Mineral Exploration Licenses” Bloomberg, 2 July 2014. Web. 18 Apr. 2016.

  18. 18.

    For instance, Law on Minerals of 2006 which is effective currently are amended every year between 2008 and 2016.

  19. 19.

    This Law restricted foreign direct investment in certain sectors of the Mongolian economy and then was replaced by the Investment Law of Mongolia in 2013.

  20. 20.

    The laws which have prohibited to grant exploration licences were adopted in 2011, 2012 and 2013.

  21. 21.

    Resolution 18 of the State Great Hural, 16 January, 2014. For english translation See http://en.mongolianminingjournal.com/content/54797.shtml

  22. 22.

    Art. 2.1 State Policy on Mineral Resources (2014–2025).

  23. 23.

    The National Security Concept of Mongolia, Resolution 48 of the State Great Hural, (2010).

  24. 24.

    The Foreign Policy Concept of Mongolia, Resolution 10 of the State Great Hural, (2010).

  25. 25.

    The Economic Foreign Relations Program of Mongolia, Cabinet Decree 474, (2015).

  26. 26.

    “Agreement Between Japan and Mongolia for an Economic Partnership,” March 10, 2015, accessed April 18, 2016, http://www.mofa.go.jp/a_o/c_m2/mn/page3e_000298.html

  27. 27.

    Art. 27.1.4 Law on Minerals (2006) as amended in 2015.

  28. 28.

    Art. 3.7.3 and 4.3.10, The State Policy on Mineral Resources (2014).

  29. 29.

    See Provision 1.4 of Oyu Tolgoi Investment Agreement between Government of Mongolia and Ivanhoe Mines Mongolia Inc LLC and Ivanhoe Mines Ltd and Rio Tinto International Holdings Limited dated October 6, 2009. Available at http://www.turquoisehill.com/i/pdf/Oyu_Tolgoi_IA_ENG.PDF. There is also policy study conducted at the Open Society Forum “Уул ууpxaйн caлбapын бoдлoгын зapим acуудлууд Oюу Toлгoйн жишээн дээp гapгacaн caнaл, зөвлөмж” [Some Issues of Mining Sector Policy: Opinion and Suggestion based on Oyu Tolgoi Example], Open Society Forum, 2009.

  30. 30.

    Xудaлдaaны туxaй xуулийн төcөл (draft Law on Trade), March 2, 2015 version available at http://mi.gov.mn/images/turiin_uilchilgee/huuli/Hudaldaanii_tuhai_huuliin_tusul.pdf

  31. 31.

    For reference about related Mongolian laws see I. Trifunov and Y. Krouchkin, MONGOLIA: ITS MINERAL RESOURCES & LAW ENCYCLOPEDIA, Moscow, 2000; J.R. Wingard and P. Odgerel, COMPENDIUM OF ENVIRONMENTAL LAW AND PRACTICE, 2001; Pekka Hallberg, RULE OF LAW ADMINISTRATIVE JUSTICE MINING, MONGOLIA-FINLAND, 2013.

  32. 32.

    At present, Mongolia has adopted separate law on petroleum and radioactive substances which more typically regulate relations in the petroleum and nuclear power sectors and not mining. The Petroleum Law was adopted in 1991 and issues of importation, production, sales and transportation of petroleum producs are regulated by the 1995 Petroleum Products Law. The Law on Nuclear Energy was adopted in 2009.

  33. 33.

    The Constitution of Mongolia provides expressly that land, underground resources, air and water are object of exclusive ownership by the people of Mongolia. See Article 6.1 of the Constitution of Mongolia. The Land Law provides for ownership of land by Mongolian citizens and the State. See in detail the Law on Land of Mongolia www.legalinfo.mn

  34. 34.

    See art. 12.1.1, Law on Investment of Mongolia (2013).

  35. 35.

    Arts. 5.3–5.5, Law on Minerals (2006) as amended in 2015.

  36. 36.

    Art. 20.2 and 20.4, Law on Minerals (1997). According to this Law which is ineffective to date stabilized tax regime for 10–15 years.

  37. 37.

    There are number of secondary legislation such as mining regulations and procedures which have been adopted by the Ministry of Mining, Ministry of Energy and Mineral Resources Authority of Mongolia. These rules and procedures regulate such issues of mining activities as the safety, open pit operations, issue of mining licenses, submission of information and reports to the Mineral Authority and other government agencies and other issues of mining operations.

  38. 38.

    REPORT ON THE “MONGOLOR” GOLD CONCESSIONS IN THE TUSHETU KHAN AND TSETSEN KHAN AIMAKS, OUTER MONGOLIA, Peking-Mongolor Mining Company, 1921.

  39. 39.

    D. Bat-Ulzii, Mongolor was a Multinational Joint Stock Society, CONFERENCE PROCEEDINGS “PENDING ISSUES OF INTERNATIONAL LAW AND MINING SECTOR”, 2013, p. 91.

  40. 40.

    D. Bat-Ulzii, pp. 92–94.

  41. 41.

    DEVELOPING MONGOLIA, World bank, Washington, D.C., 1991, p. 1.

  42. 42.

    Kohn, Michael. Mongolia coalition takes shape, fans fears of resource nationalism. Reuters, 20 July 2012. Web. 18 Apr. 2016.

  43. 43.

    For overview see General Assembly resolution 1803 (XVII), Permanent Sovereignty over Natural Resources, (14 December 1962) available at http://legal.un.org/avl/ha/ga_1803/ga_1803.html

  44. 44.

    Country strategy note Mongolia, Natural Resource Governance Institute, May 2015, available at http://www.resourcegovernance.org/sites/default/files/nrgi_Mongolia-Strategy_20151207.pdf

  45. 45.

    Environmental aspects of mineral legislation are not considered in detail.

  46. 46.

    M. Enkh-Amgalan, The Resource Sector in Mongolia: Is It Time for Mongolia to Consider Embracing FSIs? Is Production Sharing Agreement a better Option for Mongolia?, Mongolian Law Review Journal (2013–2014), No. 3, International Law Committee of the Mongolian Bar Association, Ulaanbaatar, p. 60.

  47. 47.

    In Mongolia issues of artisanal mining operations are regulated by the governmental act and this issue attracts the interests of lawyers and legal scholars. For this issue see P. Munkhselenge, Legal issues in the Mining Sector of Mongolia, Mongolian Law Review Journal, (2013–2014), No. 3, International Law Committee of the Mongolian Bar Association, Ulaanbaatar.

  48. 48.

    For instance civil society groups were very active in the last two revisions of the Minerals Law of 1997. See in detail N. Algaa, Building a stable legal environment of mineral resources is the basis of economic development, Paper presented to the International Workshop on Legal Regulation of Market Economic Relations: Conflict of Interests and its Consequences, Shihihutag Law School, Ulaanbaatar, 2014, pp. 134–138.

  49. 49.

    Issues the human rights, environmental protection and public participation are considered in the State Policy on Mineral resources. For detailed discussions of these issues see I. Idesh, Local Development Issues of Minerals Law: International and National Law perspective, CONFERENCE PROCEEDINGS “PENDING ISSUES OF INTERNATIONAL LAW AND MINING SECTOR”, 2013.

  50. 50.

    Very clear sign of dependence of national revenue from mining sector and mineral resources is recent promulgation of Law on Sovereign Wealth Fund (Ирээдүйн өв сангийн тухай хууль (2016)). This fund’s main source of revenue is projected from the minerals sector.

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  1. School of Law, National University of Mongolia, Ikh Surguuliin gudamj -1, 210646, Ulaanbaatar, Mongolia

    Amarsanaa Batbold

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  1. The University of Tokyo, Bunkyo-ku, Tokyo, Japan

    Mitsuo Matsushita

  2. Law School, George Washington University NW, Washington D.C., USA

    Thomas J. Schoenbaum

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Batbold, A. (2016). Law and Policy on Mineral Resources in Mongolia: Seeking Inescapable Stability. In: Matsushita, M., Schoenbaum, T. (eds) Emerging Issues in Sustainable Development. Economics, Law, and Institutions in Asia Pacific. Springer, Tokyo. https://doi.org/10.1007/978-4-431-56426-3_3

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