Only recently Mongolia was known as the biggest nomadic country in the world. Today, it is struggling to move past it.
by Bankwatch in collaboration with OT Watch and MONES
Mongolian herders are losing their pasture land to mining, infrastructure development and desertification caused by climate change and overgrazing. Extreme cold winters exacerbate their losses through decimating weakened herds.
Having lost their lands, former nomads are forced to settle in crowded ‘ger districts’ of the capital Ulaanbaatar. Such massive rural-urban migration brings to light long-standing concerns over environment, human rights, and social impacts of internationally funded projects.
Housing and infrastructure projects are causing another wave of displacement and violations of human rights. Households have to make room for roads, heating pipes, landfills, new efficient apartment blocks, water and sanitation infrastructure. Some households have titles to land, but many just pitched their tent at the end of the city a few years back and are now facing evictions and unfair resettlement.
Multilateral Development Banks, backed with political and financial support of G20 shareholders, have a major role to play in Ulaanbaatar’s development through loans, grants, policy dialogue and technical assistance.
The projects they finance look great on paper, promising significant energy efficiency gains, introduction of energy efficiency standards in housing and solar power on roofs, measures to manage pollution from coal burning and to improve the air quality in the city.
That is why it was disheartening to discover suffering and gross injustices behind the facade of climate action and sustainable development ambitions.
Empowering civil society
The good news is that Mongolian civil society is increasingly aware of the role of international financial institutions and bilateral development agencies in their country.
They are keen on using the standards and mechanisms of these institutions to ensure that their investments ‘do no harm’ and deliver on the promise for inclusive, equitable and green development. Groups from the capital and the countryside are demanding more information about projects and participation in decisions that impact their lives, health and livelihoods.
Bankwatch together with its Mongolian partner OT Watch and the network of Independent Accountability Mechanisms at the multilateral development institutions organised a workshop for Mongolian and Central Asian groups to discuss avenues for seeking redress for harm done by development projects.
For two days, over 50 participants discussed the opportunities for involving professional mediators and investigators from financiers’ complaints mechanisms, and what the pros and cons of this approach are. For example, while dispute resolution comes at a lower cost to complainants if compared to court action, issues such as retaliation risks, language and the digital divide are barriers to accessing information.
Ulaanbaatar is one of the coldest capitals in the world with temperatures reaching -40 degrees Celsius in winter. At the same time Mongolia is rich in coal reserves of both low-quality lignite, used for heating and electricity production, and high-quality metallurgical coal, mostly exported to China.
Pollution from the city’s outdated heat and power stations is exacerbated by inefficient heating within the households in the ger districts. It is no longer only gers (or tents) that are seen in these districts, since many people have constructed small houses that are not connected to central heating but rely on the burning of coal indoors.
The result is badly polluted air and a very high health bill that Ulaanbaatar citizens have to bear. A UNICEF report from June 2016 cautioned that “[t]he alarming levels of air pollution in Ulaanbaatar during the long winter cannot be neglected any longer as their short and long-term negative health impact has been demonstrated especially for children.”
Support from the international community
The Mongolian government relies on its international partners to help solve the problem through providing know-how and technical cooperation, as well as financial investments in new city infrastructure. Bilateral development agencies, such as Japan’s JICA, provide training and assistance to the country to develop an emissions inventory system and air quality analysis and evaluation capacity.
The Asian Development Bank (ADB) has implemented projects for energy conservation and emission reduction from poor households and the Ulaanbaatar Clean Air technical assistance. Together with the European Investment Bank (EIB) and the Green Climate Fund, the ADB is financing various phases and components of urban developments, including water, wastewater and sanitation, road, heating and energy efficient housing blocks.
The European Bank for Reconstruction and Development financed an expansion of Ulaanbaatar’s waste facilities and provided technical cooperation grants for the development of its Green City Framework and Action Plan. One of its seven technical cooperation grants is intended for assessing the environmental and social impacts of new waste management facilities and developing a Livelihood Restoration Plan for the waste collectors who will be physically and economically displaced to make way for the new infrastructure that should be in line with European standards.
In addressing sudden population growth in Ulaanbaatar, the Mongolian government initiated a ‘Ulaanbaatar Master Plan’ back in 2013 with the aim to redevelop densely populated ger dwellings across eight districts. For one of its urban modernisation projects, Mongolia recently received a USD 50-million grant and a USD 95-million loan from the Green Climate Fund to supplement USD 399 million from the ADB for roughly 10 000 energy efficient and affordable housing units. The EIB provided additional EUR 50 million for other components of the Master Plan: financing water, wastewater and sanitation in the ger areas.
But at what cost?
Green cities and improved housing that provide sanitation, access to renewable energy, generated electricity and heating – all sound like a move in the right direction. However, it is how the massive land acquisition and resettlement is happening that is really worrying.
From our site visits to the project area and interviews with project affected community members, it is clear that most have been deprived of a fair, participatory, and transparency process. Evidence points to inadequate compensation for land and properties that these people need to leave behind. In the meantime, some of these people have been intimidated into accepting unfair compensation offers.
How the project can restore livelihoods of affected members of the community – estimated at over 1,000 people – is still not clear.
Another trend that makes investments even less transparent and accountable to the public is the increased financial intermediation – development bank investments that are then distributed through Mongolian commercial banks – which publish little information about these sub-projects and are yet to build capacity for consultations with impacted populations and effective monitoring.
Information about all these projects is very hard to find and the above-mentioned institutions are non-transparent with the citizens of Ulaanbaatar. Meetings at the headquarters of the ADB and the EBRD revealed that often the social specialists for the projects are not Mongolian-speakers and are not based in Ulaanbaatar, and as well the expert analysis and monitoring of implementation are outsourced. While the financial institutions coordinate with the responsible Mongolian authorities and among themselves, meaningful consultations with affected people and participation of civil society in decision-making are lacking.
The case of Baganuur
Baganuur is an industrial town that grew together with one of the oldest and biggest coal mines in Mongolia. Open pits and massive piles of mining dominate the landscape around the city and pollute air and water. In 40 years the mines have exhausted only an eighth of the coal deposit. The production is expected to double to fuel a future 750MW power plant that Chinese companies started constructing here in 2016.
The influx of foreign workers for the plant construction have triggered fears related to gender and social impacts among the town’s women and households, as well as concerns among rural populations about the impacts on the nearby Kherlen river.
The World Bank is financing the Mining Infrastructure Investment Support project (MINIS), which is supposed to help Mongolian authorities manage scarce water resources and to make decisions about mining and energy projects based on assessments of the impacts and the carrying capacity of ecosystems. Although the project reports progress with the Selenge and Orkhon rivers, including trans-boundary consultations with Russian populations from the Lake Baikal basin, the questions in Baganuur regarding Kherlen remain unanswered.
Two local groups shared their concerns and vision of development of the town. They discussed the rights of citizens to participate in decision-making, the needs of marginalised groups, and the opportunities that should be investment priorities.
One was a women’s rights group that runs a women’s shelter for victims of violence. The other – an organisation representing disabled people, many of whom are former coal miners with numerous health problems.
Average life expectancy of coal miners is 50 years.
Local activists started monitoring projects for coal mine modernisation and construction of a 700MW thermal power plant. The project reportedly involves China Power Engineering Group – the company announced it won a tender back in 2016.
Chinese company workers have been seen on the project site since 2017, although to date the company refuses to disclose information about their participation in the project or engage with the communities.
The Chinese Embassy in Ulaanbaatar, responsible for overseeing Chinese-financed and constructed projects in Mongolia, has shunned requests from civil society that wishes to share concerns in relation to the missing environmental and construction permits.
Baganuur-based groups and activists are concerned about the impact of these projects on local communities and the Kherlen, a trans-boundary river that provides water to Tuv, Dornod and Khenteii aimags before flowing into the Dalai lake in Inner Mongolia in China.
They requested official information from local authorities about water extraction, land use and construction permits. They also participated in several trainings and skill shares between environmental and human rights defenders, and organised locally several public meetings with local institutions and companies.
Information is power. And institutions often deny the communities their right to be informed and empowered.
The two groups helped set up local monitoring committees in five khoroos (neighbourhoods) of Baganuur, to ensure transparency, accountability and sustainability of local governance. Five representatives of each khoroo were appointed to actively monitor government plans and decisions, and public money spending. Among other issues they are watching are water supply and pollution, safety and security of local communities, prevention of abuse and crime against women and children.
This inspiring initiative by the civil society in Baganuur is a model of active citizenship. However, oftentimes it is a ‘one-way street’ as their questions to institutions can remain unanswered and their input in planning is rarely requested. Information is power and institutions often deny the communities their right to be informed and empowered. In the absence of reliable official sources of information, suspicion, gossip and exaggerated fears proliferate.
Participation is only meaningful if it is well-informed on factual information, not word-of-mouth rumours that can easily be discredited and disregarded. This is why we discussed with the local organisers the need to meticulously document their work and findings, to collect official information and to be persistent in their demands for transparency of public institutions.
Although sufficient information about the coal plans for Baganuur is missing, people were keen on drawing parallels with other mines in Mongolia. For example, when discussing the benefits and costs of mining, they were all too aware of the Oyu Tolgoi copper project, a flagship investment of international financiers (including the IFC and the EBRD) that put Mongolia on the map of the resource-rich countries in the world. People asked when Mongolia would start reaping the profits of these investments.
While promising prosperity in the long-term, Mongolia’s dependence on export of raw mineral commodities has caused harsh economic and social impacts and endless political instability during the market downturn. The country ended up into a debt trap. To pay back the accumulated debt, the country has to keep mining and exporting its mineral wealth (and potentially electricity in the future). In other words, first borrow to mine, then mine to pay back your debts.
First borrow to mine, then mine to pay back your debts.
Baganuur people were asking what would be the benefits for Mongolia and for local communities from expanding extractive industry in the country. Will they get quality jobs? Will women have equal opportunities or carry unequal burden? Who will pay the health bill? Are there viable alternatives to coal? Is there enough water in the Kherlen river basin to support both life and water-thirsty coal development?
The World Bank’s MINIS project was designed to answer exactly these kinds of questions. It was supposed to present credible scientific information and impact assessments as a base for drawing plans, informing opinions and making decisions. The project was also expected to ensure that the public and impacted communities are involved in the assessments and planning, so the interests and needs of local people would be taken into consideration. Unfortunately, the MINIS project has done little to empower communities like Baganuur and has failed to change a culture of opaque decision-making.
Our meetings ended with the most unique encounter.
A ten-year-old boy came to speak to us and to translate for his grandmother. His English was excellent and we learned that he was completely self-taught.
We learned that he personally wrote to the health inspectorate about a threat to children’s health posed by fungus-infested sweets sold by local supermarket. The health inspectorate took measures and thanked the young citizen for his initiative. The boy was also named the most compassionate young person of Baganuur after he started a charity campaign and collected money to help local children with cancer.
We left feeling optimistic. With such active civil society and promising youth, Baganuur stands a chance for a brighter and more sustainable future.
We would like to acknowledge our partnering organisations in Mongolia, OT Watch, and MONES, for their tireless work in building civil society and organising exchanges between environmental and women’s rights groups as part of the Gagga project.
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