Australia’s overseas mining operations – a “hard” regulatory role for the Australian Government in Mongolia

By Amy Rogers | 02 Aug 13
Mining in Mongolia

By Amy Rogers

In early July, Oyu Tolgoi, the $6.6 billion Rio Tinto project, shipped the first of the 40,000 tonnes of copper concentrate out of the enormous South Gobi desert mine in Mongolia. Oyu Tolgoi, managed by Rio Tinto, is Mongolia’s largest mining project – and one of the “world’s largest underdeveloped copper-gold resources’”, which is expected to operate for 50 years. Rio Tinto, which holds a 66% shareholding in Oyu Tolgoi, is listed on the Australian Securities Exchange and has its executive offices in Melbourne.

While the previous stalemate between the mining company and the Mongolian Government has focused on exacting Mongolia’s costs and financing, ascertaining their likely slice of the pie, little attention has focused on the potential human rights impacts on local communities.

Without delving into the debate about sustainable mining, I wish to highlight some of the reasons why it is important that the Australian Government play a monitoring role in ensuring Australia’s involvement in Mongolia and elsewhere does no harm to local communities. This is particularly important given Mongolia’s less than perfect human rights record and poor regulatory framework when it comes to mining and human rights.

Mongolia and mining – human rights violations and corruption

The mining sector is a major contributor to the Mongolian economy, and has been since the country’s transition to a market economy. Despite its significant economic progress, Mongolia is still in its infancy in terms of human rights and democracy. Despite the focus on developing the mining sector in the last ten years, the government has overlooked the rights of nomadic herders, and failed to integrate their protection into a development framework. Furthermore, corruption remains a threat to sustainable development, which raises the question of whether mining revenue will trickle down to those who need it most.

The National Human Rights Commission of Mongolia (‘the Mongolian Commission’) has documented environmental degradation and serious human rights violations due to irresponsible mining. The right to live in a healthy and safe environment, the right to health, the right to land ownership, and cultural rights continue to be violated. These violations occur despite human rights protections embedded in the Mongolian Constitution and Mongolia’s ratification of the major relevant international human rights treaties.

Mineral licenses today cover approximately 22.3 million hectares of Mongolian land. This constitutes a significant threat to Mongolian traditional nomadic herders who will not be able to continue to graze their livestock over land once mining operations commence in their local areas.

The threat to Mongolian culture has been recently discussed by the Mongolian Chief Human Rights Commissioner, Mr. Byambadorj Jamsran at an international conference on mining and human rights, attended by Australian civil society representatives and Rio Tinto. Commissioner Byambadorj spoke of the decrease in nomadic herders in three “soum” regional areas, from 3,029 in 2004 to just 1,352 in 2011. Many of these herders resettled to regional centers due to shrinking pastoral land and the impossibility of continuing their traditional livelihoods alongside mining. Many others were involuntarily resettled.

It is especially difficult to protect Mongolia’s traditional nomadic culture and redress violations of cultural rights because the Mongolian Government does not itself consider traditional ways of life as falling under the category of “culture”, as defined by the International Covenant on Economic, Social and Cultural Rights, and by the Committee on Economic, Social and Cultural Rights, general comment 21. Traditional herders are not considered indigenous peoples, nor are any other group in Mongolia, despite their continued connection with the land and their traditional way of life. Mongolians prefer to consider themselves as a homogenous population, with culture defined more in terms of art and history, and less about their traditional way of living.

In addition to the loss of culture, mining has had far reaching human rights implications. These are not limited to the environmental damage that has resulted in the contamination of air and water sources. It also includes health and social impacts as populations migrate to ill-equipped urban centres. These urban centres are now seeing an increase in HIV-AIDs, respiratory illnesses, and sexually transmitted diseases as well as domestic violence.

When an Australian company is operating in a developing country with a history of corruption, environmental and human rights violations, our government must step up and play a more active role in ensuring transparency and respect for human rights.

Opt-in business and human rights framework inadequate

The challenge of business and human rights is nothing new, but it is becoming increasingly relevant as Australian owned multinationals become deeply intertwined in the global economy, especially in the extractive sector.

Of course foreign companies must abide by national laws, but what happens when the legal framework, particularly related to environment and human rights is poor and the enforcement of the law is inadequate in host nations?

Companies must be responsible for their activities, but so too should governments that headquarter the companies – especially those benefiting from mining revenue. Australia should not only ensure that its companies are operating responsibly overseas, but also that they are abiding by international laws and best practices. The duty of the state to protect against human rights abuses by third parties, including businesses is a key pillar of the UN “Protect, Respect and Remedy”’ Framework, drafted in 2008 by the Special Representative of the UN Secretary General on Business and Human Rights, John Ruggie.

While the voluntary UN Guiding Principles on Business and Human Rightsprovides a basis for businesses to opt into monitoring their human rights implementation, enforceable national laws, mandating a human rights due-diligence process and government regulation overseas is also needed. Such laws might require Australian public companies to carry out and make public a human rights risk-assessment process, including a gender impact assessment. The aim of such as assessment is to identify human rights risks to communities and to find ways to mitigate these risks.

When an Australian company is operating in a developing country with a history of corruption, environmental and human rights violations, our government must step up and play a more active role in ensuring transparency and respect for human rights. It is not enough to leave it up to companies to self-regulate. We know that doesn’t work – just take a look at Australia’s experience in Bougainville. We also know that a glossy corporate social responsibility brochure is not a guarantee of practices that respect human rights abroad.

So far Rio Tinto has demonstrated an awareness of the risks to the human rights of local communities in mining-affected areas in Mongolia, having released its environmental and social impact assessment, which was met with a mixed response. While we are only beginning to see how Oyu Tolgoi will impact the human rights of local communities, the length and size of the mining project calls for a significant level of transparency and oversight to ensure the human rights risks identified are appropriately managed. As a significant recipient of Mongolia’s mining wealth, Australia also has a significant monitoring role to play in Mongolia, as it does in many other parts of the world. Ultimately we are all responsible for the activities of Australian companies overseas, whether we are shareholders, or simply citizens.

Amy Rogers is an Australian human rights advocate currently living in Mongolia, working at the National Human Rights Commission of Mongolia as a Human Rights Education Officer. Recently, Amy has worked for the Australian Human Rights Commission and GetUp!

To learn more on mining and human rights go to Oxfam Australia’s mining resource page.