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Mongolia

Information Transparency of the Owners of the Entities with Rights to Use Mineral Resources (MN0033)

Overview

At-a-Glance

Action Plan: Mongolia Action Plan 2016-2018

Action Plan Cycle: 2016

Status: Inactive

Institutions

Lead Institution: Central Government Authority

Support Institution(s): Central Government Authority Responsible for Justice Central Government Authority Responsible for Foreign Investment Petroleum Authority Mineral Authority; Open Society Forum Transparency Initiative for Extractive Industry Borderless Steps NGO

Policy Areas

Anti-Corruption Institutions, Asset Disclosure, Beneficial Ownership, E-Government, Environment and Climate, Extractive Industries, Land & Spatial Planning, Private Sector, Public Participation, Records Management

IRM Review

IRM Report: Mongolia Mid-Term Report 2016-2018

Starred: No

Early Results: Pending IRM Review

Design i

Verifiable: Yes

Relevant to OGP Values: Access to Information

Potential Impact:

Implementation i

Completion:

Description

Status quo or problem addressed by the commitment: Transparency of the operations related to the use of natural resources is the fundamental principle of accountability. Today, this information is not entirely transparent, thus limiting the public's capacity and opportunity to monitor and make these operators accountable. Main Objective: Make information public about the owners of the entities who are exploiting natural resources. Brief Description of commitment (140 character limit): - Identify relevant natural resources o Minerals and oil o Land and Water - Establish mechanism to collect information about owners - Establish mechanism to check and confirm the information - Disseminate the information to the general public

IRM Midterm Status Summary

12. Transparency of information on beneficial ownership in mining sector

Commitment Text:

- Identify relevant natural resources

o Minerals and oil

o Land and Water

- Establish mechanism to collect information about the owners.

- Establish mechanism to check and confirm the information

- Disseminate the information to the general public.

Status quo or problem addressed:

Transparency of the operations related to the use of natural resources is the fundamental principle of accountability. Today, this information is not entirely transparent, thus limiting the public's capacity and opportunity to monitor and make these operators accountable.

Main Objective:

Make information public about the owners of the entities who are exploiting natural resources.

Milestones:

12.1. Identify relevant natural resources

a. Minerals and oil

b. Land and Water

12.2. Develop mechanism to collect information about the owners

12.3. Establish mechanism to confirm the information in the database

12.4. Disseminate the information to the public

Responsible institutions: Central Government Authority responsible for Budget and Finance Central Government Authority responsible for Mining Related Issues

Supporting institutions: Central Government Authority Responsible for Justice Central Government Authority Responsible for Foreign Investment Petroleum Authority Mineral Authority, Open Society Forum, Extractive Industry Transparency Initiative, Borderless Steps NGO

Start date: 30 June 2016

End date: 30 June 2018

Context and Objectives

The Asia Foundation and the Sant Maral Foundation’s 2017 study on corruption perceptions in Mongolia found that the public viewed land utilization, state mining, and local procurement offices as the most corrupt sectors in Mongolia.[Note114: The Asia Foundation and Sant Maral Foundation, '2017 Survey on Perceptions and Knowledge of Corruption: Strengthening Democratic Participation and Transparency in the Public Sector in Mongolia Project,' https://asiafoundation.org/wp-content/uploads/2017/09/MG-SPEAK2017_ENG.pdf.] Despite concerns of potential corruption in the extractives sector,[Note115: United Nations Development Programme, Corruption risk assessment in Mining sector of Mongolia, 7 June 2016, available at: http://www.mn.undp.org/content/mongolia/en/home/library/democratic_governance/CorruptionRiskAssessmentinMiningSectorofMongolia.html.] Mongolia passed the Law on the Amendments to the Mineral Law in 2014, which lifted a 2010 moratorium on issuing new licenses.[Note116: For more information on the 2014 amendments to the 2006 Minerals Law, see: http://www.eisourcebook.org/cms/January%202016/Mongolia%20Mineral%20Law%20Amendments%202014.pdf.] Mineral license information is available online through the Mineral Resources and Petroleum Authority’s central directory. This commitment aims to improve transparency in the extractives sector by collecting information on beneficiaries of companies involved in this sector and disseminating it to the public. In doing so, this commitment builds off Commitment 3.3.1.4 from Mongolia’s previous action plan that established a central database for information on oil, mineral, and land tenure ownership licenses.

The dissemination of information on beneficial ownership of companies involved in the extractives sector to the public is relevant to the OGP value of access to information. While the commitment’s overall objective (to publish information on beneficial ownership) is clear, the milestones leave out some important details such as how the mechanism to confirm information on beneficiaries will be established and how the information will be disseminated to the public. Also, the definition of 'beneficial ownership,' which can have multiple interpretations, is unclear from the commitment text. Therefore, the specificity is marked as medium.

Although the publication of oil, mineral, and land tenure license ownership on a central database (Commitment 3.3.1.4) had a potentially transformative impact at the outset of the previous action plan, the IRM End of Term Report found that it only improved access to information marginally because of the limited disclosure of petroleum and land license ownership.[Note117: Independent Reporting Mechanism, 'Mongolia: 2014-2016 End-of-Term Report,' https://www.opengovpartnership.org/wp-content/uploads/2001/01/Mongolia_EOTR_2014-2016.pdf, pg. 18.] In addition, civil society considered the published information to be unsatisfactory and requested that the government disclose the beneficial ownership information for companies that hold licenses. This commitment specifically addresses this recommendation and is particularly salient due to the concerns of corruption in the extractives sector. Therefore, the commitment could have a potentially transformative impact on access to beneficial ownership information for the Mongolian extractives sector.

Completion

Implementation of this commitment is linked to Mongolia’s compliance with the Extractive Industries Transparency Initiative (EITI), a global standard to promote open and accountable management of natural resources. Requirement 2.5 of the EITI Standard 2016 requires all implementing countries to disclose beneficial ownership information for companies that have obtained rights to extract oil, gas, and minerals by 2020.[Note118: EITI International Secretariat, The EITI Standard 2016, 15 February 2016, http://www.eitimongolia.mn/sites/default/files/uploads/english_eiti_standard_0.pdf, pg. 21] In December 2016, Mongolia’s EITI multistakeholder group (MSG) approved a roadmap to disclose beneficial ownership of corporate entities that bid for, operate, or invest in the extractive sector.[Note119: See: Roadmap for beneficial owners disclosure within the EITI standard, available at: https://eiti.org/sites/default/files/documents/mongolia_eiti_road_map_on_bo_2016_12_20_in_english.pdf.] The roadmap has seven objectives with 32 planned activities to be carried out by 2020, including the incorporation of a database with beneficial ownership information in Mongolia’s 2018 EITI report, and to conduct awareness raising activities and disseminate this information to the public.

Mongolia’s 2016 EITI report found that out of 213 companies selected to complete the template for beneficial ownership in accordance with Requirement 2.5 of the EITI Standard, only 47 companies (22 percent) submitted their beneficial ownership information to the Mongolia EITI’s e-Reporting system.[Note120: Mongolia Extractive Industries Transparency Initiative, Mongolia Eleventh EITI Reconciliation Report 2016, November 2017, https://eiti.org/sites/default/files/documents/2016_m_eiti_report_final_english.pdf, pg. 127.] Objective 6 of the EITI roadmap is to conduct a pilot collection of beneficial ownership information and ensure data accuracy by incorporating government bodies and agencies’ data system, exchanging information and updating relevant forms. Objective 7 of the roadmap is to ensure beneficial ownership information is disclosed and publicly accessible through Mongolia’s 2018 EITI report. However, according to the roadmap, the collection of information for the database and its disclosure to the public are not scheduled to take place until 2019, after the action plan’s June 2018 end date.

There have been regular meetings and discussions among EITI stakeholders on beneficial ownership disclosure. In 2016–17, nine discussions and workshops took place among different government agencies, extractive companies, and CSOs. Civil society and media representatives have also formed an informal group to improve the legal environment for beneficial ownership disclosure. According to a civil society representative, the State Registration Agency is working to collect beneficial ownership information on all mining companies by June 2018.[Note121: IRM questionnaire completed by Enkhtsetseg Dagva, Program Manager, Open Society Forum, 23 April 2018.]

Given the limited number of companies that provided beneficial ownership information in the most recent EITI report, as well as the scheduled collection and incorporation of beneficial ownership information for 2019, the completion of this commitment is considered limited and behind schedule.

Early Results

Mongolia’s EITI website includes an interactive infographic with the results of a beneficial ownership questionnaire that the multistakeholder group prepared for Mongolia’s 2013 EITI report.[Note122: See: http://www.eitimongolia.mn/en/beneficial-owners.] The infographic includes the shareholder country, type, and name for the 215 companies that responded to the voluntary questionnaire (out of a total of 250). However, subsequent EITI reports have been less successful in providing beneficial ownership data. Thirty of 236 companies provided information in 2014, 51 of 202 companies responded in 2015 (of which 26 disclosed beneficial ownership), and 47 of 213 companies reported information in 2016.[Note123: See: https://eiti.org/mongolia#beneficial-ownership-disclosure.] For the most recent data, Appendix 25.a of Mongolia’s 2016 EITI report includes beneficial ownership information for the 47 companies that responded to the request for disclosure.[Note124: See the 2016 Mongolia Extractive Industries Transparency Initiative Report Appendices, https://eiti.org/sites/default/files/documents/2016_m_eiti_report_appendices_en_final.pdf, pgs. 121-123.]

Next Steps

According to a representative from the Open Society Forum, government organizations are still reluctant to publicly disclose their beneficial ownership information. There are also continued barriers in privacy-related laws that limit the amount of beneficial ownership disclosure. Moving forward, beyond implementing the steps outlined in Mongolia’s EITI roadmap, the government could ensure that privacy laws do not inhibit future beneficial ownership disclosure to the public.


Commitments

  1. Mobile Application for Citizens Feedback and Requests

    MN0022, 2016, E-Government

  2. Starred commitment Improve Provision and Quality of Education and Health Services

    MN0023, 2016, E-Government

  3. Civic Engagement in Decision Making

    MN0024, 2016, Legislation & Regulation

  4. Transparent Funding of Political Parties

    MN0025, 2016, Anti-Corruption Institutions

  5. Create Favourable Environment for Media and Journalism

    MN0026, 2016, Civic Space

  6. National Action Plan for Combating Corruption

    MN0027, 2016, Anti-Corruption Institutions

  7. Transparency of Loans and Aid from Foreign Countries

    MN0028, 2016, Aid

  8. Online Registration of VAT

    MN0029, 2016, Capacity Building

  9. Improve Glass Account System

    MN0030, 2016, Anti-Corruption Institutions

  10. Make Government Procurement Process Transparent

    MN0031, 2016, Anti-Corruption Institutions

  11. Transparency of Contracts of Public Resource Exploiting

    MN0032, 2016, Anti-Corruption Institutions

  12. Information Transparency of the Owners of the Entities with Rights to Use Mineral Resources

    MN0033, 2016, Anti-Corruption Institutions

  13. Make Licenses, Information and Activities of the Companies Transparent and Effective by Government

    MN0034, 2016, Anti-Corruption Institutions

  14. Monitor and Ensure Implementation of Information Transparency and Information Access Right Act by Establishing National Information Transparency Committee and Creating Structure of Information Commissary.

    MN0001, 2014, Legislation & Regulation

  15. Modernize Performance Indicators of Information Transparency of Public Organizations Into ―”Citizen Targeted” Ones.

    MN0002, 2014, Capacity Building

  16. Starred commitment Launch ―Transparent Account Systemǁ in Order to Enable Consistent, Transparent Reporting to the Public and to Provide Comprehensive Information on Budget Revenue Collection, Income and Expenditure Details, as Well as Public Procurement and Investments.

    MN0003, 2014, Fiscal Transparency

  17. Develop Central Information Database of Minerals, Oil, and Land Tenure License Owners, Open to the Public.

    MN0004, 2014, E-Government

  18. Ensure Transparency All Agreements on Investment, Stability and Production- Sharing of Public-Owned Resources Such as Water, Minerals, Oil and Land.

    MN0005, 2014, Extractive Industries

  19. Starred commitment Publish List of Mandatory Public Information on Environment Such as Information Regarding Any Action Harmful to Natural Environment and People’S Health.

    MN0006, 2014, Environment and Climate

  20. Starred commitment Disclose Information to the Public Relating to Foreign Loan Assistance Projects and Programs, Including the Total Amounts, Terms, Payback Duration and General Provisions Related to the Loan Rate, Board Members, and Implementation Bodies. Information About the Terms of Implementation of the Projects as Well as General Conditions of Contracts Between Suppliers and Buyers Shall Be Disclosed as Well.

    MN0007, 2014, Aid

  21. Disclose Budget Funded Procurement Contracts Above 80.0 Million MNT

    MN0008, 2014, Open Contracting and Procurement

  22. Ensure Civic Engagement in Planning and Developing Public Services at Central and Local Levels by Introducing Communication Channels Such as Organizing e-Conferences, Public Hearings, and Open Meetings.

    MN0009, 2014, Public Participation

  23. Launch “Smart Government” Program, for Delivering e-Public Services to the People Regardless of Distance and Location Through the Public Service Portal.

    MN0010, 2014, E-Government

  24. Create a Single Access Public Service for Citizens Without Requiring Supplementary State Registered Data, Based on Principles of “One Citizen-One Public Servant”.

    MN0011, 2014, Public Service Delivery

  25. Improve and Develop Smart e-Service Capability for “One Window-Public Service” and Introduce It as a Standard Unit of Public Service.

    MN0012, 2014, E-Government

  26. Increase Number of “Public Service Online Machines” at Local Levels for Delivering Public Services to Individuals in Remote Areas, as Well as Increase the Content of Its Data.

    MN0013, 2014, E-Government

  27. Report Public Feedback on Government Performance Received from the Government’S “11-11” Center. Government Shall Also Establish a Data System That Responds to and Tracks Petitions and Enquiries.

    MN0014, 2014, Public Participation

  28. Develop and Publish E-Mapping of Crime Occurrence.

    MN0015, 2014, E-Government

  29. Create a United Information Database on Law Enforcement Activities, Crimes and Violation Records, and Ensure That the Database Is Accessible to Relevant Bodies.

    MN0016, 2014, E-Government

  30. Introduce a System of Random Disclosure to the Public of Asset and Financial Statements of Any Public Servants.

    MN0017, 2014, Asset Disclosure

  31. Publish the Asset and Financial Statements of Officials Who Work in Organizations with a High Likelihood of Corruption Index on Websites and Ensure Citizen Monitoring.

    MN0018, 2014, Asset Disclosure

  32. Create Regulation That Repeals Decisions Made Without Due Participation of Citizens and Contradict Public Interests, as Well as Hold the Officials at Fault Accountable.

    MN0019, 2014, Legislation & Regulation

  33. Deliver the Draft Laws, Acts, Amendments and Administrative Rules to Public Attention in Due Time. in Particular, Create an Opportunity for People to Access Such Information from “Public Service Online Machines”, Citizens Chambers, and the Public Libraries at Each Provincial Level.

    MN0020, 2014, Capacity Building

  34. Strengthen the Capacity of Citizens by Implementing Certain Projects to Enhance Legal Knowledge of Target Groups Using Simple Language.

    MN0021, 2014, Capacity Building