CAO Cases

Arne Hoel, The World Bank

East Asia & the Pacific

Mongolia / Oyu Tolgoi-01/Southern Gobi

Complainant
Local herders with support of OT Watch (a national NGO) and Gobi Soil (a local NGO)
Date Filed
October 12, 2012
Concerns
Impacts to land and water, Indigenous culture and livelihoods, compensation and relocation, project due diligence
Case Status
Open - Ombudsman
 

Synopsis

Complaint

The Oyu Tolgoi project is a $12 billion investment to develop a copper and gold mine at Oyu Tolgoi in the Southern Gobi region, Mongolia. Oyu Tolgoi LLC's majority owner (66%)  is  Turquoise Hills Resources, a Canadian public company listed on the Toronto Stock Exchange.  Erdenes Oyu Tolgoi, LLC,   a Mongolian state-owned holding company, owns the remaining 34%.  Turquoise Hills Resources majority shareholder is international mining major Rio Tinto Plc. IFC’s proposed investment is a  A Loan for IFC's account of up to US$400 million  together with a B Loan of up to $1 billion  to be syndicated to international commercial banks, as part of a proposed $4.5 billion project debt financing.  In addition to the proposed IFC financing, MIGA is providing a guarantee against the risks of expropriation, war and civil disturbance, and breach of contract.  for a parallel debt tranche of up to US$1 billion.   

 

In October 2012, a complaint was filed by nomadic herders, with the support of OT Watch, a national NGO, and Gobi Soil, a local NGO, on behalf of nomadic herders who reside and/or raise livestock close to the project site. The complainants’ main concern is the project’s use of land and water, which they claim disrupts their nomadic way of life, and puts in jeopardy their indigenous culture and livelihood. The complainants contend they have not been compensated or relocated appropriately, and question the project’s due diligence, particularly around the issue of sustainable use of water in an arid area.

 

CAO Action
The CAO found the complaint eligible for further assessment in October 2012 and conducted multiple field trips to Mongolia between November 2012 and February 2013.  Based on stakeholder discussions conducted as part of the CAO Assessment, the complainants and company have agreed to work with CAO's Dispute Resolution function to try to resolve the issues raised in the complaint using a collaborative approach.  The assessment process is documented in CAO's Assessment Report, which is available, along with IFC's response, under "View Documents" below.

 

Status
CAO's Dispute Resolution process is underway and the team is working with the parties to help them make informed decisions regarding how they will work together through the CAO process.

 

Updated: April 07, 2014

Project information

Institution
IFC & MIGA
Project Name & Number
Oyu Tolgoi LLC 29007
Department
Oil, Gas, Mining, & Chemicals
Company
OT LLC
Sector
Mining
Region
East Asia & the Pacific
Country
Mongolia
Environmental Category
A
Commitment
$400m A loan & $1b B loan

Case Tracker

Ombudsman

  • Eligible: Completed
  • Assessment Period: Completed
  • Facilitating Settlement: In Process

Compliance