Compliance Advisor Ombudsman

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 percent) 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 percent.  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 February 2013, a complaint was filed by a local nomadic herders and community members who reside and conduct livelihood activities close to the project site. The complainants’ main concern is the Undai River diversion component of the project.  The complainants contend that the river diversion jeopardizes their traditional nomadic lifestyle and livelihood. They are specifically worried that the diversion will lead to several water systems drying up, deteriorated pastureland yields, diminished water supply to forests and a cultural impact to what they view as a sacred river.  

CAO Action
The CAO found the complaint eligible for further assessment in February 2013 and the CAO Ombudsman has begun an assessment of the situation.

Status
An Ombudsman assessment is ongoing.

Note: An Ombudsman assessment does not entail a judgment on the merits of the complaint.  Rather, the aim is to listen to people's concerns, understand the different perspectives, and gauge whether it is possible to address the concerns in a collaborative process.

Updated: March 4, 2013