CAO Cases

Arne Hoel, The World Bank

East Asia & the Pacific

Mongolia / Oyu Tolgoi-02/Southern Gobi

Local community members with support of OT Watch (a national NGO) and Gobi Soil (a local NGO)
Date Filed
February 11, 2013
Mine impacts on Undai River
Case Status
Open - Ombudsman



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. 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 and MIGA's response, under "View Documents" below.



 Given a second complaint was filed in relation to the project, the local herders elected a team to represent them in a single CAO dispute resolution process for both CAO Oyu Tolgoi complaints (01 & 02). Several interim agreements have been reached on topics such as access to information, tours/inspections of the mine site for herders, joint fact-finding related to project impacts, and access to grazing land inside the OT project site. The parties initiated a second joint fact finding (JFF) process, which include a socio-economic study of herder households intended to independently map changes in livelihoods and socio-economic conditions over the last decade, and a study which will complete the assessment of project impacts on the main tributary of the Undai River. The studies are being conducted by independent experts jointly selected by the local parties. Details on agreements and joint statements from the parties on the progress of the process so far can be found via "View Documents" link below. CAO's Dispute Resolution process is ongoing.


Status as of December 01, 2016

Project information

Project Name & Number
Oyu Tolgoi LLC 29007
Oil, Gas, Mining, & Chemicals
East Asia & the Pacific
Environmental Category
$400m A loan & $1b B loan

Case Tracker


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


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