Mongolia: Oyu Tolgoi-02/Khanbodg

Date Filed
11 Feb 2013
Status
Closed
Phase
Dispute Resolution (DR)
Country
Mongolia

Case Tracker

Eligibility
Eligibility
Assessment
Assessment
Dispute Resolution
Mediation
Monitoring
Closed
Compliance
CURRENT Status
Closed(DISPUTE RESOLUTION)

Complaint Overview

Complainant

Local herders with support of OT Watch (a national NGO) and Gobi Soil (a local NGO)

Concerns

Mine impacts on Undai River

Cross-Cutting Issues
Risk Management Resource Efficiency Community Health and Safety Land Resettlement Biodiversity Indigenous Peoples Cultural Heritage Land Water Loss of Livelihoods Project Benefits

Project Information

Region
East Asia & the Pacific
Institution
IFC/MIGA
Name & Number
Oyu Tolgoi LLC 29007 (IFC) & 7041 (MIGA)
Company
OT LLC
Sector
Mining, Oil, Gas and Chemicals
Department
Other
Category
A
Commitment

$400m A loan & $1b B loan

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 an 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 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

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 agreed to work with CAO's Dispute Resolution function to try to resolve the issues raised in the complaint using a collaborative approach.  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).

As part of the dispute resolution process, several interim agreements were reached on topics such as access to information, tours/inspections of the mine site for herders, joint fact-finding related to the Undai river diversion, and access to grazing land inside the OT project site. The parties also initiated a second joint fact finding (JFF) process, which includes 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 were conducted by independent experts jointly selected by the parties. The final reports of both JFF processes were submitted to the parties in January 2017 and formed the basis for further discussion.  The JFF reports and progress reports are available via the "View Documents" link below.

After several joint meetings, the parties reached comprehensive agreements on the issues raised in the complaints, and developed detailed action plans for implementation.  The agreements were formalized and signed by the parties in May 2017, bringing the mediation process to an end.  In March 2019, after monitoring the parties’ implementation of agreements and upon request by the TPC, CAO held formal case closure events in Mongolia. The parties' decision to conclude the dispute resolution process was documented in a public Joint Statement, which is available via the "View Documents" link below. After the closure events the TPC released a video about their experience in the CAO mediation process, which can be viewed on CAO's YouTube channel https://youtu.be/_yiY6rgdRP0 and from the Documents page linked below.  In May 2020, CAO released a Conclusion Report and formally closed the case. The Conclusion Report summarizing the dispute resolution process is available in English and Mongolian under "View Documents" below. 

Status

The case was closed in May 2020 after monitoring the implementation of agreements.  

Status as of May 12, 2020

Case Documents

  • Dispute Resolution

    Complaint
    Letter of complaint
    Feb 03, 2012
    English
    Letter of complaint
    Letter of complaint
    Feb 03, 2013
    Mongolian
    Letter of complaint
    Assessment Report(s)
    CAO Assessment Report
    Jul 01, 2013
    English
    CAO Assessment Report
    CAO Assessment Report
    Jul 01, 2013
    Mongolian
    CAO Assessment Report
    IFC's & MIGA's Response
    Jul 30, 2013
    English
    IFC's & MIGA's Response
    Agreement(s)
    Joint Statement
    Feb 01, 2014
    English
    Joint Statement
    Joint Statement
    Feb 01, 2014
    Mongolian
    Joint Statement
    IEP Methodology and Work Plan
    Dec 06, 2013
    English
    IEP Methodology and Work Plan
    IEP Methodology and Work Plan
    Dec 06, 2013
    Mongolian
    IEP Methodology and Work Plan
    Independent Expert Panel (IEP) Terms of Reference (ToR)
    Feb 01, 2013
    English
    Independent Expert Panel (IEP) Terms of Reference (ToR)
    Independent Expert Panel (IEP) Terms of Reference (ToR)
    Feb 01, 2013
    Mongolian
    Independent Expert Panel (IEP) Terms of Reference (ToR)
    Joint Informational Flyer
    Sep 01, 2013
    English
    Joint Informational Flyer
    Joint Informational Flyer
    Sep 01, 2013
    Mongolian
    Joint Informational Flyer
    Joint Statement
    Aug 01, 2014
    English
    Joint Statement
    Joint Statement
    Aug 01, 2014
    Mongolian
    Joint Statement
    Joint Statement
    Sep 01, 2014
    English
    Joint Statement
    Joint Statement
    Sep 01, 2014
    Mongolian
    Joint Statement
    Joint Statement
    Nov 01, 2014
    English
    Joint Statement
    Joint Statement
    Nov 01, 2014
    Mongolian
    Joint Statement
    Joint Statement
    Feb 01, 2015
    English
    Joint Statement
    Joint Statement
    Feb 01, 2015
    Mongolian
    Joint Statement
    Joint Statement
    Mar 01, 2015
    English
    Joint Statement
    Joint Statement
    Mar 01, 2015
    Mongolian
    Joint Statement
    FInal Grazing Access
    Mar 20, 2015
    English
    FInal Grazing Access
    FInal Grazing Access
    Mar 20, 2015
    Mongolian
    FInal Grazing Access
    Final Temporary Water Delivery
    Mar 20, 2015
    English
    Final Temporary Water Delivery
    Final Temporary Water Delivery
    Mar 20, 2015
    Mongolian
    Final Temporary Water Delivery
    Socioeconomic study of herder households in Khanbogd Soum Umnugovi Aimag
    Apr 01, 2015
    English
    Socioeconomic study of herder households in Khanbogd Soum Umnugovi Aimag
    Joint Statement
    Jun 01, 2015
    English
    Joint Statement
    Joint Statement
    Jun 01, 2015
    Mongolian
    Joint Statement
    Joint Statement
    Jul 01, 2015
    English
    Joint Statement
    Joint Statement
    Jul 01, 2015
    Mongolian
    Joint Statement
    Joint Statement
    Sep 01, 2015
    English
    Joint Statement
    Joint Statement
    Sep 01, 2015
    Mongolian
    Joint Statement
    Khanbogd Tri-Partite Council MoU
    Sep 01, 2015
    English
    Khanbogd Tri-Partite Council MoU
    Khanbogd Tri-Partite Council MoU
    Sep 01, 2015
    Mongolian
    Khanbogd Tri-Partite Council MoU
    Joint Statement
    Dec 11, 2015
    English
    Joint Statement
    Joint Statement
    Dec 11, 2015
    Mongolian
    Joint Statement
    2015 Khanbogd Tripartite Council Report
    Jul 01, 2015
    English
    2015 Khanbogd Tripartite Council Report
    2015 Khanbogd Tripartite Council Report
    Jul 01, 2015
    Mongolian
    2015 Khanbogd Tripartite Council Report
    2014-15 EHT-OT Joint Work Report
    Jun 08, 2015
    English
    2014-15 EHT-OT Joint Work Report
    2014-15 EHT-OT Joint Work Report
    Jun 08, 2015
    Mongolian
    2014-15 EHT-OT Joint Work Report
    Joint Statement
    Jan 01, 2016
    English
    Joint Statement
    Joint Statement
    Jan 01, 2016
    Mongolian
    Joint Statement
    Joint Statement
    Feb 01, 2016
    English
    Joint Statement
    Joint Statement
    Feb 01, 2016
    Mongolian
    Joint Statement
    Joint Statement
    Apr 01, 2016
    English
    Joint Statement
    Joint Statement
    Apr 01, 2016
    Mongolian
    Joint Statement
    Joint Statement
    Jun 01, 2016
    English
    Joint Statement
    Joint Statement
    Jun 01, 2016
    Mongolian
    Joint Statement
    Joint Statement
    Aug 01, 2016
    English
    Joint Statement
    Joint Statement
    Aug 01, 2016
    Mongolian
    Joint Statement
    Joint Statement
    Nov 01, 2016
    English
    Joint Statement
    Joint Statement
    Nov 01, 2016
    Mongolian
    Joint Statement
    MDT/IEP Final Report
    Jan 12, 2017
    English
    MDT/IEP Final Report
    MDT/IEP Final Report
    Jan 12, 2017
    Mongolian
    MDT/IEP Final Report
    Joint Statement
    Feb 01, 2017
    English
    Joint Statement
    Joint Statement
    Feb 01, 2017
    Mongolian
    Joint Statement
    Joint Statement
    Mar 01, 2017
    English
    Joint Statement
    Joint Statement
    Mar 01, 2017
    Mongolian
    Joint Statement
    Complaint Resolution Agreement
    May 01, 2017
    English
    Complaint Resolution Agreement
    Complaint Resolution Agreement
    May 01, 2017
    Mongolian
    Complaint Resolution Agreement
    Joint Statement
    May 01, 2017
    English
    Joint Statement
    Joint Statement
    May 01, 2017
    Mongolian
    Joint Statement
    Compensation Claims Committee Joint Statement
    Jun 28, 2017
    English
    Compensation Claims Committee Joint Statement
    Compensation Claims Committee Joint Statement
    Jun 28, 2017
    Mongolian
    Compensation Claims Committee Joint Statement
    TPC Greetings on Local Newsletter
    Jul 01, 2017
    English
    TPC Greetings on Local Newsletter
    TPC Greetings on Local Newsletter
    Jul 01, 2017
    Mongolian
    TPC Greetings on Local Newsletter
    TPC Joint Statement
    Jul 19, 2017
    English
    TPC Joint Statement
    TPC Joint Statement
    Jul 19, 2017
    Mongolian
    TPC Joint Statement
    Colombia trip public information
    Jun 07, 2016
    English
    Colombia trip public information
    Colombia trip public information
    Jun 07, 2016
    Mongolian
    Colombia trip public information
    TPC Joint Statement
    Nov 27, 2017
    English
    TPC Joint Statement
    TPC Joint Statement
    Nov 27, 2017
    Mongolian
    TPC Joint Statement
    TPC Joint Statement
    Nov 29, 2018
    English
    TPC Joint Statement
    TPC Joint Statement
    Nov 29, 2018
    Mongolian
    TPC Joint Statement
    Close-out Report(s)
    CAO Communique - Mongolia Oyu Tolgoi Closure
    Mar 01, 2019
    English
    CAO Communique - Mongolia Oyu Tolgoi Closure
    CAO Communique - Mongolia Oyu Tolgoi Closure
    Mar 01, 2019
    Mongolian
    CAO Communique - Mongolia Oyu Tolgoi Closure
    CAO Conclusion Report - Mongolia
    May 01, 2019
    English
    CAO Conclusion Report - Mongolia
    CAO Conclusion Report - Mongolia
    May 01, 2019
    Mongolian
    CAO Conclusion Report - Mongolia