A powerhouse in the land of extremes

Profile of the month: Tsolmon Shar, EITI National Coordinator in Mongolia

This profile of the month was written by Lyydia Kilpi.

In 2006, Mongolia was beginning to attract huge investments in mining and Tsolmon Shar worked for a health project. Advertisements stating that Mongolia would need the EITI to ensure that future revenues from mining would be managed well caught Tsolmon’s eye. Soon after he left the health sector to become the National Coordinator of the Mongolia EITI Secretariat, established in 2007. Since then, the country has been open about its mining revenues.

A land of extremities

Mongolia is the miners’ dream come true. There are large reserves of coal, copper, fluorspar, gold and a lot of other minerals within a near-to-deserted territory. Population density is only 1.8 per square kilometre, among the lowest in the world. Across the southern border awaits China, the commodity-hungry neighbour, which is the main destination for exports.

However, geography is not just an asset. Tsolmon names lack of infrastructure as the main challenge for the mining sector. Without a sufficient railway network, exporting minerals from the land-locked country is a hassle. Heavy ground traffic causes pollution, raises dust and ruins roads, which upsets locals. “We should be very careful with environment. Water resources are scarce in a landlocked country like Mongolia”, Tsolmon reminds us. Additionally, weather can be extreme. Tsolmon notes that the previous night the temperature had gone down to -30 °C, which is “quite normal”.

Reaching out to provinces

The EITI will not build railways or invoke rain but it has a role to play. “Our idea is to make people optimistic, to have more trust and a good approach to cooperation. This way good decisions can be found”, says Tsolmon. Public consultations on both central and local level give citizens the chance to participate in decision-making. “EITI is not just transparency. It’s cooperation between the government, companies and civil society”, Tsolmon states.

The large, scarcely-populated territory makes engaging all Mongolians in the process challenging. The EITI has recently started to re-establish local sub-councils in rural areas. The sub-councils are chaired by deputy governors and ideally involve all stakeholders groups. The purpose is to evoke local dialogue, increase knowledge about the mining sector and promote transparency in provinces. Due to decentralisation, local communities now get funds directly from the state budget and decide on how to spend them.

As always, some are more excited than others. “There are provinces that are very keen to do this and have multi-stakeholder groups with equal representation, while others are lagging behind”, Tsolmon notes.

2012 Report raises questions

Mongolia published its 2012 EITI Report last December, well ahead of most countries. The number of companies reporting has increased every year, reaching now a staggering 1800. It is no wonder that Tsolmon is eager to replace paper templates with electronic reporting. However, the report revealed that only ten companies account for approximately 90 per cent of revenues. This has lead civil society to question whether the report should include small companies at all.

Juggling different views and maintaining a balance is part of Tsolmon’s job. In fact, the toughest and most rewarding part, according to the man himself. “Important people from all sectors are involved and I can’t have conflicts with anyone. But it is interesting to work in such an environment. I learn a lot from them.”

Enshrining transparency into the law

According to Tsolmon, a big challenge for this year is pushing forward the Extractive Industries Transparency Law, which would consolidate the EITI principles in national legislation. Currently the law is caught in the Ministry of Justice.

Tsolmon anticipates a lot of hard work for year 2014 but believes it is worthwhile. “I’m convinced that we are helping to make companies and the government accountable. There are such huge amounts of revenues that should be used to further develop Mongolia.”