Mongolia

There are regular, public statements of support from the government. A senior individual has been appointed to lead on the implementation of the EITI, and senior government officials are represented on the MSWG and National Council. Government has provided funding to implementation. However, the lack of full government participation in outreach and dissemination events and the recurrent gaps in funding for EITI implementation are a concern.

Companies are actively and effectively engaged in the design, implementation, monitoring and evaluation of the EITI process. Industry representatives are taking part in outreach and efforts to promote public debate especially on regional level. The Minerals Law and model Production-Sharing Contract provide an enabling environment for company participation in the EITI and there do not appear to be any legal obstacles preventing company participation.

Civil society are fully, actively and effectively engaged in the design, implementation, monitoring and evaluation of the EITI process. Stakeholders are taking part in outreach and efforts to promote public debate especially on regional level. There is an enabling environment for civil society participation in the EITI.

Each constituency publicly codified its MSWG membership nominations procedures in January 2018. The lack of safeguards in the MSWG’s decision-making has been resolved through revisions to the MSWG’s ToR in November 2017. Attendance at MSWG meetings has improved over 2017 and the MSWG ensured strong quorum rules in its revised ToR. There is growing constituency coordination on key issues ahead of MSWG meetings.

The MSWG has been formed and includes self-appointed representatives from each stakeholder group with no suggestion of interference or coercion. Although the mechanism for civil society nominations on the MSWG restricts selection of members outside the PWYP and MECC coalitions, there is no evidence that non-member NGOs that would have liked to participate have been constrained from doing so. The ToR for the MSWG addresses the requirements of the EITI Standard, but stakeholders have highlighted certain deviations in practice, particularly related to voting. Certain MSWG decisions appear to be passed despite objections of one of the stakeholder groups, for instance in relation to data quality assurance procedures. Attendance of MSWG members is also inconsistent, with delegation of attendance to different representatives being common. these weaknesses have affected EITI implementation and contributed to inconsistent multi-stakeholder oversight of the technical aspects of EITI reporting, in particular with respect to data quality.

The 2014 EITI Report address the relevant laws, regulations and fiscal regime.

The 2016 EITI Report discloses which mining, oil, and gas licenses were awarded and transferred during the year, highlighting any non-trivial deviations from the applicable legal and regulatory framework governing license awards and transfers. The extensive work on assessing deviations in practice constitutes a good example of increasing awareness of how criteria are assessed during the allocation process.

The 2016 EITI Report provides guidance on accessing license coordinates in the oil and gas sector. Having made efforts to secure dates of applications for licenses held by material companies, he MSWG disclosed dates of application for 251 of the 661 mining licenses and eight of the 11 PSAs held by material companies in the 2016 EITI Report. It has been transparent about obstacles hindering disclosure of dates of application for licenses awarded under the previous system and included activities in its 2018 work plan to secure remaining dates of application.

The 2014 EITI Report clarifies government contract disclosure policy and provides a review of actual disclosure practice. There has been follow up by the MSWG to develop a contracts portal, amend the model oil and gas PSAs to remove confidentiality clauses and to disclose all PSAs.

The MSWG has considered beneficial ownership disclosure in detail at several MSWG meetings and has conducted initial work on disclosure of legal ownership information (which includes some beneficial ownership disclosures) in the 2013 and 2014 EITI Reports.

The 2016 EITI Report clearly defines a set of nine SOEs making material payments to government and describes their statutory financial relations with the state, including loans and guarantees, as well as non-trivial deviations in the year under review.

The 2014 EITI Report includes a detailed description of the extractive industries, including informal activities, and of significant exploration activities.

The 2014 EITI Report includes volumes of production in mining and crude oil. While the location of mining production is provided for only some mining licenses, it is possible to reconstitute the location of production using the EITIM data portal.

The 2014 EITI Report includes volumes of production in mining and crude oil. While the location of mining production is provided for only some mining licenses, it is possible to reconstitute the location of production using the EITIM data portal.

The MSWG has agreed a definition of materiality and materiality thresholds. Although the IA does not provide an assessment of the comprehensiveness of the 2014 EITI Report, it is possible for readers to assess the materiality of omissions and reach conclusions about the overall comprehensiveness of the EITI Report.

The 2014 EITI Report states that the two producing oil and gas PSA operators commercialise the state’s share of in-kind revenues (Profit Oil). There are no in-kind revenues in mining. The value of cash proceeds from the sale of the state’s Profit Oil is provided.

The 2014 EITI Report details infrastructure provisions and notes that no barters exist.

The MSWG has considered whether government receives transportation revenues in the mining sector and disclosed revenues collected by Erdenes Mongol, even if a materiality threshold for such revenues is not explicit (it is only implied as 0). The MSWG does not seem to have considered the existence of transportation revenues in oil and gas however although we understand that no SOEs (under the EITI Standard’s definition) collected transportation revenues.

The 2016 EITI Report clearly distinguishes SOE-specific transactions from other types of payments from SOEs (e.g. common taxes). Dividends from SOEs were below the MSWG’s materiality threshold for selecting revenue streams and were thus unilaterally disclosed.

The eReporting system has had a significant impact on timeliness of reporting and reconciliation of payments now takes place within 12 months of the end of the fiscal year under review.

While the 2014 EITI Report does not present all data disaggregated by revenue stream and by company, the EITIM data portal provides access to this level of disaggregated information.

The 2016 EITI Report provides a detailed description of the approach to ensuring the reliability of reconciled data, including review of audit and assurance procedures and practices, a description of the assurance procedures and an assessment of the materiality of non-complying entities. The report includes a clear statement by the IA of the comprehensiveness and reliability of the reconciled data.

The MSWG has considered subnational direct payments, disclosed and reconciled them in the 2014 EITI Report, disaggregated by payment stream. However, there is confusion between SOEs’ “subnational direct payments” and “subnational transfers”.

The 2016 EITI Report provides the detailed formulas for calculating GLDF transfers to LDFs of aimags as well as direct royalty transfers by the Ministry of Finance to LDFs of aimags. The values of planned subnational transfers according to the formula and actual 2016 transfers are provided for both aimags, the direct recipients of subnational transfers, and for soums, who receive transfers from aimags. While the discrepancies between planned and realised transfers are only explained in general, the disaggregation of data by aimag and soum allows for traceability of extractives revenues at the subnational level.

The 2014 EITI Report discloses how revenues are allocated.

The 2014 EITI Report discloses the management of earmarked revenues.

The 2016 EITI Report provides a clear differentiation between mandatory and voluntary social expenditures, distinguished from other types of payments such as quasi-fiscal expenditures by SOEs. The results of the MSWG’s reconciliation of mandatory social expenditures are provided, disaggregated between cash and in-kind (with the nature and value of in-kind expenditures provided) and highlighting the identity of the few non-government beneficiaries. The 2016 EITI Report included material voluntary social expenditures.

The 2016 EITI Report describes the MSWG’s definition of quasi-fiscal expenditures (consistent with the EITI Standard’s), its assessment of their materiality and reporting of SOEs’ unilateral disclosures of material quasi-fiscal expenditures in 2016.

The 2014 EITI Report expands on previous EITI Reports’ description of the contribution to the economy. It includes, in absolute and relative terms, the size of the extractive industries, their contribution to government revenue, exports and employment.

The 2017 annual progress report provides a summary of the MSWG’s follow-up on past recommendations from Validation and EITI Reports, as well as a narrative account of efforts to strengthen implementation and general observations on the impact of EITI implementation. Stakeholders were given an opportunity to provide input to drafting the annual progress report.

The MSWG has sought to ensure the EITI Report is comprehensible, accessible and actively promoted, particularly through aimag and soum level reports. EITI information has generated public debate, particularly at the subnational level.

EITI data is accessible, references international classifications, machine-readable and actively disseminated through the eReporting website.

Recommendations of EITI Reports are followed up on by the MSWG, even if they are not consistently implemented.