The
World Bank Board of Directors has announced plans to consider a copper and gold
mining project in the Mongolian South Gobi desert even though the Bank itself
acknowledges that there is not enough water in the region to support the life
of the Project. Despite ongoing community opposition to Rio Tinto’s Oyu Tolgoi
mine and its associated facilities (“OT Project”), the World Bank is
considering a financing package of US$900 million in loans and up to US$1
billion in political risk insurance for the OT Project in early November.

The
OT Project has faced fierce community resistance in Mongolia for years. The
company’s recently released Environmental and Social Impact Assessment (“ESIA”)
does little to alleviate concerns that the Project will destroy the fragile
South Gobi ecosystem, as well as the traditional way of life for the nomadic
herders who have lived in the region for centuries. Richard Harkinson of the
London Mining Network calls the ESIA “an elaborate and costly hoax, designed to
avoid addressing the most controversial aspects of the OT Project.” As he
explains, “the assessment only covers the construction phase of the Project,
which is already over 94% completed. Rio Tinto, the Project manager, has not
disclosed any plans for how it will manage the severe environmental impacts of
the OT Project’s operations, which will begin in a few months.”

According
to Jelson Garcia of the Bank Information Center, “The Bank should not even
consider investing in the OT Project until an ESIA covering key stages of the
Project, including operations and decommissioning or closure of the mine, has
been disclosed and accepted. To approve the Project now, on the basis of an
ESIA covering only the construction of the OT mine, would violate Bank policies
and risk damaging its reputation.” Other investors currently considering the
estimated US$13.2 billion Project, despite the woefully deficient ESIA, include
the European Bank for Reconstruction and Development, the U.S. Export Import
Bank, Export Development Canada, the Australian Export Finance and Insurance
Corporation, Standard Chartered and BNP Paribas.

The
lack of information in the ESIA about the true impacts of the OT Project is exacerbated
by Rio Tinto’s inadequate consultations with the most directly affected nomadic
herders. “Rio Tinto has not organized meaningful, participatory, and culturally
appropriate public consultations with the affected herders,” explains Sukhgerel
Dugersuren, Executive Director of OT Watch, an organization working with
affected herders. “Although Rio Tinto organized one meeting on the ESIA in
Khanbogd, it was deeply flawed and inaccessible. Notice was given only 2 days
before the meeting, making it impossible for many affected herders to attend,
given that they live between 20 and 60 kilometers from Khanbogd. Additionally,
only 2 copies of the Mongolian translation of the ESIA were provided during the
meeting, thus those attending were not able to review the document before the
meeting. Instead of organizing further meetings, Rio Tinto intends to speak
with affected herders individually. This tactic of talking to herders
one-on-one tends to intimidate them, making it unlikely that they will raise
their concerns about the Project.”

Several
herders have already experienced devastating herd loss and other impacts after
being forced to resettle because of the OT Project. They have found Rio Tinto
largely unresponsive to their concerns. The long-delayed release of the ESIA,
and the rapidly approaching date for the World Bank Board of Directors’
consideration of the Project, gives concerned community members and the
organizations assisting them little time to meaningfully comment on the details
of the 2,000-page assessment. Additionally, despite the voluminous nature of
the document, it does not comprehensively address the destruction of
pastureland, the diversion of the Undai River, the impacts of the mine’s
associated facilities, including the company international airport being built
on the reserve pasture and the 450 megawatt coal-fired power plant that will be
built to provide power to the Project, or the cumulative and aggregate impacts
of all projects in the region.