Mongolia - 8-Responsible Business Conduct Mongolia - Business Conduct
The concept and practice of responsible business conduct (RBC) in Mongolia is still in its infancy. Most reputable international companies make good faith efforts to work with local communities. The larger firms tend to follow accepted international RBC practices and underwrite a range of RBC activities across Mongolia; however, smaller companies, lacking sufficient resources, often limit RBC actions to the locales in which they work. A few large Mongolian firms regularly undertake RBC actions, with small- to medium-sized enterprises generally (but not always) hindered by limited resources. Generally, firms that pursue RBC are perceived favorably, at least within the communities in which they operate. Nationally, responses range from praise from politicians to cynical condemnation by certain civil society groups, which allege that RBC is no more than an attempt to buy public approval. Public awareness of RBC remains limited, with only a few NGOs involved in RBC promotion or monitoring, and those concentrated on large projects such as the Oyu Tolgoi mega-mine project owned by international mining giant Rio Tinto.
The government has no statutory requirement for RBC covering all companies active in Mongolia. However, the Minerals Law of Mongolia requires minerals exploration and mining companies to develop local development plans with the soum (county) in which they operate. Ministry of Mining and Heavy Industry (MMHI) officials explain that the GOM will eventually codify and standardize how companies should work with soums on local development issues. MMHI has a model agreement laying out specific, mandatory obligations that companies and municipalities would assume toward one another and the specific projects that companies would be able to undertake in the municipalities in which they operate. Investors report the model agreement remains a work in progress. Mongolia is also a member in good standing of the Extractive Industries Transparency Initiative (EITI).
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