Mongolia is at a crossroads. Long hailed as an “oasis of democracy” in a difficult region of the world, there are worries that this may be changing. Threats to the judicial independence of Mongolia’s courts and the instrumentalization of the country’s anti-corruption body and public prosecutor to serve political ends have set off alarm bells both inside Mongolia and throughout the international community.
Since Mongolia emerged as a democracy in 1992, the country has undergone breathtaking change and development, largely spearheaded by a mining boom which has brought with it surging economic growth and the promise of long-term prosperity. The massive Oyu Tolgoi copper and gold mine discovered at the beginning of this century is at the center of this extraordinary change
The Oyu Tolgoi mine – majority owned by an entity controlled by Australian miner Rio Tinto, with a minority stake held by the Mongolian government – has also become a highly charged political issue. In 2009, an investment agreement was signed for Oyu Tolgoi under the government of Prime Minister Sanjaagiin Bayar (2007-2009), and the investment which followed played a large role in Mongolia becoming the world’s fastest growing economy in 2011. However, issues soon emerged, with disputes between Rio Tinto and the government becoming so severe that by 2013 the underground expansion of the mine – an essential element given that some 80 percent of the mineral wealth lies underground – was suspended. Mongolia’s economy suffered greatly as a result, and by 2014 the Great Hural had passed a resolution calling for a solution to the Oyu Tolgoi impasse.
The importance of Oyu Tolgoi to the Mongolian economy cannot be overstated. From 2010-2019, Rio Tinto alone has invested USD 10.3 billion and paid USD 2.6 billion in taxes.
In November 2014, Chimed Saikhanbileg took office as Prime Minister of Mongolia (2014-2016), inheriting a severe economic crisis and a mandate from the Great Hural to resuscitate the economy and find a solution to the Oyu Tolgoi issue. Governing under a grand coalition which included the opposition MPP, Saikhanbileg’s government signed an agreement and financing package for the Oyu Tolgoi underground expansion.
Shortly before the end of Saikhanbileg’s term and in consultation with his cabinet, a sale of Russia’s legacy 49% stake in the Erdenet copper mine was sold to a private Mongolian corporation. On the urging of the Russian side, the deal was struck during difficult circumstances and on an expedited timeline. When the Great Hural was out of session and in the run up to the June 2016 elections, Saikhanbileg gained the unanimous approval of his cabinet and made every effort to consult parliament. The MPP government which took power in 2016 has since declared the sale illegal and forcefully nationalized all of Erdenet, despite a Supreme Court decision determining that such a move was illegal. A prominent Mongolian news outlet called the Erdenet saga a “classic example of political interference in business.”
In 2017, Khaltmaagiin Battulga, a former Sambo martial arts champion and a wealthy businessman-turned-populist politician won the Presidential election with just 50.6 percent of the vote. Bloomberg Businessweek described Battulga as a populist figure who is “cozying up to Putin.” Despite hailing from the Democratic Party (DP), he was worked closely with, and relies on the support of the Mongolian People’s Party (MPP) and its leader, Prime Minister Ukhnaagiin Khurelsukh.
Worryingly, under Battulga, Mongolia’s status as an “oasis of democracy” has been called into question. The international community condemned a 2019 law pushed through by Battulga which has empowered the President to dismiss members of the judiciary, prosecutors, and the head of the country’s top anti-corruption body – powers which Battulga immediately put to use. Still more worrying, since taking office, the President has arrested numerous political opponents on trumped up charges, many of whom have been convicted on politicized charges while some remain under investigation years later despite failing to find any wrongdoing.
It is under these circumstances that Saikhanbileg – as well as former Prime Minister Bayar (2007-2009) and other members of the two governments which signed the 2009 investment agreement and 2015 expansion agreement – were arrested under dubious circumstances in Spring 2018. Numerous irregularities took place in the proceedings and during their imprisonment, including the dismissal of a judge who refused to extend the 30-day detention of the accused. Both Saikhanbileg and Bayar developed serious health conditions warranting urgent medical attention while they were incarcerated. In addition to former Prime Ministers Bayar and Saikhanbileg, numerous officials as well as journalists and members of civil society have come under attack since President Battulga took office.
In late 2019, an Interpol red notice was issued at the request of Mongolian authorities for the arrest of Saikhanbileg, however, the international police organization cancelled the notice in October 2020 after determining that Mongolia’s request was not compliant with Interpol’s rules against abuses of the non-political nature of the organization.
In June 2018 both Saikhanbileg and Bayar were released. The next year, Saikhanbileg gained the approval of the relevant court to travel to the United States to seek urgent medical attention.
President Battulga, some ministers, as well as certain politicians and media outlets in Mongolia have relentlessly pushed the narrative that both the 2009 and 2015 agreements relating to Oyu Tolgoi (passed under Prime Ministers Bayar and Saikhanbileg, respectively) were pursued unlawfully and without the approval of the Great Hural. These claims are made despite publicly available evidence and parliamentary resolutions to the contrary, in an effort to justify the investigations. The result has been politically motivated convictions on dubious charges have resulted for many former officials, while others are still awaiting their verdicts.
Claims have also been made that Saikhanbileg left the country illegally, despite the existence of a signed approval authorizing his travel overseas to seek medical care.
While Battulga and his allies have pursued political persecutions, the President’s own allegations of egregious misconduct and corruption from his years in business and as Minister of Industry and Agriculture (2012-2014) have mysteriously disappeared from public discourse, and the investigations have been quietly shut down. As Minister, Battulga presided over the construction of a mega industrial park and a railroad connection, financed by the sale of hundreds of millions of dollars of “Chinggis Bonds.” Mongolian media has long alleged that some USD 280 million has “disappeared,” and the anti-corruption body launched an inquiry which snared several of Battulga’s associates. Nevertheless, the Pres-ident “has never responded in a substantive way to these allegations,” possibly because of the immunity from persecution he enjoys as President.
The plight faced by former Prime Ministers Saikhanbileg, Bayar, former President Elbegdorj, and the dozens of judges and prosecutors who have been unjustly dismissed by a president who has dangerously consolidated power, threatened Mongolia’s democratic system, and broken the independence of the judiciary are the focus of this whitepaper. This whitepaper also recounts the history of the Oyu Tolgoi mine and the agreements struck in 2009 and 2015 – demonstrating that they were carried out lawfully and with the approval and consultation of the Great Hural.
Claims by the current government that the Oyu Tolgoi agreements were negotiated illegally are being used for dual purposes – for President Battulga to persecute his political opponents, and to cajole Rio Tinto into signing a “better” agreement which the current government can take credit for while tarnishing Mongolia’s international business reputation in the process. Battulga is also overturning Mongolia’s longstanding “third neighbor” policy and as a result is bringing more Russian and Chinese influence and further alien-ating other foreign investors.
For the sake of Mongolia’s democracy and the human rights of those affected, it is imperative that the stories of those who have been politically persecuted, and the judges and prosecutors who have been unceremoniously removed from their positions by an increasingly authoritarian President be brought to light as part of an urgent effort to put Mongolia back on a democratic path.