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A Matter of Survival

Case Study: The Voluntary Code of

Practice of the Mining Sector in Mongolia

In 2016, the International Finance Corporation (IFC), a member of the World Bank
Group, adopted a Voluntary Code of Practice (VCP) for common water management
and reporting for the mining industry in the South Gobi region. The aims of the code
are to protect water resources and promote the efficient and transparent use of
water. Moreover, the VCP is a critical step towards building trust among government
authorities, local communities, civil society organizations, and the media.

Mining is the backbone of Mongolia’s economy. The arid Gobi region is experiencing
a major mining boom. Exploration and mining companies need water for their
operations and are becoming increasingly aware that it needs to be managed as a
shared resource. A statement issued by the VCP’s signatories says: “The VCP is a
powerful display of corporate accountability. It is necessary to balance mining sector
development with the human need for water in the Gobi region. We have made a
statement of intent; now we have to deliver on it.” Furthermore, Mr. B. Byambasaikhan, “Gobi nomads fear desert mega mine” The Guardian, http://bit.ly/2vmcdWR
CEO of Erdenes Mongol, Mongolia’s largest investment holding company and one of
the signatories to the VCP, pointed out that “[t]he VCP provides the framework for
a positive impact on water management by conserving ecosystems, strengthening
communities, and committing to specific operational practices.” Mr. Tuyen D. Nguyen,
Resident Representative for IFC in Mongolia added that “[i]n Mongolia, water is a
shared resource requiring common awareness and joint management approaches”
and noted that “[t]he mining industry’s comittment to the VCP shows its willingness
to take a sector-wide approach to address a national challenge.”

Together, the IFC and the South Gobi Water and Mining Industry worked with over
ten companies to develop the VCP, based on leading international practices on
community engagement, participatory water management, and monitoring.
The VCP’s signatories are: Erdenes Mongol, Oyu Tolgoi, Energy Resources, Erdenes
Tavan Tolgoi, Erdene Resource Development, South Gobi Sands, Terra Energy, Gobi
Coal and Energy. The Government of Canada, 2030 Water Resources Group, Australian
Aid, European Bank for Reconstruction and Development (EBRD), International
Council of Mining and Metals (ICMM) supported the process for the adoption of the
VCP.

Source: IFC Press Release, 2016. https://www.commdev.org/
press-release-ifc-promotes-responsible-water-management-in-mongolias-mining-sector/

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