Mr. Muhammad Ehsan Khan, Regional Director, East Asia Dept.
Mr. Dustin S. Schinn, Project Officer, East Asia Dept.
Asian Development Bank (ADB)
Cc:
Mr. Priyantha Wijayatunga, Senior Director, Energy Sector Office, ADB
Mr. David Morgado, Senior Specialist, Energy Sector Office, ADB
Mr. Bruce Dunn, Director, Office of Safeguards, ADB
Ms. Christine Engstrom, Senior Director, Finance Sector Office, ADB
- Via Email -
Re: Climate-Smart Mining for a New Climate Economy (Project 57273-001)
March 5th 2024
Dear Mr Muhammad Ehsan Khan and Mr. Dustin Schinn,
We are writing to raise specific questions and concerns in relation to Project 57273-001 in Mongolia, which has a stated outcome to improve the “enabling environment for climate-smart mining and processing of minerals” and output to enhance the state’s “capacity to catalyze investment in exploration and processing of climate-smart minerals”. According to the available project document, in December 2023, the ADB’s “President, acting under the authority delegated by the Board, has approved the provision of technical assistance not exceeding the equivalent of $500,000 on a grant basis to the Government of Mongolia for Climate-Smart Mining for a New Climate Economy”. As a result, we understand that several board members may remain unaware of this particular transaction[1]. We find this concerning on several fronts.
This is the first time that ADB has approved financing for a stand-alone technical assistance grant supporting the transition mining sector[2] (also termed ‘critical’ mineral sector), setting an important precedent that should require heightened due diligence. Approving it without any board discussion and without advance posting on the ADB’s website meant there was no time for debate, discussion or questions to be raised. The track record of ADB’s involvement in the extractive sector, for example, at the Marcopper Mine in the Philippines, was marred by irreparable harm wrought on local ecosystems and the rights of communities. Meanwhile, in Mongolia, there’s no shortage of information about the grievances of herders affected by the Oyu Tolgoi mining operations, a project which received support from the World Bank Group (WBG) and the European Bank for Reconstruction and Development (EBRD), and was the subject of two separate cases filed under the WBG’s Compliance Advisor Ombudsman (2012-2020) as well as a case filed under the EBRD’s Project Complaint Mechanism[3]. It is therefore highly alarming to see the lack of any evidence of careful consideration of human rights and environmental legacies of IFI financing in the sector, as well as of addressing broader questions of accountability and transparency, which we would have expected to be integrated into the “Lessons Learned” section of the associated project documents. We note also that Mongolia is actively implementing the Extractives Industry Transparency Initiative (EITI), yet there is no clarity provided on how this TA will interface with and benefit from the application of EITI.
The ADB Senior Management has been alerted on multiple occasions in relation to the threats posed to environmental human rights defenders in Mongolia, including those who have been involved in monitoring the Oyu Tolgoi Mine, new mines and mining infrastructure in the country. Yet, not once does the TA mention ensuring human rights due diligence or consideration for ensuring an enabling environment for herder community leaders, women’s rights advocates or other human rights defenders to engage in discussions about the impacts of the expansion of the mining industry, let alone for ensuring the mining industry consistently seeks and respects community rights to give or withhold consent through non-coercive, non-threatening channels. The silence about human rights due diligence in this TA risks the possibility of encouraging a situation in which mine-sites in Mongolia become “sacrifice zones” that will be mined for exports (serving the markets of other countries), while Mongolians bear the brunt of the impacts of mining.
The TA fails to take into account specific current harms, damages and losses attributed to the mining industry in Mongolia, and to make any mention of precautionary measures required to consider in relation to associated production and storage of vast amounts of toxic waste materials from mining. Nor is there any consideration for ensuring mapping takes into account areas that should be demarcated as ‘no go zones’ due to cultural, heritage, social, conservation or ecological considerations.
ADB’s recent blog about this technical assistance references uranium extraction arrangements for transporting to France via China as a “possible option” to explore for expanding the export of ‘rare earth’ minerals from Mongolia. In this regard, we are aware that several business newswires have reported that France has sealed deals with Mongolia to develop mining sites for extracting both lithium and uranium, and that some of ADB’s member countries consider uranium as a critical mineral. Despite the massive ecological and health harms that can result from uranium extraction, and ADB’s prohibition on financing support for nuclear facilities, we are alarmed that there is no information about how the ADB hired consultancy firm will consider uranium mining options in the recommendations and mappings expected to be provided.
We are dismayed by the simplistic assumptions embedded in the TA related to “climate smart” mining. There appears to be no due consideration on the part of the ADB for how mining can be considered ‘climate smart’ in a landscape where the losses and damages of climate change are acutely felt by the pastoralist population, and would inevitably exacerbate problems related to increasing water scarcity, droughts, dzuds and dust storms. In this regard, we would like to inquire what parameters have been developed by ADB to confidently assume or claim that a certain mining project has achieved “climate-smart” status? We understand that typically, the definition of climate smart mining is applied to sites in the region where there is an assumption that countries can generate financing through extracting mineral resources to be used in the manufacturing of components for renewable energy technologies, primarily for export, and that such mining operations may be powered by non-fossil fuel options. As explained above, this arrangement does not resolve the irreversible damage to local ecosystems and communities that are directly dependent on the land for their livelihoods, nor the reality of toxic tailings left in the wake of such extractivism.
Finally, we are aware that the project documents suggest the intention of the ADB’s effort is to “create the momentum for a green, just transition in rare earth mineral mining, processing, and manufacturing” in Mongolia. However, it is unclear how the element of ‘justice’ in these processes is being ascertained given the lack of strong regulatory policies in place to ensure communities have the "Right to Say No," while workers’, environmental, women and other human rights advocates face highly constrained options to join consultations, let alone give inputs into mappings or organize to assert concerns at specific sites[4] without fear of intimidation or reprisals.
We request specific information regarding why the above points were not addressed and how they will be moving forward. We would be open to discuss further, following hearing from you on each of the above points in writing. Thank you for your time and we look forward to receiving your response.
Sincerely,
350.org Asia, Regional - Asia
350 Pilipinas, Philippines
Accountability Counsel, International
Aksi! for Gender, Social and Ecological Justice, Indonesia
Alyansa Tigil Mina, Philippines
Asia Indigenous Peoples Network on Extractive Industries and Energy (AIPNEE), Philippines
Asian Forum for Human Rights and Development (FORUM-ASIA), Regional - Asia
Asian Peoples' Movement on Debt and Development (APMDD), Regional - Asia
Balay Alternative Legal Advocates for Development in Mindanaw, Inc. (BALAOD Mindanaw), Philippines
Bank Climate Advocates, USA
Bayansharga NGO, Mongolia
Bangladesh Working Group on External Debt (BWGED), Bangladesh
CAMBIUM, Colombia
Center for Energy, Ecology and Development, Philippines
Center for Environmental Justice, Sri Lanka
Centre for Human Rights and Development, Mongolia
Community Resource Centre, Thailand
CLEAN (Coastal Livelihood and Environmental Action Network), Bangladesh
Conseil Régional des Organisations Non Gouvernementales de Développement, DR Congo
Equitable Cambodia, Cambodia
Freedom from Debt Coalition, Philippines
Friends with Environment in Development, Uganda
Gender Action, International
Global Alliance for Incinerator Alternatives (GAIA), International
Global Alliance for Incinerator Alternatives - Asia Pacific, Regional - Asia
Globe International Center, Mongolia
Green Advocates International, Liberia
Growthwatch, India
Indigenous Women Legal Awareness Group (INWOLAG), Nepal
International Accountability Project, USA
Jamaa Resource Initiatives, Kenya
"Khovdiin Toli Newspaper" NGO, Mongolia
KRuHA (Peoples’ Coalition for the Right to Water), Indonesia
Legal Rights and Natural Resources Center-Kasama sa Kalikasan (LRC-KsK), Philippines
Lumière Synergie pour le Développement, Senegal
Mines, Minerals and People, India
MiningWatch Canada, Canada
Mongolian Women's Employment Support Federation, Mongolia
Mongolian Mother Nature Salvation Foundation NGO, Mongolia
Nash Vek Public Foundation, Kyrgyzstan
NGO Forum on ADB, Regional - Asia
Oil Workers' Rights Protection Organization Public Union, Azerbaijan
Oyu Tolgoi Watch, Mongolia
Pakistan Fisherfolk Forum, Pakistan
Peace Point Development Foundation (PPDF), Nigeria
Psychological Responsiveness NGO, Mongolia
"Public Administration New Initiative" NGO, Mongolia
Recourse, Netherlands
Rivers without Boundaries International Coalition, International
Rivers without Boundaries Mongolia, Mongolia
Sayanaa Wellbeing Association NGO, Mongolia
Steps Without Borders NGO, Mongolia
Trend Asia, Indonesia
Urgewald, Germany
Wahana Lingkungan Hidup Indonesia (WALHI), Indonesia
Witness Radio, Uganda
[1] This was verified during meetings that NGO Forum on ADB held with several board members at ADB Headquarters in Manila during early February 2024.
[2] However, we have taken note with similar alarm of the active tender on mining and extractives (explicitly to support the transition mining supply chain development) in Indonesia associated with the Regional TA “Accelerating the Clean Energy Transition in Southeast Asia” (Project 55124-001), and therefore recognize that similar stand-alone projects in other ADB borrowing member countries may already be under consideration.
[3] See: https://www.cao-ombudsman.org/cases/mongolia-oyu-tolgoi-01khanbogd and https://www.cao-ombudsman.org/cases/mongolia-oyu-tolgoi-02khanbogd. See also: https://www.ebrd.com/documents/occo/cr-report-ot-23022017.pdf
[4] As an example of an expression of broad concerns being raised across civil society sectors in relation to transition mining, please refer to the declaration issued in October 2023 from the Thematic Social Forum on Mining and the Extractive Economy.