International Development Law Organization

Rooting the Rule of Law in Mongolian Soil

22 Feb 2013

There was not much Roman sun, IDLO Director-General Irene Khan observed, to welcome a senior Mongolian delegation earlier this week. But it was still an improvement on the harsh winter of Ulaanbaatar – and indeed, some visitors could be seen enjoying the weather’s relative clemency during a coffee break. It was as much free time as they got on a whirlwind legal tour that began at IDLO’s headquarters, took in Italy’s highest court, the Corte di Cassazione, and ended with the Italian judiciary’s governing body, the Consiglio Superiore della Magistratura.

It is more than twenty years since Mongolia emerged from a political deep freeze to become a functioning, if sometimes rough-edged, democracy. Holding elections every so often is, of course, vital. But it is also the easy part. A tougher, longer-haul job is building a clean, strong judiciary. It requires much observing and learning from others. And it is exactly what IDLO is helping Mongolia achieve, through a judge-training program supported by, and implemented jointly with, the European Bank for Reconstruction and Development (EBRD).

The program is targeting commercial law – and it is, by all accounts, badly needed. This sparsely populated country stands on the brink of a mining bonanza. Its soil is groaning with precious minerals – gold, copper and uranium. It also has heaps of plain old-fashioned coal, on which next-door China depends. As a result, much of Mongolia is being excavated. Over the next decade, the country is expected to grow faster than any other: last year’s rate of “just” twelve percent is seen as an embarrassment.

Development in Mongolia is happening, in effect, from the ground up, too fast for the benefits to flow equitably. And the impact on the environment, despite investors’ efforts to mitigate it, is being felt. Still close to its herding past just a decade ago, Ulaanbaatar is now a heavily polluted city of haves and have-nots: luxury stores abound, but half of the residents lack basic amenities. The resource-led boom is putting great pressure on society and institutions.

“Mongolia,” says the head of the visiting delegation, Chief Justice Zorig Tsegmed, “has been experiencing rapid social change. Globalization makes it imperative that we acquire a legal framework for these new social relations. So one of the primary goals of our judiciary is to expand co-operation with countries that have well-functioning judicial systems. IDLO-EBRD’s two-year training project, with its emphasis on trade law, taxation, international law, and intellectual property – all of it is helping improve my country’s legal environment.”

The imminent start of production at Mongolia’s largest project to date, the copper mine at Oyu Tolgoi, has complicated the relationship between the authorities and investors. Owned by a Rio Tinto subsidiary, Turquoise Hill of Canada, the mine is expected to account for nearly a third of Mongolia’s entire GDP. How to share the profits has become the subject of fraught negotiations. Regardless of the outcome, the Mongolian economy’s dependence on foreign capital flows will only exacerbate the need for arbitration capacity.

“Mongolian judges have learned to free themselves from political influence,” argues delegate Undrakh Batsuren: she presides the Chamber for Civil Cases at Mongolia’s Supreme Court. “But it isn’t all about political influence. In our particular context, judges must be also be a match for the advisors of foreign investors, whose legal teams come with vast expertise.”

Mongolia has little pre-communist experience of democracy. That is has managed to build one, in a region not known for it, is merit enough. But for Mongolia’s democracy to prosper, amid severe social challenges, the rule of law is as precious as minerals are to the country’s economy. And when it comes to the rule of law, IDLO’s is the right door to knock on.

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