| Oyu Tolgoi LLC |
| Environmental & Social Review Summary |
| This Environmental and Social Review Summary (ESRS) is prepared by IFC to disclose its findings and recommendations related to environmental and social considerations regarding potential investments. Its purpose is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein that has been prepared by the project sponsor, authorization has been given for public release by the project sponsor. IFC considers that this ESRS is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. |
| Project number | 29007 |
| Country |
| Mongolia |  |
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| Region | East Asia and the Pacific |
| Sector | B-BC - Copper |
| Department | Reg Ind, Infra & Nat Res, ASIA |
| Company name | OT LLC |
| Environmental category | A |
| Status | Pending Signing |
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| Date ESRS disclosed | August 22, 2012 |
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| Previous Events | Approved: February 28, 2013 |
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| View Summary of Investment Information (SII), click here |
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| Overview | E & S ProjectCategorizationand ApplicableStandards | E&S Risks /Impacts andMitigation | Community/Engagements | BCS | E & S ActionPlans | Availabilityof FullDocumentation |
| Overview of IFC's Scope of Review |
IFC’s environmental and social review of the Project has consisted of appraising environmental, technical, social, health and safety information submitted by the Company. This has taken place over an extended period from May 2010 to the present time and is continuing. The major infrastructure elements included and thus considered within IFC’s due diligence were as follows;
Open Pit and Underground Mines, Processing Plant and associated infrastructure including sites for tailings and waste rock disposal, access roads, administration and training buildings, mine equipment maintenance, waste disposal areas, medical centre, fire station, heating plant, fuel storage and warehouse facilities; Water borefield and pipeline from the Gunii Hooloi basin to OT mine site; Water treatment facility and potable water bottling plant; Infrastructure such as airport, roads, power lines, housing (temporary and permanent).
IFC social and environmental specialists first engaged with Project staff in May 2010 and since then have participated in six site appraisal visits and several other meetings. The IFC team (including senior management) visited the site in September 2010, November 2010, April 2011, November 2011, January 2012 and May 2012. Meetings with the project team occurred in London in May 2010, September 2010, January 2011, December 2011 and in Seoul, South Korea in January 2012. Weekly telephone conference calls between all key parties are held. Whilst on site, visits have been paid to all of the project’s key infrastructure elements, Khanbogd town, relocated herders and cultural heritage sites, as well as to OT Head Office in Ulaanbaatar. Meetings have been held with a range of local community members, relocated herders, herders affected by loss of pasture land, government representatives, NGOs and senior representatives of several key local stakeholder groupings. |
| Project Description |
Scope of Project and IFC’s Proposed Investment
The proposed project (the “Project”) is an $12 billion investment to develop a copper and gold deposit at Oyu Tolgoi in the South Gobi desert, Mongolia. The Project owner and developer is a Mongolian company, Oyu Tolgoi LLC (the “Company” or ”OT”) which is owned 66% by Ivanhoe Mines Ltd, a Canadian public company listed on the Toronto Stock Exchange and 34% by Erdenes Oyu Tolgoi LLC, a Mongolian State owned company. As of January 24 2012, Ivanhoe is 51% owned by Rio Tinto.
OT is the world’s largest undeveloped copper-gold deposit and presents significant development potential for Mongolia bringing an expected increase in GDP of 35 % by 2020. The Project is located in the sparsely populated Omnogovi aimag of Mongolia. It is situated 600 km south of Ulaanbaatar, 220 km south-east of the aimag capital Dalanzadgad and 45 km west of the soum capital Khanbogd. A customs post is located 80 km south at Gashuun Sukhait on the border with the People’s Republic of China. OT consists of a series of deposits containing copper, gold, silver and molybdenum. The main Oyu Tolgoi deposits cover an area of 84.96 square kilometres.
IFC is part of a group of lenders that include EDC, EBRD, Standard Chartered, BNP Paribas, US EXIM, Australian EFIC and MIGA. The full value of IFC’s investment remains to be confirmed but A and B loans up to around $ 800 million are under discussion.
The Oyu Tolgoi exploration area was initially explored in the 1980’s by Mongolian and Russian geologists. The exploration rights were then acquired by BHP Billiton who undertook an initial drilling program in 1997/1998 before selling the rights in 2000 to Ivanhoe Mines (Ivanhoe) who began a drilling program. In 2002 Ivanhoe discovered a high grade, very large copper/gold deposit (Hugo North) suitable for underground mining. In October 2006, Ivanhoe entered into a partnership with Rio Tinto International Holdings Limited (Rio Tinto). On October 6, 2009, Ivanhoe Mines and Rio Tinto signed a 30-year, comprehensive Investment Agreement with the government of Mongolia for the development of the project. Rio Tinto is the manager of the Project on behalf of Oyu Tolgoi LLC.
Under the Investment Agreement, the Government of Mongolia has established the Southern Gobi Regional Development Council (SGRDC) which includes representatives of the government, local governance organisations, private sector entities, civil society organisations, potential aid donors and international financial organisations with activities directed towards the southern Gobi region. The SGRDC is mandated to co-ordinate and manage regional and community development issues and impacts associated with the OT Project and other major investments in the southern Gobi region. OT is a member of the SGRDC governing board and supports the organisation’s implementation of social and economic programmes.
Under the provision of the Minerals Law of Mongolia, 20% of mine royalties is transferred to the host aimag (province) government and 10% of mine royalties to the host soum (district) government. Transfer of these royalties during mine operation would provide local governments with significant resources which could be used for regional and community development projects and programmes.
OT supports the development of Mongolian suppliers of goods and services through the implementation of the Mongolia First Initiative. The Project will also support the development of local suppliers and a sustainable economic base through a Local Business and Economic Development (LBED) Programme. Support for local communities and government agencies in community planning and infrastructure development will be provided through OT’s Local and Regional Planning and Infrastructure (LRPI) Programme.
The project’s operational workforce will number approximately 3,500 with a construction workforce peaking at almost 14,800 in December 2011. OT has made substantial commitments with regard to the training and employment so that the operational workforce will be largely Mongolian.
The current reserve model (JORC compliant) gives a 27 year mine life based on a 100,000 tonnes/day (tpd) concentrator throughput. However, studies are underway into the expansion of the mine to 160,000 tpd. Such expansion would be subject to an update to the environmental and social assessment process, especially as regards water availability. The ore will be processed through conventional crushing, grinding and flotation circuits. The concentrate produced will initially be trucked to smelters in China but in future years, it is expected to be transported by the developing Mongolian rail network, expansions to which are under consideration.
The project will be developed into two phases. Initial production will be from an open pit copper-gold mining operation at the Southern Oyu deposit, supplemented within approximately four years by production from underground mining operations at the Hugo North deposit. This initial phase is covered by a full Environmental & Social Impact Assessment (ESIA). The ESIA contains construction phase Environmental & Social Management Plans and a framework for operational phase Environmental and Social Management Plans which will be completed and disclosed prior to IFC disbursing funds. An expansion to the capacity of the concentrator is planned during the 27 year mine life, based on a throughput of 160,000 tpd of ore (from 100,000 tpd). This Project expansion is will require regulatory approval from the Mongolian authorities, including environmental approvals, and will require the identification and permitting of adequate water resources. Updated project documentation will be required by IFC and the other lenders and will be subjected to full consultation and disclosure in line with IFC Policies.
The mine layout and processing methods are described in the ESIA and consist of an open pit (Southern Oyu deposits) and underground mine (Hugo Dummett deposit), a processing plant, a mine tailings storage facility on the eastern part of the Mine Licence Area (MLA) and on-site waste rock dump (WRD) to the south of the open pit. The main ephemeral water course, the Undai, flows across the western part of the MLA and will be diverted to bypass the open pit and WRD. The mine will operate 24 hours per day based on two 12-hour working shifts.
Water Resource Management
OT recognises that the responsible and efficient use of water resources is a key priority for the project, as it is located in a region which has limited surface water resources, low annual rainfall and also limited potable groundwater resources. During the construction phase, limited amounts of water are being obtained from shallow aquifers as well as deeper weathered bedrock aquifers within the MLA.
For mine production, water will be sourced from a significant aquifer system which has been identified and delineated in the Gunii Hooloi basin, which form a substantial groundwater resource. After extensive assessment OT determined that only the Gunii Hooloi aquifer has sufficient reserves to supply the project’s water demand without having a significant impact on the shallow water users or on groundwater-dependent vegetation. This deep aquifer water is brackish to saline and is not consumed by existing water users in the area, with the exception of one herder well in the north eastern extremity of the aquifer area where the deeper aquifers are closer to the surface. If this well is impacted, an alternative supply will be provided to the herder.
OT has been permitted to draw approximately 810 L/s of water from the Gunii Hooloi aquifer. The average water demand during the initial years of operation, with a production rate of 100 000 tpd, is predicted to be 696 L/s prior to any consideration of water recovery from the underground or open pit mines. The borefield and supply pipeline have been designed with a capacity of 900L/sec to provide for seasonal peak demand.
All open water associated with the supply (eg: lagoons) will be covered with a floating cover to prevent evaporation. OT’s ongoing groundwater assessment programme aims to provide a range of future water supply options.
Power Supply
The project is energy intensive with an energy build-up to start-up in excess of 100 MW with capacity for further growth to around 200 MW in the longer term. OT owns and operates a 20 MW diesel power station located within the MLA to provide construction power to the project, which has been expanded to 40 MW. After the project’s long-term power supply has become operational, this station will provide stand-by power. The initial permanent power supply will be via a dedicated 220 kV overhead powerline from China.
The Investment Agreement allows for power to be provided to the project from outside Mongolia, provided that within four years from commencement of commercial it sources all its power requirements from within Mongolia from one or more of the following sources: (a) a coal-fired power plant developed or funded by OT LLC; (b) a coal-fired power plant developed or funded by a third party; or (c) the Mongolian electricity grid. Heating requirements for the Project will be met by on-site coal-fired boilers which will continue to be used throughout the Project life. In line with the above alternatives, during construction of the first phase of the project OT will undertake a study for the design and permitting of a coal-fired power plant within the MLA (three 150 MW units with provision for potential expansion) . An environmental and social impact assessment (ESIA) is being undertaken to meet the requirements of IFC Performance Standards and EBRD Environmental Policy. This will be made publically available in line with the disclosure policies of both IFC and EBRD for a minimum of 60 days prior to the start of any construction.
The Power Plant ESIA is expected in Q4 2012 and will include the following additional elements: (i) An expanded alternatives analysis reviewing the feasibility and cost/benefits of different fuel sources to see whether coal in fact represents the only technical and economically viable source of fuel to meet the project’s requirements; and if coal represents the only feasible alternative, analysis to demonstrate that the technology choice meets appropriate efficiency and emission standards given design constraints (coal characteristics, location, water availability, size of plant). The analysis will also include consideration for using renewable energy as part of the supply solution as a blend for the coal power or as a stand-alone alternative for lighting and/or heating, and (ii) OT is committed to extending the independent review process which is already in place for the main ESIA (on terms of reference to be adjusted in agreement with IFC) to include an expert technical opinion on the above analysis. OT will look for opportunities to promote wider benefits of the proposed power plant, for instance by allowing for a portion of the plant capacity to meet community demand for electric power; and to consider as part of the broader initiatives in support of renewable energy at site and in the region. Power from the OT plant will be provided to local communities replacing the existing power source - most commonly diesel generators. The power from OT’s plant will represent a more efficient form of energy generation, which results in real emissions reductions compared to the alternative. Additionally, there are social benefits in bringing more electricity to the region at a price and reliability that is significantly better than what is currently being provided to local communities. A power line from MLA to Khanbogd is part of this process and its construction has been brought forward in order to supply power in time for winter 2012/2013.
Transport Infrastructure
Most supplies for the project arrive by road or by air. Concentrate production will be transported by road to markets in China. An existing gravel road (some 80 km in length) to the Mongolia-China at the Gashuun Sukhait border crossing is being upgraded to a heavy duty tarred highway. Although independent of the OT Project, the “coal” road (from Tavan Tolgoi coal mine to the border) also runs to the same border crossing. The border crossing is within the Small Gobi Special Protected Area B (SGSPA) (see PS 6 section below) and to reach it, the OT road must cross some 13 km of the western extremity of the protected area. The final alignment in the SGSPA remains to be decided but in the interim OT have constructed a temporary road which runs parallel to the “coal” road in this area.
A temporary dirt runway airstrip has been opened to service the Project. This will be replaced in due course by a permanent regional airport which is fully described in the ESIA. |
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| Identified Applicable Performance Standards** |
PS 1 – Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and working conditions
PS 3 - Resource Efficiency and Pollution Prevention
PS 4 – Community Health, Safety and Security
PS 5 – Land Acquisition and Involuntary Resettlement
PS 6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources
PS 8 – Cultural Heritage |
IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with all Performance Standards with the exception of Performance Standard 7 since there are no Indigenous Peoples as defined by IFC living in the vicinity of the mine and its facilities. The nomadic herders in Mongolia are not considered indigenous as per IFC’s definition under Performance Standard 7.
While OT is preparing all the documentation for the project based on IFC’s 2006 Performance Standards, OT has indicated that it will follow the intent of the updated Performance Standards which came into effect on January 1, 2012. |
| Environmental and Social Categorization and Rationale |
This is a Category A project because it is a very large, complex project with correspondingly significant risks and impacts on the environment and way of life in the Southern Gobi. The key concerns relate to the cross-cutting issues of water resources, biodiversity, community development and ecosystem services.
For all future activities that significantly alter the scope or footprint of the Project, OT will conduct additional environmental and social impact assessments in compliance with Mongolian law, and that are consistent with IFC’s Performance Standards, including full consultation and disclosure. Examples of such additional ESIAs would be for expansion of production, construction of the power plant and for Khanbogd Worker Housing Development (including water supply arrangements) and Khanbogd Industrial Estate. |
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| **Information on IFC's Policy and Performance Standards on Environmental and Social Sustainability can be found at www.ifc.org/sustainability |
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| Main Environmental & Social Risks-Impacts of the Project and Key Mitigation Measures |
| OT is committed to meeting the requirements of the IFC Performance Standards as demonstrated through the integrated ESIA. All requirements are equally applicable to OT staff as well as its contractors. |
| PS 1: Assessment and Management of Environmental and Social Risks and Impacts |
Policy
In addition to meeting the requirements of Mongolian Law and the IFC Performance Standards, the project will comply with Rio Tinto’s applicable standards on environment, occupational health & safety, community health, safety and security. The Rio Tinto Communities Standard includes support to health and/or livelihood initiatives that address community priorities.
These standards are the basis for a project-specific Health, Safety & Environment Policy defining environmental and social objectives and which is operationalized through a Health, Safety & Environment Management System (which reflects the key elements of ISO14001) and a Community Management System.
Identification of Risks and Impacts
The five-volume Oyu Tolgoi integrated ESIA builds upon an extensive body of existing studies and reports prepared since 2002 for project design and development purposes and for Mongolian approvals. A range of project component-specific detailed environmental impact assessments (DEIAs) were prepared for Mongolian approval and permitting purposes under the Environmental Protection Law (1995), the Law on Environmental Impact Assessment (1998 and amended in 2001) and the Minerals Law (2006). These initial EIAs were prepared over a 10 year period from 2002 to date.
Since 2002, OT has collected baseline data for planning and impact assessment: (i) field sampling programmes and surveys, such as surface and groundwater quality, dust measurement, fauna surveys and vegetation surveys; (ii) verbal evidence provided through interviews both with permanent residents and with settlers and herders; (iii) specific monitoring programmes undertaken by OT in accordance with Mongolian requirements and in compliance with international standards; (iv) laboratory assessment; and, (v) secondary data review through public sources of information, mapping and graphics sources.
In 2008-2009 OT commissioned the Omnogovi Social, Economic and Environmental Baseline Survey, the first such study to be undertaken in Mongolia. The survey’s results have provided an excellent database for a number of follow-up initiatives to be taken by both the aimag government and community-based organisations and the Company.
There has also been ongoing work with the OT design engineering team on the design and management of the TSF and the Waste Rock Dump (WRD); an assessment of biodiversity resources potential project impacts and requirements for biodiversity offset implementation conducted by leading Mongolian and international experts in order to meet Rio Tinto’s biodiversity commitment of a ‘net positive impact’ and preparation and implementation of a resettlement action plan to manage the expected economic displacement and to evaluate and document the effectiveness of the resettlement and compensation process for herders whose winter shelters were within 10 km of the OT site and who relocated in 2005.
Management Programmes
Within the management systems outlined above is a detailed Environmental & Social Management Plan (ESMP) for the construction phase and a framework ESMP for the operational phase. The operational phase ESMP will be completed and disclosed prior to IFC disbursing funds.
Taken together with more recent monitoring and survey data and additional social analysis, the integrated ESIA seeks to assess the environmental and social baseline in the project’s ‘area of influence’, and to evaluate the likely environmental and social impacts of the project. Based on the analysis of impacts, it sets out how these will be addressed in planning, construction, operation, decommissioning and closure through various environmental and social management processes (including the ESMPs) implemented by OT LLC.
With respect to biodiversity, IFC’s due diligence of the Project did identify shortcomings in the use of baseline information to inform the routing of the 220 kV high voltage transmission line through the Galbyn Gobi IBA, an area that contains ‘lekking’ (display) and nesting sites of the Houbara Bustard and other birds. Prior to construction, due diligence was thus not sufficient to fully characterize the risks and impacts associated with the siting of the powerline. IFC is working with OT to address these issues. For example, the Project committed to a set of measures to minimize impacts on Houbara Bustards from transmission line stringing (e.g., adoption of an accelerated timeline to complete stringing work prior to the lekking season, use of discrete line pulling points and lekking site identification by a Houbara Bustard surveyor). The Project has also agreed to avoid future construction and maintenance activities in the IBA during the lekking season (with the exception of emergency and time sensitive work).
For each area of impact, the ESIA contains mitigation measures describing the steps and actions to be taken, addressing project phases through construction to operation, decommissioning and closure. The dynamic nature of the project is resulting in the need for additional assessments and the process for undertaking these is covered by OT’s Management of Change Procedures. Such assessments cover the MLA to Khanbogd power line and the road diversion in the SGSPA border area.
Cumulative impacts assessment has considered water, airshed, biodiversity and cultural heritage. Although there is currently no other industry within about 200 km of OT, the assessment of cumulative impacts is a critical part of the ESIA due to concerns about the cross-cutting issues associated with water and the potential for other mineral discoveries that may need to use the same natural resources.
Organisational Capacity and Competency
Responsibilities for the Construction Phase Management System have been integrated into procedures, and extend to all personnel, contractors, subcontractors, service providers and activities at OT.
The Executive Vice President – Construction and the Chief Operating Officer retain overall accountability for the adequacy, maintenance, implementation and certification of the Environmental Management System (EMS). The OT Environment Department ensures that the requirements of the EMS are met in all activities. However, the Principal Environmental Advisor has been delegated accountability for:
(i) Ensuring that the Management System has been established, implemented and maintained in accordance with the requirements of ISO14001; and
(ii) Reporting to senior management on the performance of the Environmental Management System for review, including recommendations for improvement.
In addition two other key posts have been established – General Manager Environmental Health & Safety and Principal Biodiversity Advisor. All staff and contractors maintain general responsibilities under the EMS. These include ensuring that the OT Health, Safety and Environment Policies are adhered to.
The OT Environment Department assists where technical skills, know-how and inputs to assist or implement the EMS are required. Contractor managers are responsible for ensuring contractors understand their responsibilities under the EMS.
Responsibilities for social impact management have been integrated into the Project procedures, and extend to all personnel, parties and activities at OT. The Social Management System (SMS) is aligned to the Rio Tinto Communities Approach as outlined in the Rio Tinto Communities Standard.
The Vice President – Regional Development & Communities retains overall accountability for the adequacy, maintenance, implementation and certification of the SMS. However, the Manager – Community Relations has been delegated accountability for:
(i) Ensuring that the SMS has been established, implemented and maintained in accordance with the requirements of the Rio Tinto Communities Standard; and
(ii) Reporting to senior management on the performance of the SMS for review, including recommendations for improvement.
Responsible parties for the implementation of specific mitigation and monitoring controls are defined within each Construction Phase Management Plan.
OT has also developed procedures that define contractor health, safety, environmental and social requirements and management controls. These procedures set out the requirements and the nature of the management control relationship of OT towards its contractor(s) and provide guidance to contractors on the identification and management of HSE risks and impacts.
The OT Project Construction Phase is led by a Project Management Team (PMT) which is comprised of Fluor as the Project Management Contractor (PMC) and key members of OT management. The key contractor for underground works is Redpath. The PMT reports to the OT Project Director. The PMC Project Director and his team coordinate project execution. In practice, the OT Environment Department has assumed control and oversight of environmental management issues and works in coordination with the PMT HSE function to supervise the activities of contractors both on-site and off-site.
The Project environment, health, safety and security personnel in place during the construction-phase are approximately as follows (i) OT Environment Department – 48 staff; (ii) OT Communities and Social Performance Department – 46 staff; (iii) OT Health and Safety Department – 12 staff; (iv) Fluor HSES Department – 70 staff; and (v) Redpath Safety Department – approximately 20 staff and underground volunteers.
Emergency Preparedness and Response
A project-wide Emergency Response Plan has been developed and implemented. As part of the Plan, specific procedures are in place to address: (i) natural disasters; (ii) pandemics; (iii) medical emergencies; (iv) fires and explosions; (v) traffic incidents; (vi) civil unrest; (vii) bomb warnings; and (viii) environmental incidents including release of fuels and hazardous substances. This is further described in the section on PS4.
Monitoring & Evaluation
In addition, in September 2010, the Lenders contracted an Independent Environmental and Social Consultant (IESC) to undertake a third party review of the ESIA against Senior Lenders’ requirements. As part of this assessment, audits of project construction have been undertaken.
Extensive internal and external monitoring of EHS parameters is already underway (eg: independent external construction EHS auditing process). An Environmental Monitoring Plan has been developed as a part of the ESIA and covers the three phases of development, namely construction, operation and decommissioning/closure. Periodic external monitoring post IFC-investment conducted by qualified independent consultants will be undertaken but has yet to be finalized. The capacity for surface water monitoring, institutional monitoring capacity and participatory monitoring by the government is expected to be improved through working with OT.
Stakeholder Engagement
OT’s comprehensive stakeholder engagement activities are guided by the Stakeholder Engagement Plan (SEP), which has been developed to manage the many aspects of stakeholder engagement by the company and it is publicly available from OT’s web-site. The SEP and related issues of external communications and grievance mechanisms are further discussed in the Stakeholder Engagement section below. |
| PS 2: Labor and Working Conditions |
The project has generated significant employment opportunities for the region with a construction workforce peaking at about 14,800. The permanent workforce will be 3,500. OT has developed a Labour Management Plan detailing the methods, measures, and procedures to (i) achieve compliance with Mongolian labour law and international standards; (ii) achieve local and national employment targets; and (iii) ensure that recruitment, employment and training are carried out in a fair and transparent manner, consistent with good international industry practice.
Discrimination in the workplace based on nationality, race, sex, social origin or status, wealth, religion, or ideology is strictly prohibited, according to Mongolian regulations, although women are prevented from undertaking certain high risk forms of manual work as set out in separate regulations. Workers rights are also protected by means of collective agreements which may be concluded within professions or economic sectors and at the region, soum, aimag, or city level. Collective agreements also identify a range of the social benefits to which workers are entitled. All such collective agreements must be registered with the relevant legislative body. The Labour arbitration court settles collective labour disputes and a court or commission settles escalated individual labour disputes not resolved in the workplace. Mongolia has been a member of the International Labour Organisation (ILO) since 1968 and the country ratified the ‘core’ ILO Conventions, i.e. the eight conventions that have been identified by the ILO's Governing Body as fundamental to human rights at work.
As part of the Investment Agreement, the following commitments have been made: (i) OT will use its best endeavours to ensure that not less than 60% of the total construction workforce will be Mongolian nationals; (ii) in direct mining operations, OT must ensure that not less than 75% of mining contractors are Mongolian nationals; (iii) within 5 years of the commencement of production, OT will aim to ensure that no fewer than 50% of its employed engineers are Mongolian nationals and, within 10 years of the commencement of production, not less than 70% of engineers employed by the Project are Mongolian nationals; (iv) OT is organising training of its employees to upgrade employees’ skills and provide further practical experience; OT upgrades selected employees’ professional qualifications by enrolling them in studies inside or outside Mongolia on a contractual basis; and (v) OT has established and maintains health and safety systems and procedures at OT that comply with all applicable health and safety laws and regulations in Mongolia, while complying with all requirements under the Labour Law, including in respect of collective bargaining.
The Rio Tinto HSEQ management system standard adopted by OT was released in 2007 and replaced individual management standards for health and safety. Rio Tinto requires all its businesses and sites to implement an integrated management system that conforms to this standard.
The standard sets out the minimum requirements to address the management of health and safety and the environment, both across business activities as well as products. The standard’s requirements are mandatory and their implementation will be verified during HSEQ business conformance audits.
The HSE MS provides a structured method to identify, assess and control HSE risks. The system is designed along the principles of Plan, Do, Check and Review as a continual improvement cycle.
The management system standard is divided into seventeen elements. Each element sets out to achieve a specific objective that enables a business or site to best identify and manage its various HSEQ threats and opportunities. Many of the elements are inter-related.
Every element includes a number of clauses, which spell out the minimum requirements to meet each objective. Some of the elements refer to set processes that must be followed, and these are defined in additional documents called “work cycles”. All elements are supported by individual Guidance notes and other supporting references.
The Health & Safety system implemented by OT meets good international industry practice and all relevant IFC health and safety guidelines.
Recruitment and hiring
OT has introduced; (i) a hiring policy with employment priority for locals, thus maximizing socio-economic benefits in communities closest to operations; (ii) workers accommodation policies intended to minimize population influx and other potential workforce negative impacts; and (iii) specific anti-discrimination policies and grievance management procedures. These policies are set out in the comprehensive Hiring Policy and Procedure (2010) developed by the Human Resources Department.
The Company has adopted a policy that states (i) OT and Project Contractors will recruit from designated recruitment locations/offices and not via informal requests, approaches or solicitations from community members, relatives of the currently employed personnel and other job seekers, either in the camps or at work sites; (ii) appropriate information signs and notices will be placed at work sites, offices, camps, and predominantly on the OT website. Job advertisements will indicate the designated locations where formal hiring takes place; (iii) all recruitment information distributed will clearly state that individuals appearing at the job site or at any other non-official recruitment venue elsewhere that have not been previously screened and approved by OT will not be hired; (iv) lists of “Preferred Individuals” will not be accepted; and (v) OT does not employ or work with any informal mediation individuals who claim to recruit the Project workforce. There is no fee or payment involved when an application for a job with OT is made.
Terms of employment, compensation and contracts
Contracts of employment are in writing and may be for a fixed or indefinite term. All Employees are provided with an employment agreement, which as a minimum addresses job title, job duties, basic salary and labour conditions. Working hours and pay are set in compliance with the Mongolian Labour Law. All relevant attendance and leave requirements are set out in individual employment contracts and other relevant HR policies and procedures.
The salary scale for all employees is reviewed during annual salary benchmarking surveys. An independent company is hired to conduct the surveys in the Mongolian market. OT determines salary ranges for roles of similar responsibility level determined on the following factors: (i) inflation and cost-of-living adjustments; (ii) market supply and demand conditions; and (iii) salary terms and conditions and benefit packages offered by competitors and other industries within Mongolia.
All employee terminations are performed strictly according to Mongolian Labour Law. OT has developed procedures to guide the retrenchment of employees including a formal Retrenchment Plan for consultation with workers prior to the need for any retrenchment.
Worker Accommodation
During the construction phase, workers will live in either purpose-built camp accommodation on site or in Khanbogd soum and travel to work on a daily bus-in/bus-out basis. The OT Camps are managed in accordance with relevant Mongolian standards and the guidance contained in the IFC/EBRD Guidance Note “Workers Accommodation. Processes and Standards.” OT has established a Camp Policy and Code of Behaviour for all employees to maintain good employee and camp relations, and to guide all staff with expectations of professional behaviour at the Project.
Oyu Tolgoi is still developing its operational-phase worker housing plans and how the issues of employee housing and supplier location will be handled. The current model based on predominantly FIFO arrangements is being reviewed to consider a model which considers a balance between some FIFO, and predominantly local (Khanbogd-based) family housing. In order to avoid a sudden influx to Khanbogd and the consequent: (i) overburdening of existing municipal infrastructure, services and facilities; and (ii) risk of social problems or conflict between native and new populations Oyu Tolgoi has adopted a number of principles to guide its actions and to provide reassurance to stakeholders that it will undertake this process and implement its worker housing and other influx management activities in a responsible manner consistent with the IA, Rio Tinto standards and GIIP.. Further details on the worker housing policy and its role in managing potential adverse impacts of population influx are provided in an Influx Management Plan.
Unions, Workers Representation and Collective Bargaining
The Project endeavours to work in good faith with trade unions and any other bodies that employees collectively choose for their formal representation, within the appropriate Mongolian legal framework. Organised workforces are common in Mongolia and an Oyu Tolgoi LLC Union of Mining Employees formed in August 2010. The right to negotiate collectively at different levels (including sector and enterprise) is recognized under Mongolian Labour Law and is respected by OT. In collective agreement negotiations, workers may be represented by a trade union or, by representatives elected from a meeting of employees. If, there are multiple trade unions that are relevant to collective agreement negotiations, the unions will participate in numbers relative to the proportion of workers that they represent however are required to form one body to negotiate with the employer.
A collective agreement (which provides for more favourable conditions than those set out in the Labour Code) has been negotiated with the OT Trade Union, which represents OT employees. This collective agreement is re-negotiated and renewed annually.
Management of Direct Contractors
OT will ensure that contractors and sub-contractors working at the Project sites will comply with all requirements described above. OT will also ensure that contractual provisions reflect these requirements.
The construction workforce has been sourced primarily from within Mongolia in keeping with the agreed targets. However, there are three major Chinese sub-contractors whose workers are recruited, mobilised and demobilised in China. During working rotational periods, all contractor workers remain on-site in a separate camp and are not be permitted off-site for recreational purposes during working periods.
Labour and working conditions for contractors and their adherence to the relevant policies and requirements is monitored by OT. The compliance verification process involves the review of recruitment, hiring and employment practices, as well as working conditions and training for all key contractors. Reviews assess contractors’ performance against OT procedures, Mongolian Law, and international standards. Reviews are conducted directly by the OT HR Department or by authorized government inspection agencies. Reviews are undertaken periodically during the construction programme.
OT has established the Oyu Tolgoi Procurement Principles and Policies (2012) which sets out a range of expectations and commitments, relating to how business will be conducted between OT and its suppliers. All suppliers to the Project are expected to comply with the Mongolian labour standards, with the relevant standards of the ILO and with applicable human rights standards.
Training
OT has designed a Training Strategy and Plan to enhance the professional development of Mongolian staff and to ensure that the Project has an appropriately-trained and qualified workforce to meet the changing technical requirements of the Project as it progresses through construction, to open pit mining and underground mining.
OT has also committed to job-readiness and other bridging training for local workers. This training has been developed and is being implemented by the Oyu Tolgoi Community Relations
Department. OT is also establishing two new TVET colleges, one new training facility and is contributing to the refurbishment of four existing TVET colleges. Planning work for both new colleges is well advanced and construction on one in Nalaikh started in April 2012. OT is also developing various training initiatives for local businesses, entrepreneurs, affected herders.
This training forms part of Oyu Tolgoi’s LBED Programme.
Grievances
OT has established an employee grievance process (the “Speak Out” programme). OT has also established a Fair Treatment Policy, which provides employees with a formal process for raising concerns to management, covering any issues that are work related, that affect an employee, or that an employee deems unfair. |
| PS 3: Resource Efficiency and Pollution Prevention |
Ambient Conditions
The project area is characterised by a dry, continental interior climate with extremes of temperature from high summer temperatures to very cold winter temperatures. Spring months are characterised by frequent dust storms which can adversely impact mining-related operations and disrupt air transport. Rainfall is under 100 mm annually with a significant excess of evaporation over rainfall.
The Project is located in a remote area with no existing industrial facilities in the vicinity of the MLA, thus baseline studies show that air quality in the project area is good except for high natural dust concentrations in the air in the Gobi region, particularly associated with seasonal dust storms. Dust concentrations are generally higher in areas of overgrazing and in heavily disturbed areas such as along roads. Dust plumes are clearly visible along many of the highways.
No permanent settlements exist within a 10 km radius of the mine site. The nearest soum centre, Khanbogd, is located approximately 45 km to the north-east. Hence there are no sensitive community receptors close to the mining and construction operations in the MLA. However, wildlife and herders are potential receptors of noise associated with heavy vehicle traffic on the Oyu Tolgoi-Gashuun Sukhait road and the construction of the Gunii Hooloi water supply pipeline. Baseline noise surveys show that noise levels are varied but within IFC guideline limits and are dependent on irregular localised noise sources such as road traffic.
Vibration monitoring shows that levels decrease with distance from the OT site and that current blasting has no measurable effect outside the MLA boundary.
Pollution Prevention and Resource Conservation
Water is one of the most critical aspects of the project in relation to environmental and social impacts and management. OT has considered water in a strategic regional context, examining its role in cross cutting ecosystem services affecting local communities and herders. OT is committed to working with the local communities for the life of the operation to ensure that they are not negatively impacted by the project’s use of water and that improved water management practices are applied by all users. Over grazing in the area is occurring and thus water resource management must carefully consider influx to the region which would place additional burdens on the carrying capacity of the land. Provision of additional water resources for herders could worsen the over-grazing conditions but the Project will ensure that existing herders are not impacted.
Groundwater occurrence in the project area can be summarised as follows (i) Deep basins (up to 400 m depth) filled with clastic sediments containing large volumes of generally brackish groundwater with minimal recharge. These water sources are not generally used and to date only limited connectivity to upper aquifers systems has been identified in one small area (one herder well). Less than 20% of the available water resources will be consumed, leaving water for other users in the future. OT has undertaken hydrogeological evaluations of the deep basins around the project, including an assessment of the water resource, its sustainability and the potential for impact on other groundwater users, fauna and flora. Intermediate basins (~100m depth) at the edge of the granite massifs filled with coarse-grained sediments and recharged with water flowing off the massif. One of these basins adjacent to Khanbogd soum centre is intended to be exploited for the township’s water supply. Hydrogeological assessments are continuing. (ii) Small amounts of water present in the upper sections of the bedrock (at various depths, but 10-50 m depth in the vicinity of the MLA) present in weathered and fractured bedrock. This groundwater has been exploited for mine construction purposes and, as construction is completed, OT will switch over to the Gunii Hooloi supply. (iii) Shallow groundwater (typically 2-5 m below the ground surface) present in the alluvium within the stream beds in the project area. This is typically fresh water, which is recharged annually, and is the principal sources of groundwater used by herders and wildlife, and also supports groundwater-dependent vegetation.
OT has sought to mitigate the impact of its operations through appropriate design and planning. The network of wells installed into the deep aquifers of the Gunii Hooloi basin, which extends some 75 km northeast of the MLA, have been designed to minimise the drawdown in the basin. The layout of the wells has been derived from a groundwater model for the Gunii Hooloi basin. This model has been developed to enable the water resource and its interaction with the surrounding formation to be managed, and is subject to on-going improvement and evaluation.
Khanbogd soum centre is currently reliant for its water supply on a few shallow groundwater wells, with further groundwater exploitation limited by a lack of understanding of the local aquifers. To address these water supply issues OT has completed a geophysical appraisal of the local aquifers and is undertaking hydrogeological investigation and detailed assessment of a deeper water resource which is located outside the soum centre. The Asian Development Bank (ADB) is planning to finance the development of this water resource to provide a piped water supply into the soum centre.
Surface water in the project area of influence is limited (largely due to the low annual rainfall). Other than the intermittent summer flows in the watercourses, it is restricted to a few springs in the major watercourses and around the periphery of the Khanbogd Massif.
Although surface water is limited, the most significant ephemeral watercourses within the project area of influence is the Undai. It is called a river locally but is dry most of the year. The Southern Oyu pit excavation will extend into the Undai watercourse and the waste rock dump is planned to lie across the course of the Undai with the loss of the Bor Ovoo spring and associated impacts on both wildlife and herders. To avoid any significant impact on the surface and groundwater flow in the Undai, and the herders and fauna and flora reliant on this flow downstream of the MLA, the Undai will be diverted around the operations, and a replacement spring installed in the Undai watercourse downstream of the project fence line which will be accessible for herders and wildlife.
This diversion of the Undai, and the creation of replacement spring, will be constructed in accordance with the Government-agreed engineering design requirements. The design of these and the location of the spring have also been discussed with the herders, and are designed to provide a sustainable permanent solution which will not require future maintenance, and will protect downstream water users from disrupted water flow.
OT recognises that water in the southern Gobi region is a very valuable and finite resource and is focused on minimising water use throughout all aspects of the project. To this end water recycling forms a key part of this plan, as follows (i) 84% of production water will be recycled for use on the plant site with the remaining 16% of additional water required for the project being supplied from the ground water reserves in Gunii Hooloi, (ii) 80% of drinking and public use water will be treated and recycled into the production water and (iii) 50% of water used for cleaning machinery and equipment will be re-used.
Given that some hydrological uncertainties remain, OT is monitoring the groundwater level in the vicinity of herder wells and springs through a network of dedicated shallow bores located adjacent to the herder wells. The results are being used to develop a robust dataset of baseline water levels, which enable OT and the herders to appreciate the seasonal variations in water levels in the herder wells and the river bed aquifers. The monitoring by OT is complemented by the independent participatory groundwater monitoring with the herders which is supported by the training and equipment provided by OT.
Based on the monitoring data collected by OT to date, the water levels across the project area of influence appear to be stable with only small fluctuations recorded. These small fluctuations are considered to reflect the limited use of the aquifers by the herders and the annual recharge of these aquifers by the summer rain events. OT fully understands and appreciates the critical importance of water to the on-going development of the southern Gobi region. It is committed to playing a leadership role together with other public and private sector partners to develop a model of water use for the region that is as efficient and as sustainable as possible.
Waste
Flotation tailings will be thickened to 64% solids before pumping to the tailings storage facility (TSF). Water from the TSF will be recycled back to the processing plant. The selected TSF site is adjacent to the open pit for operational reasons and to maximise the use of suitable land within the MLA that will not compromise future mining activities. The TSF will be lined with clay to minimise any downward seepage into soils and groundwater.
Waste rock will only be produced from the open pit as rock extracted from the underground operations is almost entirely ore, due to the mining method which creates little waste. The Waste Rock Dump (WRD) is located within the MLA, adjacent to the open pit to reduce haulage distances. It will form a semi-circular structure around the southern part of the open pit and reach an ultimate height of 90 m above the surrounding land surface.
Non-hazardous non-mining wastes are currently sent to a temporary waste management facility. A new permanent fully engineered facility is being constructed after which the temporary facility will be rehabilitated.
Hazardous Materials
The ore will pass through a grinding and floatation circuit typical of porphyry copper processing with no unusual features or equipment. Reagents required for ore processing (eg: frothers and settling agents) will be managed according to good international industry practice and will be obtained from international suppliers.
Other hazardous materials are fuels and lubricants which will also be managed in accordance with good international industry practice with recycling of used oils.
Air Quality & Greenhouse Gas Emissions
The baseline studies show that air quality in the Oyu Tolgoi area is unaffected by industrial emissions. However, there are sometimes very high natural dust concentrations in the air in the southern Gobi region, particularly associated with seasonal dust storms. Dust concentrations are generally higher in areas of overgrazing, vehicle traffic and mineral exploration drilling and at heavily disturbed areas such as roads, exploration camp and drilling sites. Dust plumes are clearly visible along many of the highways accessed by mining-related vehicles, and are also very apparent along the existing “coal road” to the Chinese border.
The long-term climate change trend for temperature is a steady increase which is not expected to have any significant effects on the project. The same trend predicts a marginal decrease in rainfall which is not expected to affect project operations as the principal source of water is the Gunii Hooloi deep aquifer. Conditions for herder wells (which exploit the shallow aquifer) could be affected and OT LLC has designed a programme of well monitoring to assess changes over time.
Construction activities generate dust through the operation of construction traffic, cut and fill operations, construction and use of access roads and the preparation of camps and other infrastructure. Construction phase impacts are expected to be minor and transient; a potential adverse impact is in relation to dust nuisance to herders and vegetation along the Oyu Tolgoi to Gashuun Sukhait road prior to surface sealing. These impacts are short term and OT LLC has offered relocation to the closest herders. International good practice measures will be used to minimise any adverse impacts, should they arise. The operation of mobile mining equipment, process heaters, power generation and the ore processing plant will lead to the generation of gaseous emissions to the atmosphere.
A dispersion modelling assessment has been undertaken in order to predict the potential impacts to air quality associated with the operations. Although the modelling predicts that levels of some pollutants could at certain times exceed ambient air quality standards, the remoteness of the area and lack of nearby residents mean that project activities will not adversely impact permanent herder winter shelters which are located at least 10 km from the centre of the MLA. The arid climate and high evaporation levels will mean that dust treatment will be required for roads, the TSF and, potentially, other project features.
Most recently, during the preparation of the ESIA in 2010-12, additional activities have been undertaken, including: re-evaluation of dust modelling results for the Tailings Storage Facility (TSF); re-running the air dispersion model to take account of the current plant design and layout; modelling of potential climate change scenarios and impacts on the Project. OT is also preparing a greenhouse gas inventory but this is predicted to be below the level requiring reporting under PS3. |
| PS 4: Community Health, Safety and Security |
| Please refer to PS4.txt under Availability of full documentation tab |
| PS 5: Land Acquisition and Involuntary Resettlement |
| Please refer to PS5.txt under Availability of full documentation tab |
| PS 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources |
| Please refer to PS6.txt under Availability of full documentation tab |
| PS 8: Cultural Heritage |
OT has conducted a comprehensive assessment of project impacts on cultural heritage, including archaeological and paleontological surveys, ethnographic assessment and extensive stakeholder consultations.
The area is rich in archaeological and paleontological heritage, including both physical artifacts, ritual sites, places of cultural or historical interest, fossil sites and protected landscapes (‘tangible’ heritage) together with rituals, ceremonies, folklore, music, handicrafts, and traditional knowledge (‘intangible’ heritage).
Ritual sites include ovoos, stone or wooden structures built on historically, culturally or religiously significant places or a particular mountain or hill that is located separately from other mountain ranges, and stupas – religious monuments made of bricks, mud, wood, and other materials. Ovoo rituals also represent a very important part of the traditional spiritual practice that links local communities to the land.
Intangible cultural heritage in the region include rituals and worship performed in local monasteries, such as daily Tsogchin chanting, Gombo sutra, meditation on the 25th of every lunar calendar month, and the 15-day meditation on the Lunar new year. In addition, local crafts and traditions identified as intangible cultural heritage include: (i) metal smithing; (ii) Urtiin duu singing; (iii) Tradition of Tsulkhir and Bajuun flour making; (iv) animal brands used by herding families as symbolic inheritance from their ancestors; (v) a tradition of making Mongolian ger and ger facilities; (vi) deity images and ritual worship objects inherited from ancestors; (vii) traditional food and diet adhered to by herding families; (viii) kin relationships and the knowledge of kinship affiliation; (ix) the game of Building Stone Gers; (x) the game of Ankle Bone Shooting (Shagai); (xi) traditional taboos of Gobi people inherited within herding families; and (xii) local Buddhist and shamanist practices.
An Ethnographic Assessment has been conducted to identify and record sites of spiritual significance in the areas of the OT - Gashuun Sukhait road, transmission line pylons, water pipeline, and the new airport. This assessment was carried out by the Institute of History (Department of Ethnology and Anthropology) of the Mongolian Academy of Sciences.
The Company has developed measures for minimizing and mitigating impacts and these are presented in the OT Cultural Heritage Management Plan, which is included in the ESIA.
The OT Code of Behaviour includes cultural heritage sensitivities. The observance of the Code of Conduct is ensured through regular refresher training, control by responsible supervisors and application of the prescribed disciplinary measures in case of breaches.
Cultural Heritage Programme (CHP)
In order to minimize and mitigate the impacts on tangible and intangible cultural heritage, OT has developed a Cultural Heritage Programme (CHP) as part of its CHMS. The CHP involves three phases, the first of which was conducted between July 2010 and March 2011. The CHP is considered a living document that will continue to be updated. The main aims of Phase I were: (i) to prepare an inventory of cultural heritage resources; (ii) to understand potential changes to these resources through the OT Project; (iii) to conduct a risk assessment of threats and risks to these resources; and (iv) to prepare documentation and literature on the resources for the benefit of the Mongolian people. Research for Phase I investigations was conducted in Khanbogd, Manlai, Bayan-Ovoo and Dalanzadgad soums. Phase II of the CHP (April to July 2011) defined a long-term strategy for the protection of tangible and intangible cultural heritage resources of the Omnogovi aimag.
Consultations and stakeholder meetings have been the integral elements of the CHP. A series of stakeholder meetings held in 2010 enabled the establishment of an Advisory Board to counsel the Project on the cultural heritage concerns of key stakeholders. The Board comprises 15 members of the local community, interested parties, archaeological organizations and a representative of OT.
As part of the CHP, OT has also supported the restoration of Demchig Monastery which has since become a focus point for visitors as well as locals. Support for traditional crafts, museums and cultural festivals have been also provided as part of CHP.
Archaeological and Paleontological Heritage and Chance Find procedure
For all areas where ground disturbance activities will take place, including the open pit and other excavations, there is a chance finds procedure developed in consultation with Rio Tinto’s cultural heritage advisors. The procedure is designed to ensure the safety, integrity and proper handling of any previously undocumented objects of cultural or historical significance, including archaeological assets and paleontological features. Observance of the procedure is mandatory for all OT employees and contractors.
To date, the principal mitigation measure for archaeological impacts has been a number of rescue excavations undertaken jointly with Ulaanbaatar State University, Mongolian National University, Mongolian State University of Education, Archaeology Department of Mongolian Academy of Science (MASIA), Ulaanbaatar. The principal mitigation measure for paleontological impacts has been on-site monitoring by paleontologists during earthmoving activities in sensitive areas, and a number of salvage excavations undertaken by the Paleontology Centre, Mongolian Academy of Science, Ulaanbaatar. |
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| Client's Stakeholder Engagement |
OT’s comprehensive stakeholder engagement activities are guided by the Stakeholder Engagement Plan (SEP), which has been developed to manage the many aspects of stakeholder engagement by the company and it is publicly available from OT’s web-site.
OT’s stakeholder engagement builds upon Rio Tinto’s “Communities Standard” described in Performance Standard 5 above . It specifically deals with the principles of consultation and engagement and is closely aligned with the IFC Performance Standards and EHS Guidelines and EBRD’s Environmental and Social Policy.
Multiple stakeholder engagement and public consultations activities have been undertaken as part of the ESIA. Stakeholder identification was conducted in 2008 in a comprehensive workshop with community relations staff and other OT departments, including Environment, Communications, Human Resources and Procurement. A comprehensive list of stakeholders was developed from this process and is continually being updated. The stakeholder mapping process has been used to define the appropriate level and types of engagement required for the different affected parties.
A number of methods of stakeholder engagement are used, including: (i) meetings with Government Representatives such as collaboration with the SGRDC; (ii) household visits and consultations; (iii) surveys and interviews; (iv) focus group discussions and workshops; (v) participation in local community meetings (Bagh Khural); (vi) participation in public events, education and outreach; (vii) site tours for local community members.
OT has developed a schedule and Action Plan based on results from the assessment of the stakeholder engagement programme to date. The action plan identifies target groups and the specific range of engagement activities required for each stakeholders group. The Action Plan is included in the SEP.
In addition, OT has developed a specific community consultation plan to ensure effective engagement with local communities prior to, during, and after the Undai river diversion (Undai River Diversion Plan). The plan contains the methods and recommendations for ongoing engagement with local herders living near the Undai river, as well as the wider herding community in Khanbogd soum, government authorities, and other stakeholders who may be affected by or interested in this specific component of the Project. The Undai River Diversion Plan is included in the SEP.
Community Development and Community Agreements
Community development projects have been in place since 2004 at OT. The five core programmes for health, education, local business development, cultural heritage and herder support have been central to community consultation and engagement efforts conducted by the Project during exploration and early works construction. As a result, numerous local communities, NGOs and other partners have been engaged with the Project.
OT has actively sought to develop long-term community development initiatives within its target soums. A series of regional community development programmes have been launched including: (i) Herder Livelihood Improvement Program; (ii) Local Business & Economic Development Program; (iii) Cultural Heritage Programme (CHP); (iv) Community Health, Safety, and Security Programme (CHSSP); (v) Participatory Environmental Monitoring (PEM) Programme by stakeholders for the Project; (vi) Local Supplier Development Program, with programmes started in Khanbogd, Dalanzadgad, and Ulaanbaatar; and (vii) Local and Regional Planning and Infrastructure (LRPI) Program.
OT began development of Community Agreements with local communities and soum/aimag authorities in September 2010, in accordance with Article 42 of the Minerals Law and with the Rio Tinto Communities Standards.
OT has engaged local NGOs and specialist “community visioning” consultants to facilitate the development of a clear and broad-based community vision for each of the four target soums around the Project. This exercise is also intended to result in the development of strategic community development plans and programmes for each soum.
Visioning exercises have been completed with all target communities and a range of government and non-government stakeholders. A Steering Committee was established to guide the process and identify participants, and facilitate the future agreements. This included aimag and soum authorities, herders and elders representatives, local women’s and youth NGOs, business representatives and OT. It is expected that formal agreements will be finalized with communities before production begins.
Grievances procedure
OT has implemented a comprehensive Community Grievance Procedure, described in the SEP.
As part of the community grievance process, grievances are required to be categorized, so that the type of complaint being reported can be readily identified. Complainants/Aggrieved Persons or OT may complete the classification of grievances. When public grievances are reported, the Community Grievance Procedure (a six-step process) shall be invoked to ensure containment and resolution of grievances. Detailed actions required for each step are outlined in the procedure, together with the key responsibilities for each step in the community grievance process. The grievance process and a summary of grievances will be report to the community through the Khanbogd soum government and Citizen’s Khural at regular intervals, to be determined by the Mediation Committee
The Community Relations department is responsible for ensuring that community grievances are adequately managed and resolved, including coordinating the receipt of and response to all complaints / grievances. Relevant OT managers actively participate in and are responsible for helping to resolve complaints that relate to their technical areas, e.g. environment, engineering, construction etc. All contractors and relevant suppliers are required to follow and implement the Community Grievance Procedure.
Consultation and Disclosure of the ESIA
OT has a dedicated website (http://www.ot.mn) which is in both Mongolian and English. The website contains background information about the Project, policy documents, as well as current details about activities being undertaken and key Project milestones. A range of environmental and social reports are disclosed on this website including a copy of the ESIA and SEP.
OT prepares a monthly info sheet in Mongolian for local communities. The info sheet has been in place since January 2009 and is used to keep local people regularly up to date with Project related activities and issues.
Print media, television and radio are used by OT to provide updated information about the Project. Specific articles have been published following key milestones in the Project development process.
Disclosure and consultation on the consolidated ESIA and Management Plans will be undertaken to ensure that the affected parties are fully aware of the environmental and social impacts that may affect them and OT’s commitments towards minimizing and managing such impacts.
General activities will include the following: (i) the ESIA (including a Non technical Summary) and Management Plans will be released by OT on its website, and will also be available in OT branch offices in the south Gobi, other public locations in the south Gobi (see below), and at the Oyu Tolgoi Information Center in Ulaanbaatar; (ii) disclosure of the ESIA documentation will be in Mongolian and English, as relevant to the location where it is being disclosed; (iii) Fact Sheets on key ESIA themes/topics and commitments by OT to manage impacts will be prepared in Mongolian for local disclosure. Fact Sheets will include information in a culturally- appropriate format for residents in Khanbogd, Manlai, Bayan Ovoo and Dalanzadgad soums; (iv) OT will advise people e.g. through the website, advertorials, in newsletters, one-on-one meetings, advisory groups and the media etc, on how they can access a copy of the updated ESIA documentation, as well as the timetable and process for making comments on the ESIA; (v) OT will engage with local communities and relevant local, regional and national authorities on the content of the ESIA / Management Plans to discuss key social and environmental impacts and mitigation measures that may affect them; (vi) OT will provide appropriate mechanisms for stakeholders to provide feedback on the ESIA documentation, including through a response mechanism on the OT website, through comment boxes at branch offices in the Project area and through regular contact with community relations staff as part of routine consultation activities; and (vii) lenders will provide project information and website links to the OT website in accordance with their own disclosure policies. |
| Local Access of Project Documentation |
The key documents will also be available for review at public locations throughout Omnogovi aimag and in Ulaanbaatar, including:
OT LLC offices in Khanbogd soum centre, Manlai, Bayan-Ovoo, and Dalanzadgad
OT LLC website http://www.ot.mn/en/about-us/environmental-social-impact-assessment
Additional locations in Omnogovi:
Khanbogd: Ceremonial House (Yosloliin Urguu)
Manlai: Information Hall, Governor’s Office
Bayan-Ovoo: Secondary School
Dalanzadgad: Central Library and the Citizen’s Hall
In Ulaanbaatar: Oyu Tolgoi Information Centre.
Comments or questions can be submitted by email: mailto:OTESIA@ot.mn or by using drop-boxes (forms and drop boxes can be found at the locations listed above.) |
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IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring them to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities.
In addition, Affected Communities have unrestricted access to the Compliance Advisor/Ombudsman (CAO), the independent accountability mechanism for IFC. The CAO is mandated to address complaints from people affected by IFC-supported business activities in a manner that is fair, objective, and constructive, with the goal of improving environmental and social project outcomes and fostering greater public accountability of IFC.
Independent of IFC management and reporting directly to the World Bank Group President, the CAO works to resolve complaints using a flexible, problem-solving approach through its dispute resolution arm and oversees project-level audits of IFC’s environmental and social performance through its compliance arm.
Complaints may relate to any aspect of IFC-supported business activities that is within the mandate of the CAO. They can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC-financed business activity. Complaints can be submitted to the CAO in writing to the address below:
Compliance Advisor/Ombudsman
International Finance Corporation
2121 Pennsylvania Avenue NW
Room F11K-232
Washington, DC 20433 USA
Tel: 1 202 458 1973
Fax: 1 202 522 7400
E-mail: cao-compliance@ifc.org
The CAO receives and addresses complaints in accordance with the criteria set out in its Operational Guidelines which are available at: www.cao-ombudsman.org
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| IFC’s Determination of BCS |
| Based on the review of Project documentation, assessment of free prior informed consultation and informed participation of the affected communities, and interviews with directly affected communities and other stakeholders, IFC has determined that the Project has achieved Broad Community Support (BCS) |
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*ICP - Information Consultation and Participation |
| **BCS - Broad Community Support |
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| Environmental & Social Action Plan - Appraisal |
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| Availability of Full Documentation |
The complete set of Category A documentation is available from the World Bank Infoshop:
World Bank Infoshop
1818 H Street, N.W., Room J1-060
Washington, DC 20433
USA
Telephone: (202)-458-4500
Fax: (202) 522-1500 (USA)
E-mail: mailto:pic@worldbank.org
Hours of Operation: 9:00am to 5:00pm (Monday through Friday)
The complete set of Category A documentation is also available locally at the following locations: |
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| Information Disclosed |
Environmental & Social Impact Assessment
Section A: Introduction and background
Chapter A1: Introduction
Chapter A2: Policy and Legal Framework
Chapter A3: Methodology
Chapter A4: Project Description
Chapter A5: Alternatives Analysis
Chapter A6: Community Consultation
Section B: Baseline Assessment
Chapter B1: Introduction
Biophysical Environment
Chapter B2: Climate and Climate Change
Chapter B3: Air Quality
Chapter B4: Noise
Chapter B5: Topography, Geology and Topsoils
Chapter B6: Water Resources
Chapter B7a: Biodiversity
Chapter B7b: Ecosystem Services
Human Environment
Chapter B8: Population and Demographics
Chapter B9: Employment and Livelihoods
Chapter B10: Land Use
Chapter B11: Transport and Infrastructure
Chapter B12: Cultural Heritage
Chapter B13: Community Health, Safety and Security
Section C: Impact Assessment
Chapter C1: Introduction
Biophysical Environment
Chapter C2: Climate and Air Quality
Chapter C3: Noise and Vibration
Chapter C4: Topography, Landscape, Geology and Topsoils
Chapter C5: Water
Chapter C6: Biodiversity and Ecosystem Services
Human Environment
Chapter C7: Economic Impacts
Chapter C8: Population and Influx
Chapter C9: Employment
Chapter C10: Land Use and Displacement
Chapter C11: Cultural Heritage
Chapter C12: Community Health, Safety and Security
Chapter C13: Cumulative Impacts
Section D: Management Plans
Chapter D1: Environmental and Social Management Plan Framework
Chapter D2: Air Quality Management Plan
Chapter D3: Noise Management Plan
Chapter D4: Topsoil Management Plan
Chapter D5: Petroleum and Fuels Management Plan
Chapter D6: Biodiversity Management Plan
Chapter D7: Water Resources Management Plan
Chapter D8: Waste Management Plan
Chapter D9: Waste Rock Management Plan
Chapter D10: Tailings Management Plan
Chapter D11: Transport Management Plan
Chapter D12: Hazardous Materials Management Plan
Chapter D13: Cultural Heritage Management Plan
Chapter D14: Stakeholder Engagement Plan
Annex 5 - Community Brochure (available only in Mongolian)
Chapter D15: Resettlement Action Plan
Chapter D16: Influx Management Plan
Chapter D17: Labour Management Plan
Chapter D18: Community Health, Safety and Security Management Plan
Chapter D19: Worker Health, Safety and Security Management Plan
Chapter D20: Emergency Response Plan
Chapter D21: Mine Closure and Reclamation Plan
Non-Technical Summary
Non-Technical Summary (PDF - 4.5MB)
Supplemental Information (to be provided at a later date)
Supplemental Memorandum: Oyu Tolgoi to Khanbogd Power line
Supplemental Memorandum: Oyu Tolgoi to Gashuun Sukhait Road |
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