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Speeches, Op-Eds & Other Important Documents

Ambassador Piper Campbell, Coal Mongolia Address

February 21, 2013
Ulaanbaatar, Mongolia

As Prepared for Delivery –

I have the luxury of speaking after esteemed diplomatic colleagues and the Vice Minister for Economic Development, and can begin by agreeing with much of what already has been said.  I wanted to avoid repetition, and so thought I would take a somewhat different approach in my remarks, noting as well that I had ample time for introspection during a very useful trip I just completed to Umnugobi Aimag, during which I saw many of the sites we are discussing today.

As we are entering the Year of the Water Snake, I thought I would use this as a starting point and a motif.   In the West, we have become suspicious of the snake, forgetting that it is, in fact, the symbol of healing – regularly found on doctors’ signs.  In Mongolia, I am told, the Water Snake symbolizes rationality and careful thinking, planning, and meticulous execution.  I am hopeful those qualities, plus the Western quality of healing, can inform the conversation as we ponder how Mongolia will develop its resources, not just coal but all the riches of this beautiful land.

Taking the Water Snake as my guide, I have attempted a calm approach to thinking through the short-term challenges we are facing.  During my trip last week, I had the opportunity to speak to many people, and I came to believe that the problems are not ones of finance, technology, or fluctuations of commodity markets.  Even if we do not publicly agree on such issues, everyone in this room (and audiences beyond) knows where the coal is, what markets are likely to buy it, how it’s to be extracted and employed, and who among the many who want to mine it are best able to do so in a way that yields sustainable commercial enterprises and maximum returns to Mongolia’s people.  Many of the disputes which have arisen reflect what the Russian Ambassador described as the “emotional component” – relational conflicts among the various parties – more than real argument over the practical aspects of mining coal in Mongolia.   I’d like to propose that we may be able to remove some of the emotion by focusing on how we define and address accountability, transparency, ownership versus decision-making authority and, most importantly, how we ensure mutual respect.

For example, I think the distinction between foreign and domestic investors is obsolete. The needs of foreign investors are the same as those of Mongolian investors.  To make a distinction is destructive, and allows opportunistic individuals to divide and conquer. Both the American investor and the Mongolian investor need the same things from the Mongolian government: the rule of transparent and stable law so that all can place precious hard-won resources into Mongolia rather than in other nations.   As a Mongolian speaker said in an earlier panel, “Investments in value-added products need to generate financial benefit to the company, and also to the country as a whole.” 

To get there, we need transparency in our dealings with one another.  For investors, this means laying out to shareholders, local communities, and the government what will happen, how it happen, how much it will cost, and establishing clear, accessible lines of communication so that parties can reach one another.   Transparency applies not only to investors but to communities and governments, too.  The government of Mongolia – from the Office of the President to the baga – has to be equally open about laws and regulation; it must consult on what it plans, the impacts of its plans, the timing; and it must be willing to alter those plans in the face of reasoned critique.  Transparency is ultimately an act of respect among the parties, and without such respect nothing can positively evolve in the coal sector, or for copper, or for any of Mongolia’s resources.

We all also need accountability.  Throughout my trip, I heard that people want the government to craft and execute laws and regulations that serve the public interest.  They also want laws which are enforceable – and will be enforced.  There is a sense out there that everyone else is being “let off” and that rules are applied inconsistently.   Systems exist that would allow the various sides to hold one another accountable, but the problem is that no one seems to be trusting these systems.  Claims are made without actual proof, and concerns are raised out distrust about the other sides’ intentions. It also is hard to tell if the current laws are effective, because many are not enforced.  Accountability does not come from an endless stream of new laws and regulations, but from transparent and consistent enforcement of good laws.  Passing laws without any reasonable expectation that the stakeholders can live with those requirements, or that state can enforce such requirements is nothing more than legislative theatre that undercuts the authority of the law and the very accountability that the state seeks; and that destruction of accountability makes development all but impossible.
Finally, we need to re-start the conversation from a foundation of respect.  Sounds simple and naïve, but the lack of respect among us is killing projects and development in Mongolia.  I’ve been in meetings with governments and business where both sides accuse the other of violating laws, working corruptly, and other lapses, without a thought about the impact of such attacks.  Both sides leave the room angry, disputes fester. Yet, when disaster comes, everyone seems surprised. 
Calling the other side a criminal and a liar is no basis for productive discussions.

Sensational claims, public or casual, by all parties must stop.  Of course, we cannot stop opportunistic people from spewing their venom to promote themselves, but we don’t have to aid them or stoop to their level. As a diplomat, I’ve seen all too often that basically positive circumstances can be overwhelmed by bad blood among the parties.  Mongolia’s coal sector, and this applies to Mongolia’s other mineral resources, is well situated to spark the boom that everyone talks about but that hasn’t fully come yet.  But mining and development are human activities that depend on the active cooperation of tens of thousands of people, and if those people aren’t cooperating, then nothing happens.  Right now, that’s where we seem to be, like a snake eating itself, going nowhere. 

I am not suggesting that paradise will come if everyone is more transparent, accountable, and respectful, but you will never get to discuss the practical issues involved with mining in Mongolia and Mongolia will never get the development it needs, unless we can move away from the toxic atmosphere that currently prevails.