Serendipity and stealth,resistance and retribution: Policy development in the Mongolian mining sector

Introduction

This article is a sequel to a case study published in this journal in 2014, which recounted events surrounding the unilateral termination in May 2013 by the Swiss Agency for Development and Cooperation (SDC) of a joint research project between SDC and the Ministry of Mining of the Government of Mongolia (Blunt, 2014). The research project was terminated by SDC because its early results were deemed to threaten Swiss and other Western interests in Mongolia’s mineral resources. The conclusion to Blunt (2014: 14) observes that ‘despite the embargo placed on the research findings and [the] unilateral cancellation of the research project … [it was likely] that … the research findings and recommendations would find their way to sympathetic sites in government’.

Here, the circumstances are discussed of the take-up five months later, in mid-October of 2013, by ‘sympathetic sites in government’ (principally the second author of this article) of policy recommendations concerning community development agreements (CDAs) contained in the banned research report and of the inclusion of some of those recommendations in national policy approved by the Mongolian Parliament in late December 2013 (‘State Policy on the Mining Sector of Mongolia (2014–2024)’ – the Policy).

CDAs between rural communities and mining corporations provide recompense for damages inflicted on livelihoods and the environment and can therefore be effective means for establishing sufficient levels of tolerance among affected communities for them to allow mining activities to proceed uninterrupted (e.g., World Bank, 2010a, 2010b). The CDA policy inclusions could therefore have significant positive consequences for sustainable community development in rural Mongolia and national economic performance as well as ramifications for state sovereignty and political legitimacy.

The main purpose of this article is to analyze the process of policy development that resulted in the CDA inclusions in the Policy. The discussion illustrates how policy-making can be serendipitous and conflict-ridden, in part confirming Sutton’s (1999) description of it as ‘a chaos of purposes and accidents’. But it also reveals the extent and character of the opposition that can be engendered and the types of retribution that can be meted out by vested interests to policy advocates and their supporters.

The reactions on the part of SDC to the research findings set out in Blunt (2013, 2014) and to the policy developments analyzed in this article indicate clearly that SDC in Mongolia operates strictly according to the maxim of ‘self-interest first’, paying little heed when its own interests are at risk to potential development benefits for the country that it professes to be assisting. Such doublespeak, such unabashed self-interest and lack of altruism are to be expected from development assistance (e.g., Blunt, 2012; Blunt and Lindroth, 2012; Blunt, Turner and Hertz, 2011; Blunt, Turner and Lindroth, 2012, 2013).

However, this case is noteworthy for a number of other reasons. First, it highlights wider hypocrisy on the part of SDC, evident in the sharp contrast between its espousal and proselytization of standard principles of good governance (such as, transparency, avoidance of conflicts of interest and ‘freedoms’ of debate, information and association) and its flagrant disregard for these same principles in its own behaviour. This confirms Roy’s (2004a: 49) view that in the establishment lexicon the meaning of terms like freedom has ‘little, if anything, to do with freedom’ as we would want it, as opposed to freedom to do pretty much anything you please.

Second, for people who are unwilling to accept as fair or reasonable this view of development assistance and are prepared to say so openly and to behave accordingly the case shows that retribution can be swift and uncompromising, illustrating how power responds when it is challenged or thwarted or when its layers of deceit are peeled back by intellectual enquiry (Chomsky, 2011, 2013; Hedges, 2011). A clear message from this case is that either ‘you say the things that are required for service to power’ (Chomsky, 2007: 2) – even when its manifestations are partly merely that of petty officialdom – or you suffer the consequences. The findings confirm Roy’s expectation that the effects of such ‘probing’ can include ‘a bilious rush of abuse, intimidation, and blind anger’: in short, ‘the intellectual equivalent of a police baton charge’.

However, the case was made more pointed because in ‘provoking this kind of unconstrained, spontaneous rage …’ it exposed ‘the instincts of some of these normally cautious, supposedly “neutral” people, the pillars of democracy – judges, planners, academics’ and development officials (Roy, 2001: 27). That is to say, the case laid bare the inner workings and the thinly veiled real intentions of the ‘manufacture of consent’ (Chomsky and Herman, 1988), a major consequence of which of course is a denial of social justice for the poor people that development assistance purports to be its primary beneficiaries (Blunt and Lindroth, 2012).

Another noteworthy feature of the case was the opposition’s misjudgement of CDAs as constituting a threat, which caused it to act in ways that ran counter to its own interests and to those of all other affected parties. The article thereby affords insights into some of the difficulties and some of the compromises that must be made in the interests of progress and the depth of feeling surrounding mining in Mongolia. Such conditions are to be expected where the interests of powerful corporations and members of government influenced or co-opted by them are involved. These interests are underpinned by neoliberal ideology and by the pressures in favour of it that are exerted by international financial institutions and by donor agencies, whose job it is to establish and maintain conditions that allow ‘their’ corporations to make the most of the rich pickings on offer. The case shows that the fervour with which the dogma is applied, the degree of hostility directed at its critics and the rationality of response can be strongly influenced by the idiosyncrasies and limitations of the usually foreign petty officials associated with such organizations.

Among Mongolians, many younger, mainly foreign educated, members of the emerging middle class – those who have benefitted from some ‘trickle down’ and the greater opportunities for consumption afforded by more open markets – are also broadly supportive of the establishment status quo. However, this is a potentially volatile mix because surveys show that among most ordinary Mongolians there is increasing discontent with chronic high levels of poverty and rising inequality, which are perceived to be a consequence of the unfair and corrupt deals that have been struck between government and foreign mining corporations (Sant Maral Foundation, 2014). In such circumstances, seemingly minor misjudgements or overreactions – in this case to policy supportive of CDAs – can be inflammatory or, at least, more counterproductive than one might otherwise expect.

The analysis is situated within the discourse surrounding community-owned or commonly-held and nurtured natural resources, or ‘the commons’ (Ostrom, 1990), which include minerals and the forests, rivers, mountains and pasturelands that can be adversely affected by their exploitation. Community opposition to such exploitation can be traced back formally at least to the 13th century, to the Magna Carter’s Charter of the Forests (Chomsky, 2012a). In the past 30 years in particular, community enjoyment of such traditional sources of sustenance has been ‘steadily dismantled’ worldwide on the basis of a ‘perverse doctrine’ known as the tragedy of the commons, ‘a doctrine which holds that collective possessions will be despoiled so therefore everything has to be privately owned’ (Chomsky, 2012a). The damaging consequences of this doctrine are graphically illustrated by the effects of big dam construction, which in the past 30 years in India alone has forced more than 30 million mostly indigenous people from their homes, destroyed their livelihoods and devastated ecosystems (Roy, 2012). The doctrine’s global menace is emphasized by the fact that pastoralists occupy up to 45 per cent of the planet’s land surface (Pearce, 2012).

Mongolia, of course, is a particularly striking case of commons vulnerability, as about 80 per cent of its vast geographical space – equivalent to half the size of India or 3 times the size of France – is devoted to pastoralism. Livestock production comprises about a third of GDP, and up to 50 per cent of Mongolians still depend at least partly on pastoralism for their survival, probably the highest percentage of any country in the world (UNDP, 2011; Vernooy, 2011). The exploitation of the mineral wealth that lies beneath these lands can only be achieved with significant disruptions to the pastoral way of life and damage to the environment upon which it depends.

The assault on the commons in Mongolia began in earnest with the decollectivization of the rural economy in the early 1990s, when Mongolian pastoralists became subject to the new property regime imposed under neoliberalism. Since then, community-held land in Mongolia increasingly is a resource available for private ownership and the award of private mining concessions (Sneath, 2012). To the extent that the latter adversely affects the environment upon which rural communities depend for their livelihoods and impairs their enjoyment and sustenance of it (e.g., Breckenridge, 2012; Padilla, 2012), the CDA policy developments outlined in this article, and moves towards resource nationalism which it is hoped they will encourage, can be seen as a ‘microcosm of the general defence of the commons … part of a global uprising against the violent neoliberal assault on the population of the world’ (Chomsky, 2012a).

Setting and background

Mongolia is at a watershed in its development, its main hallmark being a likely long-lasting wave of strong economic growth fuelled largely by gains from the nation’s rich endowment of mineral resources. It is a watershed marked also by a crescendo of powerful external influences that in the past 20 years have been brought to bear on a hitherto relatively sheltered Mongolian society – influences like foreign investment, neoliberal ideology and design, consumerism and global popular culture. Governance of the Mongolian state, in the interests of social justice and the maintenance of national sovereignty and cultural identity, is severely constrained by these forces.

Mining, then, is clearly crucial to Mongolia’s development, but it also makes it vulnerable to international commodity price swings and other ‘resource curse’ risks. ¹ Such vulnerability is heightened in the short term by the fact that most of the industry’s ‘golden eggs’ will be produced by a single and majority foreign-owned copper and gold mine (Oyu Tolgoi – OT). ² Once in full production in 2014, OT will be the main contributor to what could be by 2018 a tripling of national per capita GDP (International Monetary Fund [IMF], 2012). Not far behind is a world-class coal deposit at Tavan Tolgoi in the south of the country, where production is gathering momentum (Li, 2012; Mossman, 2013). But mining is crucial as well because the management of the country’s mineral resources by government – with OT (justifiably) as the touchstone of this – is closely and, we would suggest, legitimately tied to public perceptions of social justice and of national sovereignty ³ and identity, as it is in some other countries (e.g., Breckenridge, 2012; Padilla, 2012). ⁴

Such promising economic prospects must be tempered further, however, by the legacies of the ‘shock therapy’ (Klein, 2008) administered by the IMF in the 1990s, which have left Mongolia with the tell-tale scars of chronic high levels of poverty (around 35 per cent) and unemployment and growing inequality. These conditions stoke popular resentment of foreign corporate predation and mistrust of government (Rossabi, 2013; Sant Maral Foundation, 2014). In addition, environmental damage associated with mining has provoked protest and conflict, and community outrage at the patchy implementation of relevant legislation, or ‘the law with long name’, persists (Li, 2012; Simonov, 2012). Mining therefore carries a heavy burden of both development and political expectation and responsibility.

International trends towards resource nationalism

Any discussion of mining-related community development occurs within a socio-economic and environmental framework whose principal features increasingly are defined by resource nationalism. The Mongolian Mining Journal (September 2013: 99) refers to resource nationalism as ‘the attempts by owner countries to extract the maximum value and developmental impact for their people from their finite natural resources’. Arguing the need for greater ‘nuance’, Bremmer and Johnston (2009) identify four types of resource nationalism: on the one hand, ‘revolutionary’ and ‘legacy’ and, on the other, the more corporate-friendly, ‘economic’ and ‘soft’. Economic resource nationalism entails the redistribution of revenues ‘from international to domestic hands’. Whereas the ‘revolutionary’ form, attributed to countries like Russia and Venezuela, is associated among other things with ‘broader political and social upheaval … (and the) rollback of privatisation in strategic sectors’.

Evidence of an international trend towards resource nationalism includes recent mass protests against foreign ownership of natural resources in Thailand (Cartalucci, 2013) and in Mexico (Matalon, 2013) and deadly conflict between mine workers and corporations in South Africa (McClenaghan and Smith, 2013). No longer the exclusive preserve of developing countries such as Bolivia and Ecuador, protests in favour of resource nationalism increasingly are intermingled with popular antagonism towards the austerity programmes of neoliberalism in countries like Greece, Spain, Ireland and India (Mossman, 2014; Roy, 2012; Salafia, 2013; Ward, 2009).

Responding no doubt to the writing on the wall, mining industry impression management ⁵ is at pains to present a public face that is understanding and supportive of these developments:

In our view, there’s nothing wrong with resource nationalism … governments are correct to want to extract as much as they can for the benefit of their countries and peoples out of what are finite resources … it’s actually the duty of government to see that a country’s natural resources benefit its people. (Creamer, 2013)

Perhaps inconveniently to the establishment, in Europe, the strongest and most conspicuous case for resource nationalism is Norway’s. Its main principles require that the country’s natural resources be exploited sustainably and that they ‘belong to the people, and must benefit society … rather than … a small and select group who become steadily richer at the expense of the wider community’ (Norwegian Petroleum Directorate, 2012).

Closer to Mongolia, Kazakhstan has adopted a strong form of economic resource nationalism (Domjan and Stone, 2010; Kennedy and Nurmakov, 2010). Bremmer and Johnston (2009: 151) put Mongolia in the same category, anointing its corporate-friendliness: ‘Mongolia recognises that its rebalancing efforts in rewriting contracts and legislation governing natural resources cannot be so punitive that international companies exit the country.’

The CDA policy developments outlined in this article are integral to resource nationalism in Mongolia and discussion of them should therefore take account of these international trends and commentaries. To reiterate, CDAs can provide modest compensation for damage to livelihoods and to different features of the commons and, under ideal circumstances, for the partial recovery of community–commons interdependence. They can also contribute to tolerance of mining activities by affected communities, reducing the likelihood of costly disruptions.

However, the discussion that follows suggests that the clarity of CDA benefit for foreign investors can be obscured when establishment hackles are up or neoliberal defensive passions are aroused, and it shows that community benefits count for little in such circumstances.

Muddled opposition

Indeed, this was one of the more notable, and strikingly ironic, features of the CDA policy development process. The resistance it encountered and the retribution dealt out by its opponents to policy advocates and their supporters in many respects ran counter to their own vested interests. That is, the resistance was unhelpful to the perpetuation of the prevailing neoliberal order and to the ‘conducive investment climates’ ⁶ and corporate predation that neoliberalism cultivates the grounds for so assiduously (e.g., Blunt et al., 2013; Chomsky, 2011). It was unhelpful because CDAs can distract attention away from some of the more ‘sensitive’ questions of resource ownership and of taxation and royalties (Blunt, 2014), considerations that Bremmer and Johnston (2009) attribute to revolutionary resource nationalism. In addition, if, as they should, CDAs make significant contributions to community development and livelihoods, they can also reduce the likelihood of violent conflict between miners and mining-affected communities and they can enhance political legitimacy at all levels of government.

For these reasons, CDAs are among the finer instruments of neoliberalism, an inference reinforced by their endorsement as ‘win-win’ by the World Bank (Dansereau, 2005) and by mining industry sources like Creamer (2013), and hence, their designation in Blunt (2014) as being a politically safe subject for research.

The opposition to CDAs encountered in this case can therefore be seen as self-inflicted interference by certain elements of the establishment to the achievement of its own ends. The case shows that this came about because neoliberal opposition to policy development can come in different shapes and sizes and levels of sophistication. For some, any additional corporate expense is seen axiomatically as being detrimental to profitability, and hence, to the attractiveness of investment climate. Much of the resistance and retribution encountered during the policy development process discussed below appeared to be so inspired.

Serendipity

The spark that lit the fuse of the policy development process was a chance meeting (at a cocktail party) between the first and second authors of this article, the latter being an independent Member of the Mongolian Parliament well known throughout Mongolia for his strong advocacy of social justice, of clean government, of state sovereignty and of fair returns to the state from mining or resource nationalism (including strong and sustained criticism of the OT agreement) (see Sainkhuu, 2014). ⁷ The meeting, which took place on Friday 11 October 2013, ⁸ was instigated by a national professional member of staff of the SDC Governance Team, who said to the first author: ‘You must come and meet Ganbaatar Sainkhuu. I have told him about you and the banned CDA paper and that we (the SDC Governance Team) think that the paper is in the national interest and should be made public, and he is keen to talk.’ As a prelude to the discussion that followed, it was made clear that any assistance concerning CDAs provided by the SDC Governance Team would have to be informal and pro bono and done out of hours and should not be linked in any way to SDC, as SDC was strongly opposed to the ideas and had banned the CDA research report and was insistent on being disassociated from it.

The meeting referred to above was entirely serendipitous, but so too was its timing. On Monday of the following week (after the Friday ‘cocktail-party meeting’), a working group of the Mongolian Parliament was due to finalize discussions of a draft of the policy, which would then work its way through the relevant parliamentary processes. Written comments on the draft policy and suggestions for revisions and inclusions had to be finalized by Monday. Such inclusions in the policy were crucial to establishing a basis for subsequent legislative change concerning CDAs.

An informal policy team – comprising the second author and his advisers and the SDC Governance Team led by the first author – emerged from the cocktail party encounter. Its first meeting was a Sunday lunch preceding the parliamentary working group discussion scheduled for the next day. This was the first of a series of such meetings, whose purposes were to review progress of the discussions taking place in parliament and to agree defensive tactics and arguments to be employed by the second author in relation to them.

In embarking on this course of action, the policy team realized that advancing the cause of CDAs by itself ‘would leave unaffected the “enabling environment” and other conditions governing mining and the economy in general that incline Mongolia towards a resource curse fate similar to that experienced by other resource-rich developing countries’ (Blunt, 2014: 14). Nevertheless, the policy team’s strategy was to do some local good and to stimulate public debate of resource nationalism.

Stealth

The need for stealth arose from SDC opposition and suspected surveillance. This created an atmosphere of trepidation among the members of the SDC Governance Team and a somewhat conspiratorial, cloak-and-dagger undertone in the policy development process. The atmosphere was charged also by fears of retribution from SDC – fears that for some subsequently turned out to be well-justified. Meetings were therefore held clandestinely, signifying the degree to which an opportunistically ‘friendly’ foreign presence in a sovereign state can constrain open debate among its citizens (including members of parliament), debate that in this case was clearly in the national interest, just as the banned CDA research report discussed in Blunt (2014) had been.

At the same time, SDC was presuming to advise the government and people of Mongolia about – and to assume the moral high ground in relation to – the usual range of democratic ‘freedoms’ and of ‘good’ governance (Blunt and Rondinelli, 1997) thereby lending weight to Roy’s (2009: 1) conclusion that such notions have been ‘hollowed out and emptied of meaning … and have metastisised into something dangerous’.

Resistance

The policy team’s first reading of the draft policy document revealed that it went to considerable lengths in providing safeguards to the environment and entrepreneurial activity but was completely silent on safeguards for mining-affected communities and on matters of social justice. The second author of this article was a lone voice in relation to such questions among the members of the parliamentary working group and was intent on filling the social lacunae in the policy.

The policy team therefore drafted a new section for inclusion in the policy, entitled ‘Safeguarding Community Interests’. The section contained a number of paragraphs, the first two of which stated: (a) ‘Local communities will be consulted beforehand about extractive industry activity within their jurisdictions and will be empowered to influence decisions concerning permissible activities, including the possibility of powers of veto’ and (b) ‘Mining corporations will be obliged by law to engage in local development activities that make a significant contribution to the well-being and livelihoods of affected communities, so that such livelihoods can continue and be sustained after the resource has been exhausted and mining has stopped. The intention here is to create conditions in which mining-affected communities become self-sustaining and are able to maintain a reasonable standard of living from livelihoods that do not depend on mining. The formal bases of such local development activity will be community development agreements (CDAs) entered into by mining corporations and the local governments and the communities that they represent.’

These two clauses were augmented by detailed specifications concerning the preferred character of CDAs and supporting legislation. The deliberate intention was to start ‘strong’ in the expectation that concessions would have to be made, for example, in relation to the possibility of community ‘powers of veto’, in relation to legal requirements for ‘significant contributions’ by corporations that could be ‘sustained after the resource has been exhausted and mining has stopped’, and in relation to the detailed CDA specifications. The policy team’s strategy was to be left with sufficient direction in the policy to legitimize the subsequent development of detailed and unequivocal legislation requiring CDAs, that is, to be able to contest the detail on another day and on a firm basis of policy.

There was vigorous debate of these matters at all stages (working group, standing committee and plenary session of parliament), meaning that community and commons-friendly clauses were constantly at risk of being deleted altogether or significantly weakened.

Resistance in parliament had two main sources: first, a distinct mining-lobby group of MPs that had been influenced or co-opted by the mining sector, and second, those persuaded by establishment neoliberal convictions ordaining that anything that threatened corporate profits would damage ‘investment climate’ and ‘investor confidence’ and would result in ‘capital flight’ and so on.

Even so, the pace of policy development was brisk. From a starting point two-and-a-half months earlier, by the time of its approval in late December 2013 the community safeguards that had been inserted in early drafts of the policy had been reduced to a short section containing two clauses: Clause 3.5.1: ‘Before starting extractive operations, the investor and local communities should establish an environment of mutual understanding. It is the responsibility of local governments to explain the social and economic significance of mining projects’; and Clause 3.5.2: ‘During extractive operations in order to provide for social development the investor and local government should enter into a Local Development Agreement (LDA) in a transparent and participatory manner.’

Clearly, Clause 3.5.1 constitutes a substantial retreat from what was first put to the parliamentary working group in mid-October, removing completely any suggestion of community decision-making power over mining activities and introducing in its place the equivocal and corporate-friendly language of ‘mutual understanding’. As noted earlier, this was an anticipated consequence of significant corporate lobby, and related, resistance applied at every step of the way. Roy (2004b: 105) explains why: ‘Today corporate globalization needs an international confederation of loyal, corrupt, preferably authoritarian governments in poorer countries, to push through unpopular reforms [and to resist popular ones], and quell the mutinies. It’s called “Creating a Good Investment Climate”.’

However, Section 3.5.2 is clear and unequivocal about the requirement for LDAs to be entered into, thereby achieving the minimalist position hoped for at the outset by the policy team.

Retribution

Outside of parliament, the main non-corporate opposition continued to be SDC. This manifested itself most noticeably midway through the developments described above (mid-November 2013) when the first author’s contract with SDC was peremptorily terminated (with pay in lieu of notice), the pretext being an irreconcilable difference of opinion concerning the ‘strategic direction’ of the SDC Governance and Decen tralisation Programme (GDP) managed by him. However, during the contract termination meeting, the newly appointed SDC Country Director made it clear that had he been in position when the banned CDA document referred to in Blunt (2014) had been produced, he would have ‘brought things to an end then’. This admission suggested a causal correlation between, on the one hand, the policy development process and other events discussed in this article and, on the other, the contract termination. In the circumstances, retribution seemed the most plausible explanation.

Such plausibility was strengthened by two subsequent events. First, the first author’s work visa was immediately cancelled by SDC, giving him about 2 weeks in which to leave the country or to make other arrangements. Second, a few days later, a senior national member of the SDC Governance Team was interrogated by SDC management about matters connected with (a) the banned CDA document; (b) another research report produced by the SDC Governance Team, discussed below (Blunt, 2013); and (c) a YouTube video depicting the involvement of the Swiss-based Glencore corporation in the exploitation of Zambian copper, referred to in Blunt (2014; see Guldbrandsen et al., 2013).

In relation to the latter, the national staff member had (after hours and pro bono) written Mongolian subtitles for the video so that it could be broadcast on Mongolian TV. She had done this at the (indirect) request of the Mongolian Minister of Mining, who had seen the video and thought (like she) that other Mongolians should too, in order for them to learn about such matters as transfer pricing and fraudulent investment inflation and about apparent collusion between corrupt mining officials and government. ⁹ Despite the fact that the video was freely available on the Internet and its clear relevance to Mongolia (see Blunt, 2014), the Mongolian SDC staff member was grilled by SDC management about her motivation and made to feel that her job was at risk by virtue of what she had done.

These events coincided with the release in early October 2013 of another research report, which questioned the development effectiveness of important elements of SDC’s GDP (Blunt, 2013). This report also incurred the displeasure of SDC management, especially the Deputy Country Director who had designed the GDP, who had the final say in relation to it, and whose wife was employed by one of its principal implementing agents. While this article was not banned by SDC, about 10 days after the article’s public release, the SDC Governance Team was instructed by SDC management not to make presentations of the article to government. But this direction came too late to prevent the premier Mongolian Public Administration journal from publishing it in Mongolian, clearly signifying that local intelligence was persuaded of its relevance to matters of local governance and development in Mongolia.

The interrogation by SDC management of the senior national SDC staff member, mentioned above, included accusatory questioning about the translation and distribution to local government officers at a meeting in Ulaanbaatar in late October 2013 of that article (Blunt, 2013). This, despite the fact that the article’s bibliographic details included the words ‘SDC/GDP Discussion Paper’, presumably making it a document intended for public discussion. Neither SDC’s proclivity for doublespeak nor its cavalier disregard for freedoms of information was diminished by its contemporaneous promotion of ‘horizontal learning’.

Were it not for their potentially serious negative effects on rural communities and the commons, such blatant hypocrisy, such muddled thinking and such clumsy and disproportionate retribution could also be seen as faintly comical, as their effects clearly ran counter to the very self-interests that they strove so frantically to defend and conceal. The failure to recognize the simple logic that shows that CDAs can make significant and low-cost contributions to stable political and conducive investment climate conditions suggests that donor petty officialdom is quickly out of its depth, and founders, in anything other than the safe and shallow waters of its own neoliberal rhetoric and development platitude. The ensuing thrashing about in response to real or, as in this case, imagined threat enables it to accomplish the quite tricky feat of being unhelpful to all sides at the same time – to mining-affected communities, to government at all levels, to local business interests and to international corporate investors and their national progenitors.

In this somewhat theatrical, but no less combative, atmosphere the minimalist aims of the policy team concerning CDAs were largely achieved. They constitute a small and necessary, but not sufficient, step towards providing for mining-affected communities reasonable and sustainable local development prospects, and some measure of defence against the assault on the commons. They could also help to promote greater and better informed demand for resource nationalism from the general public and from within government, with the hope of achieving what Blunt (2014) refers to as ‘a thorough investigation and re-evaluation of the bigger questions surrounding mining in Mongolia, leading to a fairer distribution of the proceeds to the nation and its citizens and to avoidance of the otherwise seemingly inevitable “resource curse”’.

The next, and greater, challenge will be to convert the clauses concerning CDAs that are now a part of the policy into binding legislation. This phase has begun and is likely to be subjected to just as fundamental and fierce resistance as that encountered in this case and from the usual suspects. But even if successful, such hard-won progress, cannot guarantee that good legislation will be put to the uses for which it is intended or implemented without fear or favour.

Conclusion

This case exposes the different forms that resistance can take to real or imagined threats to private control of mineral resources and the commons in Mongolia and the scattered and muddled, but no less effective, nature of such resistance. ‘Effective’, even if the results are perverse, or serve to eradicate or weaken policy that could be in the corporate interest as well as for the general good.

Among the most striking revelations was the breath-taking hypocrisy and arrogance of development assistance, evident in the lengths to which it would go in defence of its interests, including brazen contempt for conventional rules of good governance. It was as if to say ‘it is for “us” to make the rules, and to follow them or not at our convenience, and for others – poorer, lesser mortals – to abide by them or break them at their peril’. This, of course, is a form of hypocrisy or doublespeak that has become the stock-in-trade of power’s conduct of international relations, as anyone who watches the news on TV will know – and as exemplified most recently by events in the Ukraine.

Apart from this, the forms of resistance illustrated most vividly in the case comprised, first, corporate-co-opted and neoliberal-sympathetic oppositions within parliament targeted precisely at commons-friendly policy development. And second, vitriolic ‘intellectual baton charges’ (Roy, 2001) and other sanctions targeted just as unerringly by development assistance at local sources of commons-friendly policy advice over which it had some authority. The character of the resistance and retribution implied that any perceived threat to corporate control or short-term profitability was regarded as something to be stamped out without hesitation, suggesting for some ignorance or mistrust of the potential benefits to corporate interests associated with CDAs, for others perhaps simply befuddlement in the fog of war.

Such direct forms of resistance and retribution were reinforced by several forms of background resistance. First, relevant professional literature is dominated by apologia ¹⁰ for the neoliberal status quo in mining, or as close to it as it is possible to get in the face of what is seen by the establishment as the gathering storm of resource nationalism. Such corporate sympathies are clearly evident in Bremmer and Johnston (2009: 150) who refer in grand sweep to the ‘dangerous effect(s) on international resource companies’ of ‘revolutionary’ resource nationalism, mentioning as examples Venezuela, Russia and Bolivia, but conveniently omitting the less readily discredited Norway. The same authors ‘warn’ that ‘ownership of prized assets may be wrenched away through forced negotiation…, using perceived historical injustice or alleged environmental or contractual misdeeds by the companies as justification’. Anyone not afflicted with power’s (or its servant’s) convenient sense of historical amnesia (Chomsky, 2009) or selective attention and recall will of course wince or grit their teeth at such remarks.

‘Revolutionary’ resource nationalism is contrasted unfavourably by Bremmer and Johnston (2009: 151) with the corporate-friendly ‘economic’ variety, which dutifully steers clear of questions of project ownership, concentrating instead on a ‘rebalancing’ of benefits. Unsurprisingly, Mongolia is praised (or patronized and flattered to deceive) for realizing that ‘without the deep pockets and technology of the mining multinationals, the Oyu Tolgoi riches would likely remain in the ground’. The account given of ‘soft’ resource nationalism, its mildest form, is just as revealing of allegiances and attitudes. Described as being ‘rampant’ in the Organisation for Economic Cooperation and Development (OECD) countries, it at least ‘avoids tearing up existing contracts and using arbitrary tactics’ (Bremmer and Johnston, 2009: 152). To have their desired effects, such observations must clearly rely either on host government insecurity and ignorance or indoctrination or host country elite connivance or some combination there of.

Drawing on such literature, the second form of background resistance comprises corporate-controlled media, which faithfully amplify the alarms. Their importance as agents of control in Mongolia is signified by the facts that, first, for its small population (about 2.8 million), Mongolia has an unusually large number of media outlets (550+), and, second, as in India (Roy, 2012), political party and corporate influence or outright ownership dominate (Redl and Nielsen, 2006).

A third form of background resistance arises from the Mongolian intelligentsia, the younger generations of which (since 1990) in their education abroad have been indoctrinated to conceive of development exclusively in neoliberal terms (Chomsky, 2012b), views that now predominate in the Democratic Party majority in government.

This panoply of resistance, this dense cloud of opposition, in this case proved impossible to evade and difficult to counteract. Although the strength, sophistication and acrimony of the different elements can be expected to vary according to a country’s natural resource profile and other local circumstances, such resistance and opposition is likely to be encountered in all resource-rich developing countries. In these conditions, the tiniest pinprick of real or imagined challenge to corporate interests is unlikely to escape notice or avoid retribution. The theatre of opposition choreographs by dint of a combination of corporate and donor-supplied material inducement, institutional threat and the binding strength of the ruling neoliberal paradigm and of ‘normal science’ (Kuhn, 1970). Accordingly, without conscious arrangement between them, such – bullied, bought (Roy, 2004b) or merely indoctrinated – ‘prisoners of the paradigm’ (Blunt, 1997) can mount attacks from different angles either in concert or opportunistically, thereby weakening challenge significantly or extinguishing it altogether. The way in which the policy proposals outlined in this case were systematically whittled away and the manifold pressures to desist that were brought to bear on policy proponents and their supporters are evidence of this.

Our discussion of ‘economic’ and ‘soft’ resource nationalism suggests that they are formations in an orderly corporate retreat in the face of a global offensive towards more fundamental forms of resource nationalism, a retreat that attempts simply to decant the old wine of mining industry business as usual into new bottles. The plausibility of this interpretation is strengthened by the fact that it is nearly impossible to tell whether under the milder forms of resource nationalism host country governments are getting a better deal than they did before. This is because the detection of legislative or contractual breach and, if detected, the proper application of legal sanctions are always problematic and are subject to informal influence. As Mossman (2014) points out, transparency in mining does not necessarily ensure accountability (both sides of the equation are problematic), perhaps suggesting that when it comes to misleading and deceptive conduct mining corporations and complicit governments have few peers in what has become a highly competitive neoliberal-sponsored race to the bottom (e.g., Loewenstein, 2013).

Kazakhstan’s version of resource nationalism recognizes this as it pays close attention to tax evasion, particularly transfer pricing. The gravity of the problem is conveyed by the fact that Kazakhstan’s Ministry of Finance has accused more than 100 extractive corporations of having used this device. Legislation in Kazakhstan therefore specifically prohibits transfer pricing and imposes heavy penalties for transgressors (Kennedy and Nurmakov, 2010). There is good reason to suppose that Kazakhstan’s experience in this regard is representative of what obtains in other resource-rich developing countries, including Mongolia.

The events recounted in this case and our analysis of ‘economic’ and ‘soft’ resource nationalism suggest that a successful defence of the commons and of mineral resources – in Mongolia and elsewhere – is unlikely without a complete paradigm shift that entails rejection of fundamental aspects of neoliberalism, along the lines of countries like Venezuela, Bolivia, Russia and Norway and, to some degree, Kazakhstan. Norway, for example,

wishes to ensure national ownership and control of the country’s extensive natural resources… . State ownership of Statkraft (hydroelectric power) and Statskog (forestry) helps ensure that such resources are exploited for the common good. Partial privatisation of these companies is … out of the question. (Norwegian Ministry of Trade and Industry, 2011)

Accordingly, of the variants outlined above, a form that draws on ‘revolutionary’ and ‘legacy’ resource nationalism seems to us to have the best fit and to hold the brightest prospects for rural communities in Mongolia and for the Mongolian state.

We say ‘legacy’ because, first, like Mexico and Kuwait, which Bremmer and Johnston (2009: 151) use to define this category, polls suggest that public opposition to foreign ownership ‘runs deep’ and wide in Mongolia, and second, because resource ownership is ‘central to national political and cultural identity’. Mongolia is also unusually ethnically homogeneous (more than 90 per cent Mongol) and Mongolians are indigenous to their land. Indeed, one might say that in Mongolia, as in countries like India, Brazil, Ecuador, Papua New Guinea and Bolivia, ‘the minerals, the environment, and the indigenous people are all stacked up, one on top of the other’ (Roy, 2012).

Everywhere it is indigenous peoples who are taking the lead in confronting the crisis of the commons, in resisting ‘the land grabber’s charter’ known as the tragedy of the commons (Pearce, 2012). It is they who are fighting the hardest to uphold the Charter of the Forests, as in Bolivia, which ‘has taken the strongest stand’ (Chomsky, 2012a). This might explain why, in Mongolia, despite the strength and pervasiveness of neoliberalism’s grip, the natives continue (perversely) to be restless. Within parliament and among the general population there is significant support for the renegotiation of the OT agreement (perhaps unknowingly) following precedents set by countries like Norway and the UK (Murrell, 2013). Growing assertiveness from the Mongolian side is evident in the protracted negotiations concerning costs, benefits and environmental protections surrounding the development of underground mining at OT. These negotiations have lasted for much longer than expected and will extend well into 2014. And, as we have said, the polls clearly show that ordinary people are strongly in favour of Mongolian majority ownership of its minerals. Our own position on this is clear. Like Murrell (2013), we take the view that ‘a Mongolian negotiator would be letting down his side if he silenced the resource nationalists who are now stirring the pot’. We can but hope that these sentiments are expressed just as or more strongly in defence of the pastoral commons in Mongolia and that the policy developments discussed in this case, and the debate surrounding them, may serve to encourage both ambitions.