Thursday, July 5, 2012

[CPSI NewsWire: Ovoot Railway In Concession List, Opens Door For Aspire's Railway Alliance]

CPSI NewsWire brings you market updates on Mongolia, compiled by CPS International, a Mongolian marketing arm of CPS Securities, a Perth, Western Australia based stockbroking and corporate advisory firm, specialising in capital raising for mining and junior stocks.

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AKM closed +7.14% to 15c


Ulaanbaatar, Mongolia, July 4 /MONTSAME/ At its meeting held on Wednesday, the cabinet made a decision to register the construction work of base structure of the railway in route of Erdnet-Moron-Ovoot in the list of works to be done by concession after getting acquainted with a course of works of the railway's base structure. Related officials have been ordered to work out a proposal on doing the construction work under a concession contract and to submit it to the cabinet.

It has been calculated that money of USD 2.2 billion is required for the construction work, and the railway will be constructed through territories of Khovsgol aimag's Tsetserleg, Moron, Tsagaan-Uul, Burentogtokh, Khatgal, Tosontsengel, Tomorbulag, Rashaant, Ikh-Uul, Tarialan soum; Bulgan aimag's Khutag-Ondor and Bugat soums; and Orkhon aimag's Bayan-Ondor soum. It is projected that the new railway will capacity of transporting 13.5 million tons freight between Ovoot and Moron, and 22.2 million tons freight between Moron and Erdenet a day.

The cabinet also got acquainted with the valuation of a tender of granting concession for the "#5 Thermal power station" project, and then ordered the State Property Committee to launch talks with the selected enterprisers on reducing tariffs and the cost of the project and to toughen criteria for equipment and facilities.

Apart of the matters, the cabinet obliged D.Zorigt, the Minister of Mineral Resources and Energy to render support to those entities implementing projects on liquefying coal to tackle urgent problems faced to them.

Link to Montsame


1878 closed +12.66% to HK$34.25 in HK on Wednesday

SouthGobi Shares Climbs Back 12.66% After Chalco Extends Bid

HONG KONG, July 4 (WSJ) —Aluminum Corp. of China Ltd.  will get an extra month to make a more than $920 million offer to buy a controlling stake in SouthGobi Resources Ltd. (TSX:SGQ, HK:1878) from Ivanhoe Mines Ltd. (TSX:IVN, NYSE:IVN), indicating that the state-owned Chinese aluminum giant is still keen on investing in the Mongolia-focused coal company despite challenges posed by new foreign-ownership restrictions adopted by the Mongolian government.

The proposed deal, under which Aluminum Corp. of China, or Chalco, would buy up to 60% of the coal miner, faces political opposition in Mongolia amid growing sensitivity about foreigners cashing in on the country's hoard of coal, copper, gold and other natural resources. Given its size and influence, China, in particular, raises concerns in the landlocked country, which broke from Soviet influence just over two decades ago and formed a democracy.

Mongolia adopted a new law on foreign investment in May that limits foreign ownership in strategic industries such as mining to 49%, unless the buyer obtains parliamentary approval. That came shortly after Chalco first announced in April its plan to make an offer for the stake in SouthGobi, which produces coking and thermal coals at its flagship Ovoot Tolgoi mine 40 kilometers from the China border.

In a joint statement Tuesday, Chalco and Ivanhoe said they will cooperate with the Mongolian government to ensure the deal complies with the country's new foreign investment law.

The two sides, whose shareholders have both approved the deal, have also agreed that the Chinese aluminum giant now has until Aug. 3 to make its offer, after pushing back the original deadline from July 5, the statement said.

Word of the extension sent SouthGobi's Hong Kong-listed shares up as much as 13% to 34.35 Hong Kong dollars ($4.43) in the morning session Wednesday, helping them recover somewhat after they had fallen more than 40% since the offer was announced in April because of the ensuing uncertainty. Wednesday afternoon, shares of the company were up 12.3% at HK$34.15 but still 48% below Chalco's planned offer price of HK$65.97.

Chalco's Hong Kong-listed shares were up 1.2% at HK$3.35, outperforming the benchmark Hang Seng Index's 0.02% gain.

Ben Kwong, chief operating officer at brokerage KGI Asia, said SouthGobi's shares rebounded because the market sees the extension as a sign of how committed the Chinese aluminum producer remains to the deal.

"We saw some bottom-fishing in SouthGobi's shares following its recent share-price correction as investors bet that Chalco will get the green light from the Mongolian government," he said.

However, it isn't clear yet whether the Mongolian government will approve the acquisition. SouthGobi Chief Executive Alexander Molyneux told Dow Jones Newswires earlier that the deal will have to be endorsed by parliament, but that no other legal exceptions will have to be made.

In June, SouthGobi said its Mongolian business had to stop operating a dry-coal-handling facility because the country's environmental ministry declined to revise an environmental impact assessment for the plant, which washes coal and prepares it for transport to market.

The miner has also had to suspend mining activities and put capital spending plans on hold because of weak demand due to the global economic downturn and a "lack of clarity" on whether its license to mine would be suspended by the Mongolian government after Chalco announced its acquisition plan.

Link to article


Shares in 61 still in suspension till full announcement

North Asia Resources Selling Its Mongolian Iron Mining, Coal Trading and Logistics Business To Connected Person

July 4, North Asia Resources Holdings Limited (HK:61) --

This announcement is made pursuant to Rule 13.09 of the Rules Governing the Listing of Securities (the  "Listing Rules") on The Stock Exchange of Hong Kong Limited (the  "Stock Exchange").

Reference is made to the announcements of North Asia Resources Holdings Limited (the "Company") dated 10 February 2011 and 27 March 2012 in relation to the negotiations on a possible acquisition of certain coal resources and a possible disposal of certain mining resources.

The board (the  "Board") of directors (the  "Directors") of the Company announces that on 12 June 2012, (i) a conditional sale and purchase agreement was entered into by a wholly owned subsidiary of the Company as purchaser (the  "Purchaser") with City Bloom Limited as vendor, a third party independent of the Company and its connected persons, regarding the proposed acquisition (the  "Acquisition") by the Purchaser of the entire issued share capital in a company, which holds equity interests in certain subsidiaries, which are engaged in the operation of certain coal mines in Shanxi Province, the People's Republic of China; and (ii) a conditional sale and purchase agreement was entered into by the Company as vendor with a connected person of the Company regarding the proposed disposal (the "Disposal") by the Company of the Group's iron mining and coal trading and logistic operations in Mongolia.

In addition, the Company is engaging in discussions with the holder of the convertible bonds issued by the Company (the  "Convertible Bonds") regarding the possible capitalisation of part of the Convertible Bonds (the "Capitalisation") and the possible alteration of the existing terms of the Convertible Bonds (the  "Alteration"). As at the date hereof, the final terms and conditions in respect of the Capitalisation and the Alteration have not yet been agreed and no legally binding agreement has been entered into between the relevant parties.

The Acquisition constitutes a very substantial acquisition and connected transaction for the Company under the Listing Rules. The Disposal constitutes a very substantial disposal and connected transaction for the Company under the Listing  Rules. Completion of the Acquisition, the Disposal, the Capitalisation and the Alteration (when respective definitive agreements of the Capitalisation and the Alteration are entered into by the relevant parties)  are conditional on a number of conditions and are inter-conditional on each other. An announcement (the  "Announcement") in respect of the Acquisition and the Disposal to be made by the Company in compliance with the Listing Rules is being prepared and will be published by the Company as soon as practicable.

Trading of the shares of the Company on the Stock Exchange has been suspended since 9:00 a.m. on 13 June 2012 and will remain suspended pending the release of the Announcement.

Link to release


MATD closed -1.33% to 9.25p in London on Wednesday

Cabinet Renews Product Sharing Contract With Petro Matad For 5 Years

Ulaanbaatar, Mongolia, July 4 /MONTSAME/ The cabinet meeting held on Wednesday decided to grant monthly allowance of MNT 15 thousand to people aged up to 18 years who urgently need the social welfare and assistance, and the allowance of MNT 10 thousand will be given to those people aged 18 or above a month.

- The cabinet discussed and issues a resolution on some measure to be taken to ensure transparency of the extractive industry.

- In accordance with a cabinet decision, the period of the production-sharing contract established between the Oil Authority and the "Petro Matad" company has been prolonged for five years. When the contract signed, the sides had agreed to spend USD 5 million for the extraction. As of today, the spending of the money has reached about USD 40 million.

- Money of MNT 1 billion will be allotted from the government's reserved fund to recover damages in Khentii, Tov aimags and the General Authority for Border Protection caused by the natural disasters occurred in June.

- The cabinet discussed results of the State Head's participation in the 12th Meeting of the Council of Heads of Member States of the Shanghai Cooperation Organization (SCO) to run on June 6-7 in Beijing, China. Then, the cabinet decided to submit it to the National Security Council.

- The cabinet did not back a bill initiated by D.Kyokushyuzan Batbayar MP on annulling some special licenses of mineral exploration, and a draft amendment to the law initiated by L.Gundalai MP on mineral resources.

A parliamentarian Kh.Battulga has drawn up a draft law on granting cash prizes to athletes who won Olympic medals and their coaches, but it was not backed.

- The cabinet backed in principle a draft new wording of the law hygiene, and decided to submit it to the State Great Khural. The cabinet also backed a draft intergovernmental agreement between Mongolia and Vietnam on cooperating in the educational sphere until 2015. In accordance with this agreement, 15 Mongolian students will study in Vietnam every year.

- The "Baganuur" and "Shivee-Ovoo" companies have been exempted from the payment for air pollution.

- The cabinet discussed and backed a draft law on ratifying the amended charter of the International Telecommunication Union (ITU) and the ITU's Convention. It will be submitted to parliament.

Link to Montsame


Currently shares suspend, pending a significant announcement

MIG: Annual Results For Year Ended March 2012

July 4, Mongolia Investment Group Limited (HK:402) --

Link to report


Erdene Completes US$3.35 Million Sale of the Granite Hill Quarry Property/Provides Results of AGM

HALIFAX, NOVA SCOTIA--(Marketwire - July 3, 2012) - Erdene Resource Development Corp. ("Erdene" or "Company") (TSX:ERD), is pleased to announce it has completed the sale of its real estate and associated royalty interest in the Granite Hill property located in Hancock County, Georgia, USA, for US$ 3.35 million cash on closing.

Under the terms of the Asset Sale Agreement, the Company's 100% interest in the 339 acre parcel of land and the associated lease and royalty was sold for US$3.35 million to an arm's length, third party. This transaction has increased the Company's working capital position to ~$5.0 million.

Appointment of Board and Executive

At the Annual General Meeting ("AGM"), the shareholders elected a board, of nine directors: Peter Akerley, John Budreski, Bill Burton, John Byrne, Dave Carnell, Chris Cowan, Ken MacDonald, Stuart Rath and Philip Webster to hold office until their successors are duly elected or appointed.

The board would like to thank Mr. Malcolm Cox, who did not offer for re-election, for his contributions to the Company during the two years he served on the board of directors.

Following the AGM, the Erdene board of directors confirmed the appointment of its executive officers, namely: President and Chief Executive Officer - Peter Akerley; Vice President Asia - Chris Cowan; Vice President Business Strategy and CFO - Ken MacDonald; and Corporate Secretary - Suzan Frazer.

Auditor Re-Appointed

KPMG LLP was re-appointed Auditor of the Corporation to hold office until the next annual meeting of shareholders or until its successor is duly appointed.

Link to release


BoM Issues 133B One-Week 13.25% Bills

July 4 (Bank of Mongolia) BoM issues 1 week bills worth MNT 133.000 billion at a weighted interest rate of 13.25 percent per annum. /For previous auctions click here/

Link to release


Turkish Airlines resumes its service to Ulaanbaatar in Mongolia after 15 years

July 4 ( On 2 July, Turkish Airlines further expanded its presence in East Asia, as it resumed services from Istanbul Atatürk (IST) to Ulaanbaatar (ULN), the capital of Mongolia. The route is now offered with thrice-weekly frequencies and operated using A320s with a technical stop in the Kyrgyz capital, Bishkek. Turkish Airlines preciously operated the route between 1996 and 1997, but dropped it due to low demand. The economic exchange between Turkey and Mongolia is still low, although year on year figures doubled in 2011.

Link to article



Ulaanbaatar, Mongolia, July 3 (The International Republican Institute) – In keeping with Mongolia's effort to progressively improve the quality of elections since its transition to democracy in 1990, the General Election Commission (GEC), for the first time, allowed local civil society groups to observe the June 2012 parliamentary elections.  Their efforts added to increased transparency and helped ensure the elections reflected the will of the Mongolian people. 

"Local independent monitoring of elections is crucial for the transparency of the democratic process," said Dr. T. Burenjargal, Director of the Social Policy and Development Research Institute, a Mongolian civil society group and partner of IRI.  "This is our first time observing elections, without the international trainer and seminars provided by IRI we would not have known what to look for."

In addition to allowing civil society observers, the GEC also added national voter identification cards with fingerprint recognition, used electronic vote tabulation machines for the first time to minimize fraud during vote counting and speed up reporting of results, and installed web cams in polling stations to allow web monitoring by the public in order to increase transparency.

With funding from the United States Agency for International Development, IRI trained people representing 45 different Mongolian civil society groups.  International election experts lead training seminars in the capitol of Ulaanbaatar and two others in the aimags (provinces) of Durnogobi and Umnugobi.  The seminars were held in cooperation with GEC and covered topics such as a review of Mongolian Election law provisions, rights and responsibility of election observers, identification of common types of voting irregularities and how to write election observation reports.  In addition to these trainings, IRI contributed to voter education by producing an election guide on how to correctly vote using the new ballots for the electronic vote tabulation machines.  IRI distributed more than 45,000 copies of the guide in Bulgan, Darkhan-Uul, Dornogobi, Orkhon, Selenge, Tuv and Umnugobi aimags and in six districts of Ulaanbaatar.

The Mongolian groups are now writing their reports and will publicly present their findings to the GEC doing their part to continue to improve the voting process in anticipation of the presidential election scheduled for May 2013.

Link to article



July 4 (InfoMongolia) The Head of the Democratic Party (DP) N.Altankhuyag, Head of the DP group in the State Great Khural (Parliament) Ch.Saikhanbileg and Secretary General of DP D.Erdenebat have held a press conference today on July 04, 2012.

During this, the Head of DP N.Altankhuyag noted, "In the 22 years of Mongolian democracy, it is the first time for Mongolia to have democratic governance. It is the first occurrence, where there is a democratic President, democratic Speaker of the Parliament, democratic Prime Minister and democratic majority in the Ulaanbaatar City Citizens' Representative Council."

Also, he added "Although DP was potential of gaining over 40 seats with the 2012 Parliamentary Elections, but currently we have 32-33 seats due to election frauds that occurred in aimags such as Uvs, Uvurkhangai and Orkhon. Great responsibility has come on the shoulders of DP. We will immediately discuss the matter of providing Mongolian citizens with employment and income. We will forefront to establish a new ministry, the Ministry of Labor. Combat corruption. Establish justice. We will separate the Ministry of Justice from the Ministry of Home Affairs, where we will implement the principal of equality before the law. Now, it is needed to promptly compose the new Parliament and the new Cabinet. However, DP gained many seats in the 2012 Parliamentary Elections, it did not become the majority party. Thus, DP will form a coalition with a force that would implement the DP Action Plan, establish justice, combat corruption and provide the citizens with job and sustainable income."

The Head of the DP group in the Parliament Ch.Saikhanbileg gave an answer to the question of who will be leading the newly established government, saying "By the rules of our party, the Head of DP will become the Prime Minister of Mongolia." Thus, it is now certain that the Head of the Democratic Party Norov ALTANKHUYAG will be appointed as the Prime Minister of the new Cabinet of Ministers of Mongolia.

Link to article



July 4 (InfoMongolia) On July 04, 2012, the Civil Will Green Party (CWGP) has released a statement on the post-Parliament election conditions among the Mongolian society.

In the statement, it was noted, "The CWGP candidates are sending in complaints on the illegitimate actions that occurred during the Parliamentary Elections' campaigns and voting process. These complaints are based on specific grounds, where the CWGP will continue to demand a control vote count on some electoral districts.

Nevertheless, there are many issues that have accumulated in the society needs to be promptly resolved. The issue that is concerning the citizens the most was the emerging signs of economic instabilities, with inflation reaching 16%. The budget expenditure of this year's first half has exceeded the intended target, especially due to the allotment of cash and salary-pension increases prior to the election, the state budget is intending for bankruptcy. If political instability keeps its pace, it will be difficult to further sustain inflation. Moreover, there tendencies have emerged for the prices of our main export raw materials to decrease on the world market, thus negatively affecting our budget and financial stability.

Therefore, CWGP deems the significant necessity to promptly compose the new State Great Khural (Parliament) and a new Cabinet of Ministers and to start resolving these accumulated issues."

Link to article


Expedited Steps Toward New Government

July 4 (Julian Dierkes, University of BC) Contrary to the pattern from previous elections when the various steps following the polls came rather slowly, it appears that the DP is now eager to move ahead much faster.

With run-off elections scheduled for this Sunday, the final results for the election could come as early as this weekend.

The DP then seems to be eager to dissolve parliament and swear in a new parliament before Naadam.

DP leaders also gave a press conference to announce that the DP would be forming a government under party leader Altankhuyag as prime minister. (Mogi: actually they did not TECHNICALLY say Altankhuyag will be PM, but rather said according DP rules, the party leader should also be the PM, which TECHNICALLY rule out the possibility of change of party leader, but of course, this would be very unlikely now, window of opportunity was before election campaigns) They did not specify which party they would be forming a coalition with to reach the necessary 39 votes in the Ikh Khural to vote in a prime minister.

While a DP + MPP coalition seems the most natural given their collaboration in the past and the solid majority that they would command jointly, there are persistent rumours of DP discussions with the MPRP. In all likelihood President Elbegdorj would be opposed to that because some DP voters would surely not take kindly to such a coalition and might have this in mind as they cast their votes in next year's presidential election. Also, Enkhbayar is very likely to be a candidate for president (again) for the MPRP.

Whatever coalition emerges, if it is under the DP's leadership, this would be the first time that the DP would hold the top three offices in the country (president, prime minister, chairman of the Ikh Khural) and would also control the Ulaanbaatar city council at the same time.

The negotiations over various coalitions will surely involve many personal dynamics and ties, though the DP announcement seems to pre-empt the emergence of an alternative DP candidate for prime minister, a move that Battulga and Z Enkhbold had both rumoured to be planning.

Link to article


Mogi: has some mistakes in the number of women actually elected, but author admitted to the error and will correct

The Impact of a Quota: Female MPs in the Ikh Khural

By Julian Dierkes, University of BC

July 3 (Mongolia Today) A trip to the Mongolian countryside quickly produces the impression that women do all the work, waking at dawn to make breakfast for their husband, and waiting for him to lay down before finally retiring themselves. Yet, somehow men seem to remain "in charge", at least as nominal figureheads; not just in the ger, but also in the political arena. This year the new election law required 20% of candidates in the Mongolian parliamentary elections be women. These affirmative-action-like quota requirements are nothing new and have been implemented at various percentages in different jurisdictions.

The current Parliament, elected without a quota even though this had been initially enacted in 2008, has only three women members our of a total of 76: D Arvin (MPP), S Oyun (CWGP), and D Oyunkhorol (MPP). Together they make up less than 4% of the Parliament.

The election law of 2012 that was passed in anticipation of the election on June 28 contained many new regulations, including the introduction of proportional representation for 28 of the 76 seats. It also specified that a minimum of 20% of the candidates nominated and approved as candidates would have to be women. There is no quota on women parliamentarians, just on the candidates for seats in parliament.

So, what was the impact of this quota on the number of MPs? Looking at the preliminary results for this year's election, seven women have been elected directly in the 48 first-past-the-post contests: D Oyunkhorol (MPP), Ts Oyungerel (DP), G Uyanga (MPRP), S Odontuya (DP), and  Erdenechimeg (DP) (Mogi: names are correct but the number is 5 women from direct). Another five have been elected based on proportional representation: R Burmaa (DP), M Batchimeg (DP), S Narangerel (MPRP), S Oyun (CWGP), and Ts Tsolmon (MPRP).  (Mogi: by list there's FOUR women likely to win, but list candidates not officially announced yet I believe, Ms. Narangerel is not elected out of here) This means that a total of 10 women, or about 13% of the new parliament will be women. (Mogi: actually 9 are for sure, but there's a chance for 10, as there will a revote in UB's Bayanzurkh & Nalaikh district between Mr. B. Batzorig (MPP, 3rd place) and Ms. D. Arvin (MPP, 4th place).

This election proved to be especially challenging for incumbents with the new quotas for women and a new system of proportional representation. In fact, of the seven women directly elected, six are newcomers to Parliament, and four of the proportional representatives are also about to enter Parliament for the first time. Additionally, looking at both male and female candidates, we can see that roughly half of the new Parliament will be entering for the first time. This "new blood" has potentially major implications in a country where most people complain that the same politicians are always just circling through office.

Women politicians clearly have made some important gains. Since few parties exceeded the 20% women quota by much, women were elected about as often as you would expect given their inclusion as candidates. However, there is some variability on this among the parties. In scanning the party lists of candidates nominated to be elected via proportional representation, the MPP notably put almost all their women candidates towards the bottom of this list, ensuring that male candidates had a much higher chance of being elected, while women would only have been added had the MPP won in a landslide. Accordingly, only one of the 10 female MPs will be from the MPP, with the possibility of one more following an up-coming run-off election. By contrast, five women will be representing the DP in the Ikh Khural.

With the DP coming into the parliament with most seats and thus likely to be involved in forming a government, the composition of cabinet and assignments to chair standing committees will be the next test of women's inclusion in political decision-making.

Of the few women in Mongolian politics, several stand out as being especially well-known and respected. One such example is S. Oyun (CWGP). Oyun is the sister of one of the most famous supporters of democracy in the early 1990s – Zorig – whose 1998 murder shocked the nation. Her consistent support of the free market, human rights, and anti-corruption initiatives puts her in a seat of moral authority and trustworthiness that few other Mongolian politicians can command. Oyungerel (DP, seen campaigning in June 2012 on the left) is also well known for her support of human rights and international outlook. She even managed to command more votes than MP L Bold (DP) who was considered a public favourite from early on.

Why have a quota in the first place? One local female politician (see her campaign ad balloon on the right) that we spoke with during our observation of the campaign leading up to the Ulaanbaatar city election that was held in parallel to the parliamentary elections, expressed her opinion that women should "make it on their own". On one hand, this is the classic response to such affirmative action steps; on the other hand, this is also indicative of a larger wish that quotas were not necessary.

Still, perhaps they will be necessary for some more years until voters can see for themselves the advantages of women politicians. Feminist groups in Mongolia have pointed to lower instances of corruption and caring, maternal instincts as advantages for the country should more women be in politics. Some of us might be tired of such stereotypes, yet what really matters is whether these slogans speak to the Mongolian voter. With more women elected this year, perhaps it is safe to say that we are on the right path to a more equal representation of women among the visible leadership of Mongolia even when many suspect that much of the management of the country is already performed by women.

Link to article



Ulaanbaatar, Mongolia, July 4 /MONTSAME/ At a regular cabinet meeting held on Wednesday, the Minister of Finance D.Khayankhyarvaa was obliged to place in the state annual budgetary planning and clarification financial resource of capital and current expenditures to realize projects reflected in the investment program.

Developing Mongolian people and providing them with friendly environment for working and living is one of the priorities of the investment program of Mongolia. It also aims to create human-friendly governance, developing the economy region-by-region and the responsible mining, to make the base of heavy industry, to promote the competitiveness of manufacturing industries and to develop the infrastructure ensuring the intensive economic growth.

In addition, the budgetary planning based on the program will be co-ordinated with the investment program, and the limit of money to be allotted from the state budget will be fixed in accordance with international standards for projects to be implemented in principle of the state and private sector partnership.

Some obligation were given to Ts.Dashdorj, the Minister of Road, Transportation, Construction and Urban Development to improve working cohesion of the state administrative bodies and to approve a general plan of locations of the administrative organizations in order to make the actions faster and to decentralize in these organizations.

Link to Montsame



July 4 (InfoMongolia) The President of Mongolia Ts.Elbegdorj has released an ordinance on the issues ofproviding a friendly environment for a citizen of Mongolia to live healthy and safe in their home country, providing a healthy and stable development of the youth, improve population growth and ancestry roots, additional state policy on accommodating the needs of the work force, enhancing its activities and improving the legal environment, and has given the following orientation to the Government of Mongolia.

The ordinance states:

One. The following measures are to be accounted as orientation to protect the root for stable population growth, the base of maternal and infant health, and to refine all economic and social systems to provide their healthy growth.

1.1                  To allot a monthly benefit of 100 thousand MNT to a parent or legal guardian that has given birth or adopted a child until the child reaches 2 years of age.

1.2                  To comprehend a parent or a legal guardian that has given birth or adopted a child as primary in the housing program, to show certain discounts.

1.3                  To annually reflect the budget for establishing a nursing kindergarten for young children based on population density, growth and other studies, to continuously implement, to increase the salary for nursing teachers and to renew and improve their fringe benefit system.

Two. To provide a friendly legal environment for Mongolian citizens, residents, natives, their families and children who are living, studying and working abroad to return, settle, work, live and invest in their homeland.

Three. To execute the juridical, financial and organizational works of providing Mongolian nationals and ethnic groups with an opportunity to study, live and settle in Mongolia by implementing in phases and preference based on inquiries and research.

Four. To oblige the Government of Mongolia to provide the work group on developing an additional integrated state policy to implement the above objectives with adequate possibilities and administration.

Link to article



July 4 (InfoMongolia) The new Ambassador Extraordinary and Plenipotentiary of the United Sates to Mongolia Piper A.W.Campbell was officially appointed with the US Senate meeting held on June 29, 2012.

On March 02, 2012, President B.Obama announced his intent to nominate Piper Campbell as the next Ambassador to Mongolia. On May 01, 2012, President of the United States B.Obama had delivered his proposal to the U.S. Senate Standing Committee on Foreign Relations to appoint Ms. Piper Campbell, 46, as an Ambassador to Mongolia. After undergoing all legitimate steps Piper Campbell, who has served 22 years in the diplomatic service, has now received her 3 year justifiability to reside in Mongolia. P.Campbell is the 5th woman ambassador to be appointed from western countries to Mongolia and the 3rd to be appointed from the United States. She will come to her newly appointed office starting September 2012.

Piper A. W. Campbell is a career member of the Senior Foreign Service and has served as Consul General at the U.S. Consulate General in Basrah, Iraq since July 2011. Prior to her time in Iraq, Ms. Campbell was Chief of Staff to the Deputy Secretary of State for Management and Resources. From 2006 to 2009, she was the Deputy Chief of Mission at the U.S Embassy in Cambodia. Other overseas posts have included Counselor for Humanitarian Affairs for the U.S. Mission to the UN in Geneva, Switzerland; Advisor to the USAID Mission Director in Croatia; Senior Advisor to the Head of Civilian Affairs for the United Nations Transitional Administration in Eastern Slavonia, Croatia; General Services Officer in Belgium; and General Services Officer and Consular Officer in the Philippines. Domestically, Ms. Campbell has served as an Advisor on Asian Issues for the U.S. Mission to the U.N.; Human Rights Officer in the Bureau of International Organizations; and a Watch Officer in the State Department's Operations Center.

Ms. Campbell holds a B.S.F.S. from Georgetown University School of Foreign Service and an M.P.A. from Harvard Kennedy School.

Link to article


Finally A New Era in NATO-Mongolia Relations

By Mendee Jargalsaikhan

Key Points

The implementation of the first Individual Partnership and Cooperation Program is a noticeable acknowledgement of Mongolia's sustained commitment toward democratization and international peace and security.

Mongolia's inclusion in NATO initiatives offers an opportunity for the military  and security forces to expedite their transformation toward NATO-standard professionalism, and civilian control.

Mongolia's experience may offer lessons for Central Asian states, especially in its success in creating a democratic civil military relationship, civilian control of the military, military professionalism, and determined commitments toward peacekeeping operations.


Mendee Jargalsaikhan  served as Mongolia's Defense Attaché to the United States, Chief of the Foreign Cooperation Department of the Ministry of Defense of Mongolia, and Senior Fellow at the Mongolian Institute for Strategic Studies. He is a graduate student at the Political Science Department of the University of British Columbia (UBC).

On March 19, 2012, NATO announced that Mongolia would implement its first Individual Partnership and Cooperation Program (IPCP).1

This will be the first IPCP to be carried out under the new partnerships policy, adopted by NATO foreign ministers in Berlin during their April 2011 meeting. This is a substantial change in NATO's behavior towards Mongolia. Ulaanbaatar has sought to engage the North Atlantic Alliance since the beginning of the 1990s, but until now has been left out from the Partnership for Peace (PfP) program, which was proposed to all former Soviet republics. Yet Mongolia is the only postcommunist Asian state whose democratization has not regressed since its peaceful transition to free-market economy.2

This paper explores the history of NATO's changing attitudes to Mongolia and the policy implications of the NATO announcement.

Link to full publication


Justice Ministry: The legal reform continues in pace with the modern development.

July 4 (Democracy Magazine) S. Mandakhbat, deputy chief of the legal policy department at the Ministry of Justice and Home Affairs, speaks to "Democracy" Newspaper

- Recently, certain members of the Great State Hural and even citizens voice criticism that the officials of the Ministry in charge of the legal policy are not doing their work, that there are no new laws being initiated, drafted and submitted to the Great State Hural and that the legal reform is not undertaken. Let us start the conversation from that. 

Our Ministry has had many laws approved by the Great State Hural since 2008. The legal reform including the legislation reform policy is continuing without interruption in pace with the modern development. As for an example of innovative issues, our Ministry drafted and secured the approval of the methodology on identifying overlaps, contradictions and loopholes in the law and improving the coherence, methodology on estimating the impact of laws and draft laws and methodology on legislative drafting. We are organizing the work to implement and introduce these methodologies in real life. It is a significant reform carried out in our legal area. This is because some of this work is being done anew in Western countries, namely, Europe. 

- Some lawyers pass on a judgment that our country has all the necessary laws, but articles and provisions of these laws overlap, contradict each other, lack coherence or contain loopholes. Hence the Ministry of Justice and Home Affairs has started a "big cleanup" on the laws since 2008. How is the progress of this work? 

Mongolia's best doctors, professors and officials participating in the discussion and adoption of the laws formed a team and conducted an approximately two-year research, analysis and monitoring of the legal reform program approved in 1998 ending with the production of conclusions. The conclusion in the report of this team published in 2008 suggested that there are all the necessary laws in Mongolia and because these laws are incoherent between each other and have numerous contradictions, overlaps and loopholes there is a further need to correct this situation and improve the laws. 

As of today, Mongolia has 456 independent laws. Therefore, the Ministry is in accordance with the aforesaid conclusion implementing the work to improving the coherence of these laws on a gradual basis. We cooperated with the German International Cooperation Society beginning from 2008, drafted methodologies to identify overlaps, contradictions and loopholes in laws and to improve the coherence and had them approved. In accordance with it, the work to identify legal overlaps, contradictions and loopholes and improve the coherence was started. 26 top students majoring in law that had the best grades were hired on a contractual basis in order to implement this work. Thus, we prepared the domestic professionals. 

After the approval of the methodologies, we have launched a "big cleanup" on 81 laws related to civil and economic matters as a first priority. For example, there is the Law on Non-Governmental Organizations. We put together all international treaties and conventions related to this law, Constitutional Court decisions, all laws related to legal entities, resolutions of the Government and the Supreme Court interpretations and clarified what was wrong. 

- It was a very large scale work, wasn't it? 

Yes. We selected 81 laws related to civil and economic matters as a first priority and submitted them as a listed package. For example, it became necessary to amend 63 related laws in order to remove the overlaps, loopholes and contradictions in 29 laws. So we have drafted and submitted a package of draft laws amending 92 laws. Our country adheres to the principle of discussing laws one by one. Therefore, the Law on the Procedure to Draft and Submit Laws and Other Decisions of the Great State Hural was amended by introducing a completely new concept of allowing the submission of "packages of laws" intended to remove the overlaps, loopholes and contradictions. So we amended the relevant laws. 

- How many packages of draft laws have you submitted within the scope of "cleaning up" the legislation? 

The Government submitted to the Great State Hural in 2011 the package of draft laws to remove the overlaps, contradictions and loopholes in 29 laws regarding civil and economic matters. Since it was considered necessary to discuss it at the full session of the Great State Hural, the first reading is continuing. The Government submitted to the Great State Hural the package of draft laws aimed at improving the coherence of laws within the scope of responsibilities under the Minister of Finance. The relevant Ministries delivered to the Administration of the Government the package of draft laws within the scope of responsibilities under the Minister of Environment and Tourism, Prime Minister and Head of the Administration of the Government for the deliberations at the meeting of the Government. 

- Would you please provide a real example of what is being said by the terms overlap, loophole and contradiction? From the submitted package of draft laws. 

The Law on Licensing of Economic Activities stipulates that only the law shall regulate the procedure of granting and suspending the licenses. But two Laws on Water Transportation and on Auto Roads specify that the licensing procedure shall be governed by the regulation approved by the Minister. The regulation surpassing the law affords an authority to the Minister. The reason why the licensing law requires the regulation "only by the law" is perhaps to keep it as a special power of the Great State Hural for the purpose of preventing the abuse of power by the Government or a Minister and creation of red tape for companies during the provision of a license. We proposed to annul these two provisions and amend it to be a regulation only by the law. That was evidently a breach. 

Let me cite an example of a loophole in a law. The Great State Hural appoints commissioners of the Financial Regulatory Commission for the period of six years. The speaker of the Great State Hural introduces the issue of appointing the next person. But it is not clear when it is introduced. The period of six years has expired. It is impossible to carry on without appointing the next person. But the previous person may continue for half a year or even two years. This opens the possibility for him to work as the commissioner, exercise the powers and basically keep breaching the law. Therefore, our draft includes the language where the next person is presented within 30 days. 

The Law on Partnerships and Companies has been annulled. But many laws include references to the Law on Partnerships and Companies. The term "disabled people" has been in use for a long time, but many laws employ the term "invalid". All this was corrected. 

- Laws are not implemented in real life due to drafting and adoption of laws without any estimation and studies. There may be many examples starting from the "long named" law. What does your Ministry do in this regard? 

The occurrence of such criticism is partially true in that laws are being adopted having a poor estimation and study and without a research of consequences. State institutions, citizens and business entities incur a lot of pressure and expenses because of the decisions issued from the state. The verification of one document by a notary, acquisition of one license by a company, administration of a signature and increase of the number of applications received by civil servants each entail new expenses. That is why we researched the European and other Western systems. The countries in the West set on an objective to reduce the pressure and expenses incurred by the three aforementioned entities due to the decisions from the state by 20 or 25 percent in the nearest five years. 

We have studied their experience and in 2010 adopted the methodology on estimating the impact of laws (consisting of four parts) which is now in force. In other words, the Ministries must study of the draft laws according to this methodology before drafting them and sending their concept papers to our Ministry for approval. For example, it will be necessary to estimate and clarify what stress citizens will have, what expenses companies will incur and what costs the Ministry of Construction or the state will additionally face when introducing the system of licensing the people intending to become construction workers. Simply put, the ultimate objective is to produce a report expecting that the state, citizens and business entities will face a cost of 20 billion MNT if a draft law is adopted, but there will be a cost of five billion MNT if the Government resolves the matter by issuing a resolution. Such report will be presented to the entity intending to initiate the draft law and will save the costs. 

- There is criticism saying that the work in the Great State Hural is protracted due to the poor drafting of the legislation and abundance of incomprehensible and ambiguous articles. What has been done to make the legislative drafts more improved and qualified? 

Three years ago the methodology on legislative drafting was revised. There are instances when draft laws initiated by the Ministries, members of the Great State Hural and President contain textual and grammatical mistakes, are unclear, submit issues already covered by another law or do not comply with the principles of the Constitution and other laws. Thus, we produced the methodology specifying the detailed guidelines of the technical nature such as the textual comprehensiveness, avoidance of using foreign words and terms, proper numbering and correct references. The methodology of this type exists in all countries. All law initiators must devise the drafts according to the consolidated methodology. By doing so, the matter of legislative drafting and discussion will normalize. 

- The different interpretation of articles and provisions in the law by lawyers confuses the citizens and leads to the doubt as to which one is right. What needs to be done to straighten this situation? 

There are instances in our country when a law is drafted within a week, submitted and approved by the members of the Great State Hural. It has no estimation and study. If one writes a law in a week, then he is bound to have mistakes. It is necessary to properly draft the law and examine from every side on whether it overlaps or conflicts with other laws. But the failure to do so has the potential of issuing bad laws. There will be none of these problems if initiating and drafting the laws will use the three methodologies mentioned by me. Lawyers in any country interpret the articles and provisions of the laws differently. They attempt to interpret for the benefit of themselves and their clients. This is a typical lawyer's behavior. There is a joke related to it. A first grade pupil answers "two" to the question "what does one plus one equal". An economist says "eleven" and a lawyer asks how much you want. So a lawyer should not generally work to get any result, but one cannot deny that there are such lawyers. 

However, state institutions and their employees must have a uniform understanding of the law and use it uniformly. The methodology on legislative drafting stipulates that the draft of any provision shall not be formulated in an ambiguous language. Because it cannot be well implemented, I may interpret a given article or provision in one way and you in another. 

- There was previously only one sort of a provision in the law concerning the human trafficking crime. But now it is an independent law. There are quite many legislative initiatives arising out of the modern conditions and circumstances. Being the Ministry in charge of the legal policy, what laws such as this did you initiate and secure the adoption? 

We work towards securing the adoption of few proper laws. We had the Law on Combating Human Trafficking mentioned by you adopted. This is another law that has been specifically drafted regarding newly emerging crimes. Formerly, we have drafted and secured the adoption of the special law governing the matters of combating money laundering and terrorism. This work will carry on. 

Our country experienced a financial crisis in 2008-2009. Then the Great State Hural issued a special resolution on overcoming the financial crisis and instructed to urgently draft certain laws for adoption. Our Ministry drafted all the legislation specified in that resolution and submitted for adoption. The Laws on Concession, on Asset Backed Securities and on Mortgage aimed at overcoming the financial crisis were adopted. The passage of these laws opened the way for the large scale development in the mining industry of our country and the influx of investments and funds counted in several millions and billions. 

The Law on the Driver's Insurance was enacted. It is the first mandatory insurance law introduced in Mongolia. Every country has this system. The adoption of this law makes it possible for the development of the insurance industry to reach a new level and become more understandable to the public. We cannot rule out going on with the laws on the mandatory mining insurance, on the doctor's mandatory liability insurance and on the lawyer's mandatory liability insurance. Everyone makes a mistake. It is important that in the event of an occurrence of a mistake and damages to others one can compensate the damages by an insurance organization even if he does not have money in his pocket. 

- It is observed that laws are approved and draft laws are submitted after the matter has long been established. It seems that negative consequences arise due to the failure of a timely adoption of a law. For example, it is said that the law on regulating the foreign investments was initiated and submitted three years ago. But it had been remaining without review and the discussion started when the problem with "South Gobi Sands" company recently emerged. 

The members of the Great State Hural and the President obtain the opinion of the Government on a mandatory basis when initiating laws. Such report is prepared by our Ministry. Member of the Great State Hural G. Zandanshatar initiated three years ago the law on regulating the foreign investments in business entities operating in industries that are strategically important for ensuring the national security. At that time, the Government endorsed the general concept and principles of this draft law and delivered a specific opinion on focusing and pointing out certain issues. Therefore, this is not the case when we suddenly delivered a draft law after the appearance of a problem. But I cannot rule out that such cases exist. 

- After the adoption of a law, the relevant industry and agencies undertake the duty to implement it. But not much is said about the labor of the people who spend days and nights drafting the law . . . 

The legislative drafting work is very odd. The work of the Ministry of Mineral Resources and Energy and of the Ministry of Roads, Transportation, Construction and Urban Development is apparent and open to the public eye. For example, anyone can see and understand the development at Oyu Tolgoy and Uhaa Hudag. As for the construction of roads and buildings, the result is immediately visible to the public. But the legal work is not like that. We come under criticism, spend days and nights, draft laws and work towards the adoption, but it has the tendency of becoming the accomplishment of others. But it is a good job for a lawyer because few lawyers are engaged in it and it is a source of pride demanding the professional expertise. Young people can learn a lot and face challenges. The leadership of our Ministry understands and knows this providing every form of support.

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