The Gap between Paper and Practice
Industry Insights
“There have been positive steps recently. The new investment law that the government is talking about looks at scraping the US$100,000 limit for investment, as well as rationalizing the legislation for the ownership of land for foreign companies and streamlining inspections. These points are great, but we need to see them passed into law, and then, ensure that the underlying regulations are enacted quickly enough.”
Shaukat Tapia, Country Managing Partner, PwC (Mongolia)
“Our politicians are quite slow at making changes. For instance, the mine closure regulations we proposed are still not part of the official legislation after failing to become law two times; now these provisions are in the draft of the new Minerals Law. The allocation of royalty contributions to local communities was put into law some time ago, but implementation lagged as politicians required more control of the budget distribution.”
Dagva Myagmarsuren, CEO, Qualified Management Consulting (QMC)
“While there is a continuing nationalistic sentiment, which is embedded in the legislative framework, there is also a recognition that foreign investment is required to build the industry and more broadly the infrastructure and services. For instance, the law for strategic mineral deposits potentially allows the government to take over an asset discovered and developed by a third party by declaring it of strategic importance. There is this dichotomy that results in a cautious approach from even experienced mining investors.”
Petr Osvald, General Manager, SRK Consulting (Mongolia)
“Water and environmental protection laws in Mongolia draw from Western countries and Russia. Ensuring strict compliance with these regulations is essential, but it can be difficult due to our economic situation. In the future, we hope to see more policies that focus on improving the standards of living for the Mongolian people, because too many smart, talented people leave the country because they cannot meet their basic human needs; it’s unthinkable that there are many Mongolians living at -20 Celsius without central heating or hot water.”
Gantulga Enkhbold, Chief Operating Officer, Khaanzaa Service (KHS)
“One of the areas that require further improvement in Mongolia is lawsuits and the judicial courts. The current legal framework presents multiple challenges for foreign investors, as we learned from our own transition from Mongolian-Russian ownership to a state-owned entity.”
Munkhbat B. CEO, Mongolrostsvetmet
