TopicsContract transparency and monitoringMeasurement of environmental and social impactsRevenue managementRevenue sharingSubnational governanceTax policy and revenue collection
Formal agreements between resource companies and subnational or local level stakeholders affected by company projects, or local level agreements (LLAs), are becoming an important mechanism for increasing benefits for local communities and minimizing or avoiding conflicts in many countries. The main objectives of this policy paper are to assess Mongolia’s experience with LLAs to date, identify gaps and opportunities, and recommend policy responses to improve existing regulation and agreement-making in practice.
Key policy recommendations
Prioritize mining projects and reduce the number of resource projects required to establish LLAs
Implementation of the LLA requirement can be optimized by defining thresholds for resource development projects to establish LLAs.
Incentivize the establishment of LLAs
Linkages back to the project approval process can be created to motivate mining companies to engage and establish agreements with “host” local governments and communities.
Clarify enforcement of the model agreement
The model agreement needs to be revised and defined as a hybrid document consisting of a mandatory framework that defines the core elements of an LLA and a non-binding guidance document on potential agreement processes and content that local governments and mining companies can adjust to their needs and contexts.
Develop and implement capacity-building programs
Comprehensive capacity-building programs on local level agreement-making need to be developed and implemented countrywide.
Support local civil society organizations to monitor implementation of LLAs
The monitoring projects prove that independent third parties can play an important role in identifying gaps in implementation and opportunities for improvement of both individual LLAs and the overarching legal and policy frameworks for LLAs.