Constitutional Court Strikes Down New Minerals and

UNCLAS ULAANBAATAR 000143

SIPDIS

SENSITIVE
SIPDIS

STATE PASS USTR, USTDA, OPIC, AND EXIMBANK
STATE FOR EAP/CM AND EB/IFD/OIA
USAID FOR ANE FOR D. WINSTON
MANILA AND LONDON FOR ADB, EBRD USEDS
TREASURY FOR USEDS TO IMF, WORLD BANK

E.O. 12958: N/A
TAGS: PGOV EINV PREL ETRD EMIN ENRG MG
SUBJECT: Constitutional Court Strikes Down New Minerals and
Anticorruption Laws

Ref: Ulaanbaatar 115

Sensitive But Unclassified - Not for Internet Distribution.


1. (U) On March 2, the Constitutional Court struck down the new
Minerals Law and Anticorruption Law passed by Parliament last July.
The laws took weeks to emerge from the Parliament Secretariat last
summer, in the interim undergoing extensive changes by both the
Secretariat staff and Speaker Nyamdorj. A citizen who urged the

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Constitutional Court to strike down the Minerals Law stated that
changes from what Parliament had passed had been made in 147 clauses
of the law, or over half of its provisions. Speaker Nyamdorj's
representatives argued that there had been an accepted practice of
editorial changes being made by the Speaker and Secretariat, and
that last July the Parliament had authorized the editing of the
passed texts. They added that the laws as passed needed editing,
especially the Mining Law, an unwieldy amalgamation of two different
drafts. However, the Constitutional Court ruled that the
post-passage changes in both the Minerals and Anticorruption laws
were pervasive and substantive, and thus violated the Constitution's
stipulation that only Parliament can pass legislation.


2. (U) The Constitutional Court's decision has immediate effect,
and suspends implementation of the two laws. The Spring session of
the State Great Hural has 15 days after it convenes in early April
to consider and vote on the Constitutional Court's position. If the
Parliament votes to overrule the decision, then the Constitutional
Court will again sit and make the final ruling on the
constitutionality of the laws.


3. (SBU) Comment: The Court's decision throws into immediate
disarray the staffing up of the new Anticorruption Agency, as well
as the negotiations on the Oyu Tolgoi copper mine project with
Ivanhoe Mines/Rio Tinto under the provisions of the radically
revised Minerals Law (under which, for instance, the state gained
the right to seek a major equity state in the project). The
extensive, often substantive, edits made by Speaker Nyamdorj and the
Secretariat in the major laws passed last summer had raised

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eyebrows, with most observers seeing them as going far beyond the
minor changes made to laws in past years. However the
constitutional issue is ultimately decided, MPs may ultimately
choose during the Spring session to re-enact the laws using the
texts as "improved" by the Speaker.

Minton