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Account(Ing)/(Ability): Democratising the Environmental Impact Assessment in Mongolian Mining

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Account(Ing)/(Ability): Democratising the Environmental Impact Assessment in Mongolian Mining ACCOUNT(ING)/(ABILITY): DEMOCRATISING THE ENVIRONMENTAL IMPACT ASSESSMENT IN MONGOLIAN MINING BY DANAASUREN VANDANGOMBO A thesis submitted to the Victoria University of Wellington in fulfillment of the requirements for the degree of Doctor of Philosophy in Accounting Victoria University of Wellington (2012) Abstract This study examines sustainable development in practice, particularly in the context of mining and environmental management in a less developed country (LDC). It argues for sustainable and participatory mining in LDCs, such as Mongolia, by encouraging democratisation of the environmental impact assessment (EIA) process. The EIA, a major tool of environmental management, addresses the negative environmental and social impacts of development projects, such as mining, and has the capacity to mitigate such impacts by incorporating EIA recommendations into business practice. To ensure the inclusion of affected communities in the EIA process, public participation in EIAs is legislated in many countries. This is particularly important for mineral-rich LDCs, as they have experienced growing conflict among mining companies, local communities, and government authorities, due to a lack of dialogue among mining constituents and a lack of effective public policy and public engagement in the promotion of socially and environmentally accountable mining. This study applies Brown‘s (2009) dialogic accounting framework in the exploration and evaluation of current EIA practices. By using Mongolian EIA practices for illustrative purposes, this study seeks to contribute to debate in EIA and SEA literature, and to support calls for more participatory EIAs that can embed sustainable development into business practice. Furthermore, the current and potential engagement of NGOs in the EIAs of Mongolia is examined in order to explore their potential to foster dialogic accounting. Keywords: dialogic accounting, accountability, EIA, NGO, mining i This doctoral thesis is dedicated to my father Professor Vandangombo Radnaasumberel ii Acknowledgements First and foremost I wish to thank my supervisors, Professor Trevor Hopper and Professor Judy Brown. It has been a privilege to have them as supervisors. They have taught me through frequent discussions and advice how to think more critically, and how to conduct and deliver research. I have been particularly amazed by their patience when reading my numerous drafts, written in halting English, and their surprisingly prompt reviews and replies. My supervisors have guided me in a non-threatening, empathetic way on my research path, assisting me with compliance of administrative requirements, and offering timely words of encouragement and advice during the many ups and downs of this PhD study. I appreciate their belief in me, their time, advice, encouragement, and patience, which have been so motivational and inspiring. They have set an excellent example as supportive, knowledgeable professors. I am also thankful to Professor Tony van Zijl and Professor Keitha Dunstan, my previous supervisors, who assisted me to explore the literature of many disciplines and to develop my research interest. I am very grateful to the New Zealand Development Scholarship, which provided the generous funding to help me pursue my PhD study. I am very thankful to the Victoria International Student Advisors, Ms Julia Harrison, Ms Inge De Leeuw and Ms Bridget Nankivell for their great understanding and support, enabling me to successfully complete this study. During my study I have received much generous assistance and advice – notably from Professor Amanda Ball, Professor John Roberts, Professor Rob Gray, Professor Jesse Dillard, Professor Peter Söderbaum, Professor Ian Thomson, Professor Rosemary J. Coombe, Professor John Overton, Dr David Carter, Dr Michael Fraser, Dr Helen Tregidga, Dr Thu Phuong Truong, Mr Pala Molisa, Dr Jenny Alves, Ms Vanessa Borg, Dr Prae Keerasuntonpong, and many other professors and colleagues at the School of Accounting and Commercial Law at Victoria University of Wellington, and School of Economic Studies at Mongolian National University. I extend my warm and grateful thanks to them all. I owe loving thanks to my family for all their care, encouragement, and support, particularly my parents, Professor Vandangombo Radnaasumberel and Gantogoo Suidaan, who by their examples, raised me to become a full scholar, and supported me in all my pursuits. I am also grateful to my brother, Undrakh-Erdem Vandangombo, my uncles, Professor Gonchigdorj Radnaasumberel and Professor Rinchinbazar Ravsal, and friends, Mr Enkhbayar Chimedkhorol and many others, who provided invaluable support and encouragement throughout my PhD study. I also thank my friends, Mr John Deverall and Ms Philippa Woodcock, for their patience and proofreading of my thesis. I owe sincere gratitude to my friend, Ms Nora Munkhuu, and her daughter, Duka, who have been so close to me from the beginning of my study in New Zealand. Ms Nora has always been helpful and encouraging, and showed much kindness during difficult moments in my study. iii This thesis is not only the outcome of my own passion and industry, but also the result of support and encouragement from my supervisors, professors, colleagues, friends, and family. iv Table of Contents Abstract ................................................................................................................ i Acknowledgements ............................................................................................. iii Table of Contents ................................................................................................. v List of Tables ...................................................................................................... ix List of Figures ...................................................................................................... x List of Abbreviations .......................................................................................... xi Statement of Originality ..................................................................................... xii Chapter 1: INTRODUCTION .............................................................................. 1 1.1 Research motivations .................................................................................. 1 1.2 Scope of the research .................................................................................. 3 1.3 Research aims and objectives...................................................................... 7 1.4 Thesis organisation ..................................................................................... 9 Chapter 2: A CALL FOR ECONOMICALLY SUSTAINABLE AND PARTICIPATORY MINING ............................................................................. 12 2.1 Role of mining in the world ...................................................................... 12 2.1.1 Mining impacts .................................................................................. 14 2.1.1.1 Economic impacts ........................................................................ 14 2.1.1.2 Environmental impacts ................................................................ 15 2.1.1.3 Social, cultural and political impacts ............................................ 18 2.1.1.3.1 Social impacts ...................................................................... 18 2.1.1.3.2 Cultural impacts ................................................................... 20 2.1.1.3.3 Political impacts ................................................................... 20 2.1.2 A call for economically sustainable mining ........................................ 24 2.1.3 A call for participatory mining ........................................................... 26 2.1.3.1 ‗Best practices‘ ............................................................................ 27 2.2 Mining in Mongolia .................................................................................. 30 2.2.1 Mongolia in brief ............................................................................... 30 2.2.2 Economic, social, and political contexts ............................................. 30 2.2.2.1 Economy ..................................................................................... 30 2.2.2.2 Social and political contexts ......................................................... 31 2.2.2.3 Social and political issues ............................................................ 34 2.2.3 Mining sector ..................................................................................... 38 2.2.3.1 Overview of the mining sector ..................................................... 38 2.2.3.2 Mining impacts ............................................................................ 39 2.2.3.2.1 Economic impacts ................................................................ 39 2.2.3.2.2 Social impacts ...................................................................... 40 2.2.3.2.3 Cultural impacts ................................................................... 43 2.2.3.2.4 Political impacts ................................................................... 44 2.2.3.2.5 Environmental impacts ......................................................... 46 2.2.4 Challenges of the mining sector .......................................................... 49 Chapter 3: AN ENVIRONMENTAL IMPACT ASSESSMENT AS A POTENTIAL DIALOGIC ACCOUNTING TOOL ............................................ 53 3.1 Dialogic
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