EUROPEAN COMMISSION Brussels, 10.2.2020 SWD(2020) 23 final JOINT STAFF WORKING DOCUMENT

The EU Special Incentive Arrangement for Sustainable Development and Good Governance ('GSP+') assessment of Mongolia covering the period 2018 - 2019 Accompanying the document Joint Report to the European Parliament and the Council Report on the Generalised Scheme of Preferences covering the period 2018 - 2019 {JOIN(2020) 3 final} - {SWD(2020) 16 final} - {SWD(2020) 17 final} - {SWD(2020) 18 final} - {SWD(2020) 19 final} - {SWD(2020) 20 final} - {SWD(2020) 21 final} - {SWD(2020) 22 final} - {SWD(2020) 24 final} - {SWD(2020) 25 final}



Mongolia 1.Summary Assessment Mongolia shows a strong engagement in the monitoring process of GSP+ compliance, despite challenges in taking more commercial advantage of the unilateral tariff preferences of the EU. Progress was made in the area of child rights, in recent legislation (Child Rights Act and Child Protection Act) and efforts to implement these laws, including an increase of budget and a hotline to report abuse. With regard to human rights, the conclusion of the Government’s assessment that a reintroduction of the death penalty would not be in line with international commitments and has therefore been dismissed is welcome. Concerns with regard to recent legislation impacting the independence of the Judiciary and public prosecution are to be addressed urgently. Mongolia is showing commitment regarding implementation of labour Conventions of the International Labour Organisation (ILO) and is in the process of strengthening their implementation through the revision of the Labour Code, which is to be discussed in Parliament. Mongolia has many challenges in the field of environment, also related to pollution, which the EU is helping to address through its development cooperation. The Government is committed and making progress on the reporting requirements; and the EU welcomed the announcement of upcoming national report on the implementation of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES); and the submission of the national report for the Basel Convection on the Control of Transboundary Movements of Hazardous Wastes and their Disposal in April 2019. With regard to the cluster on good governance, challenges remain and some of the recent reporting (for instance by the OECD) shows areas where further work can be done. Priorities The EU’s GSP+ monitoring mission took place in Mongolia on 19-25 June 2019, in connection with the EU-Mongolia Human Rights Dialogue and the EU-Mongolia Joint Committee meetings. During the reporting period 2018-2019, monitoring focused on several priority areas: prevention of torture; the death penalty; human rights defenders; labour inspections and the revised labour law; child labour; and corruption. Human Rights Overall, Mongolia remains committed to the advancement of human rights. Concrete progress was made on child rights with Child Rights Act and Child Protection Act adopted and budgets increased. There has been incremental progress in the rights to a healthy environment, equality and non-discrimination, and fight against human trafficking. Furthermore, Mongolia participates in multilateral initiatives such as the Global Alliance for Torture-Free Trade and the International Contact Group on Freedom of Religion, and has extended invitation to the United Nations Special Rapporteur on the situation of human rights defenders for a next visit. In response to comments from the Committee Against Torture, Mongolia committed to setting up an independent mechanism to investigate complaints of torture as recommended by the UN Committee Against Torture (December 2018); and to put in place a national preventive mechanism against torture in line with the requirements of the Optional Protocol to the Convention Against Torture (OPCAT). However, several challenges remain. Developments over the reporting period comprise the threat to independence of the judiciary, including a series of dismissals of high level members of the judiciary in March and June 2019 following quick changes in the legal framework; and steps towards a possible restoration of capital punishment in Mongolia. The situation of human rights defenders remains of concern, as well as the lack of a sytematic law on Human Rights Defenders, a draft of which remains to be submitted. Dangerous amendments to several laws, which tend to concentrate the political power in the hands of a reduced number of people, are another source of serious concern. Labour Rights There have been no substantive changes to the legal framework for the application of the core labour standards over the reporting period. A draft revised Labour Law, under review with the Parliament since spring 2018 would address a majority of concerns and recommendations of the International Labour Organization (ILO) on all fundamental Conventions. However, not all its provisions have received the endorsement of the social partners; in particular trade unions have raised concerns about potential lower standards of labour protection if the law is approved. Progress was noted in the area of child labour, in the increased capacity of institutions in charge of supervision and control, including trainings for child rights and labour rights inspectors. However, the previous wintertime ban on horse racing and training between November and May was relaxed in 2018, allowing the use of child jockeys over 12 years old between the Mongolian Lunar New Year and 1 May. Child labour exists in other and largely informal sectors where it is not covered by the legal protections and not addressed. Current limitations to the power and resources of the labour inspectorate continue to hinder monitoring and enforcement of labour laws. While there have been no actions to reduce these limitations, Mongolia is considering ratifying ILO conventions on labour inspections, but without a set roadmap. Environment In 2017 the UN Special Rapporteur on Human Rights and the Environment praised Mongolia for working to protect the environment with exceptional commitment, and for upholding pertinent laws that set out strong environmental standards and safeguards. However, further action is needed on air pollution, ensuring an in depth assessment of new major gold mining projects, as well as the appointment of an Environmental Ombudsman. Good Governance Corruption in the public sector and the judiciary is an ongoing challenge, despite the Government’s commitment to improving the legal and institutional framework. High level public scandals, such as the case of the SMEs Fund from October 2018 and the subsequent protests, have further drawn attention to this in the reporting period. Shortcomings are noted in the legal framework on anti-money laundering and counter-terrorist financing framework Status of ratification and reporting

Over the reporting period (2018-2019), Mongolia maintained ratification of all the GSP+ relevant Conventions. The country also continues to demonstrate a very good level of compliance with its reporting obligations under the treaty monitoring bodies, despite continued capacity and expertise constraints. Regarding conventions on environmental protection and climate change, while Mongolia has not ratified the Kigali Amendment to the Montreal Protocol on Substances that Deplete the Ozone Layer, it has improved reporting under the Convention on International Trade in Endangered Species of Wilda Fauna and Flora (CITES), the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal, and the UN Framework Climate Change Convention (UNFCCC). However, it did not fully comply with its reporting obligations under the Stockholm Convention on Peristent Organic Pollutants and the Cartagena Protocol on Biosafety. 2.Recent Developments Mongolia is a vibrant parliamentary democracy since 1990, situated between China and Russia. Parliamentary Elections last took place in 2016. The Mongolian People's Party (MPP) won a landslide victory: 65 of the 76 seats in Parliament. The next polls are due in June 2020. Presidential Elections took place in 2017. In the first ever presidential run off, the Democratic Party (DP) candidate Battulga obtained 50.61% of the votes while MPP's Enkhbold obtained 41.16%. The next presidential elections will be in June 2021. EU – Mongolia Bilateral Development Assistance EU bilateral assistance to Mongolia amounts to €65 million for the period 2014-2020, concentrating on improved governance of revenues for inclusive and sustainable growth, and support for better employment opportunities. Since April 2017, the EU is assisting Mongolia under the Trade Related Assistance (TRAM) project to enhance Mongolia's international trade and economic diversification and to contribute to sustainable economic growth. The project aims at strengthening capacities and at supporting Mongolian public institutions and the private sector for effective trade policy initiatives with a special focus on specific products/sectors with high potential. The EU is supporting Mongolia in the monitoring and implementation of the 27 international conventions that are covered by GSP+ through the European Instrument for Democracy and Human Rights (EIDHR). The EU's priorities for 2018-2019 continued to be labour law, courts and lawyers, administration of justice and law enforcement, and strengthening of Civil Society Organisations (CSOs). Other EU programmes support economic development in the country, including rural areas. For instance, an EU-funded project supports the participation of civil society organisations in the agriculture sector in the Khenti Province to promote inclusive and sustainable development. In the Zavkhan province, another EU funded project aims at empowering civil society organisations to improve economic development. The Empowered People-Empowered Livelihoods project contributes to improving the livelihoods of rural population in Arkhangai and Uvurkhangai provinces. Parliamentary politics was unstable in 2018, and revolved around two major corruption cases. The first is the ‘SME fund’, which offered low interest loans to SMEs. The vast majority of firms that received loans from the fund allegedly had connections with Government officials across party lines. The second is the ‘60 billion case’, which relates to audio recordings made during the 2016 electoral campaign that allegedly reveal positions in a future MPP administration being offered in return for donations. Between November 2018 and January 2019 controversies around these two corruption cases led to a legislative shutdown as well as public protests in the square of Ulaanbaatar. In August 2018, two Ministers were ousted for mismanagement and corruption, while further two resigned after the no confidence vote in November. On 30 November 2018 the Government survived a no confidence motion filed by 27 MPs from its own party. The four new Ministers were appointed in early 2019. The revelation of corruption cases was an indicator of the freedom of press but also of the poor management of public funds. 3.EU-Mongolia Trade and GSP Dependence on commodities: Mongolia is not a typical country – its total nominal GDP is USD 11 billion and its economy is rather dependent on a few key commodity exports. The biggest mines in Mongolia are Oyu Tolgoi (copper, gold), Erdenet (copper), and Tavan Tolgoi (coal). In other words, prices of copper, coal and gold have a profound impact on the country, either in the positive or negative direction as 90% of export products are mineral products. When the commodity cycle hit its trough in 2016, which hit Mongolia’s external demand hard (as well as investment in commodity), the government tried to offset these shocks through unsustainable expansionary fiscal policies, which resulted in an increase of public debt. As most of the debt was in foreign currency and to external creditors, Mongolia faced a typical balance of payment crisis, in which reserves were depleted. The central bank had to raise rates to stabilise the currency. As the economy deteriorated, expenditure further increased, and revenue sources declined, Mongolia had to raise additional external debt to service its existing debt, at much higher funding costs, which further eroded its fiscal position. All these factors led it to ask assistance from the IMF as debt reached 88% of GDP, became unsustainable as reserves only covered 2.4 months of imports and the deficit exceeded 15% of GDP in 2016. A risk factor for Mongolia's economy is its lack of diversification, being dependent on a few export and import markets (China and Russia). Around 94% of all Mongolia's exports go to China, whereas imports from China are 35% and from Russia - 27% of the total. In 2018 total trade was € 524 million; € 75 million of imports, € 449 million of exports. The EU is Mongolia’s 3rd import partner after China and Russia (€ 488 million), a second export market (€ 214 million) and ranks 3rd total trade partner. In 2016, real GDP growth slowed to 1%, down from an average growth rate of 9.8% over the period 2010-2015. The key drivers of the slowdown are weaker economic activity in China and a decline in foreign direct investment (FDI), along with lacklustre performance in non-mining sectors. The sharp decline in FDI has exacerbated the country's deteriorating balance of payments position. Additional pressure is expected over the next few years as large external debt repayments are scheduled for 2017/2018. With prices of raw materials increasing, the IMF projects Mongolia's real GDP to grow by 1.8% in 2018. Figures 1-3 below describe Mongolia's utilisation of GSP+ in the context of the EU's overall imports from Mongolia. The value of EU imports from Mongolia using GSP+ has remained relatively steady, at around 16.5 mio USD in 2018, or around 23% of total imports. GSP+ utilization rates, on the other hand, are steadily increasing at are currently above 90%. EU imports from Mongolia under GSP+ reamin concentrated on articles of apparel and textiles (87% of total EU imports from Mongolia using GSP+). Mongolia's utilisation rate of trade preferences under GSP+ stands at around 84%, leaving some room for improvement. Source for all statistics: Eurostat data as of September 2019. Figure 1: Imports to the EU 2016-2019 – GSP+ utilization rate Figure 2: Imports to the EU 2016-2018 by regime

Figure 3: Product Diversification of GSP+ Preferential Imports, 2018 4.Compliance with GSP+ Obligations 4.1UN Human Rights Conventions The EU funded Right to Breathe (R2B) project focuses on enhanced transparency and accountability on air pollution data and actions in Ulaan Bataar and Arkhange; and Closing the gap: a right based approach toward independent living for people to disabilities. The EU also has a Policy Support Facility to support the EU-Mongolia Human Rights Dialogue. It has two components: 1) to enhance effective implementation of international human rights instruments; and (2) to strengthen the capacity of the Prosecutors' General Office. Mongolian authorities are committed to moving the country forward on human rights. Mongolia accepted all 150 Universal Periodic Review (UPR) 2015 recommendations in its National Action Plan. Mongolia’s next UPR will take place in May 2020. In preparation for the Civil Society Organisations UPR midterm report, the Government presented actions taken to implement the UPR recommendations to over 100 participants at a meeting in May 2018. The government aims to address recommendations of the UN Human Rights Committee from August 2017 on the limited capacity of the National Human Rights Commission of Mongolia (NHRC). The NHRC has 50 staff and an advisory board of 19 NGOs and 21 journalists, and it went from processing 17 complaints in 1990 to around 800 in 2018. International Convention on the Elimination of All Forms of Racial Discrimination (CERD) The main challeges noted by the Committee on CERD in its Concluding Observations from 2018 were the lack of a legal definition of racial discrimination and a law prohibiting all forms of racial discrimination; Mongolia considers that the proper legal environment has been established. The Committee also noted a lack of disaggregated data to determine any racial discrimination and to measure developments. The revised Criminal Code included a section punishments for crimes of racial discrimination. Further recommendations included support to victims of racial discrimination; regular human rights based assessments on the situation of ethnic minorities; and combatting the underlying causes of a rise in ultranationalist and neo-Nazi organisations through education and information campaigns. International Covenant on Civil and Political Rights (ICCPR) In its Concluding Observations on the sixth periodic report regarding Mongolia's implementation of the ICCPR, issued on 22 August 2017, the Human Rights Committee (HRC) asked Mongolia to strengthen its efforts to achieve effective application of the provisions of the Covenant before domestic courts. This should go hand in hand with training of lawyers, prosecutors and judges on international human rights treaties and public awareness raising. In the area of rule of law (administration of justice and law enforcement), between October 2017 and March 2019, the EU has been implementing a project to improve the application of human rights conventions in the criminal justice system and strengthening the capacity of the General Prosecutor’s Office to adapt to the new Criminal Code. Under the project three conferences took place in 2018: on the implementation of human rights (January); on causes of violence against children and youth (June); and on the need to establish a full fledged juvenile justice system in the country (November). The three conferences ended with a concrete set of recommendations. The project also translated in Mongolian twelve of the Human Rights Treaties, as well as the Human Rights Indicators from the Office of the High Commissioner on Human Rights. The HRC made a number of recommendations concerning pre-trial detention in view of its reported widespread and lenghty use. According to the NHRC chief commissioner, conditions in most of the 23 prisons in the country had improved because most prisons had moved to new facilities; however, conditions remained poor and sometimes harsh in the five (of 26) pretrial detention centers that still operated in old facilities. The HRC expressed concern about broad legal restrictions on the media, including the internet, and limitations on access to information due to the broad interpretation of confidentiality provisions by Mongolian authorities. It invited Mongolia to ensure that any restriction on media activities is in strict compliance with the provisions of the ICCPR. Globe International, a local NGO specialising in freedom of the press and media, reported continued pressure from police, politicians, and large business entities on local media and press outlets. The ownership and political affiliations of the media often were not disclosed to the public, and a Globe International survey of 2017 found that 23.3% of journalists reported they did not cover some stories due to their media outlet’s ties to political officials and business elites. The Mongolian Center for Investigative Journalism also reported that journalists sometimes practiced self censorship for the same reasons. The Committee also expressed concerns about the remaining provisions on defamation in the Criminal Law, which may unduly restrict the exercise of freedom of expression. Press representatives faced libel complaints by government authorities and private persons or organizations. The courts prosecuted the majority of libel and slander cases as petty offenses punishable by fines ranging from 2 million to 20 million tugriks (USD 770 to USD 7,700). The law provides an exception during election campaign season, when fines of 450,000 to 5.4 million tugriks (USD 175 to USD 2,100) or imprisonment from one month to one year apply for spreading false information that defames political parties, coalitions, or candidates running for office. The law imposes additional restrictions against media during campaign periods. During the reporting period, NGOs have expressed concerns over the inclusion of defamation as a criminal offence and the Libel clause under the Law on Administrative Offences of 2017. The Committee expressed concern about reports of attacks and harassment against journalists and media workers. There are some reports of politically motivated interference and cases of intimidation of journalists. The Committee invited Mongolia to protect journalists and media workers against any form of harassment and threats, promptly investigate all such attacks and bring those responsible to court. Some journalists reported they faced violence, harassment, or intimidation by police. The UN special rapporteur on human rights defenders visited Mongolia from 30 April to 13 May 2019. In his End of Mission statement, he states that Mongolia has a relatively safe environment. However, he notes, this does not mean human rights defenders are encouraged, enabled and empowered in their activities. Obstacles such as stigma, pressure, criminalisation, hate speech on social media, the lack of understanding of who human rights defenders are and the lack of access to information and to participation in decision making processes hinder their work. He invited Mongolia to take a series of steps in the field of human rights that could improve the situation. Human rights defenders continue to report occasional physical attacks and harassment by law enforcement authorities and private corporations, including more recently students with disabilities complaining of discrimination and sexual abuse in a school, and journalists trying to report on gender-based violence. Moreover, the World Freedom of Press Index is steadily regressing over the last three years – from world rank 54 (2015) to 70 (2019). The Cabinet discussed the draft law on human rights defenders during its meeting in February 2019 and resolved to ensure the coordination of the draft law with other relevant legal documents currently in force. With the support of the Ministry of Foreign Aggairs of Mongolia, the Office of UN High Commissioner for Human Rights (OHCHR) and the National Human Rights Commission of Mongolia organised an awareness campaign including workshop with the participationof UN special rapporteur on human rights defenders in September 2019 as a follow up to his visit to Mongolia. It was planned that the draft law will be resubmitted to the Cabinet following the workshop and the campaign.

The Government introduced a draft law on Non-Profit Legal Entities (NPLE) enabling the prohibition of NPLE on general grounds, most notably those threatening “national unity”. Some of the provisions seem not to be in line with the ICCPR The death penalty was removed from the revised Criminal Code in 2015, entered into force on 1 July 2017. However, on 5 April 2018, at the opening of Parliament, President Battulga reiterated his initiative to reinstate the death penalty for perpetrators of child abuse. The possible reinstatement of the death penalty was one of the key issues discussed during a two-day event (13-14 April) organised in Ulaanbaatar by the Globe International Center, within the framework of the EU funded DRI's project Promoting Human and Labour Rights through GSP+. In May 2019 the Minister of Justice stated in Parliament that is it is impossible for Mongolia to reintroduce the death penalty because of its ratification of Optional Protocol 2 to the International Covenant on Civil and Political Rights. However, a case is pending before the Consitutional Court on the constitutionality of the ratification of Optional Protocol 2 in 2012. During the recent GSP+ monitoring mission, the Government reconfirmed its commitment not to reintroduce the death penalty. In 2018, Jehovah’s Witnesses were granted permission to renew their religious activity. The Court reversed the 2017 City Council decision to withold the permission for the legal entity to carry out religious activity in Ulanbaatar. Religious organisations are required to renew their registration annually. International Covenant on Economic, Social and Cultural Rights (CESCR) In its latest Concluding Observations (July 2015) on Monoglia's implementation of the CESCR, the Committee on Economic, Social and Cultural Rights expressed its concerns about the adverse impacts of mining projects on the economic, social, and cultural rights of herders; and the absence of a comprehensive anti-discrimination law covering all grounds of discrimination, including sexual orientation, gender identity, and disability. Mongolia was recommended to bring its legislation in full conformity with the Convention. The Human Rights Committee expressed concern about reports that corruption continues to exist within the judiciary, undermining the independence of judges and the confidence of the public in the justice system. There are reports that foreign nationals and companies face difficulties in accessing justice and alleged discrimination in favour of nationals in judicial decisions. Travel bans have been used against foreign investors to settle civil and criminal disputes. In a worrying development, on 27 March 2019, the Parliament in an emergency session adopted amendments to the Law on the Legal Status of Judges, the Law on Prosecutor’s Office, and the Anti-Corruption Law. The amendments were requested by the President on the day before and entered into force on 28 March 2019, when the the Chief Justice of the Supreme Court, the Prosecutor-General and Deputy Prosecutor were reportedly dismissed by Presidential order, issued upon recommendation of the National Security Council. The latter is Chaired by the President of Mongolia and includes also the Prime Minister and the Speaker of Parliament. In June 2019, the Judiciary Council and the National Security Council dismissed another 17 judges. The judges, accused of corruption, were dismissed on the basis of the emergency amendments to the laws governing the judiciary and anticorruption agency from March 2019. However, Mongolian authorities have shown a willingness to address concerns regarding this recent legislation impacting the independence of the judiciary and public prosecution. According to an estimate concluded jointly by National Statistical Office and the World Bank, the poverty rate in Mongolia reached 29.6 % in 2016 – an increase by 8.0 percentage points from the poverty rate of 21.6 % in 2014. This shows that nearly 1 million people on a population of 3.0 million were living in the poverty. The Special Rapporteur on human rights to safe drinking water and sanitation undertook an official visit to Mongolia from 9 to 20 April 2018, at the invitation of the Government. During his 2 week visit the Special Rapporteur examined access to water and sanitation services for Mongolians living in urban and rural areas, including the nomadic population. He observed inequalities in access to drinking water and sanitation services. This issue requires legal, policy, institutional and technical solutions and Mongolia should incorporate human rights into its efforts to improve water and sanitation services for all. In July 2018, the Disabled Person's Organisations of Mongolia submitted a report prior to the second review by the Disability Committee set up by the UN Convention on the Rights of Persons with Disabilities. The most pressing issues according to NGOs are accessibility, independent living, access to education, access to employment, and lack of data. The National Human Rights Commission of Mongolia also submitted a report where it views the enforcement of the right to education for children with disabilities as insufficient. Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW) There is a clear under-representation of women in the public and private sectors, especially in senior managerial positions. There is still no comprehensive antidiscrimination legislation that addresses discrimination in both the public and private spheres, including direct and indirect discrimination, and that provides for effective remedies in judicial and administrative proceedings. In April 2017, the Government approved a National Programme on Gender Equality to be implemented in 2017-2021. The programme aims at creating gender sensitive policies and planning and removing gender stereotypes. On 1 February 2017, Mongolia's newly amended Law to Combat Domestic Violence entered into force, criminalising domestic violence. The nongovernmental National Centre against Violence (NCAV) and the National Police Agency both reported that in 2018 police response to domestic violence complaints improved. Moreover, better training of justice sector actors and the enactment of 31 new regulations designed to improve the implementation of domestic violence law contributed to an increase in convictions for domestic violence during the year. Although the law provides measures of protection for victims of domestic abuse, including restraining orders, procedural and other barriers made these difficult to obtain and enforce. Mongolian law on the promotion of gender equality prohibits sexual harassment. However, the current labour law or the draft revised labour law do not cover quid pro quo and hostile work environment sexual harassment. Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (CAT) Mongolia committed to setting up an independent mechanism to investigate complaints of torture as recommended by the UN Committee Against Torture (December 2018); and to put in place a national preventive mechanism against torture in line with requirements of the Optional Protocol to the Convention Against Torture (OPCAT). In its August 2016, Concluding Observations on the second periodic report of Mongolia, the Committee against Torture welcomed the revision of the Criminal Code, which entered into force on 1 July 2017. The revised Criminal Code provides a definition of torture; however, the definition does not cover acts of torture committed by private persons and therefore is not fully compliant with the provisions of the ICCPR. The Mongolian government, while considering the current definition compliant, has signalled that it will consider a revision. In October 2018, the Committee Against Torture regretted that Mongolia has not yet established an independent body or mechanism to investigate complaints of torture and ill-treatment by persons deprived of their liberty. The committee noted that three complaints of torture which were investigated by the Investigation Office of the General Police Department ended without an initiation of criminal proceedings. In addition, family visits to persons deprived of their liberty continue to be contingent upon the consent of the competent person who made the decision to detain or with the written consent of their senior management office. The death penalty was removed from the Mongolian Criminal Code in 2015, which entered into force on 1 July 2017. However, capital punishment still remains in the Constitution (Art. 16.1). On 5 April 2018, President Battulga reiterated his initiative to reinstate the death penalty for perpetrators of child abuse.

Convention on the Rights of the Child (CRC) Concrete progress was made on child rights with child rights and protection acts adopted and budgets increased. The Government adopted a biennial action plan 2018-2019 to implement the National Program on Children Development and Protection 2017-2021. The National Human Rights Commission conducted a child right survey in 2016. The Laws on the Rights of Children and on Child Protection entered into force in September 2016. The laws have the overall aim to strengthen comprehensive child protection systems and to respond to risks and vulnerabilities of children stemming from violence, abuse, neglect and exploitation. The Law on Promotion of Youth Development (LPYD) entered into force on 1 January 2018, promoting youth development based on equal participation and non-discrimination with respect of national unity and justice; improvement of young people’s selfworth; and respect of their views. Child abuse is a significant problem and consists principally of domestic violence and sexual abuse. The rates of violence against children, economic exploitation of children, and incidents causing death or severe injuries involving children are not declining. In autumn 2017, particularly cruel rape cases prompted President Battulga to propose the reinstatement of the death penalty for crimes against children. In March 2018 a large demonstration addressing violence against children took place under the slogan ‘No More Tolerance’. It was accompanied by aggressive exchanges online about the death penalty. The Committee on the Rights of the Child expressed its serious concern that children continue to be engaged in dangerous and hazardous work, notably in agriculture, mining, and horseracing. An updated list of jobs prohibited for minors in both the formal and informal economy in force since February 2016 includes horseracing or training between November and May. However, this position was relaxed in 2018 by Government Resolution No. 19, which permits the use of child jockeys aged 12 and over between Mongolian Lunar New Year (between late January and late February) and 1 May. In its Concluding Observations of 22 August 2017 regarding ICCPR implementation by Mongolia, the Human Rights Committee asked Mongolia to establish a comprehensive juvenile criminal justice system and to provide legal assistance to minors. There are no further developments in this area during the reporting period. On disabilities, the most pressing issues according to NGOs are accessibility, independent living, access to education, access to employment, and lack of data. The National Human Rights Commission of Mongolia also submitted a report where it views the enforcement of the right to education for children with disabilities as insufficient. Conclusions and priorities Developments over the reporting period comprise the threat to independence of the judiciary, the steps leading to a possible restoration of capital punishment in Mongolia, the threats to freedom of expression and religion or belief, as well as the lack of a systematic law on Human Rights Defenders. There has been incremental progress in other areas: rights of children, rights to a healthy environment, equality and non-discrimination, and the fight against human trafficking and child labour. While Mongolia has ratified most of the core human rights treaties, the limited awareness among lawyers, judges, prosecutors and the public at large of international human rights treaties hampers the actual implementation of these treaty obligations. In addition, new or amended legislative acts are not followed up with adequate resources; executive decisions further undermine compliance. 4.2ILO Labour Rights Conventions While there have not been cases of serious violations of core labour standards in Mongolia over the reporting period, several areas need strengthening. The key initiative, which urgently needs to be prioritised and implemented, is the ongoing revision of the Labour Code. Its adoption has been pending for more than ten years. The parliamentary procedure was relaunched in March 2018 and amendments are being discussed in Parliament. It is essential that the final draft also addresses the outstanding observations by the ILO supervisory bodies related to the implementation of Conventions 87 and 98. On labour rights, the EU is, in cooperation with ILO, supporting the Government in promoting the ratification of the Protocol of 2014 to the Forced Labour Convention No 29. The EU and the ILO provide technical assistance and policy advice to Mongolia in tripartite review of the revised labour law. On courts and lawyers, ILO experts led a training seminar on child and forced labour for 35 members of the Mongolia Bar Association (judges, prosecutors, legal advocates and legal educators), under an EU financed project in June 2018. Not all provisions in the draft law that is now with Parliament have received the endorsement of the social partners. The Confederation of Mongolian Trade Unions (CMTU) is concerned with the potential lower standards of labour protection once the law is approved. The CMTU insists on the involvement of government as a party in collective bargaining. In addition, the absence of a legal framework for employers’ association continues to seriously impede effective social dialogue. The new Labour Code would establish for the first time the independence of employers’ organisations, and their right to draw up their own by-laws and determine their structure, activities, and programmes. The General Agency for Specialised Inspection (GASI) is the government agency in charge of all types of state inspection. Restrictions set in the law as well as insufficient staff for labour inspections continue to impair effective enforcement of labour laws. Restrictions include prior notice of 48 hours for all inspections (planned or based on complaints) and the fact that complaints are not confidential. In addition, inspectors are not permitted to address violations detected during unplanned visits. GASI continues to be underfunded. There are also concerns of non-dissuasive penalties in case of noncompliance by businesses. Ratification of ILO Conventions 81 and 129 on labour inspection already envisaged under the 2017-2018 tripartite agreement for labour and social consensus was reportedly reconducted in the new 2019-20 agreement signed in April 2019. The substantial informal sector (a majority of SMEs) continues to challenge effective implementation of labour rights. Informal employment is estimated to account for some 50% of all employment, and 30% of employment in non-agricultural sectors. The ILO launched a project to support formalisation of employment in January 2019, due to run through 2020. Expanding representation in the informal sector is also an objective of the CMTU in its 2017-21 development programme. Freedom of Association and Collective Bargaining (Conventions 87 and 98) National legislation in Mongolia guarantees the right of workers to establish trade unions to protect their legal rights and interests. Similar rights are still not guaranteed to employers. Intentions to prepare a law on the Legal Status of employers were not confirmed. The draft revised Labour Code would establish for the first time the independence of employers’ organisations, and their right to determine their structure, activities, and programmes but is still pending examination by the Parliament. Concerns remain on the scope of application of the right to strike. Specific concerns remain on freedom of association and of collective bargaining for civil servants. The new Law on Civil Service, which entered in force in January 2019, maintains prohibition for civil servants to participate in strikes that would disrupt public services. Restrictions to their rights to participate in political, non-governmental, and religious organisations also remain.In its 2018 report, ILO recalled that the right to collective bargaining should cover public servants not engaged in the administration of the State. The draft revised Labour Code is expected to correct the situation. Penalties for violations of freedom of association and collective bargaining – essentially fines, up to 200,000 MNT (approx. €65) - are not sufficient to deter violations. Most labour disputes are settled by tripartite settlement committees, which continue to be criticised as non-compliant with labour or mediation laws. Mongolia continues to work with the ILO on further building up the bargaining capacity of social partners. Despite an impressive economic recovery (7% GDP growth in 2018; 8% in the first quarter of 2019), the legacy of the strong downturn that followed the global economic crisis, when many collective agreements were suspended, remains present.

Abolition of Forced Labour (Conventions 29 and 105) Mongolia remains primarily a source of forced labour (and sex trafficking) of its nationals to other countries. Labour trafficking vulnerabilities are intensifying with the growing internal and international migration driven by the development of the mining industry in southern Mongolia. Among migrant workers in Mongolia, Chinese nationals are reportedly among the most vulnerable to forced labour in sectors such as agriculture, forestry, construction, and mining. Chinese companies are also increasingly hiring Mongolians to work at agricultural operations for substandard wage and under ambiguous immigration status, placing them at high risk of trafficking. Mongolia does not fully meet the minimum standards for the elimination of trafficking, but was upgraded in the 2019 US Department of State Trafficking in Persons Report to Tier 2 from Tier 2 Watch List in 2018, following increased efforts in several areas: identification of victims and repatriation; victim service provision; convictions under the amended criminal code; new law enforcement campaign. The pending draft revised Labour Code is expected to align the definition of forced labour with ILO Conventions No.29 and No.105. The ratification of the Protocol of 2014 to the Forced Labour convention (P29) could effectively help addressing and eliminating all forms of forced labour. The Mongolian Bar Association is completing the analysis on the gap between national laws and practices and the requirements of Protocol 29. The findings will be discussed by the key stakeholders of the National Plan of Action against Trafficking in Persons for Sexual and Labour Exploitation. Overall, Government capacity to identify and prevent forced labour is growing. The 2017–2021 National Programme against Human Trafficking sets out plans to conduct research on trafficking in persons, raise public awareness, train law enforcement and other relevant agencies, conduct labour inspections and increase protection for victims. Minimum Age for Work and Worst Forms of Child Labour (Conventions 138 and 182) The most prevalent type of child labour is the use of child jockeys, including crossborder use, which has some characteristics of human trafficking. Children’s horse racing entails high risks of fatal accidents and lifelong health damages. The work of children as assistant herders in the countryside needs to be studied in detail. Child labour is also reported in many other sectors, notably construction, dumpsites, and artisanal mining where informal work is the rule. Mongolia is on the US Department of Labour 2018 List of Goods produced with child labour for coal, fluorspar (mineral), and gold. There is growing focus on building the capacity of relevant institutions to address child labour, notably training for child rights and labour inspectors on handling child labour situations and enforcing relevant legislation by AFCYS (the Authority for Family, Child and Youth Development) and GASI under the EU funded ILO ‘GSP+2’ project. According to the Government, over 38 qualified specialists or inspectors, in charge of supervising implementation of children rights according to the Children Law, were trained and certified for two years. Limitations to labour inspections set in the law continue to hamper effective control and sanction of violations to child labour legislation. Data and information remains a challenge for effective monitoring of child labour. Employers are still not required to keep a register of workers under 18. No comprehensive child labour survey has been done since 2012. A survey is envisaged in 2020, supported by the EU. The revised Labour Code is expected to address most of the ILO requirements to bring legislation in closer compliance with Convention 138. It would in particular define the ‘employment relationship’ as covering all employees and employers in both formal and informal economy and thus extend labour protection to children in informal employment. It would also prohibit children over 15 from entering employment if they have not yet completed their compulsory schooling, thus linking the minimum age for admission to employment to the age of completion of compulsory schooling (15 years). Lastly, it should require employers to record the names and dates of birth of children working for them, introduce a system of permits granted in individual cases to allow exceptions to the minimum age provisions, and define ‘light work’ permissible for children aged 13 and over. An updated list of jobs prohibited for minors in both the formal and informal economy in force since February 2016 includes horseracing or training between Nov and May. However, this position was relaxed in 2018 by Government Resolution No. 19, which permits the use of child jockeys aged 12 and over between Mongolian Lunar New Year (between late January and late February) and 1 May. A 2017-2021 Children Development and Protection National Program (adopted in Sept. 2017) recalls that ‘labour contrary to the children health, safety and behaviour is prohibited’. An Action plan for 2018-2019 is being prepared for approval. Equal Remuneration and Elimination of Discrimination (Conventions 100 and 111) Women’s labour force participation lags well behind that of men and is relatively low compared to other small transition economies. Women are also reportedly under-represented in managerial and technical jobs and high paid sectors such as mining, transportation and energy and facing specific difficulties in accessing jobs and career opportunities. Legislation in place (Constitution, current Labour Law, Civil Code of 2002, Law on the Promotion of Gender Equality (LPGE)) covers antidiscrimination, in particular gender discrimination, and sexual harassment. However sexual harassment is not criminalised under the current version of the Criminal Code, and the Labour Law does not include any provisions on prohibition of sexual harassment at the workplace. Currently both laws are under revision. To support an effective legal framework to protect victims of sexual harrassement, the EU funded project "Support to employment creation in Mongolia (SECIM 1, Component: Labour Policy)" organised a Roundtable discussion on "Workplace – Harassment Free Environment" with the Parliamentary Sub-Committee on Human Rights on 19 November 2019. Implementation of the ILO conventions concerning non-discrimination and sexual harassment, are followed closely by the Parliament. Members of the Parliament have been advocating to include provisions on sexual harassment in the amendments to both laws to reflect the recommendations of the ILO on the aforementioned areas. The INSPIRED+ Mongolia EU funded project, implemented by the Mongolian NGO Teghs Niigem, focused on labour rights for people with disabilities (PWD). The goal of the multistakeholder policy dialogue in Mongolia was to contribute to the adoption of a locally owned agenda for reforming Mongolia policy impacting the labour rights of PWD, in line with GSP+ related conventions and the UN Convention on the Rights of People with Disabilities. In 2018, the project produced Mongolia’s first baseline survey on the employment situation of PWD and a roadmap to improvement. The list of occupations prohibited for women was annulled in 2008 without being repealed from the legislation (Labour Code of 1999 and Order 1/204 of 1999) or well publicized; thus, employers still consider the restrictions to be in force. Civil servants have been reportedly dismissed on grounds of political views. According to the authorities, the Civil Service Act to come into in force in 2019 ensures protection against discrimination on such grounds. Political opinion is also included in the prohibited grounds for discrimination in the draft new Labour Code. Concerns also exist on access to employment in practice for persons with disabilities, ethnic groups, and LGBT people.

Conclusions and priorities The adoption of the revised Labour Code, pending for several years, has been further delayed and remains a key priority, as it would address remaining legal gaps related to all fundamental ILO conventions, notably on freedom of association and collective bargaining, sexual harassment, and child labour. A particular barrier are the constraints on labour inspections, which prevent unannounced inspections, thus significantly reducing the effectiveness of monitoring, especially on child and forced labour. Constraints on labour inspections, in both the law and the capacities of the state agency for inspections are not addressed and continue to seriously hamper effective application of labour standards, especially regarding child and forced labour. More investments are needed to increase the number of labour inspectors and their technical capacities. Ratification of ILO labour inspection Conventions 81 and 129 would be an important step in improving the functioning of labour inspection and its legislative framework, including existing limitations to inspections. The absence of a legal framework for employers’ association remains a serious issue for freedom of association and needs to be urgently addressed, in due consideration of ILO’s comments. While there have been steps taken, Mongolia should take stronger action to prevent and eliminate worst forms of child labour in line with its commitments to both fundamental human rights and international labour standards. Child labour occurs in hazardous and export-orientated sectors, notably (informal) mining. More needs to be done on awareness raising of child labour and of the importance of schooling and education. Accurate and comprehensive data and information are necessary to ensure evidence-based policy formulation. If carried out as intended in 2020, a new child labour survey would help adequate policy formulation. The challenge of child horse racing remains in Mongolia. Despite cultural differences, steps should be taken to better protect children, avoid life-long damages and injuries, and to regulate, limiting minimum age and period for children engaged in horseracing. New labour demand and migration patterns inside and outside Mongolia create enhanced risks of forced labour and exploitation that need to be addressed in addition to ensuring compliance of national legislation with the ILO conventions. The prevalence of informal employment remains a major obstacle to effective implementation of fundamental labour standards. 4.3 UN Conventions on Environmental Protection and Climate Change Urban pollution in Mongolia is among the highest in the world, inspiring a pro-environment policy and request for EU cooperation and inclusion of related conventions in the future GSP. Transparency in the mining sector remains a concern as reportedly deposits for cleaning operations are being misused. Informal ‘ninja’ mining operations are affecting environment and child labour. The UN Special Rapporteur on Human Rights and the Environment visited Mongolia in September 2017 for the first time. He recommended Mongolia to step up its action to protect the environment including tackling the severe impacts of mining and coal burning. He praised Mongolians for working to protect the environment with exceptional commitment, and for upholding pertinent laws that set out strong environmental standards and safeguards. However, he called for urgent action to tackle air pollution, improve resources, and properly assess a major new gold mining project, which has the potential to cause major environmental damage. Existing laws should be fully deployed and an Environmental Ombudsman should be appointed to serve as a focal point for environmental information and complaints. The Special Rapporteur presented a comprehensive report on the findings of his mission to the UN Human Rights Council in May 2018. The report presents detailed recommendations in the field of air pollution, minerals and mining, conservation as well as information, public participation and access to remedies. Convention on International Trade in Endangered Species of Wild Flora and Fauna (CITES) Mongolia has established a working group on the implementation of CITES, including experts and civil society organisations. However, Mongolia's national legislation continues to be ranked as Category 2 under the Convention, meaning it does not yet fully meet all the requirements for the implementation of the Convention. A formal warning was sent by the Standing Committee under CITES in December 2017 due to lack of reporting by Mongolia on the steps inteded to upgrade their legilsation; and acknowledged by the Mongolian government in January 2018. In September 2018 the CITES secretariat notes some progress in the form of a draft revision of legislation, which has been submitted to the Secretariat in the national language. The Secretariat expects the finalisation of the draft and submission of enactment, as well as its adoption and submission the Secretariat. Following this, Mongolia and the Secretariat are to agree on a revised legislative analysis, including a possible Category 1 status. Basel Convention No significant developments took place during the reporting period. Convention on Biological Diversity (CBD) On the basis of available information, during the period 2018-2019 no salient shortcomings were identified in Mongolia as regards the implementation of the Convention on Biological Diversity. Mongolia's National Biodiversity Programme for the time up to 2025 is under implementation. Mongolia reports that as a step to stop biodiversity loss, it intends to add the great bustard, steppe eagle, wild reindeer, and gobi bear to the appendixes of the Convention on the Conservation of Migratory Species of Wild Animals (CMS) by the end of 2017. Stockholm Convention on Persistent Organic Pollutants

No significant developments took place during the reporting period. Cartagena Protocol on Biosafety No significant developments took place during the reporting period. Conventions on Climate Change No significant developments took place during the reporting period. Mongolia's ratification of the Paris Agreement in September 2016 and the submission of its Intended Nationally Determined Contribution (INDC), which envisages a 14% reduction of GHG emissions by 2030 compared to business-as-usual scenario, demonstrate Mongolia's commitment to contribute to the objectives of the UNFCCC. Conclusions and priorities Mongolia faces significant environmental challenges, including high levels of pollution and the severe environmental impact of mining and coal-burning. In response, the country has been noted to show exceptional commitment to protecting the environment and setting strong evironmental standards and safeguards. Following a formal warning by the Secretariat, Mongolia is still working on bringing up its legislation to Category 1 under CITES. Mongolia continues to face persistent capacity constraints. EU and GEF-UNIDO-funded projects support Mongolia with the effective implementation of the Cartagena and Stockholm Conventions. 4.4 UN Conventions on Good Governance During its mission to Mongolia in July 2018, the International Narcotics Control Board noted the commitment and strong political will of the Government to strengthen its efforts with regard to national drug control policy. Against this background, Mongolia flags capacity challenges to the comprehensive implementation of drug control conventions. Stakeholders seem to disagree whether corruption is getting worse (dropping in rankings) or if the increase in corruption charges, including against members of Cabinet, is an indication of progress. IMF is suspending its program over alleged money laundering. A tax reform and electronic procurement system should help the business climate and Mongolia and would follow up on OECD recommendation to ensure enforcement of integrity for political officials, through a civil ethics bill. International Drug Control Conventions A National Plan (2017-2019) for the implementation of the 2017 National Programme on Combating Narcotic Drugs and Psychotropic Subsatances is in place. The plan focuses on increasing technical capacity of forensic institutions, amendments to the law on medicinal drugs, and on monitoring illicit traffic in narcotic drugs, streamlining of policy and organisational set up, and awareness-raising activities. The Criminal Code and the Law on Infringement are in line with international obligations after amendments in May 2017. Mongolia emphasises the lack of human resources and new techniques needed to detect narcotic drugs and psychotropic substances at the border, lack of awareness and prevention measures, as well as the need for specialised medical personnel to treat people with addiction. During its mission to Mongolia in July 2018, the International Narcotics Control Board noted the commitment and strong political will of the Government to strengthen its efforts with regard to national drug control policy. The Board’s delegation was informed about developments in demand and supply reduction and noted results achieved through the recently adopted National Programme. UN Convention against Corruption (UNCAC)