A/HRC/43/45/Add.2 projects, including for the Oyu Tolgoi mine. In the same vein, closer attention should be paid to debt generated in the context of public-private partnerships. 35. From a private individual debt perspective, it is important to highlight that while loan providers vary, including financial institutions and non-banking businesses, the obligations of the State remain the same: protect, respect and fulfil human rights.47 Businesses also have a corporate responsibility to protect human rights in conducting their operations. 36. Although banks are legally limited in terms of borrowers’ interest rates – which remain quite high, with bank rates for borrowing against pensions reaching 18 per cent, for example – the non-banking financial system is not subject to any ceiling. It has been reported that these financial institutions charge very high interest rates, sometimes on a daily basis, particularly through microloans. This can put individuals at risk of not having the resources to enjoy their most basic social and economic rights, including their rights to food, education, health and adequate housing. In this regard, the Independent Expert urges governmental intervention to impose interest caps on all businesses operating in the area, regardless of whether they conduct banking activities.48 37. It is the Independent Expert’s view that the banking and financial sectors should, without delay, start implementing the Guiding Principles on Business and Human Rights, and that the national action plan currently being developed should include this issue as one of its priorities. IV. Mineral rents, social and environmental policies A. Collecting mineral rents 38. Licence fees, royalties, corporate income tax and custom duties constitute the mining sector’s fiscal contribution to the Mongolian economy.49 Corporate income tax is applicable to all businesses operating in Mongolia; mining businesses are no exception and are subject to standard tax brackets, as explained in chapter V of the present report. A portion of mineral rents is devoted to ensuring macroeconomic stability and equitable social fairness for future generations. 39. In this regard, the Independent Expert commends the State for the establishment of the Fiscal Stability Fund and the Future Heritage Fund, which can play a key role in ensuring that mining profits can benefit all. This is in line with the Government’s acknowledgement of the need for it to build up buffers during the good times.50 40. However, withdrawals from the Future Heritage Fund will not be allowed until 2030, when 10 per cent of the Fund’s net investment income is to be transferred to the State budget on a yearly basis. 51 In the meantime, public revenues from the mining sector and other domestic revenues such as taxation and social insurance contributions are to be mobilized to create sustainable linkages between intergenerational and socioeconomic groups. Currently, the fund is provisioned by two main sources of income: (a) the dividends distributed for State shares in licensed companies operating in mining deposits; and (b) 65 per cent of mining royalties from all deposits collected in the budget.52 However, a recent report points out that while most State-owned companies in the region pay 100 per cent of their profits to the Government as a dividend, the same regularity has not been observed for Erdenes Mongol and its subsidiaries, which still do not pay regular dividends to the Mongolian treasury. 53 47 48 49 50 51 52 53 8 See the Guiding Principles on Business and Human Rights. See A/HRC/43/45, recommendations. See https://eiti.org/mongolia#tax-and-legal-framework. Government of Mongolia, letter of intent, 13 April 2017. Law on the Future Heritage Fund, art. 9. Ibid., art. 7. Bauer and Namkhaijantsan, “Wild growth”, p. 3.

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