Is the Government's Special Regime Legal?

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The current Government of Mongolia (GOM) is appointing plenipotentiaries in state-owned enterprises, while claiming a special regime under which the subject entities are fully and solely controlled by the government itself, without adhering to common rules and laws applicable to their operation. It started with Erdenet Factory SOE and is further continuing with Tavantolgoi JSC and Tavantolgoi Railway LLC and becoming a more frequently exercised practice.

Yet, there are no provisions in any effective laws at the time, including the Law on State and Local Property and the Law on the Government of Mongolia, allowing the GOM for this practice.

Thus, it raises many questions such as “Is the declaration of special regime and appointment of plenipotentiary legal?” and “What could be the reason or motive behind the GOM practicing this frequently?”.

Officials explain that the legal ground of this practice is Article 1 of the Law on Granting Right to the Government of the Mongolian People’s Republic (the 1991 Law), passed by the State Little or Baga Khural of Mongolian People’s Republic (MPR) on Jan 4, 1991.

That article reads “If it is deemed necessary for specific industrial establishments and organizations that play a vital role in maintaining the normal conditions of the country's economic life and public services, the government of the Mongolian People’s Republic shall have the right to establish a separate special regime for a period of up to 6 months without adhering to the commonly applied rules and laws and to have those establishments and organizations under the direct control of the government, regardless of jurisdiction.”

In other words, the GOM believes that the 1991 Law is still in force and effective to date, therefore, it’s declaring special and “outlaw” special regime and appointing plenipotentiaries on the basis of that law.

On the other hand, not only that the 1991 Law has become impossible to enforce, but it also is believed to be invalidated. Here is why:

First, under the 1991 Law, the Government of the Mongolian People's Republic (“MPR”) was granted the right to establish the special regime. However, Article 1.3 of the "Annex Law on the Transition from the Constitution of the Mongolian People's Republic to Fully Adhere to the Constitution of Mongolia," dated January 16, 1992 ("Annex Law"), stipulates that the continuity of the MPR government shall remain in effect until the new government is established by the State Great Khural (the current Parliament). During this period, the MPR government shall exercise the powers specified under the Constitution of Mongolia. It's worth noting that the Annex Law is an integral part of the current Constitution, as stated in Article 9.1 of the Annex Law.

This means that once the Parliament establishes the new Government, the powers of the MPR Government are terminated. In July 1992, the Parliament appointed P.Jasrai as the Prime Minister and established the new government by appointing all the cabinet members in August 1992. Therefore, the MPR Government was fully terminated by then.

Since the very existence of the MPR Government was terminated, and there was no longer a government of MPR, all the powers specifically granted to that government under the then 'system' should immediately cease, including the right to declare a special regime.

Second, not only that the powers granted to the MPR government terminated, but the 1991 Law in its entirety is considered to be invalidated upon the adoption of the new Constitution in 1992.

Because Article 5.3 of the Annex Law stipulates that laws and any provisions of laws that existed before the new Constitution shall be invalidated if the law or their provisions are not in conformity with the Constitution.

There are, in fact, several reasons to believe that the 1991 Law is not in conformity with the new Constitution. For instance, the 1991 Law states that the MPR Government shall be obligated to report to the State Baga Khural on a monthly basis about the special regime and its implementation status. However, the State Baga Khural was terminated and there is no longer any entity like that since the new Parliament was formed in 1992 following the first democratic parliamentary election of Mongolia under the new Constitution. In other words, the 1991 Law had become impossible to be implemented “as-is,” and, therefore, it does not conform with the Constitution. Not only is the 1991 Law unenforceable, but the nature of the provisions of the 1991 Law granting the right/power to the MPR Government and their content contradicts the Constitution.

To be specific, I cite the relevant parts' extraction of Article 1 of the 1991 Law here as follows: “If it is deemed necessary ..., the government of the Mongolian People's Republic shall have the right to establish a separate special regime ... without adhering to the commonly applied rules and laws and to have those establishments and organizations under the direct control of the government, regardless of jurisdiction.”

According to this, the MPR Government was entitled to declare a special regime and take control over any entity, regardless of jurisdiction, whether it's state-owned or private property. Consequently, 'without adhering to the commonly/generally applied legislation' represents a contradiction of the principles of the rule of law and being based on law. In other words, it clearly contradicts the principles of the rule of law in government activities and the legal protection of the rights of property owners of any type, as stipulated in the Constitution.

From this point of view, the fact that the current government, formed under the new Constitution dated 1992, is assuming the rights granted to the MPR Government in 1991 when its full powers had already terminated long ago, and the 1991 Law, which existed before the constitution, is supposed to be invalidated due to its non-conformity with the constitution. This does raise valid suspicions that those in power may be neglecting the rule of law and enforcing a law that should be considered invalid to pursue their own narrow interests.

This suspicion is further reinforced by the fact that they do not even follow the procedures stipulated in the law. For example, according to the 1991 Law, the MPR Government is required to provide monthly reports to the State Baga Khural and the public regarding the special regime and its implementation status. Additionally, the MPR Government is not authorized to extend the special regime on its own; it can only propose an extension to the State Baga Khural. If deemed necessary, the State Baga Khural may extend the regime, but this can only be done once and for a maximum of six months.

However, the GOM does not provide such reports to the parliament or the public, and they are extending the regime independently.

When will the government, which has caused numerous serious problems and operates in a manner clearly contrary to the Constitution and other laws, cease its actions that defy the law? Is it not high time for the relevant institutions to scrutinize the actions and decisions of this government, which is arbitrarily implementing what it labels as a “special regime” without any oversight or adherence to the rule of law?

Myagmardorj Buyanjargal
Myagmardorj is a freelance writer and certified translator who holds a Bachelor of Law Degree from the National University of Mongolia and Bachelor of Science Degree in engineering in mining technology from the Mongolian University of Science and Technology.