Transparent Funding of Political Parties (MN0025)

Status quo or problem addressed by the commitment: Funding of political parties is a contentious issue not only in Mongolia but also in other countries as well. According to survey data and study reports, political parties have the highest risk of exposure to corruption. There are still cases of violations related to election funding; This shows that the system is not comprehensive enough to handle these issues. Various international studies reveal that corruption in political parties is the base of defects in the political system, and has a negative effect on the development of parties and creates a foundation for future corruption. Therefore, there is an immediate need to address the issues of funding to political parties and make these channels more open, transparent, monitored and accountable. Amend law on political parties of Mongolia and reflect the issue of funding transparency of political parties in the new amendment to the law. Main Objective: Amend the law on political parties of Mongolia to reflect the issue of funding transparency of political parties in the new amendment of the law. Brief Description of commitment (140 character limit) Make an Amendment to the Law on Political Parties of Mongolia to reflect the issue of funding transparency of political parties in the new amendment of the law.

4. Develop a legal environment that ensures transparency in the funding of political parties

Commitment Text:

Make an Amendment to the Law on Political Parties of Mongolia to reflect the issue of funding transparency of political parties in the new amendment to the law.

Status quo or problem addressed:

Funding of political parties is a contentious issue not only in Mongolia but also in other countries as well. According to survey data and study reports, political parties have the highest risk of exposure to corruption. There are still cases of violations related to election funding; this shows that the system is not comprehensive enough to handle these issues. Various international studies reveal that corruption in political parties is the base of defects in the political system, and has a negative effect on the development of parties and creates a foundation for future corruption. Therefore, there is an immediate need to address the issues of funding to political parties and make these channels more open, transparent, monitored and accountable. Amend the law on political parties of Mongolia and reflect the issue of funding transparency of political parties in the new amendment to the law.

Main Objective:

Amend the law on political parties of Mongolia to reflect the issue of funding transparency of political parties in the new amendment to the law.

Milestones:

4.1. Design the draft amendment of the Law of Political Parties in accordance with the processes outlined in the 'Law on Legislations and Law on Public Hearing' while engaging stakeholders of the OGP in the process.

4.2. Reflect detailed regulations regarding the funding of political parties in the legal draft and organize actions to advocate the approval of legislation, which clearly states how to ensure transparency and accountability in the funding issues in the law.

4.3. Organise advocacy activities in cooperation with OGP stakeholders until the approval of the draft legislation.

Responsible institution: Central Government Authority responsible for Justice

Supporting institutions: National Audit Authority, General Authority for Tax, Independent Agency Against Corruption, civil society organizations who actively work and research on government transparency, corruption and governance issues, MNB, Mongolian National Chamber of Commerce and Industry (MNCCI), political parties

Start date: 30 June 2016

End date: 30 June 2018

Context and Objectives

Regulations on the funding of political parties in Mongolia remain weak. The OSCE found in its 2015 report on anticorruption reforms in Mongolia that the 'lack of effective supervision over political finances promotes political corruption and vested interests controlling government institutions,' and that 'existing basic provisions on party finances are not enforced and are easily circumvented in practice.'[Note58: Organisation for Economic Co-Operation and Development Anti-Corruption Network for Eastern Europe and Central Asia, 'Anti-Corruption Reforms in Mongolia: Joint First and Second Rounds of Monitoring of the Istanbul Anti-Corruption Action Plan,' 2015, pg. 7, https://www.oecd.org/corruption/acn/Mongolia-Round-3-Monitoring-Report-ENG.pdf.] While the 2005 Law on Political Parties regulates non-election party financing and requires that political parties report their financing, it lacks clear provisions to monitor compliance with the law and ensure accounability, which in turn incentivizes the use of illicit funding and disincentivizes reporting income and expenditure.[Note59: Dr. Bat-Ölzii Erdenedalai, 'How are political parties in Mongolia financed?' The Mongolian Observer, 6 April 2016, https://mongolianobserver.mn/political-parties-mongolia-financed/. For Mongolia’s 2005 Law on Political Parties, see: http://www.legislationline.org/topics/country/60/topic/16. ] Additionally, there is growing public distrust of political parties in Mongolia, as evidenced by the findings from recent surveys by Transparency International[Note60: See: https://www.transparency.org/gcb2013/country?country=mongolia.] and the Asia Foundation regarding popular corruption perceptions in the country.[Note61: The Asia Foundation and Sant Maral Foundation, 'Survey on Perceptions and Knowledge of Corruption: Strengthening Democratic Participation and Transparency in the Public Sector in Mongolia Project,' 2017, pg. 56, https://asiafoundation.org/wp-content/uploads/2017/09/MG-SPEAK2017_ENG.pdf.] To address these issues, this commitment calls for increasing transparency in political party funding. Specifically, the commitment includes amedending the 2005 Law of Political Parties, passing new regulations on political party transparency, and organizing advocacy activities with OGP stakeholders.

This commitment is relevant to the OGP values of access to information and civic participation because it has a clear objective on increasing the transparency of political party financing while involving OGP stakeholders in the process of drafting an amendment to the Law on Political Parties. While the commitment calls for drafting an amendment to the Law on Political Parties and drafting new regulations regarding the funding of political parties, it does not explain what aspects of the law will be amended or what the new regulations will entail. Also, the commitment does not explain how OGP stakeholders will be consulted during the drafting of the amendment, or how the consultations will impact the final wording of the law. Therefore, the specificity is coded as low. Given that the commitment does not specify the extent of the amendments to the Law on Political Parties, the commitment will have only a minor potential impact on this issue. While the consultations with stakeholders are important, it is not clear how stakeholders will affect the final legislation.

Completion

In December 2015, former President Ts. Elbegdorj initiated a draft Law on Political Parties to replace the existing law.[Note62: 'What requirements must political parties meet?,' News.mn, 2 December 2015, https://www.news.mn/?id=210971.] According to the Office of the President, the draft amendments included a provision that would require political parties to publish their budget information online through the Glass Accounts system.[Note63: See: The Office of the Present of Mongolia, Discussion on Draft Law on Political Parties Held, 2 December 2015, http://eng.president.mn/newsCenter/viewNews.php?newsId=1757.] However, Parliament rejected the draft law. A civil society representative informed the IRM that a number of discussions on the draft law took place before it was rejected, though the composition of these discussions is unclear. The new parliament created a new task force to draft the amendments to the Law on Political Parties in December 2017.[Note64: Email exchange between IRM and representative of the Open Society Forum in Mongolia, 4 May 2017.] There are two task forces, one composed of parliamentarians representing all parties with seats in parliament, and a sub-task force comprised of researchers and parliament secretariat staff.

As these events were carried out after the first year of the action plan cycle, they will be assessed in the IRM End of Term Report. However, because the sub-task force has completed a draft framework document for the draft amendments, the commitment is assessed as having limited implementation, but is on schedule.

Next Steps

While improving the transparency of political party financing addressed both a major open government issue in Mongolia as well as a major stakeholder priority for the second action plan, this commitment does not clearly delineate which aspects of the Law on Political Parties will be amended, or how stakeholder consultations will impact the final wording of the amended law. Moving forward, the IRM recommends carrying this commitment forward, but with a clearer overall objective for the draft amendments, such as introducing greater transparency of income and revenue for political parties, establishing an independent oversight mechanism, and involving civil society in campaign financing monitoring and oversight.

4. Develop a legal environment that ensures transparency in the funding of political parties

Commitment Text:

Make an Amendment to the Law on Political Parties of Mongolia to reflect the issue of funding transparency of political parties in the new amendment to the law.

Status quo or problem addressed:

Funding of political parties is a contentious issue not only in Mongolia but also in other countries as well. According to survey data and study reports, political parties have the highest risk of exposure to corruption. There are still cases of violations related to election funding; this shows that the system is not comprehensive enough to handle these issues. Various international studies reveal that corruption in political parties is the base of defects in the political system, and has a negative effect on the development of parties and creates a foundation for future corruption. Therefore, there is an immediate need to address the issues of funding to political parties and make these channels more open, transparent, monitored and accountable.

Amend the Law on Political Parties of Mongolia and reflect the issue of funding transparency of political parties in the new amendment to the law.

Milestones:

4.1. Design the draft amendment of the Law on Political Parties in accordance with the processes outlined in the “Law on Legislations and Law on Public Hearing” while engaging stakeholders of the OGP in the process.

4.2. Reflect detailed regulations regarding the funding of political parties in the legal draft and organize actions to advocate the approval of legislation, which clearly states how to ensure transparency and accountability in the funding issues in the law.

4.3. Organize advocacy activities in cooperation with OGP stakeholders until the approval of the draft legislation.

Responsible institution: Central Government Authority responsible for Justice

Supporting institutions: National Audit Authority, General Authority for Tax, Independent Agency Against Corruption, civil society organizations who actively work and research on government transparency, corruption and governance issues, MNB, Mongolian National Chamber of Commerce and Industry (MNCCI), political parties

Start date: 30 June 2016

End date: 30 June 2018

Editorial Note: This is an abridged version of the commitment text. For the full commitment text from the Mongolian National Action Plan, see: https://www.opengovpartnership.org/wp-content/uploads/2017/05/Mongolia-NAP2-Final-Eng_0.pdf

Commitment Aim

This commitment aimed to amend the Law on Political Parties of Mongolia to reflect the issue of funding transparency of political parties; organize accompanying advocacy activities until the amendments are enacted; and to do so in cooperation and consultation with OGP stakeholders and the public, in line with laws on legislations and public hearings.

Status

Midterm: Limited

In the first year of implementation of this action plan—a period during which a new parliament came into office after elections in June 2016—the government did not hold public hearings, and did not complete the drafting of legislation on political parties (Milestones 4.1 and 4.2). However, as a sub-taskforce of researchers and parliament secretariat staff developed a draft framework document for the draft amendments, the commitment was assessed as having limited completion at the midterm.

For more information, please see the IRM 2016-2017 Progress Report. [28]

End of term: Limited

In December 2017, parliament created a new taskforce to draft the amendments to the Law on Political Parties. [29] There are two taskforces, one composed of parliamentarians representing all parties with seats in parliament, and a sub-taskforce comprised of researchers from academia, specialized in political studies, and parliament secretariat staff. However, amendments to the Law on Political Parties had still not been finalized at the end of term, and the government had not yet organized public consultations or advocacy activities around any draft amendments (Milestone 4.1, 4.2, 4.3). [30] According to the Ministry of Justice and Interior, progress pertaining to the amendment of this law remains at the discretion of parliament.

Despite this, independent of government, civil society has contributed to advocacy for the law. On 19 April 2018, Transparency International Mongolia organized a meeting on the funding of political parties and prevention of grand corruption, with the participation of members of parliament, civil society, and academia. The participants discussed a number of corruption prevention measures, such as protecting whistleblowers and indexation of political parties’ vulnerability to corruption. [31]

The Open Society Forum (OSF) also started to implement a two-year project “Level Up: Political Finance with Integrity” advocating a similar theme, in partnership with the International Institute for Democracy and Electoral Assistance (IDEA). The project organized a series of meetings and discussions on political finance involving different stakeholders, including women and youth. [32]

Did It Open Government?

Access to Information: Did Not Change

Civic Participation: Marginal

Since the Law on Political Parties had not been amended to increase transparency of political financing, and advocacy efforts took place independent of government, there was no improvement in access to information.

However, as the sub-taskforce involved in drafting the amendment to the law inclusively comprised researchers and held several discussions on political financing involving parliamentarians and civil society, the commitment did contribute to a marginal improvement in civic participation.

Carried Forward?

This commitment has been included in Mongolia’s third action plan as Commitment 8: Create legal environment for transparency of political parties.

The milestones of this commitment are: to develop the draft of the Law on Political Parties, which will include transparent disclosure of political party financing and civil society oversight; to submit the draft to the parliament; to improve oversight and monitoring by law enforcement agencies; to create conditions for preventing any potential corruption; and also to improve public awareness and knowledge on political parties’ responsibility and accountability, and build capacity to demand from political parties their compliance with duties.