On December 12, the World Bank declared a “pause” to two separate processes initiated by India and Pakistan to resolve a new dispute over the Indus Waters Treaty, relating to the construction of the Kishanganga and Ratle hydropower projects in Jammu and Kashmir. The Bank, which brokered the 1960 Indus Waters Treaty, and is thus an acknowledged arbitrator in such disputes, asked the two countries to try “alternative” approaches to resolve the dispute.
While India welcomed the decision and said such disputes could be resolved bilaterally, Pakistan’s initial reaction has not been enthusiastic. It was Pakistan which took the matter to the Bank in August, asking it to set up a Court of Arbitration under the Treaty’s provisions. Pakistan claimed that the designs of the 330 MW Kishanganga project and the 850 MW Ratle project violated the Treaty.
India argued that a Court of Arbitration was not necessary, and asked the Bank for the appointment of a neutral expert, which is a lower level of dispute resolution mechanism under the treaty. The Bank initially said it would initiate both processes simultaneously, but following India’s objection, decided to “pause” them both.
The latest dispute presents another test for the 56-year-old treaty that came under severe strain in the wake of the terror attacks in Uri in September, with demands in India for its abrogation. After Prime Minister Narendra Modi declared that “blood and water cannot flow together”, India suspended routine bi-annual talks between the Indus Commissioners of the two countries, and decided to consider re-starting work on the Tulbul navigation project on the Jhelum.
The Kishanganga Dispute
The dispute over the hydroelectric project on the Kishanganga, a tributary of the Jhelum, is not new. Pakistan took it to the Court of Arbitration in 2010, raising 6 issues — 2 were mainly legal in nature, 4 were design-related. The legal questions landed in the Court of Arbitration at The Hague. Pakistan contended that the diversion of the Kishanganga into another tributary of the Jhelum, the Bonar-Madmati Nallah, would violate the Treaty, as would the falling of the water level in the project’s reservoir below dead storage level.
The Court of Arbitration, in its partial ruling in February 2013 and final decision in December 2013, allowed India to divert the Kishanganga’s water to the Bonar Nallah, but asked it to ensure that a minimum environmental flow of at least 9 cubic metre per second is maintained in the river as it flows into territory under Pakistan’s control.
On the second issue, the court upheld Pakistan’s objection, and asked India to ensure that the reservoir was never depleted beyond the dead storage level. There were “no further restrictions on the construction and operation” of the project.
It was expected at the time that the 4 design-related issues would be settled through bilateral negotiations. In fact, the two countries did come to an amicable resolution of one of the issues. However, no agreement was reached on the other three — relating to pondage and spillway configuration — despite several rounds of talks.
The Current Standoff
It is on these 3 issues, and with objections to the Ratle project that began in 2013, that Pakistan gave notice to the World Bank for the constitution of a Court of Arbitration on August 19. In accordance with the provisions of the Treaty, India had 2 months, until October 19, to respond. In the last week of September, amid calls in India to scrap the Indus Waters Treaty, officials from the two countries travelled to Washington for a meeting with the Bank in a bid to resolve the issues through negotiations. But that did not happen.
Immediately after that, on October 4, India, instead of responding to Pakistan’s notice, moved its own request for the appointment of a neutral expert. Unlike in the case of a request for setting up a Court of Arbitration, a request for a neutral expert needs to be acted upon immediately. The World Bank, however, sat over India’s request for a couple of weeks.
After Pakistan’s request for a Court of Arbitration “matured” on October 19, the Bank said it would activate both the processes simultaneously. India objected, saying the matter would get very complicated in case the two processes produced contradictory rulings. It argued that the Bank should have first acted on India’s request of October 4, and threatened not to participate in the proceedings if a Court of Arbitration was set up.
World Bank president Jim Yong Kim then wrote to the Finance Ministers of both countries, informing them of the decision to “pause” both processes, and asking them to seek “alternative” resolutions.
Legal vs Technical
India and Pakistan are insisting on different approaches of dispute resolution because of their past experiences. On a design dispute on the Baglihar dam on the Chenab, a neutral expert had ruled in favour of India, even though the design of that dam was not strictly in accordance with the parameters prescribed in the Treaty. The expert had argued that India had employed newer technology that was not available in the 1960s, which would prolong the life of the project.
However, a similar question in the Kishanganga case — relating to reservoir level going below the dead storage level — was dealt with differently by the Court of Arbitration, which ruled that the design was inconsistent with the Treaty, and asked India to change it.
Pakistan is keen to establish again that Indian constructions are illegal, and wants a legal resolution to the dispute; India, on the other hand, maintains that the dispute is of technical nature.
The Next Steps
It’s not immediately clear what “alternative” methods could be employed by the two countries to sort out the issue. With India having forced a suspension of the Indus Commissioner talks, the regular lines of communication over the implementation of the Treaty are currently unavailable. India, meanwhile, has established a high-level task force on the Treaty — it is headed by the Principal Secretary to the Prime Minister, and has the National Security Adviser, the Foreign Secretary, the Finance Secretary and the Water Resources Secretary among its members. It is clear that any talks with Pakistan on the Treaty are unlikely to be purely technical in nature.
It is also possible that the World Bank might nominate a few independent experts to mediate between the countries.
For more on the Indus Waters Treaty, see Amitabh Sinha’s ‘Turning off Indus tap easier said than done’, in the print edition of September 23, 2016.