Indus Water Treaty 

Recently, the Hague based Court of Arbitration (CoA) ruled that it has competence to consider matters concerning the Kishenganga and Ratle hydroelectric projects in Jammu and Kashmir.

• Pakistan had opposed the construction of these projects and had approached CoA.
• After this, India reiterated its position that the constitution of the “Court of Arbitration” is in contravention of the provisions of 1960 Indus Waters Treaty.

Indus Water Treaty (IWT)

• The Treaty is a water-distribution treaty between India and Pakistan, brokered by the World Bank.
• According to this treaty, three rivers: Ravi, Sutlej and Beas were given to India and the other three: Sindh, Jhelum and Chenab were given to Pakistan.
• Rights & obligations under this treaty
  • India is under obligation to let the waters of the western rivers flow, except for certain consumptive use.
  • The treaty allocates Pakistan approx. 80% of the entire water of the six-river Indus system and reserved for India just remaining 19.48% of the total waters.
  • India can construct storage facilities on western rivers of up to 3.6-million-acre feet, which it has not done so far.
  • The IWT permits run of the river projects and require India to provide Pakistan with prior notification, including design information, of any new project.

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What are the Dispute Redressal Mechanisms Under The Indus Water Treaty?

• Article IX of the Treaty is a dispute resolution mechanism – graded at three levels to resolve a difference or a dispute related to projects on the Indus waters.
• First level
  • Either party has to inform the other side if they are planning projects on the Indus River with all the information that is required or asked for by the other party.
  • This process is done at the level of the Permanent Indus Commission (PIC), created to implement and manage the goals of the IWT.
  • If PIC is unable to solve the question in contention, the question becomes difference and goes to second level.
• Second level
  • The second grade is the World Bank appointing a neutral expert to resolve the differences.
  • If a neutral expert cannot resolve the issue, the difference becomes a dispute and goes to third level.
• Third level
  • At this level, the matter goes to a Court of Arbitration (CoA) whose chair is appointed by the World Bank.

Background

• Dispute over two hydroelectric power projects that India is constructing.
  • The present development is the fallout of a longstanding dispute over two hydroelectric power projects that India is constructing:
    • one on the Kishenganga river, a tributary of Jhelum, and
    • the other on the Chenab – Ratle Hydro Electric Projects.
  • In 2015, Pakistan requested the appointment of a Neutral Expert to examine its technical objections to these projects.
• Resolution of issue through Permanent Indus Commission
  • In 2016, Pakistan unilaterally retracted its request to appoint a Neutral Expert and proposed that a Court of Arbitration adjudicate on its objections.
  • On the other hand, in 2016, India requested a Neutral Expert to be appointed as this was an important part of the process which Pakistan was trying to skip.
  • As a result, the World Bank paused the process since two separate requests had been made by the two sides.
  • It asked India and Pakistan to resolve it through the PIC level of Indus commissioners.
• Actions on both the Neutral Expert and Court of Arbitration processes initiated
  • Despite the directive from World Bank, Pakistan refused to discuss the issue during the meetings of the Permanent Indus Commission.
  • In March 2022, at Pakistan’s continuing insistence, the World Bank initiated actions on both the Neutral Expert and Court of Arbitration processes.
    • The World Bank resumed the concurrent process and went ahead and appointed a Neutral Expert and chair of the Court of Arbitration.
• India opposed the constitution of the CoA
  • India has opposed the constitution of the CoA and contends that it is in contravention of the provisions of the Indus Waters Treaty.
  • Till date, India has not exercised its right under Treaty to appoint two arbitrators to the CoA.
  • New Delhi has not attended the court’s proceedings and has sent its correspondence to World Bank.
    • India insisted that there cannot be two processes for the same dispute.
    • If the two give different outcomes, then the workability of the IWT comes into question.
    • Such parallel consideration of the same issues is not covered under any provision of the IWT.

Key Highlights Of The Recent Development

• Statement Issued by Permanent Court of Arbitration (PCA)
  • PCA said that the tribunal considered objections to the competence of the court raised by India through its communications with the World Bank.
    • PCA is an intergovernmental organization established in 1899 and based in The Hague, Netherlands.
    • It provides a forum for the peaceful resolution of disputes between member states, international organizations, or private parties.
  • In a unanimous decision, which is binding on the Parties and without appeal, the Court rejected each of the objections raised by India.
  • It determined that the Court is competent to consider and determine the disputes set forth in Pakistan’s Request for Arbitration.
• India’s Reaction
  • India has been participating in the Treaty-consistent Neutral Expert proceedings.
    • The last meeting took place at The Hague in February. The next meeting of the Neutral Expert process is scheduled to be held in September.
  • India cannot be compelled to recognise or participate in illegal and parallel proceedings not envisaged by the Treaty.