Dispute over Indus Water Treaty
Context:
The World Bank-appointed Neutral Expert, Michel Lino, has affirmed his authority to address India and Pakistan’s differences over the design of hydroelectric projects under the Indus Waters Treaty, a decision welcomed by India.
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- While the NE’s ruling provides a pathway to address technical disputes, it does not advance India’s request to renegotiate the IWT, a demand it raised in January 2023.
- The unresolved differences between the two countries regarding the treaty’s dispute resolution mechanisms continue to pose challenges.
India’s Call for Treaty Renegotiation
- India has been seeking to revise the treaty to address its concerns about the dispute resolution process.
- Since January 2023, it has written to Pakistan four times to initiate talks, but Pakistan has not yet formally responded.
- The last meeting of the Permanent Indus Commission (PIC), a bilateral body established under the treaty, took place in May 2022 in New Delhi.
- India subsequently decided to suspend further PIC meetings until progress was made on renegotiating the treaty.
The Indus Waters Treaty (IWT), signed on September 19, 1960, between India and Pakistan, is a water-distribution agreement brokered by the World Bank. It allocates control over the waters of the Indus River system, granting India rights to the three eastern rivers—Ravi, Beas, and Sutlej—while Pakistan controls the three western rivers—Indus, Chenab, and Jhelum. The treaty allows India to utilise western river waters for limited irrigation and unrestricted non-consumptive purposes such as hydroelectric power generation. A key feature of the treaty is the establishment of the Permanent Indus Commission to resolve disputes and facilitate cooperation between the two nations.
Diverging Interpretations of Dispute Resolution
- The IWT outlines a three-step dispute resolution mechanism: initial attempts at resolution by the PIC, escalation to a World Bank-appointed Neutral Expert, and finally, adjudication by a Court of Arbitration if earlier efforts fail.
- India insists that each step must be fully exhausted before progressing to the next stage.
- However, Pakistan has bypassed India’s concurrence and moved forward unilaterally.
- The issue first surfaced in 2016 when Pakistan called for the establishment of a Court of Arbitration.
- Initially, both nations appeared to agree on appointing a Neutral Expert.
- However, the World Bank later decided that convening both a Neutral Expert and a Court of Arbitration simultaneously could result in “contradictory outcomes.”
- Despite this, in 2022, the World Bank facilitated the appointment of both the NE and the chairman of the Court of Arbitration.
- India has since refused to participate in the Court of Arbitration proceedings in The Hague, arguing that the treaty does not permit parallel mechanisms.
- Pakistan maintains its actions align with the treaty.
In the coming months, the Neutral Expert is expected to hear submissions from both India and Pakistan regarding the hydroelectric projects in question. The resolution of these disputes will test the efficacy of the IWT’s dispute resolution framework and the ability of both nations to navigate their longstanding differences over water-sharing and project development.
