Context

• In January this year, Pakistan ‘unilaterally’ initiated arbitration at the Hague-based Permanent Court of Arbitration (PCA) to address the interpretation and application of the Indus Waters Treaty (IWT).
• India raised objections as it views that the Court of Arbitration is not competent to consider the questions put to it by Pakistan and that such questions should instead be decided through the neutral expert process.

Indus Water Treaty (IWT)

• IWT was signed in 1960 between India and Pakistan and was brokered by the World Bank, which too is a signatory to the treaty.
• The treaty fixed the rights and obligations of both countries concerning the use of the waters of the Indus River system.
• It gives control over the waters of the three ‘eastern rivers’ -the Beas, Ravi, and Sutlej - to India, while control over the waters of the three ‘western rivers’ -the Indus, Chenab, and Jhelum - to Pakistan.
• The treaty allows India to use the western river waters for limited irrigation use and unlimited non-consumptive use for such applications as power generation, navigation, fish culture, etc.
• It lays down detailed regulations for India in building projects over the western rivers. 

A Background of Conflict over IWT

• Indian Decision to Modify IWT
  • In January, India announced the desire to modify the 62-year-old IWT with Pakistan, citing what it called Pakistan's unwillingness to find a solution to disputes over the Kishanganga and Ratle hydropower projects, both in J&K.
  • Two hydroelectric power projects, one on the Kishanganga river (a tributary of the Jhelum), and the other on the Chenab (Ratle), have been the subject of a prolonged controversy.
  • India called for modifications to the treaty as per Article XII (3) of the IWT which specify that provisions of the treaty may from time to time be modified for any specific purpose between the two Governments.
  • The notice comes as a result of Pakistan's continuous inaction in enforcing the IWT by repeatedly objecting to the development of hydroelectric projects on the Indian side.
• Pakistan’s Decision to Approach Arbitration Court
  • Pakistan initiated arbitration at the PCA to address the interpretation and application of the IWT to certain design elements of two run-of-river hydroelectric projects.
  • Pakistan first raised its concerns over the Kishanganga project in 2006 and the Ratle project on the Chenab in 2012.Pakistan contended that India’s plan is not in line with the IWT. 
• India’s Objection to Arbitration
  • India protested Pakistan’s “unilateral” decision to approach a court of arbitration at The Hague in the Netherlands.
  • India raised objections as it views that the Court of Arbitration (CoA) is not competent to consider the questions put to it by Pakistan and that such questions should instead be decided through the neutral expert process.

Outcome of the Arbitration

• India can Divert Water for Power Generation
  • In 2013, the CoA delivered the final judgment, ruling that the Kishanganga hydroelectric project is a run-of-river dam, and India under the IWT can divert water from the river Kishanganga/Neelum for power generation.
  • However, the court stated that India has to maintain a minimum flow of water in the Kishanganga/Neelum river to nine cusecs (cubic metre of water per second).
• No Resolution Between India and Pakistan
  • After the Court of Arbitration (CoA)’s judgment, the two countries reached an amicable resolution on only one out of four issues that were expected to be resolved.
  • Despite several rounds of talks between the Indus Water Commissioners, Delhi and Islamabad could not resolve the other three matters relating to pondage and spillway configuration.
  • Consequently, Pakistan went to the World Bank accusing India of violating the IWT and the court’s verdict.
• Rejection of India’s Objections to the Arbitration
  • On July 6, 2023, the PCA unanimously rejected India’s objections and said that it is competent to consider and determine the disputes set forth in Pakistan’s Request for Arbitration.

India’s Stand on PCA’s Decision

• India has been abstaining from participating in the proceedings at the PCA and did not attend the present proceedings as well.
• After the PCA made its observations, India said that it cannot be compelled to recognise or participate in illegal and parallel proceedings not envisaged by the Treaty.
• India has been participating in the neutral expert’s proceedings whose first meeting was held at The Hague on February 27-28; the next meeting is scheduled in September.

Way Forward

• Revisit the Treaty Rather than Court Action
  • The IWT is cited by many as an example of cooperation between two unfriendly neighbours for many reasons.
  • These include the IWT having survived several wars and phases of bitter relations, and it’s laying down of detailed procedures and criteria for dispute resolution.
  • In an atmosphere of a lack of trust between the two neighbours, the World Bank, a party to the IWT, may use its forumto forge a transnational alliance of epistemic communities (who share a common interest and knowledge to the use of the Indus waters).
  • This will help in building convergent state policies. Thus, revisiting the IWT is a much-needed step.
• Address the Issue of Trust Deficit
  • Due to a wide trust deficit between the two countries, there is a remote chance of Pakistan accepting India’s request to renegotiate to modify some of the provisions in the IWT.
  • Hence, any such revisiting requires better ties and enduring trust between India and Pakistan.
• Need to Involve Local Stakeholders: There is a need to involve local stakeholders also in any negotiation process between India and Pakistan on shared water issues.
• A joint group comprising technocrats, climate experts, water management professionals, and scientists from both countries can be set up to look at the core of the problem.
• Recognise common interests: To make the IWT work there is a need for the two countries to recognise their common interest in the optimum development of the Indus Rivers System.
• Need New Amendments: The IWT was signed more than 60 years ago, therefore amendments may be needed due to changes in the situation in the Indus River Basin region.

 Conclusion

• The two countries should use bilateral dispute settlement mechanisms to discuss the sustainable uses of water resources.
• Given the broad contours of the IWT, discussing and broadening transboundary governance issues in holistic terms could be the starting point for any dialogue regarding water disputes.