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<strong>International</strong> <strong>Watercourses</strong><strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong>in South AsiaDr. <strong>Trilochan</strong> <strong>Upreti</strong>Pairavi PrakashanDr. <strong>Trilochan</strong> <strong>Upreti</strong> has been working with His Majesty'sGovernment of Nepal as a Joint Secretary. At the moment, he hasbeen working in Human Rights division, in Office of the PrimeMinister <strong>and</strong> Council of Ministers. He has worked 23 years indifferent offices on different capacity. He has also taken part as amember of Nepalese delegation in negotiation with Indiaconcerning the water resources development in South Asia.He has concluded his Ph.D. from the University of Reading, UKin 2004. His thesis was related with the development <strong>and</strong>codification of international watercourses law <strong>and</strong> its applicationin south Asia. However, he has rewritten <strong>and</strong> transformed it intothe shape of this book. He has written dozens of articles in severaldaily newspapers <strong>and</strong> also in several journals regarding differentaspects of water resources development <strong>and</strong> has analyzed the roleof international watercourses law. Particularly, his contribution onthe application of the principle of equitable utilization has beenhighly appreciated.He has also written a travel story regarding his days in the UnitedKingdom. Besides, he has contributed one article "EquitableUtilization of Nepalese Water Resources: Bilateral <strong>and</strong> RegionalPerspectives" in <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> for the 21stCentury, edited by Surya P. Subedi, which is recently publishedby ASGATE Publisher in United Kingdom <strong>and</strong> the United Statesof America. Another article "The Role of the World Bank <strong>and</strong>Financial Institutions in Funding Water Resources Projects" hasbeen expected to publish in Indian Year Book of <strong>International</strong><strong>Law</strong>, 2005.Dr. <strong>Upreti</strong> has deep interest in legal aspects of water resourcesutilization between riparian countries <strong>and</strong> has been deeplyinvolved in several research projects. He has been teaching Public<strong>International</strong> <strong>Law</strong> <strong>and</strong> Business <strong>Law</strong> in two colleges.I II
<strong>International</strong> <strong>Watercourses</strong><strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong>in South AsiaFor Pairavi PrakashanPublished by Managing Director Padam SiwakotiEdition : 2006© <strong>Trilochan</strong> <strong>Upreti</strong> 2006All rights reserved. No part of this publication may bereproduced, stored in a retrieval system, or transmittedin any form or by any means, electronic, mechanical,photocopying, recording or otherwise without the priorpermission of the publisher <strong>and</strong> Author.<strong>Trilochan</strong> <strong>Upreti</strong> has asserted his right under theCopyright <strong>Law</strong>.Dr. <strong>Trilochan</strong> <strong>Upreti</strong>Price : NRs. 1000/–I.C. : 700US$ : 20£ : 15ISBN : Hard Bound : 99946-51-22-6Paperback : 99946-51-21-8Pairavi Prakashan(Publishers & Distributors)'M' House Ramshapath, Kathm<strong>and</strong>uP.O. Box: 9570, Tel: 4229233Printers :XVII XVIII
PrefaceIn this book, the author has attempted to present a comprehensivereview of the evolution of water law over the centuries. While doing so, theauthor has also attempted to outline the positive <strong>and</strong> negative aspects of theinternational treaties on boundary <strong>and</strong> transboundary rivers around theworld.Like any international law in general, the one covering water sectoralso constitutes mainly the State practices, judicial pronouncements,international coventions <strong>and</strong> scholarly writings. In this book, the author hascited a profusion of examples of water disputes across the world <strong>and</strong> theways they were attempted to resolve. The author, after doing a criticalanalysis of the four doctrines of international water law, viz. territorialsovereignty, territorial integrity, prior appropriation <strong>and</strong> equitableutilization, has considered the last doctrine as the best, one, for it has wideracceptance among the international community. The author seems to be anardent supporter of the principle of equitable utilization, because he hasemphasized in a number of places in the book that the principle would helpserve the interests of the riparian States <strong>and</strong> resolve their disputes in areconciliatory manner.The book also elaborates the water availability <strong>and</strong> its potential uses inSouth Asia for the economic development <strong>and</strong> environmental sustainabilityof the region. It attempts to outline the problems <strong>and</strong> suggest the equitableutilization of rivers as solutions to them.The concept of equity <strong>and</strong> the emerging concept of equitable utilizationin shared natural resources have been dealt with at length, citing judicatureof the <strong>International</strong> Court of Justice. The readers will get an opportunity tobe acquainted with numerous international treaties on water sharing that aresaid to be based on the principle of equitable utilization.The oft-quoted Columbia River Treaty between the USA <strong>and</strong> Canadais believed to be ideally based on the principle of equitable utilization. Inthis book, this treaty is broadly suggested as an ideal point of reference fortreaty on shared watercourses based on the principle of equitable utilization.However, it is important to note that the concerned riparian States tookdecades to reach an agreement on the Columbia River water sharing. Thetreaty was not signed overnight.Helsinki Rules are believed to be the basis for principle of equitableutilization. The rules state- "each basin State in entitled within its territory toget reasonable <strong>and</strong> equitable share in the benefical uses of the water oninternational drainage basin". However, it has not been easy to determinethe reasonable <strong>and</strong> equitable share from the viewpoint of various relevantfactors <strong>and</strong> is also not possible to formulate a general rule to assign weightsto these relevant factors.Equitable utilization of resource is based on equity, i.e., fairness,faithfulness <strong>and</strong> norms of distributive justice, <strong>and</strong> the interest of everyriparian State is taken into consideration. The author has recommended theprinciple of equitable utilization to be the most ideal rule for rivers of Nepalthat flows across India <strong>and</strong> Bangladesh. Although equitable utilization isarguably the best approach to achieve justice in sharing a watercourse <strong>and</strong> ispossibly the best possible means for resolving the conflicts, the question asto "how to make the principle operational" remains unanswered, <strong>and</strong> it willbe asking too much to expect an answer from the book.Nepal, as a co-riparian State, has border rivers <strong>and</strong> also trans-boundaryrivers. A regional or sub-regional treaty on sharing water is not yet inexistence. Nonetheless, we have the experience of entering into bilateralagreements on one border river <strong>and</strong> two transboundary rivers. So far asequitable utilization is concerned, agreements on trans-boundary riversnamely Koshi <strong>and</strong> G<strong>and</strong>ak Agreements in no way illustrate the principle ofequitable utilization, whereas the agreement of border river, namelyMahakali Treaty, reflects the principle of equitable distribution to a greaterextent. However, it is important to note that the Mahakali Treaty hasascertained the equitable sharing only for the water that will be augmentedfrom the development of Pancheswore Multipurpose Project <strong>and</strong> not for thenatural flow of the river. This is owing to the integration of SardaAgreement in Mahakali Treaty. Nevertheless, Mahakali Treaty could be theframework treaty for the equitable sharing of water of border rivers, ifimplemented with good faith <strong>and</strong> sincerity.Nepal without a delay needs to develop its strategy <strong>and</strong> framework forthe equitable sharing of watercourses. In doing so, she should adoptdifferent approaches for border rivers <strong>and</strong> trans-boundary rivers. Althoughthe book is comprehensive on principle of equitable sharing, it has yet toaddress the issues adequately in the context of Nepal <strong>and</strong> her rivers.The legal aspect of India's River Linking Project has been discussed inthe book in terms of her national <strong>and</strong> international dimensions both asthreats <strong>and</strong> opportunities to the smaller neighbouring countries. The bookgives quite an insight on the project for those interested in the region's waterresources.All in all, it is a very comprehensive work dealing with water issuesfrom the naitonal, regional <strong>and</strong> global st<strong>and</strong>points. The book givessignificant information on Nepal's position on water resources. The bookseems to have a number of repetitions of some of the issues, which perhapswill be done away with in the later editions.25 December 2005-12-25 (Mahendra Nath Aryal)SecretaryXVII XVIII
PrefaceSouth Asia has been remain one of the poorest area of the worlddespite the fact that immense water resource available here has notbeen fully used for the beneficial use of countries of this area. Ithas been identified that utilisation of these resources for thepoverty alleviation, infrastructure development <strong>and</strong> also for thelivelihood of people is of utmost required. However, even in thiscircumstance states are not moving forward to end their suspicion,bitterness <strong>and</strong> move ahead for the end of this cause by this means.This book has critically analysed the root cause of different views<strong>and</strong> st<strong>and</strong>s of these nations <strong>and</strong> demonstrates how states in anotherpart of the world have been able to settle their divergent views <strong>and</strong>utilised shared waters for their mutual benefits. In doing so,evaluation of the law <strong>and</strong> practice developed so far has been made<strong>and</strong> how such law can be applied in south Asia has beenrecommended. Basically, critical analysis of international waterlaw <strong>and</strong> its application in south Asia is the major objective of thisbook.Fresh water is an indispensable part of the hydrosphere <strong>and</strong> theterrestrial system. Water is a finite resource for which there is nosubstitute; its total volume cannot be increased <strong>and</strong> no living thingcan exist without it. Global water usage is becoming unsustainableat present levels, which are still rapidly increasing due to theworld’s swelling population, <strong>and</strong> per capita usage that isincreasing with prosperity. The other issue of great concern is theuneven availability <strong>and</strong> unsustainable use of water, exacerbated byproblems such as pollution, deforestation <strong>and</strong> desertification.Indo-Nepalese water relations are used as a case study.To date, most problems associated with water use <strong>and</strong> itsallocation have been resolved through negotiations, agreements,<strong>and</strong> judicial pronouncements, assisted by experts in this field, <strong>and</strong>by reference to international customs <strong>and</strong> state practices. Althoughsome of these practices – those which are unanimously recognisedby the international community – have taken the shape ofcustomary international law, many related issues still remaincontentious, particularly in the developing world. There is still noone authority able to agree a universal definition ofequity/equitable utilisation <strong>and</strong> how this is to be reconciled withthe ‘no harm’ rule, <strong>and</strong> in the meantime, state practice has led to avariety of resolutions.The notion of equity is generally agreed to imply that nationsrepresenting the weak, poor <strong>and</strong> vulnerable should receivepreferential treatment by means of concessions made by the richernations <strong>and</strong> even by the richer developing state. This concept iswell exemplified by the Millennium Development Goal <strong>and</strong> DebtRelief Programmes, amongst other measures. The problems ofvulnerable countries such as Nepal must be overcome in aconstructive, effective <strong>and</strong> prudent manner, by means of greaterinternational co-operation based on the elements of equity, <strong>and</strong>requiring a reversal of the present policies of the World Bank <strong>and</strong>the richest industrial nations. This book has shown that the rule ofequitable utilisation provides the ability to resolve conflicts in awin-win manner, including in the Indo-Nepalese context.There are very many people who have significantly contributed tothis studies but it is not possible to mention all of them. However,my wife Mrs Puspa Devi <strong>Upreti</strong> has provided me source offunding, inspiration <strong>and</strong> needful help in completing my PhD in theUnited Kingdom <strong>and</strong> the book is based on these four years hardwork. Professor S. P. Subedi, Dr Chris Waters, Dr Duncan French,<strong>and</strong> Mr Damodar Bhattarai contribution in this undertaking shouldbe acknowledged. If this book contribute, even little, in creatingconducive environment for making broader consensus amongnations of south Asia <strong>and</strong> to the academic circle in their betterunderst<strong>and</strong>ing about this complex area, the author would considerthat the effort has been succeeded.In spite of my sincere effort there could be lacking <strong>and</strong>shortcoming <strong>and</strong> any comment <strong>and</strong> criticism in this regards will beheartily welcomed.23 December, 2005 - Dr. <strong>Trilochan</strong> <strong>Upreti</strong>XVII XVIII
<strong>International</strong> Treaties <strong>and</strong> other DocumentsConvention relating to the Development of Hydraulic Poweraffecting more then one State <strong>and</strong> Protocol of signature,Geneva, 9 December 1923.Convention on <strong>Law</strong> of Non-Navigational Uses of <strong>International</strong><strong>Watercourses</strong>, 21 May 1997.Convention on the Protection <strong>and</strong> Use of Transboundary<strong>Watercourses</strong> <strong>and</strong> <strong>International</strong> Lakes, Helsinki, 17 March1992.<strong>International</strong> Regulation Regarding the Use of <strong>International</strong><strong>Watercourses</strong> for Purposes other than Navigation, Declarationof Madrid, 20 April 1911.The Convention <strong>and</strong> Statute on the Regime of NavigationalWaterways of <strong>International</strong> Concern, Barcelona, 20 April,1921.The Helsinki Rules on the Uses of the Waters of <strong>International</strong>Rivers, Helsinki, February 1966.Resolution 33/87 on Cooperation in the Field of theEnvironment Concerning Natural Resources Shared by Two orMore States, New York, 15 December 1978.1. Table of Bilateral Treaties1. Convention between Norway <strong>and</strong> Sweden on CertainQuestions Relating to the <strong>Law</strong> on <strong>Watercourses</strong>, signed atStockholm on 11 May 1929.2. Convention Regarding the Determination of the LegalStatus of the Frontier between Brazil <strong>and</strong> Uruguay signedat Montevideo on 20 December 1933.3. Treaty between Great Britain <strong>and</strong> the United StatesRelating to Boundary Waters, <strong>and</strong> Questions arisingbetween the United States <strong>and</strong> Canada signed atWashington, 11 January, 1909.4. Treaty between the United States <strong>and</strong> Mexico relating tothe utilization of the waters of the Colorado <strong>and</strong> TijuanaRivers <strong>and</strong> of the Rio Gr<strong>and</strong>e (Rio Bravo) from FortQuitam, Texas, to the Gulf of Mexico, signed atWashington on 3 February1944, <strong>and</strong> supplementaryProtocol, signed at Washington on 14 November 1944.5. Exchange of Notes between His Majesty’s Government inthe United Kingdom <strong>and</strong> the Egyptian Government inRegard to the Use of the Waters of the River Nile forIrrigation Purposes, Cairo 7 May 1929.6. Agreement between the United Arab Republic <strong>and</strong> theRepublic of Sudan for the full Utilization of the Nilewaters, signed at Cairo on 8 November 1959.7. Treaty between India- Pakistan Regarding the Use of theWaters of the Indus, signed at Karachi on 19 September1960.8. Treaty between the United States of America <strong>and</strong> CanadaRelating to Co-operative Development of the WaterResources of the Columbia River Basin, signed atWashington, 17 January 1961.9. Agreement between the Government of Nepal <strong>and</strong> theGovernment of India on the G<strong>and</strong>ak River Irrigation <strong>and</strong>Power Project, signed at Kathm<strong>and</strong>u on 4 December 1959.10. Agreement between the Government of India <strong>and</strong> theGovernment of Nepal on the Kosi Project, signed atKathm<strong>and</strong>u on 25 April 1954.XVII XVIII
11. The Treaty on the Lesotho-Highl<strong>and</strong> Water Project 1986,Lesotho-South-Africa.12. The treaty of the utilisation of the Parana River, Gauirafalls <strong>and</strong> Ygazu River, 1973 Paraguay-Brazil (ITAIPU).13. The Treaty of Peace 1994, Israel <strong>and</strong> Jordan.14. The Treaty on Sharing of the Ganges Waters at Farakka1996, India-Bangladesh.15. The Integrated Treaty on the Sharing of Mahakali River1996, Nepal- India.2. Table of Multilateral Treaties1. The Treaty for Amazon Co-operation, 1978 Bolivia-Brazil-Columbia-Guyana-Peru-Surinam <strong>and</strong> Venezuela.2. Agreement on the Environmentally Sound Management ofthe common Zambezi River System 1987 Angola,Botswana, Congo, Lesotho, Malawi, Mauritius,Mozambique, Namibia, Seychelles, South Africa,Swazil<strong>and</strong>, Zimbabwe, Tanzania <strong>and</strong> Zambia.3. Agreement for the Sustainable Development of theMekong River Basin, 1995 Thail<strong>and</strong>, Laos, Cambodia <strong>and</strong>Vietnam.Table of Cases1. Decided by <strong>International</strong> Courts/ Tribunals1. The case relating to the territorial jurisdiction of the<strong>International</strong> Commission of the River Oder, 1929 (PCIJ).2. The Diversion of Water from the Meuse 1937 (PCIJ).3. The Gabcikovo-Nagymaros Case 1997 (ICJ).4. Helm<strong>and</strong> River delta case 1872 <strong>and</strong> 1905 (Arbitration).5. Lake Lanoux case 1857(Arbitration).6. Gut Dam case 1968 (Arbitration).7. The Trail Smelter case 1938-1941(Arbitration).2. Major cases decided by municipal courts.1. Kansas versus Colorado 1902 & 1907.2. Wyoming versus Colorado 1936 & 1940.3. New Jersey versus New York 1931.4. Connecticut versus Massachusetts 1931.5. The Krishna River Dispute, 1961.6. The Narmada River Water Dispute, 1978.7. The Godawari River Water Dispute, 1980.8. The Punjab-Rajasthan-Haryana Water Dispute 1986.9. The Tungabhadra River Dispute 1944.10. The Muskhund Dam project Dispute 1965.11. The Bajaj Sagar Dam Project 1966.12. The Zwillikon Dam case 1878.13. The Leith River case, 1913.14. Societe Enerfie Electrique verusa Compaynia ImpreseElectriche Liguri 1939.15. Wurttemberg <strong>and</strong> Prussia versus Baden case 1927.XVII XVIII
ADBAJILAus.JILAYBLADPILALCCASEANAGOAInt.ABABYBILCYILCJIEL&PCERDSCBRCLJDJILDVCDPREP&LEEZECAFEESCAPECEELRFDIGEFFAOGYBILGATTGSPGIELRGIFGOIAcronymsGSP General System of PreferenceGAP Guneydogu Anadolu Projesi (Greater AntoliaAsian Development BankProject)American Journal of <strong>International</strong> <strong>Law</strong>HILJ Harvard <strong>International</strong> <strong>Law</strong> JournalAustralian Journal of <strong>International</strong> <strong>Law</strong>HMG/N His Majesty’s Government of NepalAustralian Yearbook of <strong>International</strong> <strong>Law</strong>HSC High Seas ConventionAnnual Digest of Public <strong>International</strong> <strong>Law</strong>HHDC Himalayan Hydro Development CorporationAsian African Legal Consultative committeeICJ <strong>International</strong> Court of JusticeAssociation of South East Asian NationsIDA <strong>International</strong> Development AssociationAfrican Growth <strong>and</strong> Opportunity ActILM <strong>International</strong> Legal MaterialsInter-American Bar AssociationILC <strong>International</strong> <strong>Law</strong> CommissionBritish Yearbook of <strong>International</strong> <strong>Law</strong>ILA <strong>International</strong> <strong>Law</strong> AssociationCanadian Yearbook of <strong>International</strong> <strong>Law</strong>IBWC <strong>International</strong> Boundary <strong>and</strong> Water CommissionColorado Journal of <strong>International</strong> Environmental ICCPR <strong>International</strong> Covenant of Civil <strong>and</strong> Political<strong>Law</strong> <strong>and</strong> PolicyRightsCharter of Economic Rights <strong>and</strong> Duties of States IWL <strong>International</strong> Water <strong>Law</strong>Canadian Bar ReviewILWP <strong>International</strong> Water <strong>Law</strong> ProjectCambridge <strong>Law</strong> JournalISNT Informal Single Negotiation TestDenver Journal of <strong>International</strong> <strong>Law</strong>IWC <strong>International</strong> WatercourseDamodar Valley CorporationIPP Independent Power ProducerDetail Project ReportILR <strong>International</strong> <strong>Law</strong> ReportsEnvironmental Policy & <strong>Law</strong>IJC <strong>International</strong> Joint CommissionExclusive Economic ZoneICLQ <strong>International</strong> <strong>and</strong> Comparative <strong>Law</strong> QuarterlyEconomic Commission for Asia <strong>and</strong> the Far East Int AmBA Inter-American Bar AssociationEconomic <strong>and</strong> Social Commission for Asia <strong>and</strong> IJIL Indian Journal of <strong>International</strong> <strong>Law</strong>PacificIse. LR Israel <strong>Law</strong> ReviewEconomic Commission for EuropeIMF <strong>International</strong> Monetary Fundthe Environmental <strong>Law</strong> ReporterINHURED- Institute of <strong>International</strong> Human Rights,Foreign Direct InvestmentEnvironment <strong>and</strong> DevelopmentGlobal Environment FacilityIWRA <strong>International</strong> Water Resources AssociationFood <strong>and</strong> Agriculture OrganisationKCC Karnali Co-ordination CommitteeGerman Yearbook of <strong>International</strong> <strong>Law</strong>ISNT Informal Single Negotiation TextGeneral Agreement on Tariffs <strong>and</strong> TradeIPP Independent Power ProducerGeneralised System of PreferenceIDA <strong>International</strong> Development AssociationGeorgetown <strong>International</strong> Environmental <strong>Law</strong> LOSC <strong>Law</strong> of the Sea ConferenceReviewLNTS League of Nations Treaty SeriesGlobal Infrastructure FundLDC Least Developed CountriesGovernment of IndiaPCIJ Permanent Court of <strong>International</strong> JusticeXVII XVIII
MFN Most Favoured NationsMOWR Ministry of Water ResourcesMJIL Melbourne Journal of <strong>International</strong> <strong>Law</strong>MDG Millennium Development GoalMD Managing DirectorMIGA Multilateral Investment Guarantee AgencyNAFTA North American Free Trade AgreementNRJ Natural Resources JournalNEA Nepal Electricity AuthoritySADC South Africa Development CommunitySCIP St<strong>and</strong>ing Committee for Inundation ProblemsSTABEX Stabilisation of Export EarningNYBIL Netherl<strong>and</strong>s Yearbook of <strong>International</strong> <strong>Law</strong>UNCIW United Nations Convention on Non-Navigational Use of <strong>International</strong> <strong>Watercourses</strong>NIEO New <strong>International</strong> Economic OrderNEA Nepal Electricity AuthorityNLR Nepal <strong>Law</strong> ReviewODA Overseas Development AssistanceOD Operational DirectiveOP Operational PoliciesBP Bank ProcedureOAS Organisation of American StatesPMP Pancheswar Multipurpose ProjectPPA Power Purchase AgreementRs RupeesSAARC South Asian Association of RegionalCooperationSARI South Asia Regional InitiativeSAGQ South Asia Growth QuadrangleSAPP South African Power PoolSMEC Snowy Mountain Electric CompanySASE South Asia Sub-Regional EconomicCooperationTVA Tennessee Valley AuthorityVJIL Virginia Journal of <strong>International</strong> <strong>Law</strong>WTO World Trade OrganisationWCD World Commission on DamsWDM World Development MovementWRC Water Resource CommitteeWB the World BankWSSD World Summit on Sustainable DevelopmentWECS Water <strong>and</strong> Energy Commission SecretariatWWC World Water CouncilWI Water <strong>International</strong>YBILC Yearbook of <strong>International</strong> <strong>Law</strong> CommissionUDHR Universal Declaration of Human RightsUNC United Nations ConventionUNGA United Nations General AssemblyUNCED United Nations Conference on Environment <strong>and</strong>DevelopmentUNCHE United Nations Conference on HumanEnvironmentUNEP United Nations Environment ProgrammeUNDP United Nation Development ProgrammeUSAID United States Agency for <strong>International</strong>DevelopmentUNTS United Nations Treaty SeriesUCLR University of Colorado <strong>Law</strong> ReviewUNCTAD United Nations Conference on Trade <strong>and</strong>DevelopmentUSSR Union of Soviet Socialist RepublicsUTLJ University of Toronto <strong>Law</strong> JournalXVII XVIII
GlossaryMap of the Ganges BasinThe following terms are widely used in the south Asian Subcontinent<strong>and</strong> are defined for ease of reference:1. Bigha: A unit for the measurement of l<strong>and</strong> in Nepal. OneBigha is equal to 0.6772 hectare.2. Crore: A unit of accounting equivalent to 10 million.3. Cumec: Cubic metres per second (one cumec equals 8.107acre-feet).4. Cusecs: cubic feet per second.5. One cubic metre equals 33.315 cubic feet.6. 10,000 cubic metres equals one hectre-metre7. One hectre-metre equals 8.107 acre-feet.8. One cumec equals 35.32 cusecs.9. One litre is equals to 0.22 gallons.10. Kharif: Monsoon crop.11. Lakh: A unit of accounting equals to one hundredthous<strong>and</strong>.12. MAF: Million acre feet.13. Rabi: Winter crop.14. Rs: Rupees, the currency of India, Nepal <strong>and</strong> Pakistan,with a different value in each country.15. The river known in India <strong>and</strong> Nepal as the Ganga is knownin Bangladesh as the Ganges.XVII XVIII
- Preface III- Preface V- Table of <strong>International</strong> Treaties VII- Table of Cases X- Acronyms XI- Glosory XV- Map of theGanges Basin XVI- Table of Content XVIITable of ContentsChapter- OneIntroduction1.1 Significance of Water 11.2 Uneven Availability <strong>and</strong> Scarcity 41.3 Emerging Principles 61.4 Challenges Ahead 101.5 Structure of the Book 13Chapter- TwoDevelopment <strong>and</strong> Codification of<strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong>2.1 Introduction 162.2 Sources of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> 182.2.1 Earliest Stage of Development of IWC 182.2.2 The United States 202.3 Water Disputes 252.3.1 Inter-State Water Dispute in India 252.3.2 Development in European States 322.4 <strong>International</strong> Judicial <strong>and</strong> Arbitral Decisions 362.4.1 Helm<strong>and</strong> River Delta Case 372.4.2 Trail Smelter Case 392.4.3 Lake Lanoux Case 412.4.4 Gut Dam Case 432.5 PCIJ <strong>and</strong> ICJ Decisions 442.5.1 River Oder Case 442.5.2 The Diversion of the Meuse Case 472.5.3 Gabcikovo-Nagymaros Case 482.6 Scholarly Contributions 512.7 State Practices 542.7.1 Boundary Water Treaty 572.7.2 The Colorado Treaty 592.7.3 The Nile Treaty 602.7.4 The Indus Water Treaty 622.7.5 The Columbia River Treaty 632.7.6 Lesotho-Highl<strong>and</strong> Treaty 652.7.7 Amazon Cooperation 662.7.8 Southern African Development 662.7.9 Treaty between Paraguay <strong>and</strong> Brazil 672.7.10 The Treaty of Peace 682.7.11 Mekong River Treaty 692.7.12 Ganges River Treaty 702.8 The Impact of Water Issues on Bilateral Relations 712.9 <strong>International</strong> <strong>Law</strong> Reform Efforts 772.9.1 The Helsinki Rules on the Use of theWaters of <strong>International</strong> Rivers, 1966 <strong>and</strong> ILA 772.9.2 <strong>International</strong> <strong>Law</strong> Commission 802.9.3 UNCIW, 1997 902.9.4 The Institute of <strong>International</strong> <strong>Law</strong> 952.9.5 Some Other Institutions 962.10 Some UN Resolutions 982.11 Conclusions 100XVII XVIII
Chapter- ThreeEquitable Utilisation3.1 Principles of <strong>International</strong> Water <strong>Law</strong> 1033.1.1 Absolute Territorial Sovereignty 1033.1.2 Territorial Integrity 1043.1.3 Prior Appropriation 1063.1.4 Equitable Utilisation 1083.2 The Rule of Equitable Utilisation in IWL 1093.3 Procedural <strong>Law</strong> 1173.3.1 The Duty to Consult <strong>and</strong> Negotiate 1183.3.2 Discharge of Duty 1213.4 Origin <strong>and</strong> Development of Equity 1253.5 Types of Equity 1283.6 The Role of Equity in <strong>International</strong> <strong>Law</strong> 1313.6.1 Unjust Enrichment 1343.6.2 Estoppel 1363.6.3 Acquiescence 1383.6.4 Ex Aequo Et Bono 1393.7 Equity for Scarce Resource Allocation 1383.7.1 Corrective Equity in Tradeing Arrangements 1413.7.2 Corrective Equity as Analysed toContinental Shelf Allocation 1433.7.3 Broadly Conceived Equity inContinental Shelf <strong>Application</strong> 1453.7.4 Broadly Conceived Equity inConventional Arrangements 1493.7.5 Common Heritage Equity 1513.8 Equity: an Integral Aspect of SustainableDevelopment 1543.9 Drainage Basins <strong>and</strong> Diversion of Waters 1603.10 The Right of a State to Utilise Water in itsown Territory 1633.11 Water as a Political Weapon 1673.12 Recent Developments on Equitable Utilisation 1693.13 The Role of Joint Commissions in IWC 1713.14 Conclusions 175Chapter- FourProspects <strong>and</strong> Problems ofNepalese Water Resources4.1 Introduction 1804.2 Potential of Nepalese <strong>Watercourses</strong> 1834.3 History of Water Resource Development:Indo-Nepal Relations 1874.4 Bilateral Relations with India 2004.5 Impact of Bilateral Relations in the WaterResources Sector 2064.6 Negotiations on Water Resources Projects 2084.7 Associated Multi-Disciplinary Complications 2094.8 Problems <strong>and</strong> Prospects of Nepalese Water Resources 2114.9 Projects of Bilateral Interest 2174.10 The Tanakpur Controversy 2214.11 Issues of Downstream Benefits 2234.12 Regional Co-operation 2354.13 Problems <strong>and</strong> Prospects of Water ResourcesDevelopment 2404.14 Conditions for Funding Imposed by the WorldBank <strong>and</strong> the Other Donors 2434.15 Conclusions 252Chapter- FiveIndia's River Linking Project5.1 Introduction 2575.2 Magnitude of the Problem 2585.3 Legal Issues Involve in the River Linking Project 2635.4 Concern of Neighbours 2705.5 Diversions Around the Globe 2745.6 Conclusions 275XVII XVIII
Chapter- SixConclusions <strong>and</strong> Recummendations6.1 Conclusions 2786.2 Summary of Findings 2786.3 Implications of water Scarcity 2836.4 Changing Perspectives 2866.5 Implications <strong>and</strong> Future Research 288• Appendixes 292- Appendix- 1 292- Appendix- 2 304- Appendix- 3 312- Appendix- 4 320- Appendix- 5 344• Bibliography 354•XVII XVIII
Introduction / 1 2 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia1.1 Significance of WaterChapter- OneIntroductionWater is a key element for the existence of all kinds of life.Early civilisations in Mesopotamia, Egypt, India <strong>and</strong> Chinaemerged on the banks of different rivers. 1 Water also hasimportant implications for most religions of the world. 2 TheGanges, for example, is considered holy by millions of Hindus.Thus, not surprisingly, when Saint Narad met the great IndianKing, Yuddhistira, his greeting was directly related to water: "Ihope your realm has reservoirs that are large <strong>and</strong> full of water,located in different parts in the l<strong>and</strong>, so that the agriculture doesnot depend on the caprice of the Rain-God". 3Water was equally important in the western world; twomillennia ago, the eminent Greek Philosopher, Pinder, said thatthe "best of all things is water". 4 Italian scholar Leonardo daVinci said "water is the driver of nature." 5 Life is impossiblewithout water, <strong>and</strong> it has been reported that the human bodyconsists of between 60 to 80% water by weight, depending1 D. A. Caponera (ed), The <strong>Law</strong> of <strong>International</strong> Water Resources,Rome: Food & Agriculture Organisation (FAO), Legislative study No.23, 1980, p. 6.2 A. K. Biswas, "Water for Sustainable Development of South <strong>and</strong>Southeast Asia in the Twenty First Century” in A. K. Biswas & T.Hashimoto, (eds), Water Resources Management Series 4: Asian<strong>International</strong> Waters: From Ganges -Brahmaputra to Mekong, OxfordUniversity, 1996, p. 5.3 Ibid.4 Ibid.5 Ibid.upon the individual. 6 Thus it is quite natural for states, theprincipal actors of international relations, 7 to wish to safeguardtheir interests in fresh waters from the potentially diverginginterests of other riparian states, <strong>and</strong> to reconcile their interests(insofar as this may be possible). In the present context ofburgeoning population sizes, 8 <strong>and</strong> increasing dem<strong>and</strong> for scarcewater resources, if this problem is not properly identified,addressed <strong>and</strong> resolved, there is a strong possibility of conflictsthreatening international peace <strong>and</strong> security. 9It may be useful at this point to provide a brief overview of theavailability of water resources in its different forms. Thevolume of earth's water supply is approximately 326 millioncubic metres. Of this, 97.5% is salt water (with 71% of theearth's surface being covered by seawater) <strong>and</strong> 2.5% is freshwater (8 million cubic metres). Of this fresh water, 0.4% is onthe surface <strong>and</strong> in the atmosphere, 12.3% is underground, <strong>and</strong>87.3% is in the polar ice caps <strong>and</strong> in glaciers. 10 Freshwaterresources are an essential component of the earth's hydrosphere<strong>and</strong> an indispensable part of all terrestrial ecosystems. Thefreshwater environment is characterised by the hydrologicalcycle, 11 including floods <strong>and</strong> droughts, which in some regions6 S. C. McCaffrey, The <strong>Law</strong> of <strong>International</strong> <strong>Watercourses</strong>: Non-Navigational Uses, Oxford University, 2001, p. 3.7 Lotus Case in PCIJ series A/B vol. 3, p. 17 & the Corfu Channel Casein ICJ Reports 1949, p. 35.8 Supra note 6, p. 5, the population of the world in 1950 was 2.5 billion;it has doubled in less than forty years <strong>and</strong> the United Nations forecaststhat it could reach some 9 billion by 2050.9 V. Narayan, "‘Water’ the Oil of Next Century" TERI Newswire III,(19), New Delhi: October 1997, pp. 1-5.10 P. Wouters (ed), <strong>International</strong> Water <strong>Law</strong>: Selected Writings ofProfessor Charles B. Bourne, the Hague: Kluwer <strong>Law</strong>, 1997, p. 108.11 A. Dixit, Basic Water Science, Kathm<strong>and</strong>u: Nepal Water ConservationFoundation, 2002, pp. 2-20. It has been reported that water evaporatesfrom the sea, rivers, <strong>and</strong> streams, <strong>and</strong> also a large amount of waterenters the atmosphere by transpiration from plants. The same water
Introduction / 3 4 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiahave become more extreme <strong>and</strong> dramatic in theirconsequences. 12The water going out from the surface of the earth must comeback in equal amounts - a perpetual cycle with no beginning,middle or end. In other words, the watercourse system is anelement of the hydrological cycle, which consists of theevaporation of water into the atmosphere, chiefly from theoceans, <strong>and</strong> its return to earth through precipitation <strong>and</strong>condensation. 13 The volume of groundwater is large <strong>and</strong> coversa significant quantity of the freshwater system, 14 however, theinternational community (IC) has not agreed upon a setframework of rules on groundwater <strong>and</strong> there are several issuesthat need to be resolved before such rules will be acceptable toall states. 15 As McCaffrey rightly observed, the area ofgroundwater is still in a primary <strong>and</strong> inchoate stage:"as such, the law of international groundwater may onlybe said to be, in the embryonic stages of development, .... but this situation should prevail only until a specialregime can be tailored for international groundwater". 16falls as a result of rain, snow <strong>and</strong> precipitation, which flows over thesurface to percolate into the ground, ground water emerging intostreams <strong>and</strong> moving within aquifers. In this sense, the relation ofground water <strong>and</strong> surface water is inextricably interlinked. Thus, thetotal quantity of water has remained stable over the billions of years.12 N. A. Robinsion (ed), IUCN Environmental Policy & <strong>Law</strong> paper No27: Agenda 21: Earth's Action, New York: Oceana Pub. , 1993, p. 357.13 Supra note 11, p 20.14 Ibid. p. 6, 97% of freshwater remains as groundwater.15 Supra note 10, state practice suggests different practices on groundwater, for example, the USA <strong>and</strong> Canada deliberately rejected theconcept of the unity of a drainage basin for which boundary waterswere separated from tributary waters flowing into boundary waters.Although, equitable utilisation is the applicable rule on groundwater,the Helsinki Conference placed groundwater at the head of the lists ofsubject that it recommended for further study by the ILA. pp. 299, 274& 269.16 Supra note 6, p. 433.Eventually, it appears that until the full regime is developed onthe issues, groundwater is covered by the rules of equitableutilisation adopted in the UN Convention on the Non-Navigable Uses of <strong>International</strong> <strong>Watercourses</strong> (UNCIW). 17Regardless of the definition of a watercourse (WC) in the 1997UN convention, which includes groundwater, 18 there is still alot that needs to be done in order to obtain an agreeable formulaon the issue. With regard to the lack of freshwater, Falkennarhas distinguished four different causes of water scarcity 19 :aridity, drought, desiccation, <strong>and</strong> water stress.1.2 Uneven Availability <strong>and</strong> ScarcityIn order to accrue optimum benefits from an <strong>International</strong>Watercourse (IWC) it must be developed in a holistic,integrated manner, considering the whole length of awatercourse as a unit. This fact itself highlights the significanceof riparian co-operation in order that maximum benefits can beaccrued from an IWC due to its geographical <strong>and</strong> hydrologicalcircumstance, e.g., a good site to construct a reservoir lies inone country (Nepal), but such augmented water can be used inanother country (India); flood damage can be prevented (India<strong>and</strong> Bangladesh), <strong>and</strong> hydropower plants can be constructed inother countries (in Nepal <strong>and</strong> India). Geography <strong>and</strong> hydrologydetermine this fact. In fact Nepal owns magnificent gorgeswhere high dams can be built <strong>and</strong> the Himalayan waters stored,but such sites are not available in India, Bhutan <strong>and</strong>17 Ibid.18 "Watercourse" means a system of surface waters <strong>and</strong> groundwaterscontributing by virtue of their physical relationship a unitary whole <strong>and</strong>normally flowing into a common terminus. Article 2 (a) of 1997UNCIW, 36 ILM (1997), p. 700.19 R. Clarke, Water: the <strong>International</strong> Crisis, London: Earthscan Pub.,1991, p. 2, as quoted to Malin Falkner from Stockholm's NaturalScience Research Council.
Introduction / 5 6 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South AsiaBangladesh. 20 Therefore, cooperation between the riparianstates is essential.The regulation of freshwater resources did not receive muchattention in the international arena prior to the 1950's due to therelative lack of scarcity, fewer international disputes over theuse of water, relatively low levels of use <strong>and</strong> so forth. 21However, during the latter half of the nineteenth century,efforts were made to establish the rule of free navigation ofrivers. Such rules originated with a (Revolutionary) Frenchdecree 22 of November 16, 1792, which opened the RiversScheldt <strong>and</strong> Meuse to the vessels of all riparian states. TheTreaty of Vienna of 1815, 23 along with many navigationaltreaties between nations was based on this decree. 24 The Treatyresolved the long <strong>and</strong> complex disputes on navigational rightsof European states. However, even at this stage, there weredisputes between countries concerning the use of freshwater.The efforts to settle them, which will be analysed at theappropriate juncture of the book, indicated quite clearly therelevance of the issue, <strong>and</strong> laid much essential jurisprudentialgroundwork, which has been developed since 1950. A fewinstances of international disputes over international riversinclude the dispute relating to the River Helmond in 1872 <strong>and</strong>1905 (between Afghanistan <strong>and</strong> Persia), the Nile (betweenEgypt <strong>and</strong> nine other North African states) <strong>and</strong> the Colorado(between Mexico <strong>and</strong> the USA). At the end of the nineteenthcenturythere were numerous conflicts relating to shared waterresources in India, Germany, Austria, Switzerl<strong>and</strong> <strong>and</strong> theU.S.A. Municipal court judgements of these <strong>and</strong> other states,have significantly contributed to the codification <strong>and</strong>20 D. Gyawali, “Himalayan Waters: Between Euphoric Dreams <strong>and</strong>Ground Realities” in K. Bahadur & M. Lama (ed), New Perspective onIndia-Nepal Relations, New Delhi: Har-An<strong>and</strong>a Pub., 1995, p. 256.21 L. Caflisch, "Regulation of the Uses of <strong>International</strong> Waterways: TheContribution of the United Nations" in M. I. Glassner (ed), The UnitedNations at Work, Westport: CT, Prager, 1998, p. 4.22 Supra note 10, p. 110.23 Supra note 1, pp. 29-30.24 Supra note 10, p. 110.development of international law in this area. In the nextchapter, a critical analysis of some of the more important ofthese decisions will be provided.As stated above, the use of water increases in comparison to itsavailability, due to alarming population growth <strong>and</strong>unsustainable use of water, e.g., by polluting it, which hascontributed to its scarcity. If the issues cannot be resolved intime, it may reach a level, which threatens the concepts ofpeace <strong>and</strong> security enshrined in the Charter of the UnitedNations. 25 It is because water can neither be substituted norproduced. Whilst some disputes have been resolved, manymore remain, <strong>and</strong> it is indeed a real challenge to theinternational community <strong>and</strong> international law to resolve thesedisputes to the satisfaction of the contesting states. The issuehas been further exacerbated by the increases in daily waterconsumption, which is the inevitable result of enhancedst<strong>and</strong>ards of living. 261.3 Emerging PrinciplesThe fundamental area of this study will be equitable <strong>and</strong>reasonable use of an IWC between riparian states. This bookwill argue that the principle of equity <strong>and</strong> in particular the ruleof equitable utilisation, among others, will be the best way ofresolving disputes involving IWC’s. The case of Nepal, India,Bangladesh <strong>and</strong> Bhutan will be dealt with in view of equitablelegal principles. It should be noted that the topic of pollution isnot directly addressed, although there are occasions where theconcepts “spill over”. For example as discussed below, the25 D.J. Harris, Cases <strong>and</strong> Material on <strong>International</strong> <strong>Law</strong>, London: Sweet<strong>and</strong> Maxwell, 1998, pp. 1048 – 1067: Article 1 of the Charterenvisages settling every dispute by pacific means, enhancinginternational cooperation <strong>and</strong> friendly relations between states <strong>and</strong>Articles 33-38 chart out the procedure of pacific settlement of disputes.26 A. Tanzi <strong>and</strong> M. Arcari, The United Nations Convention on the <strong>Law</strong> of<strong>International</strong> <strong>Watercourses</strong>: A Framework for Sharing, the Hague:Kluwer <strong>Law</strong>, 2001, p. 4.
Introduction / 7 8 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiaapplication of no harm rule for the North American contextinvolves discussion of pollution <strong>and</strong> analyses the failure of theno harm rule in disputes between the US <strong>and</strong> Canada. Theresearch will consider <strong>and</strong> evaluate the existing law on IWC,analyse issues of Nepal’s IWC <strong>and</strong> its link to regional issues,with the objective of assessing current obstacles <strong>and</strong> makingrecommendations for its resolution in the spirit of internationalwater law (IWL). However, the nature of the particularproblems facing Nepal <strong>and</strong> Bhutan are different from those ofother countries. From their point of view, the main problem isnot the lack of water but how to share <strong>and</strong> allocate the benefitsof these abundant water resources, with particular reference toIndia. Whereas, the issues of other riparian states i.e., India <strong>and</strong>Bangladesh, are how to augment the water in the dry season<strong>and</strong> allocate it, <strong>and</strong> also how to avert <strong>and</strong> mitigate the affect offlooding in the monsoon season.Nepal has immense hydropower potential of 83,000 megawatts(MW). Apart from this, these waters can be used for severalpurposes simultaneously 27 e.g., drinking, irrigation,navigational, industrial <strong>and</strong> other uses. So far, little benefit, hasbeen taken 28 , that is to say, vast resources are still not beingtapped. The reasons for this are lack of capital, technology <strong>and</strong>riparian objections. The huge water resources available toNepal have not been beneficially utilised so far. Worse still, inrecent years considerable harm has occurred during the drought<strong>and</strong> monsoon seasons not only in Nepal, but also in India <strong>and</strong>Bangladesh, which have been severely affected by flooding,with huge loss of life <strong>and</strong> property. It is asserted, however, thatif arrangements could be made for the fully beneficial use ofthese resources by all states concerned, it would be a milestoneevent for both the alleviation of poverty <strong>and</strong> the development of27 National Planning Commission (NPC), "The Ninth Plan, 1999-2004”,Kathm<strong>and</strong>u: NPC, (1998), p. 458; also see B. G. Verghese, Waters ofHope, New Delhi: Oxford & IBH Pub., 1990, p. 337.28 Ibid. Less then 19% people have access to electricity, only 45%irrigation facility has been provided so far.infrastructure within all four of the member states of the SouthAsia Association for Regional Co-operation (SAARC). 29 Theadvantages identified so far, are flood control, increasedvolume of water for irrigation (downstream benefits),navigation, recreation <strong>and</strong> miscellaneous other benefits. 30Tremendous harm is caused annually by flooding 31 <strong>and</strong>drought, which could be prevented by international cooperation,<strong>and</strong> the scenario could be reversed by adopting newmeasures for mitigating <strong>and</strong> averting flood water. <strong>International</strong>co-operation on the use <strong>and</strong> sharing the immense benefits ofthese resources has been duly acknowledged but divergence ofinterests, suspicion, distrust <strong>and</strong> non-cooperation have severelyprohibited such opportunities. There is a huge potential beingwasted, that could be utilised by co-operation. 32In order to fulfil the needs <strong>and</strong> aspirations of the people, use ofthese abundant resources is urgently required. It can only bechanged by the states themselves. In the past, few projects weredeveloped, <strong>and</strong> even these projects could not yield equitable<strong>and</strong> reasonable benefits to the parties. What is more,implementation of previous agreements was not carried out29 Ibid. p 393, there are four states Bhutan, Nepal, India <strong>and</strong> Bangladeshwithin the SAARC Quadrangle.30 Ibid. p 465.31 Staff, “Flood Havoc” , The Independent, 5 September 1988: the entirel<strong>and</strong>scape looked as if it had been hit by a brown snowstorm, with justa few village houses <strong>and</strong> same trees rising above it. One whole bank ofthe Ganges was completely submerged, which made the other side ofthe river appear to be the coastline” quoted by an observer. Also seestaff, “Flood in south Asia” The Guardian, 5 September 1988, 25million people were left homeless, more than a thous<strong>and</strong> died as adirect result of the floods, <strong>and</strong> three million tons of rice were lost. Onevillager, who had taken refuge on his roof, described other hardships;“I stay awake through the night to protect my children from deadlysnakes, which often climb on the roof.”32 B. Subba, Himalayan Waters, Kathm<strong>and</strong>u: Panos South Asia, 2001, p.225; also see S. P. Subedi, “Hydro-Diplomacy in South Asia: TheConclusion of the Mahakali <strong>and</strong> Ganges River Treaties” (1999) 93AJIL, pp. 953-962.
Introduction / 9 10 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiapursuant to the provisions of the treaties. As a matter of fact,from these experiences Bhutan, Bangladesh <strong>and</strong> Nepal are verycautious in dealing with India with regards to sharing of thebenefits from these resources. The situation will be described inchapter four. The reasons are obvious, India <strong>and</strong> Nepal hadconcluded two treaties in the mid-1960’s, primarily forirrigation, flood control <strong>and</strong> miscellaneous purposes includingthe Kosi project <strong>and</strong> the G<strong>and</strong>ak project. The Nepalese people<strong>and</strong> the political parties alleged that these were carried outentirely for Indian benefit, ignoring Nepal's rights to theseresources. In other words, it was a ‘sell out’ of the naturalresources. 33 Similarly, due to the construction <strong>and</strong> operation ofthe Farakka barrage, at the border between India <strong>and</strong>Bangladesh, on the Ganges River, the barrage has causedsevere adverse impact to Bangladesh <strong>and</strong> planted the seeds ofdistrust <strong>and</strong> suspicion toward the former. Bhutan also appearsnot satisfied with the outcome of past agreement. As will bedescribed later, this project seriously caused adverse affects inBangladesh for a long time period. 34Water resources are the only substantial available naturalresources in this region besides coal <strong>and</strong> gas, <strong>and</strong> there is anurgent need to utilise these water resources expeditiously forthe benefit of the people of the region. There are bottleneckspreventing the achievement ofthis objective, which must be overcome by enhancing bilateralas well as regional co-operation. 3533 B. G.Verghese <strong>and</strong> R. R. Iyer (eds), Harnessing the EasternHimalayan Rivers: Regional Co-operation in South Asia, New Delhi:Konark Pub., 1993, pp. 200-2003; also see B. C. <strong>Upreti</strong>, The Politics ofHimalayan River Waters, New Delhi: Nirala Pub., 1993, pp. 98-118.34 M. Asfuddowalah, “Sharing of Tranboundary Rivers: The GangesTragedy” , M. I. Glassner, (ed), The United Nations at Work, WestportCT: Praeger, 1998, pp. 215-218.35 Supra note 27, pp. 390-393.1.4 Challenge AheadThis book aims to discuss <strong>and</strong> evaluate the present state ofIWL. It will also try to link the issue to Nepal's circumstances,in which water sharing <strong>and</strong> taking benefits therefrom must beaccording to the rules of international law. In principle,international law is equally applicable to all nations. In practice,economically weak nations, such as Nepal or Ethiopia aretreated unequally. For instance, Egypt is able to use mostportions of the waters in the Nile, at the same time, Ethiopiahaving significantly contributing waters in Blue Nile (maintributary of the Nile), is prohibited from using its equitableshare of waters in the same river by the objections <strong>and</strong> threatsof former. In a similar way, Nepal is not able to use its ownshare of water because of Indian objections stating that suchnew use would impair its prior use. India has developed theFarakka barrage. Egypt developed the Aswan dam (with SovietUnion support). China is developing the Three Gorges projectsfrom its own resources, in spite of severe criticism frominternational spheres. 36 Of course, dams are often criticised forpolitical <strong>and</strong> environmental considerations unrelated to riparianissues. In these cases international assistance has not beenforthcoming. <strong>International</strong> cooperation has not been provided toenable the implementation of projects for example in thefollowing cases, Narmada in India, <strong>and</strong> the Southern Antoliaproject in Turkey. There is also a current conflict over theongoing supply of drinking waters from Malaysia to Singapore.In order to develop such water projects, poor countries do nothave resources, they need international or bilateral co-operationin money, technology <strong>and</strong> skilled manpower. Foreign donorsseek clearance from other riparian states <strong>and</strong> these riparianstates object to such a project stating it will affect themadversely. In many cases, donors cancel funding. Therefore, aweak <strong>and</strong> poor country does not have its own resources <strong>and</strong>36 www.internationalwaterlaw.org "Three Gorges Dam". Dams are notconsidered to be a part of sustainable development because of theiradverse affect on ecology <strong>and</strong> indigenous people.
Introduction / 11 12 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiadonors refuse to provide assistance on the basis of suchobjections. Suggestions are made in this thesis on how toresolve such a discriminatory system. There are a fewinstruments such as debt relief mechanisms <strong>and</strong> MillenniumDevelopment Goals, which favour poor, geographicallyh<strong>and</strong>icapped <strong>and</strong> vulnerable nations. 37 The adoption of similaradequate arrangements specific to IWCs will be recommended.Arguably, however, the principles of equity <strong>and</strong> the rule ofequitable utilisation could be the best weapons to tackle thesesensitive issues.In order to implement the provisions of international law, thereneeds to be a treaty or agreement between watercourse states, 38<strong>and</strong> the political will to implement such a treaty in the spirit ofgood neighbourliness. Unless these states agree with eachother, the rules of international law cannot be properlyimplemented. The real problem can only be overcome bycooperative <strong>and</strong> good neighbourly relations. <strong>International</strong> lawitself cannot work out any solutions if the states themselves arereluctant to co-operate. In the development of IWL, 'soft law',that is to say, declarations, resolutions <strong>and</strong> so on, although notlegally binding internationally, have some moral or politicalcompulsion, <strong>and</strong> have played a crucial role in the codification<strong>and</strong> development of international law. In this research,examples of both hard <strong>and</strong> soft law will be juxtaposed in regardto the equitable utilisation of watercourse. The main area to becovered in this study will be limited to equitable sharing <strong>and</strong>37 21 ILM 1982, p. 1295, Article 148-participation of developing statesactivities in the area protect the special interest of the l<strong>and</strong>locked <strong>and</strong>geographically disadvantaged nations.38 For example, in order to enjoy the right of right to access to <strong>and</strong> fromthe sea to the l<strong>and</strong>-locked states Article 125 of the UNCLOS III (1)provides the authority, whilst (2) states that 'the terms <strong>and</strong> modalitiesfor exercising freedom of transit shall be agreed between the l<strong>and</strong>lockedstates <strong>and</strong> transit states concerned through bilateral, subregionalor regional agreement', in 21 ILM (1982), p. 1290.the non-navigational use of boundary <strong>and</strong> transboundarywatercourses, although there is some link with Nepal <strong>and</strong>Bhutan's right of access to <strong>and</strong> from the sea through cooperativedevelopment on the Ganges river, which will also beconsidered.The danger in scarce water supply cannot be underestimated.Overuse <strong>and</strong> scarcity of water resources further puts pressureon the supply, quantity <strong>and</strong> quality of freshwater, <strong>and</strong> hasalready added to the number of wars throughout the world inthe twentieth century. 39 If this issue is not settled to thesatisfaction of all nations <strong>and</strong> communities, conflicts areinevitable in the future. 40 As reported in the past, rivers not onlyaggregate humans, they also separate them. 41 That is to say,there are good examples of cooperation in sharing the benefitsfrom IWC, at the same time there are several conflicts, disputes<strong>and</strong> even wars for the same reason.Clarke has argued that conflicts on IWC remain only in thedeveloping world. For example, in Europe there are four sharedrivers, which are effectively regulated by more than 175treaties. 42 Obviously, for developing countries, which lackcapital, technology <strong>and</strong> skilled manpower, co-operation fromother watercourse states is imperative. As will be seen in theforthcoming chapter, none of the donor agencies, whetherbilateral <strong>and</strong> multilateral, are prepared to finance any projectuntil they have positive signals from all other watercourse39 Supra note 6, pp. 272-73. Israelis <strong>and</strong> Arabs fought a war on waterissues in 1967 <strong>and</strong> the danger lies in many areas ahead. A World Bankofficial stated in 1995: 'the wars of the next century will be over water'.40 Supra note 9, p. 1-4.41 Supra note 26, p. 4.42 Supra note 19, p. 91-92.
Introduction / 13 14 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiastates in connection with the proposed project. 43 My workingexperience in this regard, particularly in the Nepalese context,is discussed below.1.5 Structure of the BookFollowing this introduction, Chapter Two deals with thedevelopment <strong>and</strong> codification of IWL. It evaluates statepractice, judicial pronouncements, <strong>and</strong> scholarly writings, inbilateral as well as in multilateral dimensions. Evolution ofthese principles, their far-reaching implications <strong>and</strong> criticalanalyses of these principles will be taken into consideration.Chapter Three deals with the concept of equity, itsdevelopment, the emerging concept of equitable utilisation inshared natural resources, <strong>and</strong> the jurisprudence of the<strong>International</strong> Court of Justice (ICJ) <strong>and</strong> its predecessor thePermanent Court of <strong>International</strong> Justice (PCIJ), in the area.The use of equitable utilisation in a shared natural resource hasbeen carried out to take account of the interests of all statesequally <strong>and</strong> without discrimination. It reconciles divergentneeds so as to ensure a fair deal. Apart from this, several courts,such as the ICJ, PCIJ <strong>and</strong> the decisions of numerous arbitrationtribunals <strong>and</strong> national courts in regard to the application ofequity <strong>and</strong> equitable sharing <strong>and</strong> utilisation, will be analysed.Chapter Four deals with IWL <strong>and</strong> its application in the Indo-Nepal context. In this chapter, Nepal’s past experience in waterprojects with her neighbour will be critically dealt with <strong>and</strong>43 D. Goldberg, "World Bank Policy on Projects on <strong>International</strong>Waterways in the context of the <strong>International</strong> <strong>Law</strong> Commission" in G.H. Blake, W. H. Hildsley, M. A. Pratt, R. J. Ridley &H. Schofield(eds), The Peaceful Management of Transboundary Resources,Dordrecht: Graham & Troatmat/Martinus Nijhoff, 1995, pp 153-165:Bank's Operational Directives (OD) 7.50, an internal policy documentrequired consent from a riparian states on the proposed project in aninternational watercourses in order to provide lending by the Bank.Other donors have adopted the same approach.how other states are doing in similar circumstances will beassessed. Moreover, how other states resolve the issues, howconflicts are averted <strong>and</strong> co-operation achieved, <strong>and</strong> how theyinfluence the Nepalese issues will be evaluated.Chapter Five critically described the legality of India's RiverLinking Project (RLP), its national <strong>and</strong> international dimension<strong>and</strong> its requirement to get rid from the recurring flood, drought<strong>and</strong> famine phenomenon in India <strong>and</strong> Bangladesh. Chapter Sixwill be a conclusion based on the evaluation, assessment <strong>and</strong>the critical analysis of the research. It also will presentconclusions drawn from all available materials, <strong>and</strong> suggest <strong>and</strong>identify the discrepancies, anomalies <strong>and</strong> shortcomings of thepresent system <strong>and</strong> recommend a better way out for theresolution of conflicts in a reasonable, sustainable <strong>and</strong> equitableway. Implications of the research for the areas of human rights,the environment <strong>and</strong> IWL will be provided. The main theme ofthe book will be the application of equity to resolve issuespertaining to the allocation <strong>and</strong> uses of these resources.However, the application of equity is itself a complicated task<strong>and</strong> there is no hard <strong>and</strong> fast rule on how it can apply to anyparticular watercourse. A critical analysis of its application <strong>and</strong>how states have resolved conflicts in similar situations to thatof India <strong>and</strong> Nepal <strong>and</strong> other neighbours will be made. Acritical analysis of four principles of international water lawwill be provided, e.g., territorial sovereignty, territorialintegrity, prior appropriation <strong>and</strong> equitable utilisation. I haveselected equitable utilisation as the best rule for its wideracceptance by the international community.To sum up this chapter, it can be stated that the earth, nature<strong>and</strong> the existence of living beings is impossible withoutfreshwater <strong>and</strong> the fact is that the availability of water isuneven, scarce <strong>and</strong> finite. The total availability of freshwater
has remained the same for millions of years. An United Nationsstudies indicates that by the year 2025, 50 % of the people indeveloping worlds will be lacking in water overall, <strong>and</strong> in westAsia, scarcity will reach 90%. 44 It shows the gravity of theproblem, for which international law <strong>and</strong> modern scientificinnovations have to play a very constructive role in order toresolve the conflicts arising out of it, <strong>and</strong> eliminate the rootcause of the problem in a reasonable <strong>and</strong> equitable way. Theresearch will strive to find such a resolution within the rules ofequitable utilisation.•Introduction / 15 16 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia44 P. Brown, “Scarcity of Freshwater”, The Guardian, 23 May 2002, p. 3.
16 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 17Chapter- TwoDevelopment <strong>and</strong> Codification of<strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong>2.1 IntroductionThe availability of <strong>and</strong> dem<strong>and</strong> for water was not a problemuntil the 1950s except in a few countries with arid <strong>and</strong> semiaridclimates. 1 Thus, there were very few conflicts <strong>and</strong> disputesin this area except in the western part of the United States <strong>and</strong>some parts of the Middle East. 2 In fact, the development ofIWL is a recent phenomenon in international relations. As aconsequence of the increase in various competing uses, givingrise to increasing disputes <strong>and</strong> conflicts, the necessity for lawsto resolve the issues was direly felt. In this context, variousstate practices, concepts <strong>and</strong> rules emerged. However, thedevelopment <strong>and</strong> codification of such rules were undertaken ona piece-meal basis, not based on a holistic framework orapproach.As the human powers to control, divert <strong>and</strong> use the mightyrivers through scientific innovation increased, competing aswell as complementary uses, such as, recreation, irrigation,hydropower, industrial, <strong>and</strong> drinking water have put evengreater strains on finite resources. As a result, hundred of dams<strong>and</strong> reservoirs have been constructed <strong>and</strong> water delivered fardistances to where it was needed; that is to say, technologyhelped undertake mammoth water projects. Such activities, not1 L. Caflisch, "Regulation of the Uses of <strong>International</strong> Waterways: TheContribution of the United Nations" in M. I. Glassaner (ed), TheUnited Nations at Work, Westport, CT: Prager, 1998, p. 4.2 S. C. McCaffrey, The <strong>Law</strong> of <strong>International</strong> <strong>Watercourses</strong>, Oxford:Oxford University, 2001, pp. 8-15.surprisingly, led to conflict amongst communities <strong>and</strong> nations.This was exacerbated in the areas where water was alreadyscarce.The <strong>International</strong> <strong>Law</strong> Commission (ILC), an official body ofthe United Nations, drafted <strong>and</strong> adopted the UNCIW. Severalprinciples enunciated in it will be critically assessed, byconsidering the diverging interests <strong>and</strong> views of states <strong>and</strong> theirrepresentatives, including the views of the SpecialRapporteurs. 3There are more than 300 international watercourses (IWC),which are regulated by more than the same number of treaties.The fact is that the practices of states are as different as theissues of each watercourse are unique, <strong>and</strong> require different <strong>and</strong>special arrangements. A few representative treaties will beevaluated, with an appraisal of the principles associated withthese treaties. In the process of the resolution of disputes thatemerged between states, judicial pronouncements by the PCIJ,the ICJ, federal courts <strong>and</strong> arbitral tribunals will also bediscussed. In order to tackle the issues efficiently, a separatediscussion <strong>and</strong> assessment of each segment of the sources ofinternational law, as stipulated in article 38 of the ICJ Statute,i.e., state practice, judgements of courts, international customs<strong>and</strong> writings of reputed publicists, will be carried out. 43 36 ILM UNCIW, 1997, pp 700-720; also see II (1) YBILC (1994), pp.88-135.4 Article 38 of ICJ Statute states: “(1) The court, whose function is todecide in accordance with international law such disputes as aresubmitted to it, shall apply:a. <strong>International</strong> conventions, whether general or particular,establishing rules expressly recognised by the contesting states;b. <strong>International</strong> customs, as evidence of a general practice acceptedas law;c. The general principles of law recognised by civilised nations;d. Subject to the provisions of Article 59, judicial decisions <strong>and</strong> theteachings of the mostly highly qualified publicists of the variousnations, as subsidiary means for the determination of rules of law.
18 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 19In the light of water as essential requirement for people, thedifficulty of access to water <strong>and</strong> the problems associated withits scarcity, a very careful <strong>and</strong> prudent resolution of the issue isof the utmost need in order to maintain smooth relationsbetween riparian states. As has been analysed, the issue by itscomplex nature requires a prudent <strong>and</strong> balanced resolutionreconciling the diverse interests of contestant states. 52.2 Sources of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong>2.2.1 Earliest Stage of Development of IWCThe quantum of water is the same as it was three billion yearsago. 6 At the same time, its uses have gone up to such a pointthat to keep a balance between dem<strong>and</strong> <strong>and</strong> supply has becomea formidable task. Furthermore, such waters have also becomestrategic resources for several states in order to attain the socioeconomic<strong>and</strong> political aspirations of their people as well as thebest tool for bargaining with other riparian states. The otherreason, however, for the huge increase in the use of the watersis the rising prosperity in human lives along with the rapidpopulation growth. This exacerbates the problem further, <strong>and</strong>the consequence is obvious, more stress on water supply.As a result of misuse <strong>and</strong> overuse of water, the quantityavailable as well as the quality has been found to be decreasingin several parts of the world. Consequently, it has given birth toseveral conflicts. Earlier development in the area by the courts,tribunals, bilateral as well as multilateral conventions, customs,(2) This provision shall not prejudice the power of the court to decidea case ex aequo et bono, if the parties agree thereon.”5 R. Clarke, Water: The <strong>International</strong> Crisis, London: Earthscan Pub.,1991, p. 92.6 A. Dixit, Basic Water Science, Kathm<strong>and</strong>u: Nepal Water ConservationFoundation, 2002, p. 6: “the total supply [of water] neither grows nordiminishes. It is believed to be almost precisely the same now as it was3 billion years ago. Endlessly recycled, water is used, disposed of,purified <strong>and</strong> used again.”agreements, <strong>and</strong> writings of the publicists greatly inspired <strong>and</strong>influenced the resolution of most of the conflicts. Ultimately,on numerous occasions, disputes were resolved amicably <strong>and</strong>peacefully by accommodating divergent interests, but some ofthem remain unresolved. 7 Resolution of the disputes wascarried out in accordance with the concepts of co-operation <strong>and</strong>good neighbourly relations, based on equity, which were laterlargely followed by the other states in their bilateral relations<strong>and</strong> appreciated by the international community. Efforts will beconcentrated on assessing <strong>and</strong> evaluating the far-reachingconsequence of these achievements <strong>and</strong> their implications forthe development of IWL.As stated earlier, scientific innovation has enabled humans toundertake water diversion to far away places as exemplified inthe western part of the United States, Australia, the then SovietUnion, Israel <strong>and</strong> several other parts of the world wheregr<strong>and</strong>iose diversion works have been undertaken. 8 In theMiddle-East (ME), a complex <strong>and</strong> huge project, 'the peacepipeline' has been proposed, which is supposed to deliver waterfrom Turkey to all Middle-Eastern countries including Israel.Apart from this, in Libya, there is an ambitious plan forcollecting <strong>and</strong> diverting water in a pipeline, also called a 'greatman-made river', which stretches from deep aquifers, so called“fossil” water. This is intended to augment the seriouslydepleted groundwater supplies in the coastal region, bybringing water from the hundreds of desert wells at Tazirbu <strong>and</strong>Saria. 9 Nevertheless, with such new developments <strong>and</strong>innovations, the formulation of particular rules that could7 C. B. Bourne, "The Primacy of the Principle of Equitable Utilization inthe 1997 Watercourse Convention" in XXXV CYBIL, (1997) pp. 215-231.8 P. Wouters (ed), <strong>International</strong> Water <strong>Law</strong>: Selected Writtings ofProfessor Charlse. B. Bourne, the Hague: Kluwer <strong>Law</strong>, 1997, pp. 221-241.9 Supra note 2, p. 10.
20 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 21address new circumstances <strong>and</strong> issues always remains achallenge to the international community.The uneven availability, scarcity, misuse <strong>and</strong> overuse of thewater, further confronted by the increasing dem<strong>and</strong> of a rapidlyincreasing population will arguably make water the issue of thetwenty-first century. 10 It should not be misunderstood that thescarcity of fresh water only causes conflicts between sovereignindependent states. Similar problems also exist within states, asinter-state water disputes within a federal structure. As a matterof fact, most of the legal development of this area has beenenriched by the inter-state disputes resolution mechanisms inthe United States, India <strong>and</strong> other federal states. Thesignificance of these decisions is of far reaching consequence inthe development <strong>and</strong> codification of IWL. These decisions canbe considered as a foundation of the rule of equitable utilisationin the use of IWCs. 112.2.2 The United StatesThe decisions of the US Supreme Court in water disputesbetween states have provided a rich body of jurisprudence inthe area of equitable utilisation. (In inter-state disputes, the USSupreme Court has used the term ‘equitable apportionment’whilst in international relations the US has used the term‘equitable utilisation’. There is no fundamental differencebetween these terms). To analyse all these decisions is notpossible. However, a quick survey of some representativedecisions is essential. In the United States, each of the 50 statesenacts its own water law. Most such laws hold the view that thewater resources are the wealth of the state through which theyflow. For the protection of their existing use, when such useconflicts with other states, each state tends to rely on its ownlaw. The reasons are apparent. The western part of the USA isan arid or semi-arid area where water is scarce <strong>and</strong> dem<strong>and</strong> is10 Ibid. p. 64.11 Ibid. p. 228.huge. As a result, there were, <strong>and</strong> still are, water disputes inwhich a lot of norms, concepts <strong>and</strong> ideas have been developedin resolving these issues. Intriguingly, as the disputes went tothe Supreme Court, they were resolved by the application offederal as well as international law, considering the dispute assimilar to the disputes between two sovereign nations. As willbe seen in the forthcoming sub-topic, such decisions haveplayed a significant role in the development of the area wherethe main thrust of the decisions has been ‘equitableapportionment'.In the Kansas v. Colorado cases of 1902 & 1907, Kansas, thedownstream <strong>and</strong> prior user, blamed Colorado for violating thefundamental principle of “use your own without destroyinganother’s legal right” in the Arkansas River. 12 Coloradocontested saying that because the river originates <strong>and</strong> flows inits territory, it has full authority to use its water without caringabout the effects outside its border. The court in its judgementapplied international law principles. The arguments of bothstates solely relying on their own respective water laws wererefused. The court decided that 'equality of right <strong>and</strong> equitybetween two states forbids any interference with the presentwithdrawal of water in Colorado for the purpose of irrigation'. 13The reasons given for the decision were that the court wanted toensure that justice was done to both states in the givensituation. Basically, the judgement upheld the rule of equitableapportionment of the waters, refusing their reliance on 'prioruse' <strong>and</strong> the 'Harmon Doctrine'. The Harmon Doctrine is basedon the 1896 legal opinion of Attorney General Harmon to theSecretary of State in relation to water sharing issues withMexico-US. Harmon stated that the US had full authority to theUS over water that flows in its territory without regards to itseffect on Mexico. The court regarded prior use as only one ofthe factors that had to be considered in determining whether ornot a certain use is equitable <strong>and</strong> not the only determining12 185 U.S. 125 (1902), p. 146.13 206 U.S. 46 (1907), pp. 44-118.
22 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 23factor. When the case again came to the court later in 1907, thecourt reinforced the rule of equitable apportionment,advocating that both states were entitled to an equitable shareof the flow, <strong>and</strong> this was the best way to allocate theirrespective shares. 14In the 1921 case of Wyoming v. Colorado, the latter divertedwater from the Laramie River within its territory, <strong>and</strong> theformer sought to restrain the diversion on the ground that intrabasintransfer is illegal <strong>and</strong> would hamper its prior use. 15Colorado contended that it had full right to use its river water asit pleased, based on the Harmon Doctrine. Wyoming contestedthe legality of the diversion <strong>and</strong> maintained that its prior usemust be respected. In a nutshell, the dispute was based on theprinciple of prior appropriation <strong>and</strong> territorial sovereignty. TheCourt, in its judgement, rejected the conflicting arguments ofboth states <strong>and</strong> provided that even though the constitutions ofboth states protect their respective prior uses, the basic rule inquestion was just <strong>and</strong> equitable utilisation. Therefore the courtallocated the water to both states based on this principle. In thelater case of 1940, where Wyoming alleged that the Coloradodiversion works appropriated more than its share, thecontention was refused by the Supreme Court stating that thediversion, unless it inflicted injury on the former, was lawful. 16In the New Jersey v. New York dispute of 1931, each state wasclaiming 'prior use' <strong>and</strong> 'use your wealth as you please'concepts. The former sought to restrain the diversion of thewater of the Delaware River, whilst the latter argued that it hadlegal right to use its resource as it liked. The court held:"both states have real <strong>and</strong> substantial interests <strong>and</strong>rights over the waters of a river that must bereconciled as best they can. The best way of14 Ibid.15 259 U. S. 419 (1921), pp. 430-470.16 308-310 U. S. 84 (1940), p. 960.achieving it is to secure equitable apportionmentwithout quibbling over formulas." 17Moreover, Justice Oliver Wendell Holmes provided that,“a river is more than an amenity; it is a treasure. Itoffers a necessity of life that must be rationedamong those who have power over it”. 18The essence of the adjudication was to reconcile the interests ofboth states within the parameter of equitable apportionment.Therefore, New York was allowed the diversion of a certainquantum of water with conditions, as the best way toaccommodate the interest of each party.In the Colorado v. New Mexico dispute of 1975 over theallocation of the river's waters, where the latter (downstream)was depriving the former of using the waters, the courtmaintained that the applicable rule in the dispute is equitableapportionment. 19 That is to say, this conflict was also adjudgedby the rule of equity, justice <strong>and</strong> fairness. The other morecomplicated, contentious <strong>and</strong> long running dispute was that ofArizona v. California, where in 1963 the Supreme Court heldthe view that 'equitable apportionment' is the major rule ofadjudication of the issue in question. 20 Beside this, there areseveral other judgements in the United States that haveenunciated <strong>and</strong> applied the same principles of adjudication. Asdemonstrated earlier, these judgements greatly influenced manyareas of the world in the resolution of inter state water conflictsor conflicts between sovereign nations, thereby integrating as17 Supra note 2, p. 326; also see 283 U. S. 336 (1931), pp. 1104-1109.18 283 U. S. 336 (1931), p. 343.19 459 U. S. 176 (1975), p. 332-335.20 F. J. Trelease, "Arizona Versus California: Allocation of WaterResources to People, States <strong>and</strong> Nations" in P. B. Kurl<strong>and</strong> (ed),Supreme Court Review, Chicago: The University of Chicago, 1963,pp. 158-205; also see 282-283 U. S. (1931), pp 1155-1171; also see296-298 U. S. 80 (1935), pp. 1331-1339.
24 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 25customary certain norms for state practices including treatyregimes.In Connecticut v. Massachusetts, 1931, the latter was permittedby the Secretary of War to divert <strong>and</strong> impound floodwaterduring the monsoon season, i.e., May to June. Connecticutchallenged the permission on the ground that it would impairnavigation, fish stock <strong>and</strong> farm l<strong>and</strong>. Massachusetts deniedtheir contention. The court found that the disputes betweenstates over diversion of water from streams flowing throughboth territories must be settled on the basis of equality of right.That did not mean that there must be an equal division ofwaters, but meant that the principles of equal right <strong>and</strong> equityshall be applied, having regard to both interests. 21 In the end,Connecticut’s practice was not found to be against the interestsof Massachusetts but rather consistent with the principles.However, it is not my argument that these judgements shouldbe treated as a precedent for all nations. They could rather beregarded as a catalyst <strong>and</strong> references for the resolution of waterconflicts. 22Besides the Supreme Court, the involvement of the AmericanCongress, Federal Government <strong>and</strong> the conclusion of Inter-State compacts have made possible the resolution of thesedisputes within the US. In all deliberations, reasonable <strong>and</strong>equitable apportionment of waters between the co-basin stateswas a norm that has been widely recognised <strong>and</strong> applied. 23With respect to diversion, as distinct from apportionment,slightly different reasoning was used. For example, Coloradowas prohibited from diverting water in the future without courtpermission, even though, it had not been proved that at the time21 282-283 U.S. 75 (1931), pp. 603.22 B. R. Chauhan, Settlement of <strong>International</strong> <strong>and</strong> Inter-State WaterDisputes in India, Bombay: N. M Tripathi Ltd., 1992, p. 232.23 C. B. Bourne, "The Rights to Utilise the Waters of <strong>International</strong>Rivers” (1965) in III CYBIL, pp. 190-191; also see supra note 1, p. 19.such diversion would cause injury. 24 The development <strong>and</strong>enunciation of new principles in relation to sharing of waters<strong>and</strong> the benefit therefrom are highly innovative in the UnitedStates. McCaffrey advocated that the decisions of the courts ofthe United States were milestones in the development of IWL. 25These decisions contributions are twofold, in that they have hadboth national arrangement <strong>and</strong> international impact on themanagement with its upstream <strong>and</strong> downstream riparianrelations. Each exercise (negotiation, court decision, etc) hadproduced a new example of co-operation. From the HarmonDoctrine we have moved to the principle of equitableapportionment <strong>and</strong> equitable utilisation. 262.3 Water Disputes2.3.1 Inter-State Water Disputes in IndiaIn India, there are many inter-state disputes in relation to thesharing <strong>and</strong> allocation of the water of the rivers that flow alongcommon boundaries. Most of the conflicts have been resolvedthrough the decisions of the relevant Water Tribunal. However,some conflicts remain unresolved. 27 Nevertheless, theresolutions of the disputes have been based on equitableapportionment <strong>and</strong> efficient use of the waters. It will be usefulto consider a few leading cases.In the Krishna River Water dispute, 1961 28 a commission wasconstituted following a failed intervention by the central24 Ibid.25 Supra note 2, p. 228.26 Ibid. pp. 221-228.27 There is still a dispute between the Karnataka <strong>and</strong> Tamil Nadu withregard to the sharing of Cauvery River waters. The federal governmentis pressing hard to resolve the issues but has not succeeded. Also seestaff, “Cauvery Dispute: Parched Karnataka Burns Fast” inwww.timesofindia.com Sunday Post, October 5 2002.28 Supra note 22, p. 221; also see Report of the Krishna Water DisputeTribunal, Vol. 1, 1973.
26 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 27government to resolve the conflict. The facts of the case werethat even after the promulgation of a new constitution of Indiain 1950, the Krishna River Basin was divided among severalstates, due to the high dem<strong>and</strong> of water amongst the contestants(Maharastra, Karnataka, Andhra Pradesh, Madhya Pradesh <strong>and</strong>Orissa). As disputes emerged, eventually, the Krishna disputetribunal was constituted <strong>and</strong> the disputes were referred to it. Itmust be acknowledged here that within Article 262 of theIndian Constitution <strong>and</strong> Inter-State Water Dispute Act, 1956, 29the authority for resolving water disputes between states lies inthe central government <strong>and</strong> the judiciary is excluded from thisjurisdiction:"Under Clause X of the final order of the tribunalpermitted the state of Maharastra to divert the waterof Krishna River for use outside the Krishna Riverbasin but imposed a limit beyond which Maharastacould not divert the said water within one wateryear”….The tribunal maintaining that a river is anindivisible physical unit further stressed that “theconflict of interests of the riparian states must beresolved by agreement, judicial decree, legislation oradministrative control, so as to secure a fair <strong>and</strong> justdistribution of the water resources among theconcerned states." 30In brief, this decision calls for a co-ordinated, participatory <strong>and</strong>equal entitlement in the use of a common river to all riparianstates.29 Ibid. p. 169: Dispute relating to Waters: “(1) Parliament may by lawprovide for the adjudication of any dispute or complaint with respect tothe use, distribution or control of the waters of, or in, any inter-stateriver or river valley. (2) Notwithst<strong>and</strong>ing anything in this Constitution,Parliament may by law provide that neither the Supreme Court nor anyother court shall exercise jurisdiction in respect of any such dispute orcomplaint as is referred to in clause (1).”30 Ibid. pp . 229-231.The issue of diversion was dealt with in the Narmada RiverWater Dispute, 1978 31 in which four states, Madhya Pradesh,Rajasthan, Maharastrra <strong>and</strong> Gujarat were contestant parties.The Narmada Water Tribunal was constituted <strong>and</strong> the disputereferred to it. In its decision, the tribunal quoted the findings ofthe Indus Commission (the Rau Commission dealt with below)<strong>and</strong> Articles IV <strong>and</strong> V of the Helsinki Rules 1966, <strong>and</strong> held theview that equitable apportionment is the appropriate rule inadjudicating a dispute like this. It also observed that:“the diversion of water of an inter-state river,outside the river basin is legal <strong>and</strong> the need fordiversion of water to another watershed may,therefore, be a relevant factor on the question ofequitable apportionment in the circumstances of aparticular case. … the question of diversion ofwater of an inter-state river to areas outside thebasin is not a question of law but is a question offact to be determined in the circumstances of eachparticular case”. 32The ruling explicitly relied on the principles of equitableapportionment <strong>and</strong> directed the parties to establish an entity inorder to implement the project <strong>and</strong> consent to intra-basintransfer of waters.In the Godawari River Water Dispute, 1980, 33 the disputantstates were Maharastra, Andhra Pradesh (AP), Karnataka,Madhya Pradesh <strong>and</strong> Orissa <strong>and</strong> the conflict was over sharingof water. With regard to the question of whether it was lawfulfor the state of AP to execute a project that was likely tosubmerge the territories of the other states, the tribunal held theview that 'it is to be observed that each case of possible31 Ibid. pp.244-250; also see Report of the Narmada Water DisputeTribunal, Vol. 1, 1978, p. 2532 Ibid.33 Ibid. p. 265; also see Report of the Godawari Water Dispute Tribunal,Vol. 1, 1979.
28 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 29submergence must be dealt with separately after considerationof a concrete project involving submergence <strong>and</strong> all relevantfacts bearing on the question of such submergence. But itcannot be said generally that any project of the state of APinvolving submergence of the territory of other states ispermissible without the prior consent of the affected states.' 34However, the complex issues of adverse effect on other stateswere resolved through the judgement, based on reasonable <strong>and</strong>equitable use of inter-state waters. The tribunal held that whileusing one’s share, there should not be any harmful or adverseeffect on other riparian states.The Punjab- Rajasthan- Haryana Water Dispute (EradiTribunal on sharing of Ravi-Beas Waters) 1986, 35 is an Indiancase which emerged after the conclusion of the Indus rivertreaty between India <strong>and</strong> Pakistan. 36 After the bifurcation ofPunjab into Punjab <strong>and</strong> Haryana, the dispute was settled bytrilateral negotiations that led to the conclusion of an agreementbetween the chief ministers of the respective states <strong>and</strong> thecentral government’s representatives. After the change ofpolitical situation in Punjab, in which the Punjab legislativeassembly repudiated this agreement, the Indian Prime Ministerintervened <strong>and</strong> agreed to a fair allocation of waters to Punjab byconstituting a tribunal to adjudicate the case. The principles tobe taken into account by the tribunal’s decision were:“avoidance of unnecessary waste in the utilisation of waters,rejection of territorial sovereignty, <strong>and</strong> upholding the notion ofequity <strong>and</strong> fairness.” 37 In essence, the Punjab assertion based on‘territorial sovereignty’ was rejected on the line that it is not anaccepted principle in international law. Haryana’s share ofwater allocated by earlier treaties was upheld <strong>and</strong> the principle34 Ibid.35 Ibid, pp. 283-292; also see Report of the Ravi <strong>and</strong> Beas WatersTribunal, 1987.36 II (1)YBILC, Indus Rivers Waters Treaty 1960 (1974), pp. 99-102.37 Supra note 22, pp. 283-292.of equity <strong>and</strong> fairness in the allocation <strong>and</strong> sharing of sharedwatercourses was recognised.An example of trade for water can be found in theTungabhadra river waters sharing case 38 between Madras <strong>and</strong>Mysore (Karnataka), 1944. An agreement was concluded,whereby it was agreed with Mysore that royalties shall be paidto Madras in lieu of the utilisation of its share of the waters ofKavery at Sivasamudram. This agreement shows how states cantrade off benefits from a shared resource. In this case, theformer paid reparation to the latter in lieu of its share of water.The Musakh<strong>and</strong> Dam Project provides a good example ofsharing of costs <strong>and</strong> benefits in a common interstate riverproject, by the two riparian states of Uttar Pradesh <strong>and</strong> Bihar. 39In this case, both states shared the cost in proportion to thebenefits, for which a detailed calculation of the division ofwater <strong>and</strong> construction of canals <strong>and</strong> dams was devised. Apartfrom this, there was the Bajaj Sagar Dam project, in which theGujarat <strong>and</strong> Rajasthan Governments made another cost sharingagreement in proportion to the benefits accruing from theproject in 1966. This also provides for the rehabilitation of38 Ibid. p. 309.39 Ibid. p. 313. The Karmnasa river rises in Bihar <strong>and</strong> flows through UP.The central government asked the UP government to obtain consentfrom Bihar for execution of the project for the construction of anearthen bund near the Musakh<strong>and</strong> village in Varanashi district of UP.When the governments failed to reach an agreement, the centralgovernment produced an agreement in 1965 in which:1. The total capacity of the dam would be 525 million cubic ft. outof which the shares of Bihar <strong>and</strong> UP would be 225 million cubicft <strong>and</strong> 3,00 million cubic ft respectively.2. The cost of the construction <strong>and</strong> future maintenance of the damwas to be shared by the two parties equally.3. The cost of the envisaged canals, to be built up by the two states,was to be borne by the respective state in whose territory theconcerned canal was to be constructed. Bihar was also to bear thecost of construction of the canal from the UP border carryingwater into Bihar.
30 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 31displaced persons from the areas submerged <strong>and</strong> settlement ofthe amount of compensation to be paid to Rajasthan by Gujaratin lieu of those submerged areas affected by the construction ofKadana Dam. 40 In both cases, water projects were developed insuch a way that each state shared the costs <strong>and</strong> benefits fairly,equitably <strong>and</strong> reasonably. Such an example provides the groundfor the effective <strong>and</strong> efficient development of a shared resourcefor mutual benefit.These inter-state resolutions within India could be regarded asgood examples of how to resolve the existing problems onsharing <strong>and</strong> allocation of common waters between India <strong>and</strong> herother riparian states at the international level. The fact thatIndia has already agreed to such arrangements should not berefused with respect to her neighbours. The genesis of theseresolutions has been a co-operative approach, negotiation,exchange of data <strong>and</strong> statistics <strong>and</strong> a true realisation of how toshare the costs as well as benefits proportionately with a ‘noharm’ concept. The reason for evaluating several Indian waterdisputes is that the research is explicitly linked with the issuesof India’s neighbour, Nepal, i.e., the Indian case law could behelpful to sort out the outst<strong>and</strong>ing issues in the region. Similarinter-province problems remain in Pakistan as well, in relationto the sharing of the Indus River water between Punjab <strong>and</strong>Sindh provinces. There are serious conflicts here, the formeralleging the latter wastes its share <strong>and</strong> the latter blaming theformer for stealing its share of water. This has resulted inpolitical issues being led by water issues. Consequently, thereis now an independence movement in Sind Province, assumedto stem from the water sharing issues. 41 These decisions haveinextricable linkages with the book in view of the fact that Indiais alleged to be using double st<strong>and</strong>ards while dealing with itsupstream <strong>and</strong> downstream states. 42 In conclusion, in all40 Ibid. pp. 314-315.41 M. Paukert, “The Indus umbilical” Himal South Asia, July (2002).42 A. B. Thapa, “World Bank <strong>and</strong> Nepal’s Water Strategy” (2003) 10-16Jan., in 23 Spotlight, pp. 1-3.judgements, the principles of equitable apportionment, efficientutilization <strong>and</strong> co-operation between the watercourse stateswere enunciated. This has significantly contributed to the fair<strong>and</strong> equitable entitlement of a state’s entitlement to a sharedwater resource within India.Many of the principles decided in the case law discussed abovewere foreshadowed by a commission established by the Britishgovernment in 1941. As an early commission, which wasconstituted to resolve the inter-state dispute between theprovince of Sind <strong>and</strong> Punjab in the then British India under theGovernment of India Act 1935, some of the recommendationsmade by the commission were highly significant to thedevelopment of the area. However, it must be taken intoconsideration that these recommendations were never compliedwith by the disputant parties. The commission chaired byJustice B. N. Rau, known as the Rau commission, enunciatedsix principles for the resolution of the dispute, two of which arepertinent here. One of the principles is:"the rights of the several provinces <strong>and</strong> states mustbe determined by applying the rules of 'equitableapportionment', each unit getting a fair share of thewater of the common river." The second one is that“that equitable sharing once made, may cease to beequitable later, in the face of the newcircumstances.” 43This indicates that the changed circumstance, in which newperspectives emerge, may change a judgement made earlier, asa result of which the equitable matters may become inequitablein the changed circumstance. That is to say that the term'equitable utilisation' varies in each circumstance <strong>and</strong> context,<strong>and</strong> may not be static <strong>and</strong> stable.43 Supra note 22, p. 154; also see “The Report of the Indus Commission”Lahore, Gov. Printing Punjab, 1950.
32 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 33In practice, neither party ever recognised these principles.Subsequently, the case was forwarded to the Secretary of Statein London. After independence <strong>and</strong> the subsequent partition ofIndia <strong>and</strong> Pakistan on August 15, 1947, the issue again emergedas an international dispute, that was later resolved through theconclusion of the Indus Treaty, 1960 by the mediation of theWorld Bank, which is evaluated below. 442.3.2 Developments in European StatesThe principles of equitable utilisation have been enunciated inseveral European states in water disputes between the membersof federal states on how to share the waters between them. TheSupreme Court of Switzerl<strong>and</strong> decided a case relating to waterallocation <strong>and</strong> sharing between cantons in 1878. This predatesthe US Supreme Court decisions on similar water disputes inthe United States. The Aargau v. Zurich case 45 related to theZwillikon Dam <strong>and</strong> is significant in terms of its weight <strong>and</strong>significance in IWL, as well as constituting a well-balanceddecision addressing the interests of all cantons in the sharing ofwater (in an interstate water dispute). A private firm in thevillage of Zwillikon, in the canton of Zurich, constructed a damon the Jonabach River to provide power for its factory.However, this company required deposits of a certain sum ofmoney in a bank to be used to indemnify persons whoseexisting uses downstream might be effected by the new works.As a result of diversion, the mill owners further downstream inthe canton of Aargau complained that the dam deprived them ofsufficient flow of water to operate their facilities. The SwissSupreme Court in its judgement held the view that where theinterests of two cantons are in conflict, as in the present case,international law principles derived from the ‘law of goodneighbourliness’ apply, in which each canton is entitled to therational utilisation of the waters, corresponding to its needs, but44 Ibid. pp. 183-18445 H. A. Smith, The Economic Uses of <strong>International</strong> Rivers, London: P.K. King & Son Ltd, 1931, pp 39-43.only in so far as the joint use of the water is not thereby madeimpossible but is left for the rest of the cantons in the samemanner. In other words, highlighting the significance of thejudgement, Smith stated that:“so long as the sovereign power of the state isexercised in a reasonable <strong>and</strong> beneficial manner,its exercise cannot be vetoed by the assertion ofany absolute property right .. the decision'essentially rests upon the principle of the"equitable apportionment of benefits’". 46In fact, it is the first decision in Europe in which the rule ofequity was invoked to protect the interests of the disputantparties equally <strong>and</strong> equitably.The diversion of the waters of the Leith River 1913, 47 involvedan Austrian diversion inside Austria, depriving Hungary of itsshare, which it was already utilising. The Royal ImperialAdministrative Court of Austria held the view that thediversion was against the rules of customary international law<strong>and</strong> eventually prohibited this unilateral diversion. The courtfound that states are under an obligation to respect an existingright in a watercourse beyond their frontiers. In the presentcase, for the people of downstream Hungary relying on thewater, depriving them of their share was in itself an illegitimateact. In essence, the court upheld the rules of reasonable <strong>and</strong>equitable utilisation for water sharing by riparian states.The Italian Court of Cassation, in the case of Societe EnergieElectriquedu Littoral Mediterancen v. Compagnia ImpreseElettriche Liguri 1939, 48 affirmed the principle of a community46 Ibid.47 Supra note 23; also see the text of the decision in 7 AJIL, (1913) pp653-660; also see Hackworth, Digest of Public <strong>International</strong> <strong>Law</strong>Cases, (1940) pp. 594-95.48 Ibid. pp. 253-254; also see the text in Digest of Public <strong>International</strong><strong>Law</strong> Cases, (1938-1940) p. 120.
34 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 35of ownership of water with respect to shared resources. Themain thrust of the case concerned the implementation of aFrench court decision in Italy, but at the same time, some rulesof international water sharing were discussed:“the international duty of the state not to impedeor to destroy the opportunity of the other states toavail themselves of the flow of water for their ownnational needs”. 49Nonetheless, the basic rule of an IWC, as advocated in thejudgement, is equality of right that must be utilised equally,fairly <strong>and</strong> equitably as not to inflict injury beyond the frontiersof that state.A dispute relating to water sharing <strong>and</strong> allocation emergedbetween German provinces in Wurttemberg & Prussia v. theBaden, in which the Supreme Court Staatsgerichtshof renderedits judgement in 1927. 50 The facts of the case itself areinteresting, due to the unique natural phenomenon of the waterof the Danube sinking into the aquifers, the seepage waterreappearing in a separate drainage basin, (that of the RhineRiver located in the state of Baden). In the Wurttemberg sectionof the Danube, all the water disappeared as a result of thenatural sinking phenomenon, which made the case furthercomplicated, dragging Wurttemberg into the controversy.Baden, on its part, requested an injunction restrainingWurttemberg from constructing <strong>and</strong> maintaining certain worksthat were allegedly intended to prevent the natural flow of theDanube waters to the Aach. At the same time, Prussia,downstream of Wurtttemberg, was also injured by the loss ofwater from the Danube <strong>and</strong> intervened in the suit on the side ofWurttemberg. 51 In this context, Wurttemberg asked the court togrant an injunction restraining from constructing <strong>and</strong>49 Ibid. pp. 253-254 & 120.50 Ibid. pp. 217-221.51 Ibid. Also see the text in Annual Digest of Public <strong>International</strong> <strong>Law</strong>Cases, (1927) p. 128.maintaining certain works (Baden <strong>and</strong> Prussia), <strong>and</strong> to instructBaden to remove the natural obstacles, which accumulate in thebed, <strong>and</strong> on the banks of the river in order to ensure anunimpeded flow of water.The German Supreme Court held that Baden must refrain fromcausing an increase in the natural sinking of the waters of theDanube due to its artificial works <strong>and</strong> by the accumulation ofs<strong>and</strong> <strong>and</strong> gravel in the bed of the river. And Wurrttemberg wasrequired to refrain from decreasing the natural sinking ofDanube waters due to certain works <strong>and</strong> artificial damming ofavenues of sinking. The court also held that while sovereignstates (or members of a federal state) are using waters of theirterritory, they must bear in mind that it should not cause anyharm or injury to other states <strong>and</strong> the interest of each state mustbe weighed in an equitable manner against the interest ofothers. The case dealt with a unique natural phenomenon. Italso held the view that the disputant provinces must respect theequitable <strong>and</strong> reasonable share of every province. McCaffreyhas highlighted the significance of the case by saying:"even for a case between two states of afederation, the Staatsgerichtshof’s analysis, <strong>and</strong>the principles it applied, are remarkably advancedfrom the period in which judgement was rendered.… the rules it applied are generally consonantwith those contained in the 1997 UN Convention,especially those of equitable utilisation <strong>and</strong> theobligation to prevent significant harm." 52In fact, the German case is the earliest groundwater case whichexplicitly enunciated the principles of equitable utilisation, noharm rule <strong>and</strong> due diligence by applying the rules ofinternational law as if it were a case between the two sovereignnations. 53 The significance of procedural issues such as52 Supra note 2 p. 220.53 J. G. Lammers, The Pollution of <strong>International</strong> <strong>Watercourses</strong>, TheHague: Martinus Nijhoff Pub., 1984, p. 433.
36 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 37notification <strong>and</strong> cooperation are highly important <strong>and</strong> if theseissues had been applied in this case, the dispute would probablynot have arisen. In other words, without invoking theseprocedural issues the application of equitable utilisation in ashared watercourse is not viable. These norms were notpractised by the disputant parties in this case. Procedural issuesare further addressed in Chapter Three.The above noted European cases were settled through thecardinal rule of reasonable <strong>and</strong> equitable apportionment. Inother words, the decisions advocated the notions of goodneighbourliness between riparian states, resolution of the issuesby means of negotiation, agreement, co-operation, <strong>and</strong>notification. In each circumstance, equity played a central roleto bridge the gap between the conflicting interests of thecontestant parties. In this sense, it can be concluded that equity<strong>and</strong> equitable utilisation remain at the centre of the resolutionof each conflict in the above state practices. Moreover, in mostcases, irrespective of the fact that the disputes were domestic innature, international law was applied to ensure that the interestsof each state, province or canton were considered <strong>and</strong> justicewas done.2.4 <strong>International</strong> Judicial <strong>and</strong> Arbitral DecisionsAs already noted, municipal judicial decisions have greatlyinspired <strong>and</strong> influenced the development of IWL. 54 Thedecisions of international courts <strong>and</strong> tribunals must also bediscussed. Article 38(1)(d) of the Statute of the ICJ stipulatesthat the court shall apply“subject to the provisions of Article 59, judicialdecisions ..., as subsidiary means for thedetermination of rules of law ... the decision of the54 D. J. Harris, Cases <strong>and</strong> Materials on <strong>International</strong> <strong>Law</strong>, London:Sweet <strong>and</strong> Maxwell, 1998, p. 1075.court has no binding force except between theparties <strong>and</strong> in respect of their particular case.” 55However, regardless of that fact, such decisions have greatlyinfluenced the resolution of international disputes <strong>and</strong> referenceto several such cases has become normal practice. In thissection, evaluation of a few decisions that have contributed tothe development of this area will be made even though they donot all directly address IWL.From the start it is worth noting that arbitral awards may betantamount to judicial decisions in international law. Forexample the Trial Smelter Arbitration decision is regarded as amain source of environmental law. 56 Such adjudications haveexplicitly influenced the entire process of development <strong>and</strong>codification of the area. They have been followed, quoted <strong>and</strong>recognised in the practice of states, by judicial bodies <strong>and</strong> alsoby scholars. The earliest decisions have planted the seeds of thedevelopment of sharing <strong>and</strong> allocation of IWC.2.4.1 Helm<strong>and</strong> River Delta CasesThe Helm<strong>and</strong> River originates in the mountains 35 miles westof Kabul <strong>and</strong> flows across 700 miles of the territory ofAfghanistan. 57 A water dispute arose between Afghanistan <strong>and</strong>Iran in relation to delimitation of their boundary <strong>and</strong> the use ofthe waters of the Helm<strong>and</strong> River in the Seistan delta region. In1872, the dispute was submitted to the arbitration of a BritishCommissioner, General Fredrick Goldsmid. In the award, hedecided,55 Ibid. p. 1075-76.56 C. B. Bourne, "The <strong>International</strong> <strong>Law</strong> Commission's Draft Articles onthe <strong>Law</strong> of <strong>International</strong> <strong>Watercourses</strong>: Principles <strong>and</strong> PlannedMeasures" (1992) in 3 CJIL&P, pp. 65-92.57 D. A. Caponera (ed), The <strong>Law</strong> of <strong>International</strong> Water Resources,Rome: FAO Legislative Study no 23, 1980, pp. 233-34.
38 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 39"Persia should not possess l<strong>and</strong> on the right bank ofthe Helm<strong>and</strong>. It appears therefore beyond doubtindispensable that both banks of the Helm<strong>and</strong> abovethe Kohak b<strong>and</strong> be given up to Afghanistan. Themain bed of the Helm<strong>and</strong> therefore below Kohakshould be the eastern boundary of Persian Seistan. Itis moreover to be well understood that no works areto be carried out on either side calculated to interferewith the requisite supply of water for irrigation on thebanks of Helm<strong>and</strong>”. 58This is an early decision that has contributed to the fairallocation of waters from the shared river to each riparian state.It has, therefore, clearly underlined the following concept:whilst using your share of waters you must take into accountthe interest of other riparian states, <strong>and</strong> in doing so, anydetrimental affect with or without malicious intention isforbidden. Thus this decision has been regarded as one of thefoundations of equitable utilisation.In 1902, a second dispute was submitted to ColonelMacMohan, asking what amount of water fairly represented arequisite supply for irrigation provided on behalf of Persia bythe award of 1872. The mission in Seistan had been created inorder to determine the requisite supply for Persian needs <strong>and</strong> itwas stated that one third of the water which reached Seistanwould suffice for irrigation in Persian Seistan, leaving the samesupply for the Afghan requirement as well. 59The award contained eight clauses. Two clauses, viz., clauses I<strong>and</strong> VII, are particularly relevant:"Clause I- No irrigation works are to be carriedout on either side calculated to interfere with therequisite supply of water for irrigation on bothbanks of the river, but both sides have the right,58 Ibid. p. 233.59 Ibid. p. 234.within their own territories, to maintain existingcanals, to open out old or disused canals, <strong>and</strong> tomake new canals, from the Helm<strong>and</strong> River,provided that the supply of water requisite forirrigation on both sides is not diminished.Clause VII: It will be noted that the rights to theHelm<strong>and</strong> River, which its geographical positionnaturally gives to Afghanistan as owner of theupper-Helm<strong>and</strong>, have been restricted to the extentstated in favour of Persia in accordance with SirFrederick Goldsmid's award. It follows, therefore,that Persia has not the right to alienate to anyother power the water rights thus acquiredwithout the consent of Afghanistan." 60The earlier judgement, namely the Goldsmid verdict of 1872,was supported by a later one. The award rejected the notion ofinterference in the other party's utilisation of water <strong>and</strong>supported each share of water for its own beneficial use withoutdistorting the other. In the later case of 1905, Col. MacMohanfound that Persia was causing detrimental effects onAfghanistan’s share of the waters <strong>and</strong> declared Persia’s actionillegal. However, Persia (Iran) has never accepted thejudgement.2.4.2 Trail Smelter Case, US-CanadaAt Trail, located in British Columbia, Canada, seven milesaway from the American border, there was a large stock of leadsmelters <strong>and</strong> mines being excavated by a company. During thesmelting process, the sulphur dioxide fumes were carried overthe border <strong>and</strong> caused damage to crops <strong>and</strong> vegetation on USterritory. The citizens of Washington State, due to lack of alegal remedy within their territory because of the fact that theair pollution was caused by an act in Canadian territory, asked60 Ibid.
40 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 41the US Government to initiate proceedings against suchharmful activity <strong>and</strong> to seek compensation for whateverdamage had already occurred. The United States <strong>and</strong> CanadianGovernments signed a convention in Ottawa in 1935 <strong>and</strong>constituted an arbitral tribunal accordingly. 61 The tribunalrendered its decision in 1938 <strong>and</strong> 1941:"Under the principles of international law, … nostate has the right to use or permit the use of itsterritory in such a manner as to cause injury byfumes in or to the territory or another or theproperties or persons therein, when the case is ofserious consequence <strong>and</strong> the injury is establishedby clear <strong>and</strong> convincing evidence." 62Canada was held responsible in international law for theconduct of the Trail smelter. Therefore, the Trail smelter wasrequired to refrain from causing any harm through fumespassing over the state of Washington. While this case has nodirect relation to the subject of this research, the decision, hasfar reaching implications in the development of internationallaw as a whole <strong>and</strong> especially modern internationalenvironmental law. 63 This principle is largely complied with,followed <strong>and</strong> appreciated by the international community. As aresult of such recognition the Trial Smelter principles havebecome a significant part of customary rules of internationallaw. 64 This decision is cited in many national <strong>and</strong> internationalcases, state practices <strong>and</strong> writings. The maxim sic utre tuo,propounded for the first time in this case, has been followed inmany cases including the Lake Lanoux <strong>and</strong> Corfu Channel,quoting the concept of 'use your own resources without61 Supra note 36, pp. 192-194; also see 35 AJIL (1941) pp. 684-716.62 Supra note 57, p. 244.63 Supra note 56.64 35 AJIL (1941) pp. 684-716.affecting others.' 65 It should be understood that this judgementhas an explicit link with the 'no harm rule', stipulated in Article7 of the 1997 UNCIW, Article 21 of the UN Conference on theHuman Environment, 1972 66 <strong>and</strong> Article 2 of the UNConference on Environment <strong>and</strong> Development, 1992. 67 Theseare the basic foundations for no harm rules. For the purpose ofthis book, use of waters in an IWC is the right of riparian stateswith the obligation of prohibition of any harm to otherwatercourse states. In the event of any harm to the otherriparian, such harm must be mitigated, averted or eliminated.Furthermore, this is the foundation stone for the concept ofextraterritorial water pollution, no harm rule <strong>and</strong> environmentallaw.2.4.3 Lake Lanoux Case, 1957 France - SpainThis case is more significant than the earlier cases in relation tothe development of IWL, due to the fact it is explicitly relatedto the allocation <strong>and</strong> sharing of fresh waters in an IWC. 68 Thecase was decided by an arbitral tribunal constituted by theparties according to their Arbitration Treaty of 1929. Bothstates signed a Compromise in 1956. 69The outlet of Lake Lanoux in the eastern Pyrenees of Franceflows into the Carol River. In order to generate hydropower,France proposed to divert the Lake Lanoux waters over amountain drop into the Friege River in France <strong>and</strong> later thesame quantum of water was to drain into the Carol River. Spainobjected to the diversion of the waters, contending that it would65 C. B. Bourne, "The Development of <strong>International</strong> Water Resources:The Drainage Basin Approach" (1969) in 47 CBR, pp. 72-76.66 P. W. Birnie & A. E. Boyle, Basic Documents on <strong>International</strong> <strong>Law</strong><strong>and</strong> the Environment, New York: Oxford University, 1996, pp.1-8.67 Ibid. pp. 9-1468 R. Bernhard (ed), Encyclopaedia of Public <strong>International</strong> <strong>Law</strong>:Decision of <strong>International</strong> Courts <strong>and</strong> Tribunal <strong>and</strong> <strong>International</strong>Arbitration, the Hague: North-Holl<strong>and</strong> Company, 1981, pp. 166-167.69 24 ILR (1961), p. 101; also see 53 AJIL (1959), p. 156.
42 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 43have an adverse effect in its territory. The arbitral tribunal heldthat the proposed diversion would not violate the treaty becausethere would be no net alteration to the flow of the Carol River."…the tribunal expressed its view that underexisting customary international law co-riparianstates are equally entitled to reasonable use of thewaters from an international drainage basin <strong>and</strong>its view regarding a co-riparian consent;…that there exists a principle prohibiting theupstream state from changing the waters of a riverin their natural condition to the serious injury of adownstream state. Such principle cannot beapplied to the present case because the tribunalhas established, in regard to the first questionexamined above, that the French project does notalter the waters of Carol." 70Therefore, Spain was only entitled to the adoption by France ofmeasures ensuring the reasonable protection of Spain’s interest.When one examines the question of whether France, either incourse of dealing or in her proposals has taken the Spanishinterest into sufficient consideration, it must be stressed howclosely linked together are the obligations to take intoconsideration the violation of interests in the course ofnegotiation, <strong>and</strong> the obligation to give reasonable place to thoseinterests in the adopted solution. A state that has conductednegotiations in good faith in accordance with Article II of theAdditional Act is not excused from giving a reasonable place toadverse interest in the solution it adopts, even if negotiationshad been interrupted owing to the intransigence of its partner. 71The significant aspect of the judgement is the clear <strong>and</strong>unequivocal answer to Spain’s assertion as to “whether Francemust have her consent before initiation of the project according70 Supra note 68, p. 167.71 Ibid.to the customary international law.” 72 The ruling said no; thereis no provision in customary international law that an upstreamcountry is compelled to have consent from her downstreamneighbour before initiating a water project. It can be argued thathad not this point been made clear by the tribunal, there wouldbe the danger of the downstream state having a veto over thematter. In the event of such a ruling, equitable entitlement ofthe upstream state could be jeopardised.Thus, from the analysis of the judgement, a number ofsubstantive principles have emerged. It appears that adownstream state has no veto power to stop or object to anyproject in the upstream state unless it inflicts substantial orserious or significant adverse effects. Therefore, it is a duty ofthe state that is proposing to develop a project to consult <strong>and</strong>negotiate with its co-riparian state in order to identify whetherany adverse affect may be inflicted by such work <strong>and</strong> to ensurethe equitable utilisation of such shared watercourses. It is,therefore, a milestone judgement that has far-reachingimplications in IWL.2.4.4 Gut Dam Case 1968, Canada v. USAThe St. <strong>Law</strong>rence River is one of the principal rivers in NorthAmerica <strong>and</strong> the main outlet for the Great Lakes. Lake Ontariois situated between Canada <strong>and</strong> the United States. It receivesthe drainage of the entire Great Lakes system through theNiagara River <strong>and</strong> discharges into the St. <strong>Law</strong>rence River. Withthe consent of the US, Canada constructed a dam betweenAdams Isl<strong>and</strong> in Canadian territory <strong>and</strong> Les Gallops Isl<strong>and</strong> ofUS territory in St. <strong>Law</strong>rence River in order to improvenavigation. However, a condition of this consent was not tocause any adverse effect in US territory or to its citizens. Incase of such impact, Canada had agreed to pay compensation72 24 ILR (1961), pp. 101-105. This “consent in case of harm” principlewas not recognised in the 1929 Treaty between Norway <strong>and</strong> Swedenwhich has been evaluated later below.
44 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 45for such damages. The dam was constructed in 1904 <strong>and</strong> in1951/52 the water in the same river reached an unprecedentedlevel <strong>and</strong> caused extensive flooding <strong>and</strong> erosion damage to USsoil. In order to resolve the issue, US-Canada constituted theLake Ontario Claim Tribunal in 1965. The Tribunal in itsdecision declared that Canada had caused harm <strong>and</strong> must payreparations. 73 However, to settle the amount of compensation,there was a separate agreement negotiated by the US <strong>and</strong>Canada in 1968 in which Canada paid a total US$ 350,000 asfull <strong>and</strong> final compensation for the damage caused by theconstruction <strong>and</strong> operation of Gut Dam. This case enhanced theidea of “use your own resources without causing any adverseeffect to the other riparian.”To sum up, all these arbitral tribunals’ decisions upheld <strong>and</strong>advocated the idea of equitable apportionment of the waters ofan IWC. That is to say, the shared resources of an IWC arecommon property of all riparian states, in which all riparianstates are deemed to have equal entitlement over it. Eventually,all interests should be protected equally while utilising theresources. The issue of 'no harm' is also a significant aspect,which advocates that the right of a state to exploit on an IWC isalways matched by the duty of no harm to the other riparian.2.5. PCIJ <strong>and</strong> ICJ Decisions2.5.1 The Case Relating to the Territorial Jurisdictionof the <strong>International</strong> Commission of the RiverOder, 1929The Treaty of Versailles 1919 declares the river Oder to be aninternational river <strong>and</strong> provides:"all navigable parts of these river systems whichnaturally provide more than one State with access73 P. S<strong>and</strong>s, Principles of <strong>International</strong> Environmental <strong>Law</strong>, New York:Manchester University, 1995, pp. 360-361; see 8 ILM (1969), p. 118.to the sea, with or without transhipment from onevessel to another; together with lateral canals <strong>and</strong>channels constructed either to duplicate or toimprove naturally navigable sections of thespecified river systems, or to connect twonaturally navigable sections of the same river". 74A dispute arose between Pol<strong>and</strong>, which contended that thejurisdiction of the Commission, which consisted of therepresentatives of Germany, Denmark, France, Great Britain,Sweden, Czechoslovakia <strong>and</strong> Pol<strong>and</strong>, was limited only up tothe sections of the Warthe <strong>and</strong> the Netze in Polish territory.Others contended that it must be to the navigable point ofWarteha <strong>and</strong> the Netze, even leaving the territory of Pol<strong>and</strong>. Inother words, Pol<strong>and</strong> insisted that the jurisdiction of theCommission was limited to the Wartha <strong>and</strong> the Netze rivers inPolish territory but the appellant maintained that thejurisdiction followed these rivers until the point of a navigablearea.The first water dispute was submitted to the court <strong>and</strong> the courtjudgement addressed questions which are significant to thedevelopment of IWL, in both navigable <strong>and</strong> non - navigableaspects. The court found that the difference between aninternational <strong>and</strong> a national river is that the first must benavigable <strong>and</strong> naturally provide more than one state with accessto the sea:"but when consideration is given to the manner inwhich states have regarded the concrete situationarising out of the fact that a single waterwaytraverses or separates the territory of more than oneState, <strong>and</strong> the possibility of fulfilling therequirements of justice <strong>and</strong> the considerations ofutility which this fact places in relief, it is at onceseen that a solution of the problem has been sought74 Germany, Denmark, France, Great Britain, Sweden, Czechoslovakia v.Pol<strong>and</strong>, Annual Reports of the PCIJ (1937), pp. 221-222.
46 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 47not in the idea of a right of passage in favour ofupstream States, but in that of a community ofinterest of riparian States. This community ofinterest in a navigable river becomes the basis of acommon legal right, the essential features of whichare the perfect equality of all riparian States in theuse of the whole course of the river <strong>and</strong> theexclusion of any preferential privilege of anyriparian State in relation to others. The jurisdictionof the Commission extends up to the points atwhich the Warthe (Wartha) <strong>and</strong> the Netze (Notec)cease to be either naturally navigable or navigableby means of lateral channels or canals whichduplicate or improve naturally navigable sectionsor connect two naturally navigable sections to thesame river”. 75The implications of this judgement are far reaching for sharedwatercourses, e.g., a watercourse that flows from the territoryof a state or states is common property to all riparian states <strong>and</strong>should be treated in such a way that each use does not impairothers entitlement. The idea of ‘community of interest’ hasbeen regarded as an origin of the equitable utilisation principles- main pillars of the rules of IWC. In other words, this principlehas a dominating role in the development of IWL <strong>and</strong> practiceof states largely depends on it. Thus, the submission of Pol<strong>and</strong>was refused <strong>and</strong> the other contestant states’ contentions wereupheld in the judgement. For example a state cannot regard ariver that flows within its territory as entirely its own resource.Rather, it equally belongs to the other riparian as well <strong>and</strong> insuch shared resources 'community of interest' prevails. Thisjudgment along with Diversion of the Waters of the Meuse <strong>and</strong>North Sea Continental Shelf cases has remained important even75 Ibid.today, as it was quoted by ICJ in the 1997 judgement of theGavcikovo-Nagymaros case, (which is addressed below). 762.5.2 The Diversion of Water from the Meuse 1937,Belgium v. the Netherl<strong>and</strong>sThe River Meuse originates in northern France <strong>and</strong> flowsthrough Belgium <strong>and</strong> the Netherl<strong>and</strong>s into the North Sea, whereit forms a common delta with the Rhine. The Netherl<strong>and</strong>s <strong>and</strong>Belgium concluded a treaty in 1863 relating to the regimediverting water from the Meuse for the feeding of navigationcanals <strong>and</strong> irrigation channels. In 1925, the two statesconcluded a new treaty in order to settle all differencesconcerning the enlargement <strong>and</strong> construction of new canals.The Netherl<strong>and</strong>s <strong>and</strong> Belgium started works on the diversion ofwater from the Meuse. 77Both states objected to the work carried out by the other, i.e.,the diversion works for irrigation <strong>and</strong> navigation channels. As aresult, the Netherl<strong>and</strong>s submitted a case to the court requestingit to declare such works illegal <strong>and</strong> against the provisions of the1863 treaty.The court rejected both claims, confining itself exclusively toan interpretation of the said treaty. However, it strictlymaintained the basic principle of equal treatment of states aswell as the reciprocity of the rights <strong>and</strong> duties of the parties in ashared watercourse. 7876 37 ILM (1998), p. 162-202; Caflisch has regarded this case as a‘gr<strong>and</strong>mother of all cases’ relating to the dispute on sharedwatercourse, also see; C. Caflisch, “Judicial Means for Settling WaterDisputes” in PCA (ed), Resolution of <strong>International</strong> Water Disputes,the Hague: Kluwer <strong>Law</strong>, 2003, p. 239.77 Supra note 57, p. 229-230; see supra note 35, p. 187-88; also seeThirteenth Annual Reports of the Permanent Court of <strong>International</strong>Court of Justice, Series E. No 13, (1937) pp. 135-141.78 Supra note 36, PCIJ Decision on Meuse Diversion Case, (1937), pp.187-88.
48 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 492.5.3 Gabcikovo-Nagymaros Case, Hungary v. SlovakiaHungary <strong>and</strong> Czechoslovakia concluded a treaty in 1977concerning the construction <strong>and</strong> operation of a project designedto develop, share <strong>and</strong> allocate benefits from the Danube River.This project was to be carried out by joint investment <strong>and</strong> onthe basis of a mutual management plan. The system wasdesigned to attain the broad utilisation of the natural resourcesof the Bratislava-Budapest section of the Danube River for thedevelopment of water resources, energy, transport, agriculture<strong>and</strong> other sectors of the national economy of the contractingparties. 79 The plan was aimed at the production ofhydroelectricity, the improvement of navigation on the relevantsection of the Danube <strong>and</strong> the protection of areas along thebanks against flooding. While the treaty arrangement was beingconsidered for implementation, the environmental effect of theproject was heavily criticised. The Hungarian Government, as aresult of severe pressure from its civil society, was compelledto postpone the project at first, <strong>and</strong> later (1991) terminated thetreaty unilaterally because negotiations with Czechoslovakiadid not yield any positive result. In the mean time, Slovakia (asuccessor state from Czechoslovakia) decided to begin theconstruction <strong>and</strong> then to put the project into operation by aprovisional solution. Both nations failed to resolve the disputes.Subsequently, as a result of the European Union’s effort, theyagreed to submit the case to the ICJ for adjudication. 80The Court dealt with several issues, i.e., suspension <strong>and</strong>ab<strong>and</strong>onment of the project by Hungary, issues ofenvironmental consideration, state of necessity, theimpossibility of performance of the Treaty, the occurrence of afundamental change of circumstances, the material breach ofthe treaty <strong>and</strong> development of new norms of internationalenvironmental law. Refusing all the above-mentioned79 Preamble of the Treaty Concerning the Gabcikovo-Nagymaros Project1977 at 1109 UNTS, p. 211.80 Para 15-25 of the ICJ's judgement 37 ILM (1998), pp. 162-202.arguments, the Court reached the conclusion that Hungary wasnot entitled to cancel the project. 81 The Court dismissed theabove-mentioned Hungarian submission <strong>and</strong> held the view thatto suspend <strong>and</strong> subsequently ab<strong>and</strong>on the project was notlegally justifiable. Instead of doing so, Hungary would have totake the opportunity to have recourse to the dispute settlementmechanism contained in the treaty. The court further held theview that:"the 1977 treaty was not only a joint investmentproject for the production of energy, but it was alsodesigned to serve other objectives as well: theimprovement of navigability of Danube, flood control<strong>and</strong> regulation of ice-discharge, <strong>and</strong> protection of thenatural environment. None of these objectives hasbeen given absolute priority over the other, in spite ofthe emphasis, which is given in the treaty to theconstruction of a system of locks for the protection ofenergy. None of them has lost its importance. In orderto achieve these objectives the parties acceptedobligations of conduct, obligations of performance<strong>and</strong> obligations of result". 82 “The treaty could not berepudiated unilaterally: Article 26 of the ViennaConvention of 1969 on the <strong>Law</strong> of Treaties, combinestwo elements, which are of equal importance. Itprovides that every treaty in force is binding upon theparties to it <strong>and</strong> must be performed by them in goodfaith. The principle of good faith obliges the parties toapply it in a reasonable way <strong>and</strong> in such a manner thatits purpose can be realized." 83Thus, the judgement obviously indicated that the way ofconfrontation instead of co-operation does not help to share <strong>and</strong>develop a project in a shared resource. Regarding the unilateraluse of the Danube by Slovakia, the Court held the view:81 Ibid. Para 59, p. 187 <strong>and</strong> pp. 191-197.82 Ibid. Para 135, p. 200.83 Ibid. Para 142, p. 201.
50 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 51“it is not only a shared international watercourse butalso an international boundary river, from whichpresently Hungary is deprived of its benefits <strong>and</strong>Slovakia is using between 80 <strong>and</strong> 90 percent of thewaters of the Danube before returning them to themain bed of the river, despite the fact the Danube isnot only a shared international watercourse but alsoan international boundary river.” 84The way, in which Hungary is deprived from these benefits bySlovakia putting the ‘Variant C’ (a provisional solution adoptedby Slovakia) into operation, is incompatible with the treatyprovisions. As a result, both states’ actions are illegal, <strong>and</strong> bothstates are obligated to pay compensation to the other for theinjury incurred by each action to the other <strong>and</strong> both of them arerequired to negotiate <strong>and</strong> execute the provisions of the 1977treaty in a good faith, reasonable <strong>and</strong> equitable manner. 85In summary, the judgement provided that the reasonable <strong>and</strong>equitable utilisation of an IWC is the basic requirement. Thenotion of equity, which bridges the gap between the divergentinterests, is the major rule of shared water resources <strong>and</strong> thedispute in question should be dealt with accordingly. Treatyarrangements should be implemented in good faith with theobjectives set forth in it. In doing so, there are several rightscorresponding to a duty to inform <strong>and</strong> negotiate about theproposed project, follow to the concept of ‘no harm’ <strong>and</strong>‘equitable utilisation’, <strong>and</strong> always maintain goodneighbourliness, <strong>and</strong> a cooperative attitude. Apart from this,consideration of the watercourse as a single unit <strong>and</strong> thegenuine interest of attainment to maximize benefits from such aproject for the mutual benefit of all riparian states are alsonecessary conditions.84 Ibid. Para 78, p 190.85 Ibid. pp. 198- 202.To conclude this section, states have rights in an IWC. At thesame time they are obligated to use their right with restraint,that is to say, to cause harm or injury is not permitted. Thestates in an IWC are required to consult, negotiate <strong>and</strong> cooperatewith each other <strong>and</strong> work in a co-ordinated manner byaddressing each other’s interest <strong>and</strong> maximising the benefits.Furthermore, the Gavcikovo-Nagymaraos judgement providesinsight into the significance of such co-operation. There havebeen varying state practices in this area. In the Nile basin, forexample, both treaties of 1929 <strong>and</strong> 1959 safeguarded the prioror historical or vested right of Egypt over the Nile’s water,which in essence advocated the ‘no harm rule’, against theconcept of equitable utilisation. In other treaty regimes, like thetreaty between Canada <strong>and</strong> USA, Mexico <strong>and</strong> USA, <strong>and</strong> severalothers have maintained the cardinal rule of IWC as ‘equitableutilisation’. However, from the evaluation of each practiceenvisaged in those treaties, the majority of such regimes haveemphasised the concept of reasonable <strong>and</strong> equitable utilisation,no harm to the other state <strong>and</strong> duty to cooperate <strong>and</strong> negotiate.2.6 Scholarly ContributionsAccording to article 38 (1) (d) of the statute of the Statute ofICJ,“subject to the provisions of article 59, judicialdecisions <strong>and</strong> the teachings of the most highlyqualified publicists are regarded as subsidiarymeans for the determination of rules of law.” 86The contributions of the ILI, ILA, Inter-American BarAssociation (IBA) etc, are naturally the contributions ofnumerous scholars which is dealt with later. It is not possible toevaluate every individual’s contribution here. However,eminent scholars such as Oppenheim, Lauterpacht, Smith,Berber, Andrassy, Goldsmid, Black, (then president of the86 Supra note 54, p. 1075.
52 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 53World Bank), Lilenthal, Schwebel <strong>and</strong> Bourne have madesignificant contributions in the development of this subject. 87Contribution was made by Black <strong>and</strong> Lilenthal to the successfulnegotiation that yielded the conclusion of the Indus treaty 1960between India <strong>and</strong> Pakistan, resolving a dispute which hadthreatened the peace <strong>and</strong> security not only of south Asia butalso the entire globe. The treaty was made possible by theirinstitutions <strong>and</strong> personal involvement as well. 88Chauhan has argued, as an early jurist in the subject, the workof Schulthess, a Swiss Publicist, written in German, is worthmentioning as the first work in this regard. In the Englishlanguage, the earliest contribution (book) was made by Smithwhich is The Economic Use of <strong>International</strong> Rivers 1931. 89Chauhan further contended that Berber, Gieseke, Jaeger,Caponera <strong>and</strong> himself are well-known writers <strong>and</strong> jurists on thesubject. He quoted Berber as saying that “internationalagreements are the best <strong>and</strong> most suitable means of settlementof IWL disputes.” 90Although learned experts have not been unanimous in theirviews pertaining to the rules of IWC, the majority are of theview that the reasonable <strong>and</strong> equitable utilisation approach isthe major rule of the area. It must be borne in mind that theapplication of the principles could be different in view of thesocio-economic, technical, legal, geographical <strong>and</strong> politicalcircumstances. This does not mean, however, that the norms orprinciples should different. For example, a upstream country Acould divert a significant quantum of the waters of a river inorder to fulfil the food dem<strong>and</strong> of millions of people living in it87 Most of them made their contribution through their writings on thesubject <strong>and</strong> through the Institute of international <strong>Law</strong>, the adoption ofthe Helsinki rules <strong>and</strong> in the resolution of the Indus river treatybetween India <strong>and</strong> Pakistan.88 A. K. Biswas, "Indus Water Treaty: the Negotiating process" (1992) in17 WI, p. 209.89 Supra note 22, pp. 61-63.90 Ibid.though it might curtail the recreational use of a downstreamstate B, but the same amount of water extraction from an IWCcould be denied in similar circumstances, if it hampered thedrinking water source of millions of people in State B, (even ifit were beneficial to an upstream state A). The reason forhaving no consensus on reasonable <strong>and</strong> equitable utilisation isits vagueness, lack of precise definition <strong>and</strong> different use indifferent situations. As a result, there has always been aprofound division of views, while different state practices haveemerged <strong>and</strong> different solutions on the issues have beenprovided. Nonetheless, the most respected <strong>and</strong> recognisednorms have been developed with regard to reasonable <strong>and</strong>equitable utilisation. This fact has been confirmed by theUNCIW, the judgement of Gabcikovo-Nagymaros case by theICJ 91 <strong>and</strong> other state practices.<strong>International</strong> watercourses are regulated by IWL. For states, asmembers of the international community <strong>and</strong> subject tointernational law, 92 their behaviour regarding the use <strong>and</strong>sharing of IWC has determined several practices in the arena.The best practices, which equally address their commoninterests based on equity <strong>and</strong> fairness, are largely appreciated inthe international arena. As a result, these practices havereceived unanimous acceptance <strong>and</strong> are largely followed byothers states. Basically, the undisputed, well-recognised, <strong>and</strong>reasonable exercises of states could later take the form ofcustomary international law. 93 Nonetheless, it could beasserted that such practices should be addressed in a mannerthat is not so contentious that states would be reluctant to adoptit. 9491 37 ILM (1998), pp. 162-202.92 Wimbledon case, PCIJ Reports, series A. No 1-7, p. 25.93 A. Elizabeth Roberts, "Traditional <strong>and</strong> Modern Approach toCustomary <strong>International</strong> <strong>Law</strong>: A Reconciliation” (2001) in 95 AJIL,pp. 757-791.94 J. Patrick Kelley, “The Twilight of Customary <strong>International</strong> <strong>Law</strong>”(2000) in 40 VJIL, pp. 451-457.
54 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 55A United Nation's study in 1978 has showed that there are 261international rivers. 95 With the break up of the Soviet Union<strong>and</strong> former Yugoslavia, the number has escalated further, <strong>and</strong>there are more than 300 treaty agreements regarding theallocation <strong>and</strong> sharing of such waters. Are there the samenumber of practices <strong>and</strong> principles developed so far? Theanswer is obviously no; it is not possible to enunciate a newprinciple in each agreement. As far as the state practices areconcerned, two principles have been developed, the principlesof 'equitable utilisation' <strong>and</strong> ‘no harm rule’. They are acceptedin most of the state practices as the basic norms of anynegotiation. 96 It is, therefore, argued that the increasedinteraction <strong>and</strong> interdependency of states has forced IWL to bemore responsive to the conflicting interests of co-riparian. 972.7 State PracticeIt is appropriate to examine some of the state practices that aresignificant to the development of this area. The Conventionbetween Sweden <strong>and</strong> Norway on Certain Questions Relating tothe <strong>Law</strong> on <strong>Watercourses</strong>, 1929 stipulates stringent conditionson alteration of the flow of waters; it requires prior agreementor consent of the other riparian state before any alteration offlow of the waters can be made. 98 As demonstrated earlier,from the observations of case law analysed above, states areobliged to use an IWC in such a way that shall not cause any95 Register of <strong>International</strong> Rivers, (1978) UN, Geneva, p. 3.96 Supra note 7 p. 215-230; also see S.C. McCaffrey & M. Sinjela, “The1997 United Nations Convention on <strong>International</strong> <strong>Watercourses</strong>”(1998) in 92 AJIL, p. 99.97 Moermond III, & J. O. Shirley Erickson, "A Survey of the<strong>International</strong> <strong>Law</strong> of Rivers" (1987) in 16 DJIL&P, pp. 139-159.98 Supra note 36, p. 56. Article 62 of the (1929) treaty between Sweden<strong>and</strong> Norway provides that without consent any diversion is notallowed. This provision, however, was not applied in the Lake Lanouxjudgement as evaluated earlier.detrimental or adverse affects to other riparian states. Thenotion, in fact, has become the rule of customary internationallaw as seen above in Gavcikovo-Nagymaros judgment <strong>and</strong>Article 5 of the UNCIW.A similar arrangement in the treaty of 1933 between Brazil <strong>and</strong>Uruguay provides half of the waters to each party. If anyutilisation of water may cause an appreciable <strong>and</strong> permanentalteration in the rate of flow of a watercourse running along orintersecting the frontier, the state desirous of such utilisationshall not carry out the necessary work until it has concluded anagreement with the other state. 99 It must, therefore, be borne inmind that through co-operation, negotiation <strong>and</strong> agreement anyproblems can be settled <strong>and</strong> conflicts resolved to thesatisfaction of conflicting states. If we carefully examine theprovisions of water sharing treaties, stipulations of suchconditions are common in most of the instruments.Such prohibition has become an indispensable part ofmultilateral conventions. The General Convention Relating tothe Development of Hydraulic Power Affecting More than oneState, 1923, Article 4, limits the right of a co-riparian in the useof waters flowing through its territory by requiring the consentof the other co-riparian which may have caused serious injurywith prejudice to any other contracting state. 100 However, itshould not be inferred that these provisions are against theconcept of equitable utilisation, because the concept impliesthat if a use inflicts injury or harm, this itself falls in thecategory of unreasonable <strong>and</strong> inequitable utilisation.Eventually, the instrument corresponds to both principles ofequitable utilisation <strong>and</strong> the no harm rule. The Seventh<strong>International</strong> Conference of American States 1933 alsopronounced the principle of limited sovereignty in consequenceof which no state may, without the consent of the other riparian99 Ibid. p. 125.100 Supra note 57, p. 46.
56 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 57state, introduce into a watercourse of an international character,for industrial or agricultural exploitation of their waters, anyalteration which may prove injurious to the other state. 101 Theconference further restricted works of industrial or agriculturalexploitation, which resulted in injury to the free navigationthereof, irrespective of the nature of the river, whethersuccessive or contiguous. This conference had endorsed theconcept that the state must be restrained from inflicting anyharm to the other riparian when it is utilising its own portion ofwater in an IWC.The Madrid Declaration 1911, a resolution of the Institute of<strong>International</strong> <strong>Law</strong> (ILI), an unofficial body whose declarationsare not legally binding but could constitute ‘soft law’ in thearea, affirmed the physical interdependence of riparian states insuch a way as to exclude a regime from complete autonomy onthe part of any state in the exploitation of water resources. 102The rules explicitly prohibit that in the boundary water, anystate may, without the consent of the other, <strong>and</strong> without aspecial <strong>and</strong> valid legal title, make or allow any alteration. If it isdetrimental to the bank of the other state <strong>and</strong>, in the case ofsuccessive water, all alterations injurious to the water areillegal. Moreover, international resolutions adopted by severalinstitutions (ILI, ILA etc), even though they bear no direct legalsanction, provide that the states in an IWC cannot use the101 Ibid. pp. 203-205.102 Ibid. p. 274, Article II of the <strong>International</strong> Regulation regarding the useof <strong>International</strong> <strong>Watercourses</strong> for Purposes other than navigation,(Declaration of Madrid 1911): “I. The point where this stream crossesthe frontiers of two states, whether naturally, or since timeimmemorial, may not be changed by establishment of one of the stateswithout the consent of the other. II. All alteration injurious to thewater, the emptying therein of injurious matter (from factories, etc) isforbidden; III. No establishment (especially factories, etc) is forbidden;III No establishment (especially factories utilising hydraulic power)may take so much may take so much water that the constitution,otherwise called the utilizable or essential character of the stream shall,when it reaches the territory downstream, be seriously modified.”waters by ignoring others’ rights to it. However, this does notmean that states are prohibited to utilise their common sharedresources. They must acknowledge a duty to refrain fromcausing any detrimental effects. Each co-riparian is entitled to areasonable <strong>and</strong> equitable share in the beneficial uses of thewaters. In order to examine the fundamental rules on the areathat were developing from state practice, it is imperative toevaluate some l<strong>and</strong>mark treaties.The above section demonstrates that in bilateral as well asmultilateral practice, states are entitled to use successive as wellas contiguous river water in such a way that the right over thewaters corresponds with the obligation that such use should notcause injury or harm in any way. If harm <strong>and</strong> injury werecaused, such harm or injury ought to be averted, mitigated, <strong>and</strong>eliminated. Alternatively, reparation could be one of theoptions in such a circumstance. In fact, these instruments laidthe ground for the further development <strong>and</strong> codification of thisarea.2.7.1 Boundary Water Treaty 1909 USA-CanadaOutst<strong>and</strong>ing disputes in North America over the sharing <strong>and</strong>allocation of waters <strong>and</strong> benefits therefrom were resolvedthrough the conclusion of this treaty between USA <strong>and</strong> Canada.The most fundamental provisions of the treaty are as follows: 103An agreement over the use of boundary waters was made inorder to develop them for mutual benefit. Both states reservetheir exclusive jurisdiction <strong>and</strong> control over the waters withintheir territory. An <strong>International</strong> Joint Commission (IJC) wasestablished, which is responsible for facilitating mutualunderst<strong>and</strong>ings for the overall implementation of the treaty.Equal <strong>and</strong> equitable rights on the boundary waters are providedto each state. Special arrangements were made for theapportionment of the Niagara River on a different basis.103 Supra note 36, pp. 72-74.
58 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 59Without approval of IJC, no obstruction or the works onboundary waters was made possible. The dispute on the St.Mary <strong>and</strong> Milk River flowing across the boundary was settledon the basis of existing uses as agreed by the parties.Article II, which resembles the Harmon Doctrine, providesexclusive rights over the diversion of the rivers to the parties. 104It also provides that within their territory the watercourse statescan utilise waters as they please. However, arrangement hasbeen made that if such a diversion caused any harm or injury,the injured party would be entitled to the same legal remediesas if such injury took place in the country where such diversionor interference occurs. The Article states:"Utilisation <strong>and</strong> diversion of waters of rivers flowinginto boundary waters, as well as of waters ofsuccessive rivers. Respect for acquired rights withregard to navigation. Each party reserves for itself theexclusive jurisdiction <strong>and</strong> control over the use <strong>and</strong>diversion, whether temporary or permanent, of allwaters on its own side of the line which in theirnatural channels would flow across the boundary orinto boundary waters; but it is agreed that anyinterference with or diversion from their naturalchannel of such waters on either side of boundary,resulting in any injury on the other side of theboundary, shall give rise to the same rights <strong>and</strong> entitlethe injured parties to the same legal remedies as ifsuch injury took place in the country where suchdiversion or interference occurs; but this provisionshall not apply to cases already existing or to casesexpressly covered by special agreement between theparties." 105104 Supra note 23, p. 221.105 Supra note 36, p. 73.It must be acknowledged that during the negotiations on theColumbia River Treaty, Canada had attempted to invoke theprovision <strong>and</strong> bargained to divert the Columbia Rivers waterinto the Fraser River <strong>and</strong> to the ocean, which was flatly refusedby the United States. However, this argument was regarded asthe best tool to make the USA agree with the Canadianproposal on the said treaty. This example shows how stateschange their position when it appears that certain provisions ofa treaty could be used against their interests. Such is theimportance of bargaining power of a state in order to make theother state agree with it. It has been argued that the USA agreedto pay the downstream benefits to the Canadian wateraccumulation after the later plan to divert the water ofColumbia River into the Fraser River for Canadian absoluteuse. 106 However, it must be borne in mind that geographically,Canada is both in an upstream <strong>and</strong> downstream position.2.7.2 The Treaty of the Colorado & Lower Gr<strong>and</strong>e,1944 USA-MexicoThis treaty was also the result of a long <strong>and</strong> complicateddispute resolution effort between the United States <strong>and</strong> Mexico.The treaty provision 107 provides arrangements for the utilisationof the waters of the Colorado <strong>and</strong> Tijuana rivers, <strong>and</strong> of theRio-Gr<strong>and</strong>e (Rio Bravo). 108 The treaty was the most complete<strong>and</strong> satisfactory arrangement for the use of those waters byfixing <strong>and</strong> delimiting the rights of the two countries. However,the treaty provision adopted the notion of equitable utilisationregardless of the fact that the USA had taken an extremeposition in the negotiation but later changed her positionrecognising Mexico’s equitable share in these shared resources.It is the best example of cooperative <strong>and</strong> equitable sharing of106 R. W. Johnson, “The Columbia Basin”, in A.H. Garretson, et al (eds),The <strong>Law</strong> of <strong>International</strong> Drainage Basins, New York: Oceana Pub.,1967, pp. 201-211.107 Supra note 36, pp. 80-83.108 3 UNTS 995, p. 314.
60 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 61water between a mighty <strong>and</strong> weak neighbour whereby the treatyensured Mexico’s reasonable <strong>and</strong> equitable share.2.7. 3 The Nile River Treaty, 1929 & 1959 Egypt-SudanThe first treaty safeguarded Egypt's existing <strong>and</strong> historic rights<strong>and</strong> gave all of the benefits to her, neglecting Sudan <strong>and</strong> sevenother upper riparian states’ legitimate rights over the waters ofNile. Although, this earlier treaty was concluded under theBritish colonial regime both in Egypt <strong>and</strong> Sudan, it protectedEgypt’s interest at Sudan's cost over the shared water resources.The most striking issue in both treaties is that although there arenine riparian states within the Nile watercourses, the treaty wasconcluded only between two co-riparians. 109 After thedecolonisation of Sudan, she rejected outright the earlier treatystating that it had been made by an alien power, not by thelegitimate representatives of Sudan. As a result, a new treatywas concluded. This treaty protected some interests of Sudan,which had not been covered by the earlier one. However, it stillrecognised the historic rights of Egypt. The main features of thearrangement involve sharing on the basis of the volume ofwater, whereby Sudan received 4 billion cubic metres (CM),<strong>and</strong> Egypt 48 billion CM.The case of the Nile River is extreme in IWL. The fact is thatEgypt did not contribute any waters from her territory. UnlikeEgypt, Ethiopia which contributes most of the waters in BlueNile, the main tributary of the Nile has been prohibited fromutilising the Blue Nile waters even within her own territory. 110Egypt has been continuously using these waters since timesdating back to the ancient Nile civilisations. In the givencircumstances, utilisation of the waters by the upper riparianstates could be a severe blow to Egypt <strong>and</strong> she had already109 Supra note 36, p. 65.110 T. Naff & R. C. Matson, Water in Middle East: Conflict or Cooperation,Colorado: Westview Press, 1984, pp. 1-16.declared that such utilisation would not be acceptable to her. 111Moreover, Egypt had declared that to deprive her of thesewater rights was to prepare for war with her. 112 In this treaty,the principle of no harm <strong>and</strong> Egypt's prior appropriation hasbeen heavily advocated <strong>and</strong> the principle of equitableutilisation has been largely ignored.The fact is that Egypt managed to develop a huge network ofirrigation canals through a gigantic barrage in order to useevery drop of water of the Nile. As the western governments<strong>and</strong> the World Bank refused to finance this work because ofthe riparian issues, the then Soviet Union assisted technicallyas well as financially in order to carry out such a gr<strong>and</strong>ioseproject, ignoring the interest of other eight riparians in the Nilewaters. Ethiopia <strong>and</strong> others are not able to use this water,despite the fact that they are entitled to their share of it,because international assistance is required in order to developany project with no objection from other riparians includingEgypt, which naturally would object to the proposal on thegrounds of historic use. 113 In this circumstance, the principleof equitable utilisation has been subordinated to the no harmrule, which is being advocated by Egypt. However, recentlyEgypt <strong>and</strong> her upstream states have been working together toachieve a fair, just <strong>and</strong> equitable utilisation of these waters111 S. E. Smith & Hussein M. Rawly, "The Blue Nile: Potential forConflict <strong>and</strong> Alternatives for Meeting Future Dem<strong>and</strong>" (1990) in 15WI, p. 220.112 N. Kliot, Water Resources <strong>and</strong> Conflict in the Middle East, London:Routledge, 1994, p. 68.113 A. H. Garretson, “The Nile Basin”, in A. Garreston et al (eds), The<strong>Law</strong> of <strong>International</strong> Drainage Basins, New York: Oceana Pub., 1967,pp. 275: The World Bank <strong>and</strong> the western government refused toprovide loans <strong>and</strong> other assistance in developing the Aswan dam in1965. It was because the riparian issue was not resolved.
62 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 63with the World Bank (WB), United Nations DevelopmentProgramme <strong>and</strong> other bilateral donors assisting these efforts. 1142.7.4 The Indus Water Allocation Treaty, 1960 India-PakistanThis dispute was inherited from the time of unified India.However, the Indus treaty was concluded between the tworival states after the conflict over the consumptive use of waterof the Indus basin. This treaty was to resolve the problemscreated after the temporary interruption of water to Pakistanafter the partition of India. The main elements of theagreement were: 115 All the waters of the eastern rivers, theSultej, Beas, <strong>and</strong> the Ravi are made available for theunrestricted use of India <strong>and</strong> the western rivers the Indus,Jhelum <strong>and</strong> Chenab are made available for the unrestricted useof Pakistan.The canal structures had fallen in Indian Territory leavingPakistan without such an irrigation network. In order to enablePakistan to construct a huge irrigation network, Indiacontributed £ 62,000,000 <strong>and</strong> a substantial amount of moneywas provided from the World Bank, USA, UK, Germany <strong>and</strong>Australia to construct facilities inside Pakistan. The principlesadopted to settle this complex dispute, i.e. reasonable <strong>and</strong>equitable utilisation of the waters, to the satisfaction of bothstates, has major significance in the development of this area<strong>and</strong> the preservation of peace <strong>and</strong> security. However, actualallocations of the waters were 80 % to Pakistan <strong>and</strong> 20 % toIndia. It was not an equal but equitable division, <strong>and</strong> it has beenseverely criticised in India on the ground of inequality <strong>and</strong>favour to Pakistan. 116 From the viewpoint of needs (Pakistan’shuge population relying on the waters of these rivers) <strong>and</strong> prioruse (Pakistan’s use was greater than India) <strong>and</strong> the otherconsiderations spelled out in Article 6 of the UNCIW, thisdivision of the rivers has been regarded as equitable. The ruleof equitable utilisation dictated this resolution. It is worthmentioning that the treaty refused to take account of the‘drainage basin’ or ‘watercourse’ concept considering thewhole Indus a unit. Rather the rivers were divided between twostates. In recent months, in Jammu <strong>and</strong> Kashmir, an Indian statelegislature adopted a proposal to repudiate the treaty <strong>and</strong> askedthe federal government to negotiate it again, safeguardingIndian interests which were ignored earlier. 117 However, theresolution is regarded as one of the praiseworthy assignmentscarried out by the World Bank in such a complex water issue.2.7. 5 The Columbia River Treaty, 1961 USA-CanadaThe treaty primarily covered power development <strong>and</strong> floodcontrol aspects of the Columbia River Basin. Of the principlesestablished by this treaty, 118 some of them are regarded as thebasic foundation of IWL in regard to the co-operative <strong>and</strong> jointdevelopment of a shared river for mutual benefit. However, it isstated in the treaty that it would not be construed a precedent ora general principle of law. Rather, they thought that thesespecial arrangements cover the peculiar circumstances in theColumbia River basin between the two states.In spite of the above, this treaty succeeded in enunciating somemilestone principles, norms <strong>and</strong> criteria for the equitable <strong>and</strong>reasonable utilisation of IWC. Particularly, the idea ofdownstream benefits was first developed <strong>and</strong> recognised, costs114 J. Brunnee & S. J. Toope, “The Changing Nile Basin Regime: Does<strong>Law</strong> Matter ?” (2002) in 42 HILJ, pp. 105-159.115 419 UNTS, p. 100; also see R. K. Baxter, "The Indus Basin" in A.Garretson, et. al (eds), The <strong>Law</strong> of <strong>International</strong> Drainage Basins, NewYork: Oceana Pub., 1967, pp. 443-478.116 Supra note 22, pp. 280-285.117 Supra note 41, p. 3.118 Supra note 36, pp. 76-78; also see C. B. Bourne, “The Columbia RiverControversy” (1959) in 37 CBR, pp. 444-472. Generally, the benefitsaccrued from the works upstream are called ‘downstream benefits’.
64 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 65<strong>and</strong> benefits were equally shared <strong>and</strong> the project undertakenjointly. The Columbia River was regarded as a unit <strong>and</strong>developed along those lines. The concept could be followed inseveral situations including the Indo-Nepal water issues <strong>and</strong>other circumstances as well. In fact, Nepal is always insistingon following the concept envisaged in the above treaty, which,she believes, would provide her the opportunity to have areasonable <strong>and</strong> equitable entitlement to her huge waterresources <strong>and</strong> it is largely advocated that the said treaty couldbe the basis to resolve all outst<strong>and</strong>ing issues with her riparianstates. 119 Both Canada <strong>and</strong> Nepal have huge water resources, itsutilisation requires cooperation from downstream neighbours,USA <strong>and</strong> India, by paying benefits they accrued from the workof upstream countries. This is because in order to maximisebenefits, construction of dams <strong>and</strong> reservoirs in upstreamcountries is essential. That causes inundation of l<strong>and</strong>,resettlement of people, extinction of flora <strong>and</strong> fauna etc, butprovides huge benefits downstream. These include floodbenefits, hydropower, irrigation <strong>and</strong> others. The benefits shouldbe shared mutually. Canada <strong>and</strong> the United States were able tomaximise such benefits by agreeing to share both costs <strong>and</strong>benefits from the work among themselves. The situation overthe Columbia River basin <strong>and</strong> Nepal <strong>and</strong> India’s problem bothoccur because of disputes as to the sharing of downstreambenefits. Such problems can be resolved by adopting thedownstream benefit principle, <strong>and</strong> the national interests of bothupstream <strong>and</strong> downstream states could be accommodated,creating ‘win-win’ situations. The treaty has set up a newdimension on how a relatively weak neighbour was enabled tomake agreement with a powerful nation in which equity <strong>and</strong>fairness were obtained for both.2.7.6 Lesotho-Highl<strong>and</strong> Treaty 1986, Lesotho-SouthAfricaThe creation of the Lesotho Highl<strong>and</strong> Development Authorityunder the Lesotho Government was an undertaking responsiblefor executing the overall provisions of this water transfer treaty.Under the provision, an annual payment of $ 13.6 million ismade by South Africa to Lesotho for transferring the waters tothe former as a royalty over the Lesotho resources. A JointTechnical Commission <strong>and</strong> other commissions have been set upto frame policies <strong>and</strong> implement the provisions of the treaty.Electricity generation of 73.4 MW in 1995 <strong>and</strong> 276 MW up to2001 for Lesotho are the benefits set against the cost incurredby South Africa. Lesotho received WB financing for thosehydroelectric projects. In lieu of the water transfer to South-Africa, she paid money to Lesotho.This treaty, which could be a unique type of sharing of benefitsby transferring waters of an entire river, represents bothinterests <strong>and</strong> benefits. Boadu has said that the concept drawnfrom the 'transaction costs literature' ( “The costs associatedwith the process of buying <strong>and</strong> selling. These are small frictionsin the economic sphere that often explain why the price systemdoes not operate perfectly.” 120 ) was used to analyse thegovernance structure of the trans-boundary water treatybetween the two states. In the context of international treaties,‘transaction costs’ refers to those costs associated withinteractions between nations. These include “information,contracting <strong>and</strong> policing costs (ICP)”. 121 However, theopposition party in South Africa criticised the treaty, calling it‘surrender of sovereignty to a much smaller country’.119 B. G. Verghese, Waters of Hope, New Delhi: Oxford IBH Pub., 1990,p. 345.120 G. Bannock, R. E. Baxter & E. Davis, The Penguin Dictionary ofEconomics, London: Penguin Books, 1992, p. 426.121 F. O. Boadu, "Rational Characteristics of Trans-boundary WaterTreaties: Lesotho Water Transfer Treaty with the Republic of SouthAfrica" (1998) 38 NRJ, pp. 381-403.
66 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 672.7.7 Treaty for Amazon Co-operation, 1978 Bolivia-Brazil-Columbia-Guynana-Peru -Surinam <strong>and</strong>VenezuelaThe treaty aimed to undertake joint action <strong>and</strong> efforts topromote the harmonious development of Amazonian territoriesin such a way that these collective actions produced equitable<strong>and</strong> mutually beneficial results <strong>and</strong> also achieved thepreservation of the environment. The contracting parties wereto make efforts aimed at achieving rational utilisation of theresources. 122 This shows that the extra benefits could accruefrom a resource that was developed by a group of ripariannations considering a river as a unit for mutual benefit. Underthe treaty, several water resource projects were implemented.The arrangement covered the concept of equitable utilisation<strong>and</strong> attainment of maximum benefits for all states.2.7.8 Agreement on the Environmentally SoundManagement of the Common Zambezi RiverSystem 1987, Southern Africa DevelopmentCommunity (SADC)This agreement was concluded between Angola, Botswana,Congo, Lesotho, Malawi, Mauritius, Mozambique, Namibia,Seychelles, South-Africa, Swazil<strong>and</strong>, Zimbabwe-Tanzania <strong>and</strong>Zambia. The project is being executed by the establishment ofan inter-governmental monitoring <strong>and</strong> co-ordinating committee,a co-ordinating unit <strong>and</strong> a Trust Fund under the Council ofMinisters of SADC or through an institutional <strong>and</strong> financialarrangement under this Trust Fund. 123 The aims of theagreement are to manage, share <strong>and</strong> preserve anenvironmentally sound <strong>and</strong> comprehensive plan in the Zambezi122 17 ILM (1978), pp. 1045-1053. http://www.transboundarywaters.orst.edu/projects/cases/Lesotho.html123 27 ILM (1988), pp. 1109-1143; also see www.eia.doe.gov/emau/cabs/sadc.html.river basin for the mutual benefits of its members. They haveestablished the South-African Power Pool (SAPP) aiming tolink SADC member states into a single electricity grid in whichmember states exchange electrical power. It also provides agood example of multilateral river basin development throughthe involvement of all riparian watercourse states, because itsimplementation is underway <strong>and</strong> leading towards a cooperative<strong>and</strong> successful completion. The parties have also negotiated aprotocol in 1995, revised in 2002, for the effectiveimplementation of other projects for common benefit. It is oneof the good examples of multinational efforts to attain asustainable, <strong>and</strong> equitable utilisation <strong>and</strong> sharing of commonresources.2.7.9 Utilisation of the Parana River, Guaira Falls <strong>and</strong>Ygazu River, 1973 Paraguay <strong>and</strong> BrazilThis Treaty, also referred to as the Treaty of ITAIPU, wasconcluded between the said states for the exploitation of thehydroelectric resources of the Parana River, including theGuaira falls up to the mouth of the Ygunazu River. 124 Itincludes the world’s second biggest hydropower plant with acapacity of 12,500 MW. The following principles are envisagedin the treaty:Creation of ITAIPU, a bi-national entity was formed out ofequality of rights <strong>and</strong> obligations with the scope of carrying outhydroelectric exploitation. ITAIPU is jointly <strong>and</strong> equallyowned by the two nations, with 50 % of the capital owned byElectrobras, the Brazilian federal power authority, <strong>and</strong> ANDE,the Paraguan national power agency. Either state is entitled to124 9 ILM (1980), pp. 615-617; also see S. B. Pun, “L<strong>and</strong>locked <strong>and</strong>Hydropower Rich Paraguay, Bhutan <strong>and</strong> Nepal: Cases of Lamed Duck,Flying Geese <strong>and</strong> Sitting Duck” in NepalNet, (an electronic networkingfor sustainable development in Nepal), pp. 1-4. Seewww.solar.coppe.ufrj.br/itaipu.html.
68 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 69purchase energy not used by the other for its own consumption.This treaty provides one of the successful implementations of ajointly developed project through the involvement of bothriparian states for their mutual benefit. Countries of south Asianeeds to learn from the positive <strong>and</strong> negative implications ofthis treaty.2.7.10 The Treaty of Peace 1994 Israel, Jordan <strong>and</strong>Palestine Liberation Organisation (PLO)This Treaty is a part of an integrated Peace Treaty to resolvethe outst<strong>and</strong>ing problems between Arab states <strong>and</strong> Israel, 125 inwhich efforts to resolve the outst<strong>and</strong>ing conflicts on sharing<strong>and</strong> allocation of common water resources were made. Article 6<strong>and</strong> Annex 2 deal with the sharing <strong>and</strong> allocation of waters <strong>and</strong>the rights <strong>and</strong> duties of both states in relation to the surface <strong>and</strong>groundwater resources on the common terminus. It provides forthe allocation of waters in each of the seasons, methods toincrease the volume of water <strong>and</strong> clearly prohibits thedetrimental use of such shared resources, envisaging theguarantee of quality, <strong>and</strong> safeguards against pollution <strong>and</strong>contamination of the waters. Later, Israel, Jordan <strong>and</strong> the PLOconcluded an agreement, under the auspices of NorwegianPeace initiatives, on allocation of waters from their sharedresources, which provides co-operative, sustainable <strong>and</strong>equitable use of surface as well as groundwater. 126 Theavailability of the water in this region is very scarce becausethis area is located in arid geographical terrain; its shortageposes a threat to long-term peace <strong>and</strong> security.2.7.11 Co-operation for the Sustainable Developmentof the Mekong River, 1995 Thail<strong>and</strong>, Laos,Cambodia <strong>and</strong> the VietnamIt is one of the successful multilateral treaties that conceivednorms of reasonable, equitable <strong>and</strong> sustainable use of commonresources in a co-operative manner, thus implementing therecognised norms of customary international law. Thisagreement, consisting of 42 Articles, is the best example of thecomprehensive <strong>and</strong> integrated development of the lowerMekong river basin jointly by the watercourse states. 127 Thetreaty provisions have asserted the holistic <strong>and</strong> integrated use(hydropower, irrigation, <strong>and</strong> other uses together) of the watersof the Mekong River. However, it could be argued that theupper riparian China had neither been involved in thearrangement nor recognised this agreement. However, her firmst<strong>and</strong> on territorial sovereignty principles revealed herwillingness to maintain this principle. 128 China had, in theupper reach of the Mekong, separately developed severalprojects within her territory <strong>and</strong> ignored the interests of otherdownstream states.The basic features of the treaty include the following.Minimum monthly natural flow is guaranteed. In order toexecute the project, the Mekong Commission created <strong>and</strong> maderesponsible under it, a secretariat <strong>and</strong> joint committeesrepresented by all member states. Co-operation is based onreasonable, sustainable <strong>and</strong> equitable sharing <strong>and</strong> utilisation tothe satisfaction of all member states <strong>and</strong> attenuated according toenvironmental considerations. All works in the basin are coordinatedby the Commission. The United Nations organsESCAP, UNDP, ADB <strong>and</strong> the World Bank have beenproviding assistance to the Mekong Commission to implement125 34 ILM (1995), pp. 43-54.126 36 ILM (1997), pp. 763-770.127 34 ILM (1995), pp. 864-880.128 During debate on UNCIW Gao Feng had advocated this principle.Press Release GA/9248.
70 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 71the treaty provisions. 129 Furthermore, it furnishes a uniqueexample of cooperation between Thail<strong>and</strong> <strong>and</strong> Laos, in whichthe former is guaranteed not only purchase of electricity to begenerated by the latter, <strong>and</strong> a sovereign guarantee to theinternational capital market <strong>and</strong> banks to provide loan money todevelop the Laotian projects. 1302.7.12 Treaty on Sharing of the Ganges Waters atFarakka, 1996 India-BangladeshThe Treaty, which replaced the earlier 1977 treaty, has beeninstrumental in resolving the outst<strong>and</strong>ing <strong>and</strong> chronic disputeover the Ganges water in an equitable <strong>and</strong> reasonable manner,which reconciles their mutual interests. 131 The main features ofthe said arrangement are as follows:The quantum of waters released by India to Bangladesh will beat Farakka. Both governments will be entitled to a 50% of share(without any prejudice to the existing uses of eachgovernment). Minimum flows to both states during the dryseason are guaranteed a prescribed quantum. Arrangement of ajoint Technical Committee <strong>and</strong> a Joint River Commission hasbeen made in order to execute the provisions of the Treaty (inequal representation by both governments). Very long,contentious <strong>and</strong> complex conflicts between the two neighbourshave been resolved. However, there is still some dissatisfactionfrom the Bangladesh side over the allocation of water,particularly in the dry season: in the event of unexpectedlydiminished flow, there is no provision to regulate it, as it had129 S. M. A. Salman & L. B. De Chzournes (eds), “Conclusion” in<strong>International</strong> <strong>Watercourses</strong>: Enhancing Cooperation <strong>and</strong> ManagementConflict, Washington DC: The World Bank Technical Paper No 414,The World Bank, 1998, p. 170.130 P. Chomchai, “Management of Transboundary Water Resources: ACase study of the Mekong” in M. I. Glassner (ed), The United Nationsat Work, Westport CT: Praeger, 1998, pp 245-255; also seewww.mrcmekong.org131 Supra note 126, pp. 519-527.been set out in the previous agreement of 1977. Moreover,India also agreed to a plan to construct a Ganges Barrage 20 kminside of Bangladesh territory to hold up the floodwaters fordry season use. This was previously refused by India statingthat the back up of water would be detrimental. This was amajor breakthrough achieved by this treaty. 132 The maincharacteristics are based on equitable sharing of waterresources <strong>and</strong> adoption of no harm to either state in using thewaters of their common rivers.2.8 The Impact of Water Issues on BilateralRelationsFrom the state practice explained above, it is clear that watersharing <strong>and</strong> allocation issues have profoundly influenced thebilateral relations of states <strong>and</strong> also inter-state relations within afederal set up. 133 Water matters directly influence the relationof Egypt with her upper-riparian states. In south Asia, India'srelations with Bangladesh, Bhutan <strong>and</strong> Nepal are largelyinfluenced by water 134 issues. In North America, relationsbetween Canada <strong>and</strong> USA, <strong>and</strong> USA <strong>and</strong> Mexico areinfluenced by water. Water has been described as the oil of the21 st century <strong>and</strong> it is predicted that if the problem of watersharing <strong>and</strong> allocation is not sorted out in a timely way, asargued by several authors, a third world war is inevitable. 135 Asdescribed earlier, in the water dispute between Arizona <strong>and</strong>132 S. M.A. Salman, “Sharing the Ganges Waters Between India <strong>and</strong>Bangladesh: An Analysis of the 1996 Treaty” in S. M. A. Salman &L. B. De Chzournes (eds), <strong>International</strong> <strong>Watercourses</strong> : EnhancingCooperation <strong>and</strong> Management Conflict, Washington D.C: The WorldBank Technical Paper No 414, The World Bank, 1998, pp. 143-151.133 A. Utton, "In search of an Integrating Principle for Inter-State Water<strong>Law</strong>: Regulation versus Market Place" (1985) in 25 NRJ, p. 992.134 T. <strong>Upreti</strong>, “The Perspective on Downstream Benefits" the Kathm<strong>and</strong>uPost, 24 June 2000, p. 6.135 Http//www.worldbank.org/; Lecture by J. Wolfensohn in November11, 1999. The RAF Penrose Memorial Lecture at the AmericanPhilosophical Society, Philadelphia.
72 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 73California, the governor of Arizona sent her troops to avert thewater project of its contestant, California. Later, the problemwas solved by the decision of the Supreme Court of the USA in1963. 136 There are several issues on water sharing <strong>and</strong>allocation in India, within interstate disputes, which areincreasing political tensions <strong>and</strong> challenging the federalstructure. 137 Similar problems exist between Punjab <strong>and</strong> Sind inPakistan. Some of the conflicts have been resolved by longeffort <strong>and</strong> care <strong>and</strong> some still need to be resolved to thesatisfaction of the contestant states. Such problems exist notonly in one country or continent, but also wherever water isscarce <strong>and</strong> its use under stress, particularly in developingcountries.With regard to the Israel-Arab tension, in which one of themain reasons is always water issues, 138 the Israeli Governmentthreatened the Arab water diversion plan on several occasions,stating that diversion of the head waters of the Jordan Riverwould constitute an outright attack on one of Israel's means oflivelihood, <strong>and</strong> would be regarded as a threat to peace. In thesame line, Arabs also consider Israel's water plan to be againsttheir very existence. Further to the escalation of the dispute bythe Arab water plan, Israel again warned that water is aquestion of life for her <strong>and</strong> that she would regard any attempt toprevent it from using the water it had been allotted under theJohnston United Plan as a violation of its very right to exist (theJohnston Plan was prepared by a US representative to resolvethe water dispute between the Jews <strong>and</strong> the Arabs). The issue is136 Supra note 20, pp. 158.137 Staff, “Karnataka Boycotts Cavery Meet” , The Times of India 18 May2000, The meeting was called by the Indian PM on the request ofanother contestant state Tamil Nadu, which was boycotted by theformer, alleging that the centre is working in haste. Also see, “NoConsensus on Draft Water Policy” , The Times of India 8 July 2000.Southern States criticise the policy alleging it will change the powerstructure between the centre <strong>and</strong> the state <strong>and</strong> the existing watersharing arrangements between states.138 Supra note 2, p. 373.of so much significance for the existence of a state that stateshave gone to armed conflict for the sake of water. During theIsrael- Arab war of 1967, Israel annexed the Golan Heights,which is a major source of Middle-Eastern water including thatof the Jordan River. One of the main factors leading to Israel’saggression in Lebanon in 1978 <strong>and</strong> the annexation ofPalestinian l<strong>and</strong> was water. 139 However, Israel <strong>and</strong> Jordan haveconcluded a treaty regarding the sharing <strong>and</strong> division of RiverJordan water.In Asia, India <strong>and</strong> Pakistan have had a belligerent relationship;one of the reasons was the water of the Indus <strong>and</strong> the Ganges.The increasing tensions <strong>and</strong> problems in the Euphrates-Tigrisbasin with respect to water sharing issues have also resulteddisputes between Turkey, Syria <strong>and</strong> Iraq. 140 Several tensionshad escalated to the point of troop deployments along borders,but later an agreement was concluded. 141 On the basis of thatagreement <strong>and</strong> the assurance of uninterrupted water to beprovided to Syria <strong>and</strong> Iraq by upstream Turkey, tensions wereeased. It is understood that the South Anatolia project ofTurkey has severely impaired the share of water to herdownstream states. The position of Iraq is particularlyvulnerable, as she has been denied her historic uninterruptedflow of the rivers by the upstream states <strong>and</strong> 30% of arable l<strong>and</strong>139 Supra note 112, pp. 67-68; also see S. Gupta, “In Israel <strong>and</strong> Lebanon,Talk of War over Water” , New York Times, 16 October, 2002.140 Ibid. pp. 116-123; Turkish President Suleman has said that “we do notsay we should share their oil resources <strong>and</strong> they can not say that theyshould share our water resources” in G. W. Sherk, P. Wouters& S. Rochford, “Water Wars in Near Future? ReconcilingCompeting Claims for the World’s Diminishing Fresh WaterResources-The Challenge of the Next Millennium” inwww.dundee.ac.uk/cepmlp/journal/ html/article3-2.141 A. Wolf, “A Hydro Political History of the Nile, Jordan And EuphratesRivers Basin” in A. K. Biswas (ed), <strong>International</strong> Waters of the MiddleEast, From Euphrates –Tigris to Nile, Oxford: Oxford University,1994, pp. 29-37.
74 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 75has been ab<strong>and</strong>oned because of salt contamination 142 resultingfrom bad irrigation practices <strong>and</strong> non-cooperation fromupstream states.Even on the continent of Europe, until the beginning of 19 thcentury there were conflicts <strong>and</strong> disputes regarding theNavigational <strong>and</strong> Non-Navigational use of the Danube, Meuse,Seine <strong>and</strong> Rhine rivers, which were later resolved throughnegotiations <strong>and</strong> treaty-agreements. 143 Apart from this, the EEChas issued several directives with regard to fresh water <strong>and</strong> itsutilisation. 144 Until recently, there was conflict betweenHungary <strong>and</strong> Slovakia over the sharing of waters <strong>and</strong> itsbenefits from the Danube River <strong>and</strong>, even after the judgementof ICJ in relation to their case, the problem has yet to be settled.Water conflicts are mostly settled by agreements. The best wayto accommodate the interest of all watercourse states is througha balanced plan <strong>and</strong> execution of the plan. 145 However, thereare some instances of unilateral action in utilising ‘shared’resources for one’s own sake, ignoring the rights of other142 P. Brown, “Unless We Change Our Ways, the World Face Disaster, AUN Report says” The Guardian, 23 May 2002, p. 3.143 P. Costa, "The Effects of War on the Treaties Establishing the LegalRegime of the Danube" pp. 406-408 ; also see, Menno T.Kamminga,"Who can Clean up the Rhine: The European Communityor The <strong>International</strong> Rhine Commission?” in R. Zacklin <strong>and</strong> L.Caflisch (eds), The Legal Regime of <strong>International</strong> Rivers <strong>and</strong> Lakes,the Hague: Martinus Nijhoff Pub., 1981, pp. 371-373.144 For example Directives on the approximation of the <strong>Law</strong>s of theMember States relating to Detergents 1973, the Quality required ofSurfaced Water intended for the Abstraction of Drinking Water in themember state, <strong>and</strong> the Quality of Bathing Water, 1975 etc.145 D. A. Caponera, "Patterns of Co-operation in <strong>International</strong> Water <strong>Law</strong>:Principles <strong>and</strong> Institutions " (1985) in 25 NRJ, pp. 563-588. Also seeA. E. Utton “In Search of An Integrating Principle for Interstate Water<strong>Law</strong>: Regulation versus the Market Place” (1985) 25 NRJ, pp. 985-1004. Generally regulations (known as a rule) infer the rule ofequitable apportionment whilst the market place (known for beneficialuses) refers to efficient uses of waters.riparian states <strong>and</strong> to, some extent, ignoring the rules ofcustomary international law. The proposed unilateral diversionof the Jordan River by the Arabs ignored the interest of Israel(an Israeli military attack later destroyed the diversion). Israelcarried out similar unilateral use of the Jordan headwater afterthe 1967 war. The unilateral diversion of the Chicago River bythe United States ignoring Canadian interests is another breachof IWL. Furthermore, unilateral diversion of the Ganges byIndia at Farakka ignoring the interests of the then East Pakistan(Bangladesh) <strong>and</strong> temporary interruption of the Indus waters byIndia in 1948, are examples of illegal <strong>and</strong> unilateralinterventions in shared watercourses. 146 Apart from theseextreme cases, there are good examples where the spirit ofcooperation, negotiation <strong>and</strong> conclusion of an agreement haveprevailed as positive developments in the area of IWC.As Berber suggests, it is a widely recognised fact fromexperience that resolution of the water conflicts cannot alwaysbe through a court of law. 147 The appropriate way, rather, is forstates themselves to resolve the conflicts through directnegotiation <strong>and</strong> conclusion of an agreement. 148 What is more,the disputes in relation to the allocation <strong>and</strong> sharing of waterare complex issues, <strong>and</strong> resolution is only possible when theproper knowledge <strong>and</strong> expertise are addressed to such technical<strong>and</strong> complex issues. 149 Generally, courts lack suchspecialisation. In order to achieve this goal, there are146 C. B. Bourne, "Procedure in the Development of <strong>International</strong>Drainage Basin: The Duty to Consult <strong>and</strong> to Negotiate "(1972) in XCYIL, p. 214.147 F. J. Berber, Rivers in <strong>International</strong> <strong>Law</strong>, London: Institute of WorldAffairs, 1959, p.50148 Ibid. p. 272.149 Regarding the sharing; allocation, delimiting of the continental shelf<strong>and</strong> fishing issues, after the decisions of the ICJ, states themselvesresolve their differences on the basis of guidance provided in thejudgements. The Gavicikovo-Nagymaros case is also expected to beresolve along the same lines.
76 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 77constitutional <strong>and</strong> legal arrangements made in each state. Forexample, the Indian Constitution, 1948 forbade the SupremeCourt <strong>and</strong> other courts to exercise their jurisdiction over waterissues. 150 In Italy, South Africa <strong>and</strong> the Sc<strong>and</strong>inavian countriesthere are separate water courts, <strong>and</strong> water issues are beyond thejurisdiction of other courts. 151Moreover, the SADC treaty <strong>and</strong> protocol provides for aseparate water court to provide its opinion <strong>and</strong> resolve alldisputes within its jurisdiction. That is to say generally, regularcourts are not specialists in water disputes, <strong>and</strong> therefore eitherspecial tribunals or separate water courts have been constitutedin the above examples. Even in the general courts, for examplein the case of the USA, special Masters’ findings <strong>and</strong> adviceplay a vital role in the adjudication of water resources conflicts.In this context, Bourne observed that the best way of resolvingwater related conflict is through negotiation. 152 <strong>International</strong>law provides general guidelines, but states themselves mustwork according to the concept of law. In concluding thissection, state practices <strong>and</strong> treaty provisions do not providesingle rules or practice; however, the majority of such practicesindicate that equitable utilisation is the established <strong>and</strong>recognised rule in IWL. However, the area needs to bedeveloped <strong>and</strong> enunciation of rules that can be applieduniversally is yet to be developed. It is apparent that whateverprinciples have been developed so far are still inchoate. 153150 Supra note 22, p. 231, Article 262 of the Indian Constitution, 1950 <strong>and</strong>the Inter-State Waters Dispute Act, 1956 prohibit Supreme Court <strong>and</strong>other Court jurisdiction on inter-state water disputes.151 M. Fitzmaurice,"Water management in the 21st Century" in A. Anghie& G. Sturgess (eds), Legal Vision of the 21st Century: Essays inHonour of Judge C. Weeramantry, the Hague: Kluwer <strong>Law</strong>, 1998, pp.425-463.152 Supra note 65, p. 90153 Supra note 7, pp. 215-231.2. 9 <strong>International</strong> <strong>Law</strong> Reform EffortsIn this section, analysis of IWL in light of the above will bemade <strong>and</strong> several institutions efforts on codification will bemade.2.9.1 The Helsinki Rules on the Use of the Waters of<strong>International</strong> Rivers, 1966 <strong>and</strong> the ILAThese are the first rules applicable to international waterdisputes with a holistic <strong>and</strong> integrated approach. The rules,however, were adopted by a non-governmental organisation,<strong>and</strong> are not legally binding. The rules consist of six chapters, 37Articles with one Annex. Substantial principles enunciated inthe rules must be evaluated in order to appreciate them. 154 Thefirst approach, of importance, is the drainage basin approach,which has already been described in the preceding chapter. Adrainage basin is an indispensable unit regardless of thepolitical boundary. Therefore, the rules take into considerationthe interest of other states so that no state considered free to usethe waters as it pleases, undermining the interest of the others.The core of the entire rules is equitable utilisation ofinternational drainage basins which is encapsulated in ArticleIV <strong>and</strong> will be discussed later.Article V stipulates the relevant factors, determining whether acertain use does or does not constitute an equitable <strong>and</strong>reasonable use of an international basin. The details of theseinstruments <strong>and</strong> the far-reaching effects of such rules will beanalysed in the upcoming Chapter Three. Article VI embodiesthat no use is entitled to any inherent preference over any otheruse or category of uses. Article VII provides that no basin stateis to be denied the present reasonable use of the waters of aninternational drainage basin to reserve a future use of suchwaters for a co-basin state. Article VIII spells out the154 The Helsinki Rules of the ILA 1966 (fifty-two session) pp. 478-532.
78 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 79justification of an existing use in specific circumstances.Consistent with the principle of equitable utilisation, states areprohibited from acting merely as they please or against theconditions embodied in Article X. 155 Article XI stipulates that ifArticle X is violated, then such responsible states mustnegotiate, <strong>and</strong> cease to conduct themselves in a wrongfulmanner <strong>and</strong> compensate the harmed state in case of any injuryalready incurred. Chapter 4 deals with navigation; Chapter 5with timber floating; Chapter 6 relates to procedures for theprevention <strong>and</strong> settlement of disputes; <strong>and</strong> Annex A containsModel Rules for the constitution of the conciliation commissionfor the settlement of dispute. In fact many elements of the ruleswere already state practices recognised by the internationalcommunity. The Helsinki rules are the foundation for therecently adopted UNCIW with most of the principles, e.g.,principle of equitable utilisation <strong>and</strong> no harm rule, inheritedfrom it. 156The magnitude of the problems in the Nile basin, Indus,Columbia <strong>and</strong> Great Lakes in North America <strong>and</strong> Jordan wasvery serious <strong>and</strong> posed a threat to peace <strong>and</strong> security. At theoutset of these disputes, the ILA had begun work on the law155 Article X, “(1) Consistent with the principle of equitable utilisation ofthe waters of an international drainage basin, a statea. must prevent any new form of water pollution or anyincrease in the degree of existing water pollution in aninternational drainage basin which would cause substantiallyinjury in the territory of a co-basin state, <strong>and</strong>b. should take all reasonable measures to abate existing waterpollution in an international drainage basin which to such anextent that no substantial damage is caused in the territory ofa co-basin state;(2) the rule stated in paragraph 1 of this article applies to waterpollution originating:a. within a territory of the state, orb. outside the territory of the state, if it is caused by the state'sconduct.”156 C B. Bourne, "The <strong>International</strong> <strong>Law</strong> Association 's Contribution to<strong>International</strong> Water Resources <strong>Law</strong>" (1996) in 36 NRJ, pp. 160-166.governing the utilisation of international waters in 1954. 157There was a dem<strong>and</strong> for universally applicable rules with aholistic <strong>and</strong> integrated development approach from theinternational community. In such circumstances, a committeewas constituted under the chairmanship of Clyde Eagleton. Thecommittee, also known as the River Committee, submitted itsreport, which later was adopted by the ILA in Helsinki in 1966.The ILA took account of state practices around the globe,comments <strong>and</strong> observations of learned societies <strong>and</strong> thedecisions of courts <strong>and</strong> tribunals. These rules enacted by thecommittee are holistic, integrated <strong>and</strong> serve as universaljurisdiction rules. 158 Although the members of the committee orassociation did represent their nations, it was in their personalcapacity that the rules were formulated, not as governmentrepresentatives. There is a water resources committee under theILA that is still involved in developing <strong>and</strong> adopting theequitable rules of IWC. 159 Until now the Water ResourcesCommittee has been reviewing the 1966 Helsinki rules <strong>and</strong>several meetings of the ILA have taken place, e.g., London <strong>and</strong>New Delhi conferences in 2000 <strong>and</strong> 2002, reviewing theprogress. The committee has reviewed general principles ofwater management <strong>and</strong> public participation, integrating theprinciples of IWL <strong>and</strong> sustainable development. Furthermore, ithas also been incorporating modern st<strong>and</strong>ards governingnavigation on international or transboundary water, reexaminingthe principles of water administration <strong>and</strong> resolvinginternational disputes related to IWC.In the context of separate drainage basins, each state hasdifferent views. It was obvious that addressing the divergentinterests <strong>and</strong> views through a single set of universal rules was157 Ibid. p 155.158 Ibid. pp 158-164.159 Presently the committee is involved in the codification <strong>and</strong> draftingprocess <strong>and</strong> recently they held a meeting about the amendment of 1966Helsinki Rules in Vienna. See www.ila-hq.org.
80 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 81itself a complicated task for the committee. 160 To fulfil itsassignment, the ILA undertook several conferences viz.,Dubrovnik 1956, New York 1958, Tokyo 1964 <strong>and</strong> finallyHelsinki 1966, where the rules were adopted. During theendeavour, lively discussions were held amongst the membersof the committee on issues ranging from downstream <strong>and</strong>upstream benefits, issues of equitable utilisation <strong>and</strong> issues ofexisting <strong>and</strong> future uses including other aspects of allocation ofwater <strong>and</strong> sharing of benefits therefrom. Eventually, theHelsinki Rules 1966 adopted the single basin approach alongwith the main principle of equitable utilisation. 161 The drainagebasin approach constituted the primary consensus among thecommittee members at the very outset of the work, which hasbeen defined in Article II. 162The principles of equitable utilisation became the core lawthough there was strong opposition from several scholars <strong>and</strong>the basis of their criticism was 'the ideas regarding the conceptof equitable sharing are not clear <strong>and</strong> states must be free todevelop their uses in accordance with their needs.’ 163 The lackof a precise definition of equitable utilisation is also a reasonfor criticism. Nonetheless, the ILA contribution is quoted inmany treaties 164 , state practices <strong>and</strong> judicial decisions. 165 It isalso regarded as the foundation of the 1997 UNCIW. 1662. 9. 2 <strong>International</strong> <strong>Law</strong> CommissionThe idea of developing international law through therestatement of existing rules or formulation of new rules is notof recent origin. On 22 September 1924, the resolution of the160 Supra note 8, pp. 233-35.161 Ibid. pp. 236 & 249.162 YBILA (1966), pp. 484.163 Supra note 8, p. 281.164 Mekong treaty in 34 ILM, (1995), pp. 864 880.165 Supra note 22, pp. 280, 319-20.166 YBILC (1982), p. 82, YBILC (1983) p. 130.Assembly of the League of Nations created a st<strong>and</strong>ing organcalled the Committee of Experts for the progressivecodification of international law, which consisted of seventeenmembers. 167 The institution continued even after theestablishment of the United Nations. Article 13 of the Charterof the United Nations provides that:“The General Assembly shall initiate studies <strong>and</strong>make recommendations for the purpose of:a. … encouraging the progressive development ofinternational law <strong>and</strong> its codification” 168Thus, the ILC was established by the United Nations GeneralAssembly (UNGA) in 1947 169 in order to promote theprogressive development of international law <strong>and</strong> itscodification. 34 members were elected by UNGA for a fiveyears term in an individual capacity (not as staterepresentatives). 170The UNGA Resolution 2669 (XXV) of December 8, 1970recommended to the ILC to initiate works on UNCIW. Aftersustained hard work for about twenty- five years, the ILCfinally adopted the said rules in 1994 in its forty-sixth session<strong>and</strong> submitted them to the UNGA. From that time,deliberations were made by its different members, <strong>and</strong> 5Special Rapporteurs. 171 As a result of the profoundcontributions made by well-known scholars on the subject <strong>and</strong>the intense efforts of the international community, the UNConvention on Non-Navigational Uses of <strong>International</strong>167 www.un.org/law/ilc/introfra.htm168 Supra note 54, p. 1052.169 S. C. McCaffrey, "Background <strong>and</strong> Overview of the <strong>International</strong> <strong>Law</strong>Commission's Study of the Non-Navigational Uses of <strong>International</strong><strong>Watercourses</strong>" (1992) in 3 CJIEL & P, p. 18.170 II YBILC (1994), p. 15.171 Richard Kinary, Stephen Schbell, Evansen, Stephan C. McCaffrey <strong>and</strong>Rosentok.
82 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 83<strong>Watercourses</strong> was adopted on May 21, 1997 by the UNGA 172 .For the convention to come into force, ratification by 35member states is required. So far enough ratifications have notbeen received <strong>and</strong> it seems the convention will not come intoforce in the foreseeable future. 173 However, it is not unusual forimportant <strong>and</strong> perhaps controversial conventions to take sometime to come into force. For example the <strong>Law</strong> of the SeaConference (LOSC) was approved the UNGA on 10 December,1982, but did not enter in force until November 16, 1994. TheUNCIW, even though not yet in force, still will provideinfluential guidance for states.The ILC in its first task asked the member states in 1974 toanswer its questions, viz. the scope of the proposed study, thewater uses to be considered, whether the problem of pollutionshould be given priority, the need to deal with flood control <strong>and</strong>erosion problems <strong>and</strong> the interrelationship betweennavigational <strong>and</strong> other uses. In the same year, the commissionappointed Ambassador Richard D. Kenary of the USA asSpecial Rapporteur for its work on IWC. He first developedseveral questions <strong>and</strong> sent them to the member states forcomments. By 1976, only 21 states had replied to thecommission. Not much progress was achieved other than areport submitted by the Special Rapporteur. 174The second Special Rapporteur, Schwebel, undertook to draftthe first l<strong>and</strong>mark work of the ILC. His third report, submittedin 1981, considers the basic rules of IWL. As a matter of fact,his two fundamental works were, Article 6, the principle ofequitable utilisation, which states:“without its consent, a state may not be denied itsequitable participation in the utilisation of thewaters of an international watercourse system ofwhich it is a system state”. 175He linked this article with article 8 'Responsibility forappreciable harm' that equitable utilisation is the primaryprinciple of IWL; that is to say, if any harm is inflicted in theuse of an IWC, such use comes under the rule of equitableutilisation. Paragraph 1 of that article read as follows:“The right of a system State to use the waterresources of an international watercourse system islimited by the duty not to cause appreciable harmto the interests of another system State, except asmay be allowable under a determination forequitable participation for the internationalwatercourse system involved” 176As Bourne argued,"for Judge Schwebel, then, the principle of 'noappreciable harm' must on occasion yield to that ofequitable utilisation. In Schwebel's view,appreciable harm is not the decisive factor indetermining the legality of a utilization of thewaters of an international watercourse, though it isvery important, <strong>and</strong> undoubtedly often theoverriding - factor in that determination.” 177After Schwebel, Evansen succeeded him. He provided a draftconvention of thirty-nine Articles in 1982. Like Schwebel, healso strongly endorsed the principle of equitable utilisation inhis first <strong>and</strong> second revised draft of 1984; Article 6 read asfollows:172 Supra note 125, pp. 700-72173 www.internationalwaterlaw.org/unciw/status: Till 15 August 2002,twenty countries have ratified it.174 Supra note 1 pp. 18-19.175 The <strong>Law</strong> of Non-Navigational Uses of <strong>International</strong> <strong>Watercourses</strong>, UNDOC.A/CN.4/348 <strong>and</strong> corr.1; reprinted in 1982, 2(1) YBILC 65, art.6,para 2,at 85 UNDOC A/CN.4/SER.A/1982/ADD.1.176 Ibid. p. 103.177 Supra note 65, p. 74.
84 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 85“1. A watercourse state is, within its territory,entitled to a reasonable <strong>and</strong> equitable share of theuses of the waters of an international watercourse.2. To the extent that the use of the waters of aninternational watercourse within the territory of onewatercourse state affects the use of the waters ofthe watercourse in the territory of anotherwatercourse State, the watercourse State concernedshall share in the use of the waters … in areasonable <strong>and</strong> equitable manner in accordancewith the articles of the present Convention …” 178However, Evensen has radically changed the 'no appreciableharm’ rule omitting the exception clause Schwebel hadadopted. Eventually, he made 'no appreciable harm' thedominant rule, a rule that was not to yield to the considerationof equity <strong>and</strong> reasonableness in the sharing of waters. Aconvincing argument, however, was not given for thischange. 179 That is to say, as the reverse of Scwebel’s st<strong>and</strong>,Evensen made the 'no-harm rule' the substantive rule of an IWC<strong>and</strong> the reasonable <strong>and</strong> equitable rule subordinate to that rule.McCaffrey replaced him as Special Rapporteur in 1985. Heinherited two sets of draft Articles that reflected a fundamentaldifference on the substance of the basic principle of IWL. Afterdiscussion, the ILC ultimately adopted Evensen's draft Articlethat had made the no harm rule the dominating concept of therules. Unlike Evensen, McCaffrey tried to give the reasonbehind the concepts of equitable utilisation <strong>and</strong> 'no appreciableharm'. His position is in line with the concept <strong>and</strong> opinion ofSchwebel with regard to the two concepts. It is obvious, in thediscussion of the ILC that some of its members supportedMcCaffrey while others were supportive of Evensen. 180178 The <strong>Law</strong> of the Non-Navigational Uses of <strong>International</strong> <strong>Watercourses</strong>.UN DOC. A/CN.4/381 (1984), also see Ibid. pp. 91-92179 Supra note 65, pp. 75-76180 Ibid. p. 77McCaffrey has held the view that (during the discussion inILC):“in the view of many specialists, the most fundamentalprinciple of international water law is that of ‘equitableutilization’. Thus, for example, a downstream state thatwas first to develop its waters resources could notforeclose later development by an upstream state bydemonstrating that the later development would cause itharm; under the doctrine of equitable utilization, thefact that the downstream state was ‘first to develop'(<strong>and</strong> thus had made prior uses that would be adverselyaffected by new upstream uses) would be merely one ofthe number of factors to be taken into consideration inarriving at an equitable allocation of the uses <strong>and</strong>benefits of the watercourse.” 181He further gives the reasons for their belief. These observersbelieve that if the 'no harm' principle took precedence over thatof equitable utilisation the effect would be to freeze thedevelopment by many riparian states of internationalwatercourses. He expounded the approach of the ILC to thisproblem with reference to an excerpt from the commentary toarticles 8:“(P)rima facie, at least (,) utilization of aninternational watercourse (system) is not equitable ifit causes other watercourses states appreciableharm…The commission recognizes; however, that insome instances the achievement of equitable <strong>and</strong>reasonable utilisation will depend upon the tolerationby one or more watercourses States of a measure ofharm. In these cases, the necessary accommodationswould be arrived at through specific agreements.” 182181 S. C. McCaffrey, "The <strong>Law</strong> of <strong>International</strong> <strong>Watercourses</strong>: someRecent Development <strong>and</strong> Unanswered Questions" (1989) in 15DJIL&P, p. 505-526.182 Ibid. p. 509, 510; also see supra note 65, p. 77.
86 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 87He has given three defences of the ILC commentary, in an ILCeffort to convince the states that hold the above-mentionedview in relation to equitable utilisation. One reason is that itsapproach affords a measure of protection to the weaker statethat has suffered harm. It is not open to the stronger state tojustify a use that gives rise to harm on the ground that it is'equitable'. The second reason is that it is far simpler todetermine whether the 'no harm' rule has been breached thanwould be if water uses were governed in the first instance bythe more flexible (<strong>and</strong> consequently less clear) rule of equitableutilisation. Thirdly, the 'no harm' rule is preferable in casesinvolving pollution <strong>and</strong> other threats to the environment. Whilea state could conceivably seek to justify an activity resulting insuch harm as being 'equitable use', the 'no harm' principlewould- at least prima facie- require the abatement of theinjurious activity. 183If one studied from the outset the adoption of this rule by theILC <strong>and</strong> the UNGA, it is apparent that there have always beendivergent views between the no appreciable harm <strong>and</strong>‘equitable utilisation’ rules. However, harm that threatenshuman health or safety or poses a grave or long-lasting threat tothe environment, should not be protected by the equitableutilisation rule. 184 As demonstrated earlier, the major points ofconflict were that these rules favour upstream or downstream,equitable utilisation versus no harm, whichever rule prevailedover the other, etc. With regard to the conflict between the noharm <strong>and</strong> equitable utilisation, the majority of opinion (in theILC <strong>and</strong> the UNGA discussion) was in favour of equitableutilisation that has been accepted as an established <strong>and</strong>customary law of IWC. 185 However, there is some flexibility in183 Fourth report- on the <strong>Law</strong> on Non-Navigational Uses of <strong>International</strong><strong>Watercourses</strong>, UNGAOR, ILC, 40th session. at 14 UN DOC.A/CN.4/412/Add.2 1988.184 S. C. McCaffrey, "The <strong>International</strong> <strong>Law</strong> Commission Adopt DraftArticles on <strong>International</strong> <strong>Watercourses</strong>" (1995) in 89 AJIL, pp. 395-404.185 II (1) YBILC (1994), pp. 167-168.that some minor injury or harm may occur when equitableutilisation is being made by a state that may result in anerroneous benefit, while at the same time, it may cause minorinjury to the other watercourse state. Such an example would bethe case of a watercourse state that builds a dam, which wouldprovide hydroelectric power to hundreds of thous<strong>and</strong>s of peoplebut would cause significant harm to a few hundred people inanother riparian state whose recreational fishing would bedestroyed. Taking into account the factors listed in Article 6,the most likely conclusion would be that in this hypotheticalcase, the construction of the dam was reasonable <strong>and</strong> equitableeven though it caused significant harm to the other riparianstate. However, maximum attention should be given toeliminate, mitigate <strong>and</strong> reduce the harm to the other riparianstate, by the work of upstream state. 186In the long run, however, 'appreciable harm' was not definedbut was replaced by 'due diligence' in the ILC's final adoptionof the rule in 1994. 187 With regard to the no appreciable harmview, the harm could not become the subordinate rule ofequitable utilisation. Rather, harm caused by a watercoursestate to the other state should be dealt with seriously <strong>and</strong>severely. However, from the ILC commentary, 188 whilesupporting the notion of no appreciable harm, three cases aregiven, namely, the Corfu Channel case, the Trial Smelterarbitration, <strong>and</strong> Lake Launox arbitration. The only case, whichis directly related to a watercourse, is the Lake Lanouxarbitration between France <strong>and</strong> Spain.The critique of this no harm rule is given in the example ofArticle IV of US-Canada 1909 Boundary Water Treaty, whichprovides that ‘the waters herein defined as boundary waters <strong>and</strong>waters flowing across the boundary shall not be polluted on186 Ibid. pp. 167-189.187 Ibid.188 Ibid.
88 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 89either side to the injury of health or property on the other'. 189This treaty has explicitly prohibited transfrontier harm, butthese provisions did not work at all. As a result, to reverse <strong>and</strong>avert this harm these states negotiated another treaty which wasbased on Article IV (based on no harm rule) of Boundary WaterTreaty 1909. But from the time of the treaty until 1992, theboundary waters of the Great Lakes were seriously pollutedeven after the conclusion of the new treaty. The Great LakesWater Quality Agreement, 1972 (revised 1978) was an attemptto reverse the degree of pollution. 190 So it is one of the bestexamples of the failure of the no appreciable harm principle (inArticle IV of the said treaty). 191 The first of these Treatiesbased on the no harm rule did not work at all, <strong>and</strong> has becomethe foremost example of the limitation of that rule. The twosubsequent Treaties have relied heavily on transboundarycooperation to achieve success. Also, another example of theproblematic application of this rule was on the Flathead Rivercase in which a company proposed to establish a coal mine onCabin Creek. Objected to by the US <strong>and</strong> Canadiangovernments, the subject fell under the <strong>International</strong> JointCommission (IJC) according to the boundary Waters treaty.The IJC, in its recommendation explicitly indicates that thesubject in question could irreversibly make an adverse impacton the fish population. Consequently, the establishment of acoal mine would be against Article IV of the said treaty. Theappreciable harm used by the IJC in this case, it could beargued, would come under the equitable <strong>and</strong> reasonableutilisation concept, which may be politically <strong>and</strong> legallyunacceptable to upstream states because it resurrects thedoctrine of prior appropriation. 192As a result of the above, equitable utilisation emerged as afundamental principle of IWL that protects the interests of all.189 Supra note 65.190 Ibid.191 Ibid. pp. 88-89.192 Ibid. p. 92.According to McCaffrey, 193 in the contexts of Ethiopia <strong>and</strong>Nepal, if the downstream states are authorised to have a veto asdemonstrated above, upstream states could never develop anywater project within their own territories; <strong>and</strong> this would meanextreme injustice to them. In this sense, India cannot object toNepal carrying out new water projects.The ILC has also addressed the question of non-discrimination.From the point of the Trail Smelter case, extraterritorialpollution impacts upon the US <strong>and</strong> Canada, which have beendealt with using the concept of non-discrimination. 194 Nodiscriminationrefers to the principle that a citizen of eithercountry may take action in national courts to combatexterritorial pollution. In this context, the drafting committeehad forwarded to the full commission for its consideration thearticle titled Non-Discrimination Clause, "recourse underdomestic law.” The non-discrimination clause triggeredcriticism from some of the members, who had objected to it,stating that it is, in fact, wrong to include a provision grantingsuch broad rights to foreign nationals or judicial persons,regardless of their place of residence. Main purpose of theArticle was to regulate relations between states in an areainvolving the interests of a large numbers of states, <strong>and</strong> inpractical terms it will be impossible to give the same service toa foreigner as to its own citizens. 195 The ILC was not preparedto keep the non-discrimination clause, which was severelycriticised. 196 However, it has been incorporated in the UNGAdeliberation. Nonetheless, such an arrangement on nondiscriminationis working satisfactorily without any difficultiesin Norway-Sweden <strong>and</strong> Finl<strong>and</strong>. 197 The reason is that they193 Supra note 181, p. 509.194 Supra note 169, pp. 17-29.195 II (1) YBILC (1994), p. 189.196 Ibid. p. 27.197 Supra note 151, pp. 449-463: Sweden <strong>and</strong> Finl<strong>and</strong> have similar legalsystems <strong>and</strong> citizens of either country can lodge judicial <strong>and</strong>administrative complain in either country in the event of transboundarypollution or any adverse affects.
90 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 91possess similar legal systems <strong>and</strong> legislation that function wellfor the non-discrimination clause. Eventually, the UNCIW wasadopted with the main rule being equitable <strong>and</strong> reasonableutilisation without causing any detrimental effect to otherwatercourse states. 1982.9.3 UNCIW, 1997The convention consists of 36 articles. 199 Part I deals with theintroduction. Article 1 deals with the scope of the presentconvention, Article 2 the use of terms, <strong>and</strong> Article 3 thewatercourse agreement. The definition of a watercourse wasonly made in 1991 as stated previously. By that definition,groundwater, lakes, streams, rivers <strong>and</strong> aquifers areindispensable parts of a watercourse system. This phrase wasmodified by the word 'normally' in order to address the twodiverging views on it. The reasons given for this are:"thus, for example, the fact that two differentdrainage basins were connected by a canal wouldnot make them part of a single 'watercourse' for thepurpose of the present articles. Nor does it mean,for example, that the Danube <strong>and</strong> the Rhine form asingle system merely because, at certain times ofthe year, water flows from the Danube as groundwater into the Rhine via Lake Constance." 200The reason to select the term watercourse is that this concepthas long been used in international agreements, state practice<strong>and</strong> judicial pronouncements to refer to a river, its tributaries<strong>and</strong> related canals. 201 Nevertheless, basically, there is nofundamental distinction between the watercourse <strong>and</strong> drainagebasin concepts but the former term has been habitually used198 Supra note 7, p. 217-18.199 Supra note 3, pp. 700-720.200 II (2) YBILC (1994), pp 90-91.201 Ibid. p. 91.<strong>and</strong> is less contentious <strong>and</strong> acceptable to all. Therefore, I haveselected this option rather than the contentious drainage basinapproach. The heart of the convention as evaluated earlier, ispart II, general principles, Article 5 to Article 10. In Article 5on ‘equitable <strong>and</strong> reasonable utilisation <strong>and</strong> participation’, itmust be mentioned that the word ‘sustainable’ has been addedby the Sixth Committee.Article 6 comprises 17 elements relevant to equitable <strong>and</strong>reasonable utilisation <strong>and</strong> is also analysed in the next chapter.As a matter of fact, each factor mentioned in Article 6, carriesequal weight. However, their application could vary in eachcircumstance; but equity plays the vital role in itsdetermination.Article 7, the obligation not to cause significant harm, asmentioned earlier is another significant rule. The ILC wasconfronted with a divergence of views <strong>and</strong> much of its time hasbeen spent on this Article; which was also changed in the sixthcommittee of the UNGA. 202 As evaluated earlier, the wordingof 'appreciable’ harms was changed to ‘significant harm’ in theSixth Committee <strong>and</strong> Article 7(2) was also changed by ‘duediligence’ in order to maintain a balance between the no harm<strong>and</strong> equitable utilisation principles.In some instances the equitable <strong>and</strong> reasonable use maylegitimately cause minor harm. If any use causes such harm,there must be negotiation in order to eliminate or abate suchharm. Even if some harm is inevitable, the question ofreparation could be invoked to address the problem. Article 7provides:202 Sixth committee deliberation in UN: Article 7, Paragraph 1 ‘exercisedue diligence’ changed to 'take all appropriate measures', <strong>and</strong> in article5 'sustainable' was added, II (2) YBILC (1994), Report of theCommission to the General 'Assembly on the work of its forty SixthSession, 1994, pp. 103-105.
92 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 93“1.watercourse Sates shall, in utilizing aninternational watercourse in their territories, take allappropriate measures to prevent the causing ofsignificant harm to other watercourse States.2.where significant harm nevertheless is caused toanother watercourse State, the States whose usescauses such harm shall, in the absence of agreementto such use, take all appropriate measures, havingdue regard for the provisions of article 5 <strong>and</strong> 6, inconsultation with the affected State, to eliminate ormitigate such harm <strong>and</strong>, where appropriate, todiscuss the question of compensation.” 203Article 8 deals with “General obligation to co-operate:1. <strong>Watercourses</strong> States shall co-operate on the basisof sovereign equality, territorial integrity, mutualbenefit <strong>and</strong> good faith in order to attain optimalutilisation <strong>and</strong> adequate protection of aninternational watercourse.2. In determining the manner of such co-operation,watercourse States may consider the establishmentof joint mechanisms or commissions, as deemednecessary by them, to facilitate co-operation onrelevant measures <strong>and</strong> procedures in the light ofexperience gained through co-operation in existingjoint mechanisms <strong>and</strong> commissions in variousregions.” 204This Article sought to accommodate the principles put forth inprinciple 2 of the Stockholm conference, Article 21 of theUNCED <strong>and</strong> several judgements provided by court <strong>and</strong>arbitration tribunals, i.e. Trial Smelter, Corfu Channel, Lake203 II (1) YBILC (1994), pp. 167-168.204 Ibid.Lanoux, etc. The principle requires cooperation on the basis ofsovereign equality, territorial integrity, mutual benefits <strong>and</strong>good faith in order to attain optimal utilisation <strong>and</strong> adequateprotection of a shared natural resource. Furthermore, this ideahas been supported by the ICJ in its ruling in New Zeal<strong>and</strong>versus France in 1974. 205 Also, regarding the conceptsupported in the Advisory Opinion of 8 July 1996, upon arequest from the UNGA concerning the issue of “Legality ofthe Threat or Use of Nuclear Weapons”, the ICJ stressed that:“the states have the general obligation to watch thatactivities undertaken within their nationaljurisdiction or in zones under their control respectthe environment of other states or areas beyondnational control.” 206 .Part IV deals with protection, preservation <strong>and</strong> management ofthe ecosystem in Articles 20-26. Part V, Articles 27 <strong>and</strong> 28 dealwith eco-system protection, harmful conditions <strong>and</strong> emergencysituations; whereas part IV, Articles 29-33 deal withmiscellaneous provisions for dispute settlement that has beenseverely criticised by many countries, stating that they severelyencroach upon their sovereignty. 207Articles 11 to 19 describe in detail the procedure of givinginformation concerning planned measures <strong>and</strong> proceduresregarding notification. Article 33 provides for the settlement ofdisputes with the establishment of a joint water entity includingthe referral of the dispute to an impartial fact-findingcommission. When ratifying, accepting, approving or acceding205 ICJ Reports (1974), p. 268.206 www.icj-cij.org; also see D. Momtaz, “The United Nations <strong>and</strong> theProtection of the Environment” in M. I. Glassner (ed) The UnitedNations at Work, Westport, CT: Praeger, 1998, p. 62.207 During the voting 103 states said yes, 3 (Turkey, China <strong>and</strong> Burundi)against with 27 abstentions, one of the main reasons for the voteagainst is Article 33’s obligatory provision for dispute settlement.
94 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 95to the present convention, or any time thereafter, states maydeclare that they recognise as compulsory, submission ofdisputes to the ICJ or an arbitration tribunal.Being the first instrument of universal application with anintegrated <strong>and</strong> holistic <strong>and</strong> framework approach, the UNCIWhas definitely codified many aspects of Customary <strong>International</strong><strong>Law</strong>, viz. equitable utilisation with the full consideration ofsustainable utilisation of such resources. 208 The other fact isthat the provisions of this convention will not affect the existingtreaty regimes among <strong>and</strong> between nations. However, if thestate parties are willing to bring these treaties in line with thisconvention, they can adjust it as <strong>and</strong> when they deem itappropriate. The regional agreements will also remainunaffected regardless of the fact that a regional economic blochas the right to become a party of this convention. 209 It must berecognised that the convention does not affect existing treatyregimes <strong>and</strong> these principles are only applicable when stateswish to follow them.From the view of the discussion in the ILC <strong>and</strong> in the sixthcommittee, <strong>and</strong> the voting pattern in the UNGA relating to theUNCIW, there is a delicate balance <strong>and</strong> a package deal ofArticles 5, 6 <strong>and</strong> 7, on which 38 states voted for, 4 states(China, France, Tanzania <strong>and</strong> Turkey) against, <strong>and</strong> 22abstained. From the ILC to the Sixth Committee discussions,states were hugely divided, protecting their individual interestsdownstream versus upstream. Different views were held as towhich rules - ‘equitable utilisation’ or the ‘no harm rule’ shouldsupersede the other. 210 The voting pattern on the substantiveissues suggests that the members voting against or abstainingwere equivalent to the number of states voting in favour. Inorder to implement these principles, states must have separatebilateral or multilateral agreements. From the voting pattern it208 Supra note 2, pp. 308.209 II (2) YBILC (1994), commentary, pp. 95-97.210 Press release/ UNGA/9248, 22 May 1997.appeared that both upstream <strong>and</strong> downstream states findstrengths <strong>and</strong> weakness in the final formulation of the articles,as a result of which it can be argued that these provisions lackthe status of customary rule of international law. Furthermore,the compulsory dispute settlement provision under Article 33(10) remains a major area of criticism by a number of powerfulnations. 2112.9.4 The Institute of <strong>International</strong> <strong>Law</strong>This institute has played a pivotal role in the development <strong>and</strong>codification efforts of international law since the nineteenthcentury, including the codification of UNCIW. The<strong>International</strong> Regulation on the Use of IWC for Purposes Otherthan Navigation (Declaration of Madrid), 1911, prohibits anystate from using or allowing the use of the waters of aninternational stream in a way that may cause detrimentalimpacts to other states. 212 Article II prohibits any establishmentin a stream that traverses successively the territories of two ormore states, without the consent of the other states. Along thesame lines, Article II (5) prohibits any construction in thedownstream country that could be the subject of inundation inother state territories. Those rules, however, are not legallybinding even though they are considered as general guidelinesfor states. As demonstrated earlier, the Helsinki Rules, 1966,the UNCNIW 1997, <strong>and</strong> several concepts <strong>and</strong> developmentsaddressed by these Rules are contributions of the Institute. Forexample, the illegality of trans-boundary pollution <strong>and</strong> injury orharm arising from the use of the waters in a state that affectother states is a concept inherited from the earliest works of theILI.Another pertinent instrument is the Resolution of the Use of<strong>International</strong> Non-Maritime Waters Salzburg 1961. This rule211 Ibid.212 Supra note 57 pp. 274-275.
96 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 97outlines state rights <strong>and</strong> duties in waters that extend from twoor more states territories. Article III provides:“if the various States disagree upon the extent oftheir rights of use, the disagreement shall be settledon the basis of equity, taking into consideration therespective needs of States, as well as any othercircumstances relevant to any particular case” 213 .Article IV states that any act of a state harmful to another stateentitles the latter to receive adequate compensation for any lossor damage incurred. Article V indicates the need to have priornotice <strong>and</strong> consultation before initiating any work onwaterways or watersheds. Such rules also stipulate thatnegotiations should be conducted in good faith in the event ofsuch works giving rise to conflict.2.9.5 Some Other InstitutionsThe codification <strong>and</strong> development of international law are theaccumulation of institutional contributions. As far as IWL isconcerned, the contribution of the ILI, ILA <strong>and</strong> ILC aresignificant. There are a few other institutions that have alsomade contributions in the area. The Asian-African LegalConsultative Committee (AALCC), which has a workingrelationship with the ILC, has adopted a Draft Proposition onthe <strong>Law</strong> of <strong>International</strong> Rivers in 1973 at its New Delhiconference. Article III envisaged:"1. Each basin state is entitled, within its territory,to reasonable <strong>and</strong> equitable shares in the beneficialuse of the waters of an international drainage basin.2.What is a reasonable <strong>and</strong> equitable share is to bedetermined in the interested basin state by213 Ibid. p. 280.considering all the relevant factors in eachparticular case.” 214It is an obvious endorsement of the Helsinki rules. The Inter-American Bar Association in its Tenth conference onNovember 19, 1957 in Buenos Aires initiated work onformulating the principles on international drainage basins <strong>and</strong>adopted five principles. In its San Jose Resolution in 1967, No1, third paragraph, states:"<strong>International</strong> waters have for America uniqueimportance to the extent that it is difficult toimagine a social <strong>and</strong> economic development <strong>and</strong>integration of the continent without an equitable<strong>and</strong> adequate usage of such waters, in achievingwhich the law has a substantial function" 215Besides this, there are several other organizations, which havealso contributed to the development <strong>and</strong> codification of thetopic. UNEP Principles on Conservation <strong>and</strong> HarmoniousUtilization of Natural Resources Shared by Two or More States1978 is also pertinent in this area. 216 The UNGA Resolution3129 (XXVIIII) 1973, called for adequate internationalst<strong>and</strong>ards to be established, for the conservation <strong>and</strong> utilisationof natural resources common to two or more states, <strong>and</strong> the cooperationamong those states to be enhanced by the exchangeof information <strong>and</strong> prior consultation. The principle was notendorsed by the UNGA as a general principle of law but itsimply acknowledged it. The principle forms a part of soft law.Apart from this, the Economic Commission for Europe (ECE)has adopted a regional Convention on the Protection <strong>and</strong> Use of214 AALCC, Report of the Fourteenth Session held in New Delhi, 10-18January (1973), pp. 7-14; also see supra note 57, p. 202. In ArticleIII(3) eleven factors are recommended.215 Supra note 57, pp 317-320.216 Supra note 66, pp 21-26.
98 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 99Trans-boundary <strong>Watercourses</strong> <strong>and</strong> Lakes in 1992, whichprovides for equitable utilisation, good neighbourly relations<strong>and</strong> cooperation between the riparian states. 217 The conventioncontains 29 articles <strong>and</strong> 4 annexes. It is the first of its kind thatis consistent with the 1997 UN convention in several respects.2.10 Some UN ResolutionsUNGA Resolution 3281 (XXIX) on the Charter of EconomicRights <strong>and</strong> Duties of States was adopted in 12 December 1974.Article 3 says:“In the exploitation of natural resources shared by twoor more countries, each State must cooperate on thebasis of a system of information <strong>and</strong> priorconsultations in order to achieve optimum use of suchresources without causing damage to the legitimateinterest of others.” 218The significance of this resolution is obvious. It encourages acooperative attitude without which the objective of gainingmaximum benefits from an IWC is not realisable, <strong>and</strong> that isthe foremost requirement for the harnessing of such resources.The Water Conference, Mar del Plata 1977, was the first effortof the international community to focus attention asdeteriorating <strong>and</strong> scarce resources. The conference declaredthat:"in relation to the use, management <strong>and</strong>development of shared water resources, nationalpolicies should take into consideration the rights ofeach State sharing the resources to equitably utilizesuch resources as the means to promote bonds ofsolidarity <strong>and</strong> co-operation." 219217 Ibid. p. 345218 Supra note 57, p. 162.219 Ibid, p. 166.In this first universal deliberation on water, the Member Statesidentified problems with the resolution of such issues <strong>and</strong> itwas suggested that all problems relating to water should beresolved under the UN Charter. Every problem requires apeaceful, <strong>and</strong> fair solution as suggested by the Charter.Particular attention will be given to Article 21 of the UnitedNations Conference on Human <strong>and</strong> Environment (UNCCHE),which recommend a state's full right to use such resourceswithout disturbing others by such use. 220Subsequent to the First Water Conference, the second UNWorld Water Conference, which was held in Dublin in 1980,largely failed to yield any of the expected outcomes, as arguedby Biswas. 221 His criticism was based on the discontinuation ofany further conferences with no significant outcome <strong>and</strong> nomajor result achieved. However, he has not clearly indicatedwhat result he expected. Perhaps, he was dem<strong>and</strong>ing a concreteresult in resolving the numerous issues in the area <strong>and</strong> also thecreation of an adequately funded <strong>and</strong> fully functioning waterinstitution, which may be a good argument.The Second World Water Forum held in the Netherl<strong>and</strong>s on 20-22 March, 2000, highlighted the scarcity of water, emergingconflicts on its use, sustainable <strong>and</strong> equitable use of it <strong>and</strong> soforth. 222 In its Ministerial Declaration no 1, the threat caused bythe lack of a secure supply of sufficient freshwater, difficultieswith its use, threat to lives due to its insufficiency <strong>and</strong> lack ofquality were discussed. In its second paragraph it spoke about220 Ibid, pp. 164-170; also see E. Fano," Brief Comments on the UnitedNations Water Conference" in A. E. Utton <strong>and</strong> L. Teclaff (eds), Waterin the Developing World, Colorado: Westview Press, 1978, pp. 267-269.221 A.K. Biswas, "Water for Sustainable Development of South <strong>and</strong>southeast Asia in the Twenty First Century " in A. K. Biswas & T.Hashimoto (eds), Asian <strong>International</strong> Waters: From Ganges toBrahmaputra to Mekong, Oxford: Oxford University, 1996, p. 23.222 http://www.worldwaterforum.org/index2.html ; also seewww.worldbank.org/html/extdr/extme/jdwsp03220htm.
100 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 101the effort that had been made to protect those resources: “thesethreats are not new - nor are the attempts to address them.”Discussion <strong>and</strong> actions started in Mer del Plata in 1977,continued in Dublin <strong>and</strong> were consolidated in Rio in 1992. TheThird Water Conference, held in Japan 16-23 March, 2003,highlighted the significance of the issues <strong>and</strong> asked the IC toprovide an extra annual amount of $ 50 to 100 billion toaddress these problems. 2232.11 ConclusionsWater issues always connect <strong>and</strong> divide states. The codificationof IWL has been an exercise of the world community over thepast decade. As demonstrated earlier, conflicts <strong>and</strong> disputes arenot found only in the international arena but also within federalstructures. In India, there are serious issues between the statesof Karnataka <strong>and</strong> Tamil Nadu over the allocation of Cauveryriver waters, whilst in Pakistan the conflict between theprovinces of Sind <strong>and</strong> Punjab is so serious that each province isaccusing the other of stealing <strong>and</strong> wasting its share of water. 224At the same time, it is a fact that until the recent past, there wasnot a single rule that could be applicable holistically <strong>and</strong>universally. As demonstrated above, state practices, treatyregimes <strong>and</strong> settlements of disputes have suggested severaldifferent resolutions. This has added further complication. Infact, due to the stress on scarce freshwater resources, it hasbeen predicted that the problem of water scarcity will lead tomore conflicts in the days to come <strong>and</strong> may cause world war. 225223 www.worldwaterforum.org/224 Supra note 41.225 Supra note 110, p. 12. The centre for strategic <strong>and</strong> international studiespredicted that water, not oil, will become the dominant subject ofconflict for the Middle East by the year 2000. Also, see such predictionby James Wolfensohn, President of the World Bank, in his speech tothe second world water forum in the Hague, in www.worldbank.org/<strong>and</strong> www.worldwaterforum.org/index2html.As evaluated earlier, state practices, treaties, writings of thepublicists, <strong>and</strong> case law have greatly helped in development<strong>and</strong> codification. Some non-disputed arrangements nowconstitute part of customary international law. Equitableutilisation has become the basic rule, which is supported bystate practice <strong>and</strong> opnio juris. The UN <strong>Watercourses</strong>Convention of 1997 <strong>and</strong> the ICJ’s judgement in Govcikovo-Nagymaros case in 1997 226 are notable examples of the rule inaction.However, it is not always the case. As stated above, in the Nilesituation, Egypt has been utilising almost the entire flow of theriver by refusing to share the flow with her upstream stateEthiopia, stating the ‘no harm’ principle. It is, therefore,apparent that there is a breach of the equitable utilisationprinciple that has resulted in an unreasonable <strong>and</strong> inequitablesituation for Ethiopia.Moreover, there is some confusion about the exact meaning ofthe term of 'equitable', regardless of the fact that it is beingadvocated <strong>and</strong> supported in numerous spheres of IWC’s. Statesthemselves must resolve the problem by the application ofequity based on the particular circumstances <strong>and</strong> needs of aparticular watercourse. Nevertheless, there are several issuesthat need to be sorted out, particularly the problems of the weak<strong>and</strong> poor countries that lack the huge capital needed forinvestment, technology <strong>and</strong> skilled manpower. They requireeven greater co-operation from multilateral agencies <strong>and</strong>western governments. Donors have sought clearance from theother watercourse states but at the same time also raisedobjections to such projects. 227 Eventually, such vulnerablenations are barred from developing their own resources due tothese loopholes, which need to be amended before suchbottlenecks can be removed. Again, the approach of equity <strong>and</strong>226 37 ILM (1998), pp. 162-202.227 R. Krishana, “The Evolution <strong>and</strong> Context of the Bank Policy forProjects on <strong>International</strong> Waterways” in supra note 130, p. 31 -43.
102 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Development <strong>and</strong> Codification of <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> / 103the criteria that have been developed in international law togive special consideration to the weak, vulnerable,geographically h<strong>and</strong>icapped <strong>and</strong> less developed states, such astrade concessions, <strong>Law</strong> of the Sea Convention's Article 148,should be developed by the international community <strong>and</strong> theUnited Nations. 228The UNCIW, adopted by majority voting <strong>and</strong> not by unanimity,the pattern of the voting <strong>and</strong> the concern of the state parties,reflected the complication over the matter. 229 After application,the rules definitely reveal the shortcomings or deficienciesinherent in them.In conclusion, it can be said that the past experience in thedevelopment, sharing <strong>and</strong> allocation of IWC’s has helpedseveral rules, norms <strong>and</strong> criteria to evolve. By the applicationof it, further problems could be sorted out in the distant futureas well. However, every arrangement of settlement must bedone by states invoking a cooperative attitude <strong>and</strong> strongpolitical will to comply with the Charter of the United Nations.Chapter Three will critically evaluate the origin, development<strong>and</strong> concept of equity, the role of equitable utilisation in thearea of international watercourses resources <strong>and</strong> of sharednatural resources, the jurisprudence developed by the ICJ <strong>and</strong>its far-reaching implications for the area.•228 21 ILM (1982), p. 1295.229 Supra note 1, pp. 18-23.
Equitable Utilisation / 103 104 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South AsiaChapter- ThreeEquitable Utilisation3.1 Principles of <strong>International</strong> Water <strong>Law</strong>From the preceding chapter, we can glean at least fourprinciples for resolving conflicts over internationalwatercourses: 1 absolute territorial sovereignty, territorialintegrity, prior appropriation <strong>and</strong> equitable utilisation, it hasbeen widely held that the equitable utilisation is the bestprinciple. 23.1.1 Absolute Territorial SovereigntyThe substance of this principle is that a state is fully free to usethe waters flowing through its territory as it pleases <strong>and</strong> it neednot pay heed to any restriction or prohibition on such use. Thisis the traditional view expressed by upstream states in order to1 J. Lipper, "Equitable Utilisation" in A. H. Garretson, R. D. Hayton &C. J. Omstead (eds), The <strong>Law</strong> of the <strong>International</strong> Drainage Basins,New York: Oceana Pub., 1967, pp.16-26; see O. McIntyre, "The <strong>Law</strong>Relating to the Use of Shared <strong>International</strong> Water Resources: 4 Toolsfor Equity" (1998) in 6 WI, Chancery <strong>Law</strong> Pub., pp. 23-24; also see M.Fitzmaurice, "Water Management in the 21st Century" in A. Anghie<strong>and</strong> G. Strurgess (eds), A Legal Vision of the 21st Century: Essays inHonour of Judge Christopher Weeramantry, the Hague: Kluwer <strong>Law</strong>,1998, pp. 427-429.2 B. R. Chauhan, Settlement of <strong>International</strong> <strong>and</strong> Inter-State WaterDisputes in India, Bombay: Indian <strong>Law</strong> Institute, 1992, pp. 21-40.There are some scholars who hold a different view on whether thereare only four rules on the subject. Chauhan has argued that there areseven prevailing rules, including the doctrine of riparian rights, priorappropriation, territorial sovereignty, natural flow, equitableapportionment, community of interest, <strong>and</strong> the equitable utilisationtheory.serve their own interest at the price of other basin states. It is anotorious principle that is heavily objected to by theinternational community. It is also known as the HarmonDoctrine, based on the legal opinion provided by the then USAttorney General to the Secretary of State in a dispute over thesharing of waters of the Rio-Gr<strong>and</strong>e River between the USA<strong>and</strong> Mexico in 1896. Neither the international community, northe United States itself, ever accepted this theory. Smith hastermed it as radically unsound <strong>and</strong> as a ground for legalityunaccepted. 3 However, its mention has been made by somestates; India in 1948, temporarily interrupting the flow of theriver from India to Pakistan; 4 China has asserted it even asrecently as 1997 during discussions on the UNCIW at theUNGA, 5 Austria made similar reference to the principle. 6However, it has never been a principle recognised by mostnations but rather heavily deplored for its basic foundation. 73.1.2 Territorial IntegrityDespite the semantic similarities with the title of the firstprinciple, this is just the opposite of the earlier rule. It pledgesthe right of a downstream state on the ground that upstreamstates cannot diminish, or change the flow of an IWC. Thisprinciple was invoked by downstream states such as Argentina,Egypt, Spain, Bangladesh, Syria, <strong>and</strong> Iraq against their3 H. A. Smith, The Economic Uses of Waters, London: P.K. King <strong>and</strong>Son, 1931, p. 8.4 J. Lammers, Pollution in <strong>International</strong> <strong>Watercourses</strong>, the Hague:Martinus Nijhoff, 1984, pp. 318-319.5 Press Release, including UNGA vote on the UNCIW 21 May 1997:www.un.org/law/ilc/texts/status.htm Gao Feng has said that the “statehad indisputable sovereignty over a watercourse which flowed throughits territory.”6 C. B. Bourne, “The Right to Utilize Water of <strong>International</strong> Rivers”(1965) in III CYBIL, p. 205.7 S. C. McCaffrey, "The Harmon Doctrine One Hundred Years Later:Buried, not Praised" (1996) in 36 NRJ, p. 725.
Equitable Utilisation / 105 106 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiaupstream neighbours. As we noted in the Lake Lanouxarbitration, Spain’s objection to the French diversion wasrejected on the ground that there is no customary internationallaw that prohibits such a diversion, though it could beprohibited through a bilateral treaty. 8 In substance, this rulecould be called a veto power of the downstream state because itprohibits any significant use of water by upstream stateswithout the consent of the downstream states. The no harm rulesupports this doctrine.In the context of Indo-Nepal water relations, India objected toseveral Nepalese irrigation <strong>and</strong> hydropower projects, i.e., theSikta, West Rapti (Bhalubang-Deokhuri), Kankai, Babai, <strong>and</strong>Tamur hydropower projects, stating that these works wouldviolate the principle of territorial integrity. 9 At the end ofseveral studies carried out, donors like the World Bank, ADB<strong>and</strong> Saudi Fund declined to finance those projects on theground of downstream objections. It is worthwhile to mentionthe opposite st<strong>and</strong> taken by India whilst it was negotiating withits downstream neighbour, Pakistan, in the Ganges case <strong>and</strong>also with Pakistan during the 1948 dispute over the allocation8 R. Benhard (ed), Encyclopaedia of Public <strong>International</strong> <strong>Law</strong>:Decisions of <strong>International</strong> Courts <strong>and</strong> Tribunals <strong>and</strong> <strong>International</strong>Arbitration, the Hague: North-Holl<strong>and</strong> Comp., 1981, pp. 166-167.9 B. G. Verghese, Waters of Hope, New Delhi: Oxford & IBH Pub.,1990, p. 342. The Rapti-Bhalubhang Project, in which Canadianfinance was committed, collapsed as a result of Indian objections.Initially they had agreed with the project <strong>and</strong> later changed their st<strong>and</strong>.The Babai irrigation project was also cancelled because of the Indianobjections which the Kuwait Fund had agreed to finance. Also see H.M. Shrestha <strong>and</strong> L. M. Singh, "The Ganges-Brahmaputra System: ANepalese Perspective in the Context of Regional Co-operation" in B.G. Verghese, & T. Hashimoto (eds), Asian <strong>International</strong> Waters: FromGanges-Brahmputra to Mekong, Oxford: Oxford University, 1996, p.81-94.of the Indus river waters. 10 IWL does not support this principle.This issue will be further addressed in Chapter Four.3.1.3 Prior AppropriationThis is a bit more advanced than the two principles discussedabove. Prior appropriation provides that the state which firstutilises the waters of an international river acquires the legalright to continue to receive that quality <strong>and</strong> quantity of water infuture <strong>and</strong> cannot be deprived of it without its consent. Inpractice, however, the more developed <strong>and</strong> resourcefulcountries have had their water appropriation before <strong>and</strong> oftenare therefore in a more beneficial position than the weak orpoor countries. Therefore, it could be argued that this theoryfavours more developed states at the expense of weaker states<strong>and</strong> is not based on a fair <strong>and</strong> equitable foundation. There areseveral examples of this.In the Nile case, downstream Egypt has always laid claim to itshistoric right over the waters of the river <strong>and</strong> threatened thepoorer <strong>and</strong> weaker upstream state, Ethiopia, which is not ableto use waters that originate <strong>and</strong> flow from its territory. 11 It is anobvious but notorious disparity against international law norms.Such conduct on the part of a downstream state does notprovide equity, <strong>and</strong> a fair share of waters for such vulnerablestates like Ethiopia. In this case, Egypt warned that she woulddeclare war if the waters were utilised by upstream states <strong>and</strong>also offered the transfer of some water to Israel if she would beready to resolve the Palestine problems. 12 After the conclusionof the Camp David Treaty between Egypt <strong>and</strong> Israel, PresidentSadat talking to the Israeli press, had unveiled a plan for apipeline to bring the Nile water to the recently returned Sinai.10 India has now taken opposite st<strong>and</strong> while dealing with Nepal.11 N. Kliot, Water Resources <strong>and</strong> Conflict in the Middle East, London:Routledge, 1994, p. 68.12 Ibid.
Equitable Utilisation / 107 108 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South AsiaLater, in negotiation with the Israeli PM, he put forth thisproposal officially in 1981. 13 It was reported that Israel refusedthe proposal. 14When Ethiopia, sharply criticised the Egyptian proposal statingthat it would be a misuse of its share of the Nile, PresidentSadat warned Ethiopia in stern words:"we do not need permission from Ethiopia or theSoviet Union to divert our Nile water. If Ethiopiatakes any action to block the Nile waters, there willbe no alternative for us but to use force." 15The responsible leaders of the Middle East speak aboutsecurity, which means water security. President Sadat had onceexpressed the view that “the only matter that could take Egyptto war is water.” 16 Above all, these claims were clearly basedon her historic rights over the Nile waters or ‘priorappropriation’. On the contrary in the parallel situation over theTigris <strong>and</strong> Euphrates, water supply is denied by Turkey to Iraq<strong>and</strong> Iraq’s historic <strong>and</strong> ancient right over these waters is notsafeguarded. 17 The situations in the Jordan, Ganges,Brahmaputra <strong>and</strong> Indus are quite different. However, most ofthe above examples are explicitly linked with the idea of prior13 A. T. Wolf, Hydro Politics Along the Jordan River: Scarce Water <strong>and</strong><strong>Its</strong> Impact on the Arab-Israeli Conflict, Tokyo: United NationsUniversity, 1995, p. 57.14 A. T. Wolf, "Hydro-Political History of the Nile, Jordan <strong>and</strong> EuphratesRiver Basins" in A. K. Biswas (ed), <strong>International</strong> Waters of the MiddleEast: From Euphrates-Tigris to Nile, Oxford: Oxford University,1994, p. 30; also see ibid.15 Ibid. p. 31.16 D. A. Caponera, "Legal Aspects of Transboundary River Basins in theMiddle East: The Al Asi (Orontes), The Jordan <strong>and</strong> the Nile" (1993) in33 NRJ, pp 631-632.17 Supra note 11, pp. 158-172; see A. Soffer, Rivers of Fire: the Conflictover Water in the Middle East, Lanham, Maryl<strong>and</strong>: Rowman &Littlefield, 1999, pp. 88-112.appropriation or existing use, one of the relevant factors to betaken into account under Article 6 of the UNCIW.In practice, this rule is most often inimical to the interest ofupstream states because ancient civilisations <strong>and</strong> utilisation ofwater took place along the banks of rivers in downstream states,for example in ancient Egypt, India, <strong>and</strong> China. Thus, theybenefit from this concept. Conversely, the weaker upstreamstates, like Nepal <strong>and</strong> Ethiopia, now have to contend withmassive prior appropriation by other downstream neighbours,which hinders them from utilising such common waters. Inthese circumstances, when a poor <strong>and</strong> vulnerable country needsco-operation (in finance, technology <strong>and</strong> skills), it finds itself inthe unenviable position of not being able to develop any waterprojects on account of the objections raised by asymmetricalneighbours. It is, therefore, an obvious injustice <strong>and</strong> against thespirit of the Charter of the UN <strong>and</strong> of Articles 5, 6, & 7 of theUNCIW. 183.1.4 Equitable UtilisationThis is the most widely recognised <strong>and</strong> practiced principle inthe resolution of water related problems. It is based on equity,fairness <strong>and</strong> norms of distributive justice in which the interestsof every contestant country are taken into consideration.Equitable utilisation is central to this book <strong>and</strong> the rest of thischapter is devoted to its study. IWL recognises equitableutilisation as a set of well-established rules, which are also18 There are numerous instances of projects being cancelled due to theobjection of riparian states on such grounds. In the Nile project westernfunding was cancelled as it was in Ganges, Kanaki, Tamur in Nepal<strong>and</strong> several other parts of the world. At the same time rich <strong>and</strong>resourceful states were able to develop any project against the spirit ofIWL For example the Farakka, Chicago diversion, Three Gorges <strong>and</strong>the Nile’s case explicitly ignore the right of the nine upper riparianstates for which international law <strong>and</strong> the international communityhave remained mere spectators.
Equitable Utilisation / 109 110 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiawidely recognised as rules of customary international law <strong>and</strong>supported by state practice, judicial prouncement <strong>and</strong> thewriting of publicists.3.2 The Rule of Equitable Utilisation in IWLIn order to share <strong>and</strong> allocate waters in an IWC, Article IV ofthe Helsinki Rules on theUses of Waters of <strong>International</strong> Rivers provides:“Each basin State is entitled, within its territory, to areasonable <strong>and</strong> equitable share in the beneficial uses ofthe waters of an international drainage basin”. 19This article is supplemented by Article V, 20 which provides thefactors in determining what uses are reasonable <strong>and</strong> equitable:“1. What is a reasonable <strong>and</strong> equitable share within themeaning of article IV is to be determined in the light of allthe relevant factors in each particular case.2. Relevant factors to consider include, but are not limited to:(a) the geography of the basin, including in particular theextent of the drainage area in the territory of eachbasin state;(b) the hydrology of the basin, including in particular thecontribution of water by each basin state;(c) the climate affecting the basin;(d) the past utilization of the waters of the basin, includingin particular existing utilization;(e) the economic <strong>and</strong> social needs of each basin state;(f) the population dependent on the waters of the basin ineach basin State;(g) the comparative costs of alternative means ofsatisfying the economic <strong>and</strong> social needs of each basinState;(h) the availability of other resources;19 ILA’s Helsinki Rules (1966), pp. 486-488.20 Ibid.(i) the avoidance of unnecessary waste in the utilizationof waters of the basin;(j) the practicability of compensation to one or more ofthe co-basin States as a means of adjusting conflictsamong uses; <strong>and</strong>(k) the degree to which the needs of a basin State may besatisfied, without causing substantial injury to a cobasinState.3. The weight to be given to each factor is to be determinedby its importance in comparison with that of other relevantfactors. In determining what is the reasonable <strong>and</strong> equitableshare, all relevant factors are to be considered together <strong>and</strong>a conclusion reached on the basis of the whole.”Thus, from the assessment of Articles IV <strong>and</strong> V, it can beargued that there is no single definition of what equitablemeans. <strong>Its</strong> assessment, however, is to be based on a number offactors. Therefore, the application of equitable utilisation couldbe different for different drainage basins considering theparticular circumstances prevailing in each basin.Regarding Article 5 on equitable <strong>and</strong> reasonable utilization <strong>and</strong>participation, the UNCIW also holds similar attitudes, whichstipulate that: 21“1. Watercourse States shall in their respective territoriesutilize an international watercourse in an equitable <strong>and</strong>reasonable manner. In particular, an internationalwatercourse shall be used <strong>and</strong> developed by thewatercourse State with a view to attaining optimal <strong>and</strong>sustainable utilization thereof <strong>and</strong> benefits therefrom,taking into account the interests of the watercourse Statesconcerned, consistent with adequate protection of thewatercourse.2. Watercourse States shall participate in the use,development <strong>and</strong> protection of an international watercourse21 36 ILM (1997), pp. 700-720.
Equitable Utilisation / 111 112 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiain an equitable <strong>and</strong> reasonable manner. Such participationincludes both the right to utilize the watercourse <strong>and</strong> theduty to cooperate in the protection <strong>and</strong> developmentthereof, as provided in the present Convention.”Each watercourse has unique features that dem<strong>and</strong> separatesolutions. However, the justifiable principle to address eachcircumstance is that of reasonable <strong>and</strong> equitable utilisation. Itembraces equity, rationality, fairness, justice, equality <strong>and</strong> otherimportant elements of sustainability. In determining whether ause is equitable or not, factors relevant to equitable <strong>and</strong>reasonable utilization as envisaged in Article 6 of the UNCIWshould be considered: 22“1. Utilization of an international watercourse in an equitable<strong>and</strong> reasonable manner within the meaning of article 5requires taking into account all the relevant factors <strong>and</strong>circumstances, including:(a) Geographic, hydrographic, hydrological, climatic,ecological <strong>and</strong> other factors of a natural character;(b) The social <strong>and</strong> economic needs of the watercourseStates concerned;(c) The population dependent on the watercourses in eachwatercourse State;(d) The effects of the use or uses of the watercourse in onewatercourse State on other watercourse State;(e) Existing <strong>and</strong> potential uses of the watercourse;(f) Conservation, protection, development <strong>and</strong> economyof use of the water resources of the watercourse <strong>and</strong>the costs of measures taken to that effect;(g) The availability of alternatives, of comparable value,to a particular planned or existing use.2. In the application of article 5 or paragraph 1 of this article,watercourse states concerned shall, when the need arises,enter into consultations in a spirit of cooperation.22 Ibid.3. The weight to be given to each factor is to be determinedby its importance in comparison with that of other relevantfactors. In determining what is a reasonable <strong>and</strong> equitableuse, all relevant factors are to be considered together <strong>and</strong> aconclusion reached on the basis of the whole.”Again, the role of equity is relevant in fixing the conditions ofwhat is equitable <strong>and</strong> reasonable use of such waters. Insummary, these rules are meant to resolve any conflict ordispute between the contestant states in a fair manner. 23 Theserules clearly set out the conditions <strong>and</strong> prerequisites that needto be taken into consideration when determining whether a useis equitable or not.The use of an IWC should be undertaken in such a way that itwill not prejudice or be harmful to any other watercourse states.The obligation not to cause any harm to the other watercoursestate is an inseparable part of equitable <strong>and</strong> reasonableutilisation. The other aspect of equitable utilisation is to sharethe benefits <strong>and</strong> costs of any watercourse project developed bya watercourse state. This implies that if work done by anupstream state yields any benefits for the downstream state, itmust be shared on the basis of a cost benefit-analysis;otherwise, it could be a case of unjust enrichment. 24Furthermore, equitable utilisation requires a continuous processof giving information, negotiation <strong>and</strong> cooperation among theriparian states for the beneficial use of a shared watercourse. 25The rule of equitable utilisation was predominantly developed<strong>and</strong> enunciated for the division, allocation <strong>and</strong> sharing ofmarine resources <strong>and</strong> IWC’s among contestant states. Equitableutilisation has emerged as a rule of customary international law<strong>and</strong> is the cardinal rule in the area of delimitation of the23 Supra note 1, pp. 16-25.24 Factory of Charzow case (1928), PCIJ Reports, p. 47.25 Supra note 4, p. 548; S. C. McCaffrey, The <strong>Law</strong> of <strong>International</strong><strong>Watercourses</strong>, Oxford: Oxford University, 2001, p. 340.
Equitable Utilisation / 113 114 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiacontinental shelf, allocation of marine resources <strong>and</strong> IWCissues. However, the political use of equity <strong>and</strong> the use ofequitable utilisation in legal spheres are different. The politicaluse of these words is always contentious <strong>and</strong> disputed, whilstthe legal sphere recognises it as a customary rule ofinternational law. For example, the use of equity in South-North relations, particularly in respect of internationalcooperation, entails providing resources <strong>and</strong> technologies, anissue that is always challenged by the North. 26 The politicalconcept of equity has been used to get unconditional financialresources from the North, whilst the legal use of equity is theapplication of the Articles 5 <strong>and</strong> 6 of the UNCIW <strong>and</strong> theprinciple enunciated by the ICJ in numerous cases as evaluatedin this research. The legal concept of equity is well defined <strong>and</strong>sufficiently certain for implementation. With regard to thepolitical concept of equity, the North has always maintainedthat it is not legally or even morally bound to help the South,whilst the South has taken the reverse position on these issues.Hence it is fair to say that the political concept of equity isvague <strong>and</strong> limited, perhaps to the point of being a slogan, <strong>and</strong>without compromise between two groups is not achievable. Toillustrate this point, CERDS <strong>and</strong> NIEO are always disputed.Thus the political use of equity remained a disputed whilst itslegal use has been unanimously recognised by both camps.After the prolonged <strong>and</strong> sustained effort of the ILA in itsHelsinki Resolution 1966, the rules of equitable utilisation asdeterminants of the allocation <strong>and</strong> sharing of water resourcesamong the riparian countries were adopted, which has becomethe substantive law ever since. 27 However, they are an earlydevelopment made by non-governmental organisations. At thesame time, it should be borne in mind that the outcome of therules is the result of largely accepted state practices, scholarlywriting <strong>and</strong> case law. That is to say, it is a reflection of theexisting customary rules of international law. 28There is a set of rules that provide for the rights, duties <strong>and</strong>responsibilities of watercourse states in matters relating to thesharing of resources. The basic rule is contained within ArticleIV of the Helsinki rules. 29 The formulation of those rules wasundertaken as a collection of general principles drawn fromregional treaties, judicial pronouncements <strong>and</strong> academicwritings on the subject. The ILC has been involved in thecodification <strong>and</strong> progressive development of international lawsince 1970. After sustained efforts, the ILC submitted its draftof rules to the UNGA (Sixth Committee). Subsequently, withnecessary debate, modification <strong>and</strong> negotiation at the UN,adopted the UNCIW on May 20, 1997. The convention is moreadvanced <strong>and</strong> refined than the Helsinki rules. It set out the basicrule(s) in its Articles 5, 6 & 7. 30The provisions made in the UNCIW describe the factors thatneed to be taken into account. It is important to define therelevant factors to be considered that will significantly helpresolve the dispute during negotiations <strong>and</strong> other diplomaticefforts to avert <strong>and</strong> mitigate future conflicts. The socioeconomic<strong>and</strong> demographic aspects of the populations, <strong>and</strong> theexisting <strong>and</strong> potential uses are given equal weight in order todetermine whether or not a particular use is equitable. It isuseful to mention here that in the context of rejection of thepopulation factor (huge population was a reason to dem<strong>and</strong>priority) in determining equitable utilisation by the ICJ in itsdecision of the delimitation of a continental shelf, it wasthought essential to define those elements clearly, as mentioned26 R. P. An<strong>and</strong>, Confrontation or Cooperation? <strong>International</strong> <strong>Law</strong> <strong>and</strong>the Developing Countries, Dordrecht: Martinus Nijhoff, 1987, pp. 111-120.27 ILA report of the fifty second conference (1966), pp. 478-532.28 B. R. Chauhan, Settlement of Disputes in <strong>International</strong> DrainageBasins, Berlin: E. Schmit, 1981, p. 457; also see supra note 4, p. 548.29 ILA report of the fifty second conference, Helsinki (1966), p. 486.30 36 ILM (1997), p. 700.
Equitable Utilisation / 115 116 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiain Article 6 of the UNCIW. 31 In order to give emphasis to thepopulation factor it was essential to put it expressly to avoidany confusion created by the above judgment. In the case of theallocation of resources between two developing countries, theless developed country, for example as between India <strong>and</strong>Nepal, Nepal, should get priority according to the rule ofequity. This is by analogy with the tradition of developedcountries providing finance to the development effort ofdeveloping countries, to less developed countries at differentstages of development.It can be argued that developing <strong>and</strong> vulnerable nations couldbenefit from socio-economic, <strong>and</strong> population factors stipulatedin Article 6 of the UNCIW, whilst sharing <strong>and</strong> allocating thebenefits from common water resources. 32 The next significantdevelopment is the interpretation of equitable utilisation in thecontext of the Gavcikovo-Nagymoros case by the ICJ, whichclearly recognised equitable utilisation as a basic rule ininternational law that gives impetus to Articles 5 <strong>and</strong> 6 of theUNCIW. 33 In this case, the court held the view that accordingto the treaty of 1977, Hungary had agreed to share the benefitsfrom the Danube River. Non-implementation of the treaty,however, did not mean that it had forfeited its right over thereasonable <strong>and</strong> equitable sharing of the benefits from thereon. 3431 Judge Weermantry's opinion in the Maritime Delimitation in the Areabetween Greenl<strong>and</strong> <strong>and</strong> Jan Mayen case (Den.v.Nor.) ICJ Reports(1993), p. 268: “no general proposition can be laid down that thepopulation factor is in all cases irrelevant.”32 X. Fuentes, “Sustainable <strong>and</strong> Equitable Utilisation of <strong>International</strong><strong>Watercourses</strong>” (1998) in 69 BYBIL, p. 119; also see principle 6 of theRio Declaration proclaiming that the special situation <strong>and</strong> needs ofdeveloping <strong>and</strong> those most environmental vulnerable, shall be givenspecial priority.33 In the Gavcikovo-Nagymaros case interpretation of equitable utilisationhas been construed as a skeleton rule of shared natural resourcesbetween the states, in 37 ILM (1998), para. 85, p. 191.34 Ibid. p.190.The equitable utilisation rule reciprocates with the no harm rulein Article 7, the obligation not to cause significant harm <strong>and</strong> totake appropriate measures to prevent significant harm to theother watercourses states:“2 where significant harm is nevertheless caused toother watercourses States, the States whose usecauses such harm shall, in the absence of agreementto such use, take all appropriate measures, havingdue regard for the provisions of articles 5 <strong>and</strong> 6, inconsultation with the affected State, to eliminate ormitigate such harm <strong>and</strong>, where appropriate, todiscuss the question of compensation." 35Article 8 prescribes the general obligation to cooperate.Similarly, Articles 20 <strong>and</strong> 21 oblige states to prevent, reduce<strong>and</strong> control pollution. Non-compliance with those provisionscould be alleged as a breach of Articles 5 <strong>and</strong> 6, implyinginequitable use of water resources. 36In practice, however, there have been very bitter experiences ofnon-co-operation, which have led to a situation of war. 37 TheArab decision to build an all-Arab diversion of the Jordanheadwaters to preclude the Israel National Water Carrier endedthree years later when Israeli tank <strong>and</strong> air strikes halted35 UNCIW: Article 7(2).36 Ibid. Article 20/21.37 Supra note 13 p. 173; also see supra note 17, pp. 639-641: During the1948 war, the Rutenberg Electricity generating plant was destroyed byIsrael to avoid exclusive control of the Jordan <strong>and</strong> Yarmuk waters byArabs. Arab states in 1964, had taken a steps to build dams in order toutilise water from the Wazzani, Hasbani <strong>and</strong> Banyas rivers, forirrigation in Lebanon, Syria <strong>and</strong> Jordan, after conveying water to theJordan valley through the East Ghor canal. Israel considered this is anaggressive action that threatened its water resources <strong>and</strong> destroyed itswork site in an attack.
Equitable Utilisation / 117 118 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiaconstruction on the diversion. It was in June 1967 that the sixdaywar changed the regional riparian positioning: by annexingthe Golan Heights of Syria, Israel acquired two of the threeJordanian river headwaters <strong>and</strong> the recharge zone for mountainaquifers that currently supply about 40% of Israel’s fresh watersupply.3.3 Procedural <strong>Law</strong>In order to attain the notion of equitable utilisation of an IWC,agreements are generally regarded as the best means ofavoiding disputes between co-basin states. Thus, states arerequired to consult <strong>and</strong> negotiate about the utilisation inquestion. If there were any adverse effects on the other riparian,mutual consultation <strong>and</strong> discussion are required so that anyharm is mitigated, averted or even compensated for throughconcluding an agreement to this effect. The Helsinki Rules inArticles XXIX to XXXVII provide such a procedure, i.e.,mediation, consultation, negotiation, the use of joint agencies<strong>and</strong> good offices <strong>and</strong>, ultimately, arbitration as a means ofpreventing <strong>and</strong> settling the disputes. 38These procedural rules are incorporated in Article 4 of theConvention relating to the Development of Hydraulic Poweraffecting more than one State <strong>and</strong> Protocol of the Signature -Geneva 1923. 39 Ever since, this has always been asserted inmajor publications, treaty regimes <strong>and</strong> instruments. Besides thisprovision, from the perspective of the ICJ, it has been firmlyasserted in numerous judgements, e.g., the North Sea38 Chapter Six, Articles 26-37 of the Helsinki Rules stipulates proceduresfor the settlement of disputes.39 "If a contracting state desires to carry out operations for thedevelopment of hydraulic power which might cause serious prejudiceto any other contracting state, the states concerned shall enter intonegotiations with a view to the conclusion of agreement which willallow such operation to be executed."Continental Shelf Cases 1969 40 <strong>and</strong> the Fisheries JurisdictionCase 1974. 41 In both cases, the former was concerned with thedelimitation of the Continental Shelf <strong>and</strong> the latter with theapportionment of shared fisheries. In these cases, the court heldthat the parties were under the duty not to act unilaterally but tonegotiate in good faith in an attempt to reach an equitablesettlement of those issues in dispute.3.3.1 The Duty to Consult <strong>and</strong> NegotiateBourne has observed that similar to other disputes ininternational law, international drainage basin disputes are to besettled in one of three ways:"by the agreement of the parties, reached afterconsultations <strong>and</strong> negotiations <strong>and</strong> perhaps aided by themediation <strong>and</strong> conciliation of a third party; bysubmission to third party determination; by the use offorce” as ensured under chapter VII of the UNCharter. 42Numerous instruments have been adopted to consult <strong>and</strong>negotiate in case of disputes in the execution of any project,e.g., the Declaration of the Seventh Inter-American Conferenceheld in Montevideo in 1933, the resolution adopted by theInter-American Bar Association at Buenos Aires in 1957,Article 6 of the Salzburg resolution in 1961 of the Institute of<strong>International</strong> law, <strong>and</strong> the document of the Committee onElectric Power of the Economic Commission of Europe in1954. 43 The Lake Lanoux Tribunal, in its decision in a case40 ICJ Reports 3, (1969) pp. 45-52.41 ICJ Reports 3, (1974) pp. 1-70.42 C. B. Bourne, “Procedure in the Development of <strong>International</strong>Drainage Basins: the Duty to Consult <strong>and</strong> to Negotiate" (1972) in XCYBIL, p. 212; also see Bourne, "Mediation, Conciliation <strong>and</strong>Adjudication in the Settlement of <strong>International</strong> Drainage BasinDisputes" (1971) in X CYBIL, pp. 114-158.43 Ibid.
Equitable Utilisation / 119 120 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiabetween France <strong>and</strong> Spain held a similar view (alreadydiscussed above). However, it rejected Spain’s contention thatunder customary international law, France is compelled not toinitiate any work on the disputed watercourse until it hasreceived the consent from Spain. 44 The ICJ has explicitlysupported the view in numerous cases that states are under theobligation to consult <strong>and</strong> negotiate in the event of any conflictwhatsoever in undertaking any project on an IWC. 45There are some extreme instances, however, where the duty toconsult has been explicitly ignored or knowingly violated. Forinstance, the Jordan River Diversion scheme of 1953unilaterally proposed by the Arabs <strong>and</strong> aiming to harmprovoked a war in 1967, with Israel military damaging theArabs diversion work. 46 The Chicago diversion that involvedthe transfer of waters from the Great Lake Basin to theMississippi River basin by the USA in Chicago causedsignificant harm to Canada. 47 The Farakka Barrage unilaterallyconstructed by India in 1961, 48 caused much harm to EastPakistan. Besides, which India's temporary interruption of theIndus waters to Pakistan was also against those laws. 49 Turkeytemporarily interrupted the entire flow of the Euphrates <strong>and</strong>44 Supra note 8, pp. 166-167.45 North Sea Continental Shelf Cases (1969), Fisheries Jurisdiction(1974) <strong>and</strong> Gavcikovo-Nagymaros case (1997).46 Supra note 13, p. 57; also see supra note 11, p. 68.47 Supra note 6 p. 221; also see P. K. Wouters, "Allocation of the Non-Navigational use of <strong>International</strong> <strong>Watercourses</strong>: Efforts at Codification<strong>and</strong> the Experience of Canada <strong>and</strong> the United States" (1992) in XXXCYBIL, pp. 60-63: This diversion has remained a bitter experience forthe two nations.48 Supra note 9, p. 379, also see C. K Sharma, Water <strong>and</strong> EnergyResources of the Himalayan Block, Kathm<strong>and</strong>u: S. Sharma, 1983, p.278; also see B. Crow, A. Lindquist & D. Wilson, Sharing the Ganges,The Politics <strong>and</strong> Technology of River Development, New Delhi: SagaPub., 1995, p. 66.49 Y. Claude Acceriez, “The Legal Regime of the Indus” in R. Zacklin &L. Caflisch (eds), The Legal Regime of <strong>International</strong> Rives <strong>and</strong> Lakes,Dordrecht: Martinus Nijhoff Pub., 1981, pp. 396-397.Tigris for 27 days in order to fill up the Ataturk Reservoir,which escalated the tension with further downstream countries,Syria <strong>and</strong> Iraq in 1990. However, a trilateral meeting held laterin Ankara was able to sort out the problem. 50Apart from these exceptional instances, watercourse states areusually willing to try to settle their disputes throughconsultation <strong>and</strong> negotiation. State practices suggest thisnotion. 51 The UNCIW stipulates in its Article 8, the generalobligation to cooperate; Article 9, the regular exchange of data<strong>and</strong> information; <strong>and</strong>, Article 10, the relationship betweendifferent kinds of uses. In the event of conflict on the uses of anIWC, it shall be resolved with reference to Articles 5 to 7, withspecial regard to the requirement of vital human needs. Part IIIon planned measures, from Articles 11 to 19, explicitly assertsthe procedural underpinnings of negotiation, exchange of data<strong>and</strong> statistics. The aim of those procedural rules are to informabout the proposed project in detail, notify, <strong>and</strong> respond to thepossible effect of such use, the time being fixed as six monthsfor completing the notification <strong>and</strong> making objections (if any),<strong>and</strong> replying to notification. The consequence of not respondingto notification is that the state in default cannot raise objectionsto the proposed scheme. The process of consultation <strong>and</strong>negotiation concerning planned measures <strong>and</strong> urgentimplementation of planned measures is also dealt with. Thecore of these procedural underpinnings is to encourage thetransparency of a proposed project <strong>and</strong> to ensure that it is formaximising the benefits with no significant adverse effects to50 J. Kollars, "Problems of <strong>International</strong> River Management: The Case of theEuphrates” A. K. Biswas (ed), <strong>International</strong> Waters of the Middle East Fromthe Euphrates Tigris to Nile, Oxford: Oxford University, 1994, pp. 48-49: GAP(Turkish acronym), Turkey's South Anatolia Development Project, whichincorporates construction of 21 dams <strong>and</strong> 19 hydropower projects. One millionhectares of l<strong>and</strong> are scheduled to be irrigated with water from the Euphrates<strong>and</strong> 625,000 hectares from the Tigris river waters, a total of 7500 MW installedcapacity of hydroelectricity with an average annual production of 2.6 billionkwh. This in turn represents 19% of the 8.5 million ha of the economicallyirrigable l<strong>and</strong> in Turkey <strong>and</strong> 20.5% of the country's hydropower.51 Ibid.
Equitable Utilisation / 121 122 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiathe other watercourse states. Other elements includecooperation between watercourse states in the event of anyinjury, the obligation to mitigate, avert or eliminate such injuryor, alternatively, the payment of reparation in case of injuryinflicted. Excluding some exceptional instances, co-basin orwatercourse states are usually willing to try to settle their waterdisputes by consultation <strong>and</strong> negotiation. 523.3.2 Discharge of DutyThe basic element of the <strong>Law</strong> of Treaties is to ensure that theparties will implement the provisions of a treaty in good faith. 53Judge Lauterpacht adopted the good faith concept in theNorwegian Loan Case, where he propounded: “unquestionably,the obligation to act in accordance with good faith, being ageneral principle of law, is also part of international law.” 54Similarly, in Interh<strong>and</strong>el he spoke of "the abiding duty of everystate is to act in good faith." 55 In the North Sea ContinentalShelf judgement the ICJ accepted this view, it was based on theequitable principle for delimiting the Continental Shelf betweenadjacent states on “a foundation of very general precepts ofjustice <strong>and</strong> good faith.” 56 It further states:"… the parties are under an obligation to enter intonegotiations with a view to arriving at an agreement<strong>and</strong> not merely to go through a formal process ofnegotiation; … they are under an obligation so to52 Of the 253 treaties on the non-navigational use of international rivers includedin the volume prepared by the Secretariat at the United Nations <strong>and</strong> publishedin early 1960 at least 116 indicate that no undertaking will be carried out whichmake any change in the regime of a river without the consent of the othercountry. E. Fano," Brief Comments on the United Nations Water Conference"in Albert E. Utton <strong>and</strong> L. Teclaff (eds), Water in Developing World, Colorado:Westview Press, 1978, pp. 267-269.53 Article 26 of the Vienna Convention on <strong>Law</strong> of Treaties, 8 ILM (1969)p. 685.54 ICJ Reports 9, (1957) p. 53.55 ICJ Reports 6, (1959) p. 113.56 ICJ Reports 3, (1969) pp. 46-47.conduct themselves that the negotiations aremeaningful, which will not be the case when either ofthem insists upon its own position withoutcontemplating any modifications of it…" 57The principle of good faith requires states subject to this duty tocontinue consultation <strong>and</strong> negotiation until they reach anagreement. The PCIJ in its advisory opinion of October 18,1931 concerning the Railway Traffic case between Pol<strong>and</strong> <strong>and</strong>Lithuania stated:"… an obligation to negotiate does not imply anobligation to reach an agreement, nor in particulardoes it imply that Lithuania, by undertaking tonegotiate, has assumed an agreement, <strong>and</strong> is inconsequence obliged to conclude the …agreements." 58Later, in a case where the same approach was taken by the ICJ,in its advisory opinion on The Status of South-West Africa, thecourt denied that a state which has assumed an obligation tomake an agreement with another state was in fact under anobligation to reach an agreement with it. The court had furthermade it clear that the parties must be free to accept or reject theterms of a contemplated agreement. No party should impose itsterms on another party. 59The ICJ in the Gavcikovo-Nagymoros case again endorsed theprinciple. 60 Articles 8 & 9 of the UNCIW state the sameprovision between watercourse states. Whilst carrying out anyproject in an IWC, Articles 11-19 have stipulated detailedprovisions, as briefly discussed above. These provisions spell57 Ibid. p. 47.58 PCIJ Ser.A/ NO 42, (1931), p. 116; also see Bourne, supra note 42, pp.225-226.59 ICJ Reports (1950) pp. 128 &139.60 37 ILM, (1998), para. 78, p. 190.
Equitable Utilisation / 123 124 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiaout how to discharge <strong>and</strong> dispense the requirements of theseArticles. Compliance with these Articles enhances cooperation,prevents conflicts <strong>and</strong> encourages the notion of equity.Therefore, international law imposes on a basin state theobligation to consult <strong>and</strong> negotiate in good faith with co-basinstates. As Bourne advocates, the international legal obligationimposed on watercourse states is the same: that is, not to causeany harm from their own work. 61 The view is established by theUNCIW <strong>and</strong> pronouncements of courts <strong>and</strong> tribunals asevaluated earlier.From the legal viewpoint, the UNCIW is applicable to allmember states equally under all circumstances. However, inpractice, it is applied against those that are weak, vulnerable<strong>and</strong> poor. For instance, the construction of the Aswan dam onthe Nile was not legally right as per the notion of the above rulethat the construction must not adversely affect other ripariancountries. In this case, Egypt had not fulfilled its duty toconsult <strong>and</strong> negotiate. Even then, the mammoth work wasundertaken by the Soviet Union when the western nationsrefused to get involved because of the dubious legality of thisconstruction project. 62 Even though the western countries <strong>and</strong>UN agencies refused to get directly involved, the constructionof the Aswan Project was carried out against interests of eightother co-riparian countries. Similarly, India also undertook theconstruction of the Farakka dam by means of her own resourceswhen foreign involvement was denied, regardless of Pakistan’sobjection. 63 Such a notorious “might is right” attitude was alsoexhibited in the Chicago diversion case. 64It is the argument of the author that if recourse to internationallaw were taken to seek riparian clearance, the proposedundertakings mentioned above would have been judged illegal.In such circumstances, states are able to carry out such illegalwork only if they are financially <strong>and</strong> technically self-reliant <strong>and</strong>international law cannot prevent them from doing so (or at leasthas not done so to date). As poor nations with their weakeconomic <strong>and</strong> power base cannot carry out such works, theirplight is one of victimisation through discrimination. Whatneeds to be done is that illegal work must be stopped, whetherthrough the use of economic sanctions, trade restrictions, or anysuitable means as stipulated by the UN, including by SecurityCouncil resolution. 65 If the international community werewilling to do so, it would lead to the realisation by all peoplesof the world that IWL has relevance <strong>and</strong> can be implemented.Otherwise, the creation of a system for encouraging theimplementation of the legal rules <strong>and</strong> discouraging the breachof its provisions would be the most desirable option.61 C. B. Bourne, "Procedure in the Development of <strong>International</strong>Drainage Basins: Notice <strong>and</strong> Exchange of Information”(1972) in 22UTLJ, p 205; also see R. Rosentock, "Current Development: FortySixth Session of the <strong>International</strong> <strong>Law</strong> Commission- <strong>International</strong><strong>Watercourses</strong>" (1995) in 89 AJIL, p. 392.62 A. K. Biswas, "Indus Water Treaty: The Negotiating Process" (1992)in 17 WI, p. 201. He asserted that international funding agencies havealso declined to provide loans for development of international waters,unless the countries concerned reach a mutually acceptable treaty.Without external financial assistance, developing countries have beenunable to construct capital intensive water development projects oninternational rivers.63 Supra note 6, p. 221; also see supra note 48 (Ganges), p. 64-68: Indiatemporarily interrupted Indus waters to Pakistan in 1948, againstPakistan’s historic <strong>and</strong> consumptive right.64 Ibid. Also see D. C. Piper, "<strong>International</strong> <strong>Law</strong> <strong>and</strong> Environment forMunicipal Litigation: The Chicago Diversion Case” (1968) in 62 AJIL,p. 451.65 D. J. Harris, Cases <strong>and</strong> Materials on <strong>International</strong> <strong>Law</strong>, London:Sweet & Maxwell, 1998, pp. 1057-1060. Appropriate measures arestipulated in chapter 7, Articles 39-51 of the UN Charter. Economicblockades were imposed on Iraq <strong>and</strong> Libya; such blockades may beappropriate to ensure compliance with these laws.
Equitable Utilisation / 125 126 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia3.4 Origin <strong>and</strong> Development of EquityEquity can be described as synonymous to the basic notion offairness <strong>and</strong> natural justice. It is also directly related to the ideathat human behaviour is directed by common moral, ethical <strong>and</strong>cultural principles. Equity can also be regarded as aconstructive, positive <strong>and</strong> liberal concept that helps resolveconflicts <strong>and</strong> tensions through the reconciliation of conflictinginterests. Thus, it has become a significant element of thepolitical, economic <strong>and</strong> legal spheres of modern society, 66reflected in democratic ideals as well as in the common <strong>and</strong>civil law systems of the world. 67An attempt has been made to provide an analytical descriptionof the development of equity in terms of national <strong>and</strong>international political as well as legal systems. In the legalsphere, equity has played a crucial role in resolving conflicts inthe sharing <strong>and</strong> allocation of water <strong>and</strong> is regarded as the besttool to reconcile the interest of each contending party to itssatisfaction. The role of equity in shared natural resources <strong>and</strong>its relation to IWL will be dealt with. Finally, the ICJ'sjurisprudence on equitable utilisation shall be critically assessedbased on the study commensurate with state practice <strong>and</strong> itsrelevance i.e., for future posterity. The interpretation of intergenerational(right of present <strong>and</strong> future generations) equity <strong>and</strong>the need of a NIEO in order to bridge the gap between the66 S. Chowdhary, "Intergenerational Equity: Substratum of the Right toSustainable Development" in S. Chowdhary et al (eds), The Right toDevelopment in <strong>International</strong> <strong>Law</strong>, Dordrecht: Kluwer Academic Pub.,1992, p. 241.67 D. A. French, "The Role of <strong>International</strong> <strong>Law</strong> in the Achievement ofIntergenerational Equity" (1999) in 31 ELR, p. 10469; also see J. Kokolt,“Equity in <strong>International</strong> <strong>Law</strong>” in F. L. Tooth (ed), Fair Weather? EquityConcerns in Climate Change, London: Earthscan, 1999, p. 173.North <strong>and</strong> the South will also be evaluated in the context of thedem<strong>and</strong> for an equitable society in the modern era. 68Equity developed in part due to shortcomings in the commonlaw. Frank <strong>and</strong> Sughrue have argued that the development ofequity in municipal legal systems (civil <strong>and</strong> common law) hasevolved in three stages:"First, the sovereign granted dispensations tosubjects exposed to inordinate hardship in a specificsituation. Second, precedents accumulated,evolving into a system of equitable norms parallelto the main body of the law <strong>and</strong> displacing thesystem of royal dispensation. In the last stage,equitable principles became a part of the law.” 69Equity acts in this sense to provide a fair solution to disputes byreconciling conflicting interests where there is no clear law. Toequity as a ‘softener’ of the common law, we can add thenotion of distributional equity, although it is as yet only anemerging norm, with a good deal of political content.Distributional equity suggests that richer states are normallybound to distribute at least some of their resources to poorerstates so as to ensure a more equal world. It may be useful todistinguish between the overlapping meanings of the termequity. As stated earlier, in the common law, the concept ofequity has been used to bridge the lacunae, remove the rigidityof law for fairness <strong>and</strong> to select one of the best interpretation oflaw for ensuring justice. But the expression ‘distributionalequity’ refers more to the concept of providing a better life forthe people of the developing world. The present gap in the68 U. Baxi, “The New <strong>International</strong> Economic Order, Basic Needs <strong>and</strong>Rights: Notes towards Development of the Right to Development”(1983) in 23 IJIL, pp. 225-245.69 T. M. Frank <strong>and</strong> D. M. Sughrue, "The <strong>International</strong> Role of Equity-as-Fairness" (1993) in 81 GLJ, p. 564; see M. Akehurst, ”Equity <strong>and</strong>General Principles of <strong>Law</strong>” (1976) in 25 ICLQ, pp. 801-825; also seeR. A. Newman, Equity <strong>and</strong> <strong>Law</strong>: A Comparative Study, New York:Oceana Pub, 1961, p. 34.
Equitable Utilisation / 127 128 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiadevelopment <strong>and</strong> life st<strong>and</strong>ards of the North <strong>and</strong> South is huge<strong>and</strong> the poverty in the South is terrible. There are billions ofpeople who are living below the $ 1 daily income <strong>and</strong> they aredeprived of the minimum amenities of life. The concept ofachievement of the target of halving world poverty by 2015 isbased on the idea of distributional equity in which it is certainlypossible to justify the notion of preferential treatment fordeveloping states. 70 As described below, the notion ofenvironmental protection <strong>and</strong> sustainable development in whichthe developed world is required to provide more funding <strong>and</strong>technology to developing countries to carry out sustainabledevelopment stresses the idea of distributive justice.Equity has developed into a major legal system encompassingthe civil <strong>and</strong> common-law systems, albeit the two system’sapproaches differ. The common law system developed inEngl<strong>and</strong> as a separate system of law with its own normativestatus. Equity is not only a principle but also a collection ofrules. As described by Rossi“the common law eventually freed equity from itsrestrictive function ‘as a means of correcting specificlaws’ <strong>and</strong> in so doing, made equity ‘an independentsource of fresh rules of law’ <strong>and</strong>, indeed, a newsystem of law". 71Equity provides international tribunals with a discretionary(widely accepted) means of avoiding negative effects <strong>and</strong> somelacunae in the law. 72 Equity has become an indispensable partof modern democracies <strong>and</strong> their judicial, political <strong>and</strong> social70 Department of <strong>International</strong> Development (DFID), Halving WorldPoverty by 2015, London: 2000, pp.20-22. Also see supra note 67, pp.10469-10484.71 C. Rossi, Equity <strong>and</strong> <strong>International</strong> <strong>Law</strong>, New York: TransnationalPub., 1993, p. 32; this above quotation refers to the writing of the juristGustav Radbruch.72 Ibid. p. 38; also see D. Browne (ed), Ashburner’s Principles of Equity,London: Butterworth, 1933, p. 10systems in order to ensure greater fairness <strong>and</strong> justice. It isimbued with such elements as are needed for the achievementof broader goals in order to abate hindrances to the commonaspirations of the people in a modern liberal world. Equity isnot to be construed as Statutes, but rather as a general basisaround which much of the law of it has been formed. Itfrequently appears as part of reasoning in judgements, <strong>and</strong> hasrelevance to the law of trusts. 73 Equity should be considered notonly as an individual rule but also as a collection of principleswhich are often referred to as rules of equity.3.5 Types of EquityAside from distributive equity, which is perhaps best describedas an emerging norm, the use of equity in jurisprudence hasoften been divided into three types, equity infra legem, equitypraeter legem <strong>and</strong> equity contra legem. 74 Some commentatorshave argued that a decision ex aequo et bono is a fourthcategory, which is envisaged in Article 38(2) of the Statute ofthe ICJ. 75 The notion of equity has evolved <strong>and</strong> become anindispensable part in the major legal systems of the world. As aresult, it is now widely recognised as a source of internationallaw. Article 38 of the ICJ provides:“the court whose function is to decide in accordance withinternational law such as are submitted to it, shall apply:c. The general principles of law recognised by civilisednations;”73 P. Todd, Cases <strong>and</strong> Materials on Equity <strong>and</strong> Trusts, London:Blackstone, 1996, p. 1.74 V. Lowe, “The Role of Equity in <strong>International</strong> <strong>Law</strong>” (1992) in 56AYBIL, p. 56-57.75 Supra note 69, p.570. Frank <strong>and</strong> Sughrue have correctly argued it asfourth type of equity.
Equitable Utilisation / 129 130 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South AsiaHiggins 76 argues that Equity infra legem refers to the situationfaced by a court that has to choose between more than oneinterpretation of a legal rule; each interpretation beingacceptable from the legal point of view. In this circumstance,equity infra legem allows the court to determine whichinterpretation is the most just, considering the circumstances<strong>and</strong> balancing the rights <strong>and</strong> obligations of the contendingparties.With regard to equity praeter legem, Lowe has argued that it issimilar to the ratio decidendi in municipal law, but completelydiffers from international law. 77 However, its application is tofulfil the lacunae in the elaboration of rules, the content ofwhich are too general. But, it is debatable whether or not suchlacunae exist in certain circumstances. Cheng takes the view 78that such authorisation is indeed required, but there are otherswho disagree with him on the acceptance of equity praetorlegem. Even if the lacunae exist, the judge has the authority tofill them by his or her interpretation. Higgins held the view thatequity contra legem is “a softenening of the applicable normfor extra-legal reasons.” 79 It is apparent from the analysis thatthe role of equity as a means of correcting the application of alegal rule is still a moot point.The use of equity contra legem is to soften the application foran extra-legal reason. Higgins argues that the very purpose ofusing equity is that it is fulfilling the basic objectives as a tool.For some, equity allows the decision rather than embrace a justsolution. That is to say, equity does not only provide a solution;but rather, it gives broader discretion for having a fair <strong>and</strong>acceptable solution to the dispute. It is based on the idea that a76 R. Higgins, Problem <strong>and</strong> Process: <strong>International</strong> <strong>Law</strong> <strong>and</strong> How We UseIt, Oxford: Clarendon Press, 1994, p. 219.77 Supra note 74, pp. 58-59.78 Supra note 76, p. 220.79 Supra note 66 p. 220.court has the right to decide a case contrary to the relevant legalrules when it considers such rules to be 'unjust' in the deliveryof a fair verdict in tune with equity contra legem. Unlike theother two forms of equity, equity contra legem can go beyondthe ambit of legal rules in order to obtain the required <strong>and</strong>expected result. In this sense, equity contra legem could bevery similar to the ex aequo et bono principle, which does notwork under the legal rules but rather contrary to the confines ofthe rules of law. In essence, it works beyond the legal regime.Conversely, within this rule, the court is free to apply suchprinciples, as it deems suitable in the interest of fair justice.There are many examples in international arbitral tribunalswhere infra legem has been applied <strong>and</strong> decisions made. Forexample, the Iran-US claim tribunal decided a series of disputesbetween the parties by its application. 80 In ascertaining theamount of compensation against nationalisation, there is noproper rule as such, that explicitly stipulates a certain amount ascompensation. In such circumstances, equity provides thearbitrator with a principle to ensure the fair amount beawarded. 81The general notion of equity is designed to be an aid todecision-makers in order to ensure greater justice <strong>and</strong> fairness.It is not possible by the application of the rigid provision of lawbut by the application of other factors such as socio-economic,cultural or political ones. Moreover, the achievement of a fairresolution of a dispute always requires the application ofequity. In this light, its invocation is essential. It should,however, not be understood that equity falls beyond the legalambit or allows decision makers to decide as they please. It has80 16 Iran-US Claims 1987, 112, p. 221: in Starrett Housing Corp v. Irancase, the Tribunal supports the principle that when the circumstancesmilitate against calculation of a precise figure, the Tribunal is obligedto exercise its discretion to ‘determine equitably’ the amount involved.Also see II Iran-US Claims 1986, Harza v. Iran, T. R. 76, p. 11.81 Supra note 74 p. 57-58.
Equitable Utilisation / 131 132 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiaits own procedure that regulates its application in an effectivemanner. In this connection, equity operates within a sphere ofsettled regulations. 823.6 The Role of Equity in <strong>International</strong> <strong>Law</strong>The role of equity in international law concerning general <strong>and</strong>shared natural resources in particular is paramount because,without it, a fair justice is not achievable. As each watercourseis unique <strong>and</strong> the law in the area is still in the developingstage, 83 it is impossible to adjudge any disputes without the aidof equity. As the population has increased along with the rise inthe st<strong>and</strong>ard of living brought about by innovation <strong>and</strong>scientific discoveries, the voracious appetite for more <strong>and</strong> moreresources has became the common ground for increasingcompetition among states.In the process of dispute resolution arising from shared naturalresources such as the IWC agreement among nations, the ICJ<strong>and</strong> its predecessor PCIJ have developed a very rich stock ofjurisprudence in this area. 84 French has argued:“the role of equity in the jurisprudence of the ICJ,<strong>and</strong> before that, in the Permanent Court of82 R.A. Newman, Equity <strong>and</strong> <strong>Law</strong>: A Comparative Study, New York:Ocena Pub., 1961, p. 20.83 Supra note 4, pp. 40-45.84 S. Rosenne, “The Position of the <strong>International</strong> Court of Justice on theFoundation of the Principles of Equity in <strong>International</strong> <strong>Law</strong>”, in A.Boyle <strong>and</strong> P. Van Dijik (eds), Forty Years: <strong>International</strong> Court ofJustice, the Hague: Europa Institute Utrecht, 1988, pp. 85-108.85 Supra note 67, p. 10471, he argued that “numerous meanings can begiven to the legal notion of equity. However, the subdivision intovarious 'forms' of equity is rather artificial, as, in practice, the ICJ willusually utilise the principle without referring to any particularconceptual underst<strong>and</strong>ing of the term. Moreover, … the ICJ has beenneither consistent nor uniform in its approach to equity."<strong>International</strong> Justice has had an uneven <strong>and</strong>inconsistent history.” 85From the study of judgements rendered by the court, it appearsthat the court is not consistent <strong>and</strong> several approaches havebeen adopted. For example, before 1982, the court held theview that delimitation should be decided:“in accordance with equitable principles, <strong>and</strong> takinginto account all the relevant circumstances, in such away as to leave as much as possible to each Party allthose parts of the continental shelf that constitute anatural prolongation of its l<strong>and</strong> territory under thesea.” 86But, after 1982, the court took a broader approach on the issue,holding that the ultimate aim in delimiting the continental shelfwas to arrive at an equitable result. 87 In the later case, equitableutilisation was regarded as a customary rule of international lawwhilst, in the earlier case, it was not.In the Meuse diversion case of 1937, the PCIJ came to theconclusion that the principle of equity is part of internationallaw. However, there were differing opinions on the issuebetween judges. 88 Afterwards, the world court resolved severalcases relating to the delimitation <strong>and</strong> sharing of benefitsaccruing from the utilisation of shared resources between thecontestant states.86 ICJ Reports, (1969) Germany v. Denmark <strong>and</strong> the Netherl<strong>and</strong>s, p. 53.87 ICJ Reports, (1982) Tunisia v. Libya, p. 59.88 37 PCIJ (ser.A/B) Nos. 70, 77: the principles of equity are principles ofinternational law, <strong>and</strong> as such they have often been applied byinternational tribunals. However, it was the dissenting opinion of JudgeHudson, <strong>and</strong> the majority decision did not dealt with equity.
Equitable Utilisation / 133 134 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South AsiaThe other aspect of equity as envisaged in the Charter ofEconomic Rights <strong>and</strong> Duties of States <strong>and</strong> NIEO 89 providedthat the rich nations were obliged to give full economic <strong>and</strong>technological support to enhance the lives of the people ofdeveloping countries. The crusade of the newly independentstates of the third world, undertaken as a movement indem<strong>and</strong>ed from the North sufficient technological as well asfinancial help to obviate the grip of poverty. However, theNorth stating that there is no such law in this area compelling itto help the South always challenged this notion. 90 The authordoes support the notion that the North should cooperate withthe South in order to alleviate the poverty of the latter.However, it should be on moral grounds rather than legal duty.Whatever contribution the nations of the North are makingthrough their Overseas Development Aid is based on moralgrounds <strong>and</strong> at their sheer discretion. The reasons given forsuch co-operation from the South is that the presentinternational monetary as well as trading system is unfair <strong>and</strong>inequitable to the developing nations in which the developednations are benefited at the price of the former. 91 It wasrevealed in the 1997 UN review meeting at Rio de Janeiro that89 Supra note 26, pp. 112-130: The group of 77 has called two specialsessions of UNGA to discuss <strong>and</strong> adopt the resolution for achievinggreater justice <strong>and</strong> economic parity to them by eliminating unfair trade,<strong>and</strong> the monetary policy developed by the North. Two resolutions werealso adopted, but heavily criticised by the developed nations, such asAustralia, France, Italy Japan, UK <strong>and</strong> USA stating that a 'tyrannicalmajority' <strong>and</strong> 'growing tendency … to adopt one sided, unrealisticresolutions' that cannot be implemented at all, further, they were alsoblamed that these one sided resolutions destroy the authority of UnitedNations. Moreover, the comment of Julius Nyerere to the reaction ofthe North was: "I am saying that is not right that the vast majority ofthe world people should be forced into the position of beggars, withoutdignity. We dem<strong>and</strong> change, <strong>and</strong> the only question is whether it comesby dialogue or confrontation".90 M. Jacobs, The Politics of the Real World, London: Earthscan Pub.,1996, p. 63.91 Supra note, 26, p. 108.the developed nations did not fulfil what they had promised atUNCED, i.e., to contribute 0.7% of their income to the South. 92The other fundamental aspect of intergenerational equity(entitlement of future generations) is that it imposes a duty tofulfil the needs of developing countries in order to get rid ofpoverty <strong>and</strong> to do this in a sustainable <strong>and</strong> ecologically soundmanner so that the rights of present or future generation areprotected. There is not a clear definition on intergenerationalequity but it generally refers to the notion that the internationalcommunity is under a moral, even possibly a legal, obligationto protect <strong>and</strong> preserve the environment <strong>and</strong> its naturalresources for present <strong>and</strong> future generations. Being a part ofequity this topic has an inherent links with this research. Theidea is that the present generation in seeking its own prosperitythrough exploitation of watercourses, must not jeopardise theright of future generations to a clean environment.3.6.1 Unjust EnrichmentUnjust enrichment is when someone obtains property or getsrich without sufficient reason. From the preliminary meaning ofit, it points to unreasonable, illegal <strong>and</strong> unjust ways of gettingricher. Unjust enrichment indicates the proposition that a partyshould not enrich itself, without legal cause, at the expense ofothers. 93 Whilst equity st<strong>and</strong>s for greater justice <strong>and</strong> fairness,unjust enrichment underscores exactly the reverse position <strong>and</strong>therefore the concepts are closely linked.92 G. Brown, "An Assault on Poverty is Vital too", The Guardian 13February 2003, p. 23.93 Supra note, 69, p. 565. Also see R. Boyes, "Poles enraged by memorialto expelled Germans" The Times, 24 September, 2003, p. 14: Pol<strong>and</strong>fears a flood of compensation dem<strong>and</strong>s from Germans, whose propertywas taken after the Second World War when it joins the EU next year.The row centres on proposals to commemorate the 12 million peopledisplaced when Europe's border were redrawn.
Equitable Utilisation / 135 136 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South AsiaWhen nations expropriate foreign property without givingsufficient reparation, the principle of unjust enrichment allowsjustice to be obtained through courts <strong>and</strong> tribunals. Theprinciples were interpreted in Factory at Chorzow in 1928.Until that decision, at general international law, damages inexpropriation cases has been assessed on the book value of theproperty at the time of its disposition plus interest. The courtheld that reparation should reflect not merely the book value ofproperty at the time of disposition, but all the loss sustained byexpropriation. 94 Thus, the role of equity has greatly assistedsecuring fairer justice against expropriation. The other case thatthe Permanent Court of <strong>International</strong> Arbitration (PCIA)decided by applying the principle of unjust enrichment was the1932 Norwegian Claim relating to the USA's decision toexpropriate ships being built in US shipyards for foreignparties. Once the ships had been requisitioned, the US failed topay all the compensation due. This was interpreted as a breachof the terms of US contractual obligations <strong>and</strong> the USA’ssubmission was rejected on the basis of unjust enrichment. 9594 PCIJ Reports, (1928) pp. 183-195.95 After entering the First World War, the USA decided to expropriateships being built for foreign parties in US shipyards. The dispute wasnot settled <strong>and</strong> was forwarded to the PCIA. The Tribunal’s decisionheld the view that after requisition of the ships the US failed to pay theremainder of the commission was a violation of contract. A privatefirm sought to blame the Norwegian Government for this lapse,arguing that the purchaser's assignee was contractually bound to paythe remainder. The Tribunal rejected a claim for the fulfilment ofobligations holding that the expropriation had terminated therelationship between the firm <strong>and</strong> the Norwegian purchaser <strong>and</strong>crystallised damages. Had the US paid the due amount to the broker,that amount would have been deducted from the fair market value ofthe contract. The court wrote "it appears to be equitable … to give theUS the right to retain (the amount due the firm) out of the amountawarded", on condition that the US pay that sum to the broker-Norwegian claims (Nor. V. US) Hague, Ct. Rep, 2nd, Scott, 39, 65Permanent Court of Arbitration (1922), pp. 41-79.The concept is explicitly related to IWL issues, particularly thesharing of downstream benefits between riparian states. Wherebenefits accrue to a downstream country on account of thework undertaken by an upstream country without contributingto the cost, there is unjust enrichment. Furthermore, theapplication of this principle has significantly contributed to theresolution of water conflicts between numerous countries <strong>and</strong>has provided significant guidelines for resolving other conflicts.It is now an established doctrine of equity that no one canenrich themselves at the price of another without legaljustification. 963.6.2 EstoppelThe doctrine of estoppel also forms a part of equity. It was dealtwith for the first time in international law in the context of theDiversion of Water from the Meuse case decided by the PCIJ, 97in which estoppel was held to impose a duty on a state torefrain from acting inconsistently with the interests of otherstates. Belgium's construction of a lock to extract water fromthe River Meuse violated a convention governing access to theriver water. A few years earlier, the Netherl<strong>and</strong>s hadconstructed a lock remarkably similar to the one subject to itscomplaints against Belgium. The court found no violation ofany terms of the convention. The action of the Netherl<strong>and</strong>s inthis case was akin to estoppel that compelled the Court to rejectthe Dutch claim. However, the claim of estoppel by Costa Rica,in the case of the Tinoco claims, was rejected by Chief JusticeTaft of the US Supreme Court sitting as a sole arbitrator, on theground that Britain’s failure to recognize the Tinoco regimecaused no detriment to that arrangement. 98 The Tribunal further96 R. A. Newman, The Principles of Equity As a Source of World <strong>Law</strong>,(1966) 1 Isr. LR, p. 630.97 Diversion of water from the Meuse, PCIJ (1937), p. 139.98 Tinoco claims-Gr. Britain v. Costa Rica, 18 AJIL 147, (1924) pp. 148-157.
Equitable Utilisation / 137 138 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiamaintained that the burden rests with the party seeking to relyon estoppel both with regard to the evidential burden <strong>and</strong> thatthe loss shows such facts. This was not demonstrated by theclaimant in the Tinoco claims case. 99Even in the absence of equity, detrimental reliance as a notionmay bar, under an implied principle of 'good faith', a party fromcontesting the legally binding effect of its terms of promise. Inthe Nuclear Test Case of 1974, Australia <strong>and</strong> New Zeal<strong>and</strong> v.France, the ICJ held that the French official announcement thatit would no longer undertake Nuclear tests after 1974 amountedto an obligation to act in good faith, conferring aninternationally binding character on a unilateral declaration. 100Successful invocation of equitable estoppel is tantamount toensuring that the applicant’s concerns are met <strong>and</strong> that theapprehended injury will be averted. There was nothing to provethat the French declaration would not be implemented, butnevertheless, the declaration led the other parties to believe thatFrance would refrain from carrying out further nuclear tests. Itis a wider principle of IWL that states are bound to accept thoseprinciples which have elsewhere been recognised by them. IfIndia has recognised that riparian neighbour cannot cause harmto her, she also cannot harm to her neighbours. For example,following India’s objection that East Pakistan’s reservoirproject on the far eastern border of Assam project wouldsubmerge its l<strong>and</strong>, the project was cancelled. 101 The reverseposition maintained by India in the construction of reservoirsthat have caused the inundation of Nepalese l<strong>and</strong> must bestopped under the principle of estoppel. If similar constructionshave been exists in Indo-Bhutan <strong>and</strong> Indo-Bangladesh bordersuch activities should be stopped.99 Ibid.100 ICJ Reports, (1994) pp. 110 & 118.101 Supra note 4, p. 311.3.6.3 AcquiescenceAcquiescence st<strong>and</strong>s out as another form of equitable estoppelrecognised as a general principle of law-as-fairness, in whichsilence or the absence of protest may preclude a state fromchallenging another state's claim. However, it must bementioned here that in order to succeed in a defence ofacquiescence, a state must prove that the second state hadknowledge of its claims. 102Use of acquiescence was made in the 1951 Anglo-NorwegianFisheries case between Norway <strong>and</strong> Britain. Norway had fordecades used a straight baseline to delimit its fisheries zone,rejecting the general practice of using a line based on thecoastal low water mark. The court favoured Norway’scontention <strong>and</strong> rejected Britain’s argument that it had notknown of this system of delimitation by Norway on the groundthat Britain, as a maritime power with a strong interest inNorwegian waters, must have known about the Norwegianpractice <strong>and</strong>, therefore, could not excuse itself for its failure toprotest on time. 103The Temple of Preah Vihear case followed the principle ofacquiescence, <strong>and</strong> in doing so, brought an equitable dimensionto the notion of finality. 104 The principle of equity precluded astate initiating a border dispute which had long been settled.The case relates to a border dispute between Thail<strong>and</strong> <strong>and</strong>Cambodia in which two Franco-Siamese Commissions over aperiod of sixty years delimited the frontier between FrenchIndo-China <strong>and</strong> Siam. After receiving appropriate maps, theThai Government registered no objection. The court held thatthe Siamese failure to object to the content of the maps102 Supra note 69, p. 568; also see I. C. Gibbon "The Scope ofAcquiescence in <strong>International</strong> <strong>Law</strong>" (1954) 31 BYIL, pp. 147-148.103 ICJ Reports, (1951) pp. 31-34.104 ICJ Reports, (1962) pp. 14-37.
Equitable Utilisation / 139 140 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiaamounted to acquiescence, adding that when two countriesestablish a frontier between them, one of the primary objects isto achieve stability <strong>and</strong> finality. 105 Reasoning for that argumentis right in view of the fact that if once settled border issues beallowed to arise after a long period of time, the finality of theborder would remain forever unresolved. The principle ofacquiescence does not apply generally to IWL. Under the ruleof equitable utilisation envisaged in Article 6 of the UNCIW,even if one riparian state has been utilising a huge volume ofwater, it would be unfair to prevent another riparian state fromobjecting simply because of that state’s acquiescence, as suchuse is just one of the factors in the determination of equitableutilisation, <strong>and</strong> one which can be displaced by other factors. 106However, it is not the argument of the author that equity mayitself be a factor to be considered as part of equitableutilisation: equitable utilisation is a principle of equity.3.6.4 Ex Aequo Et Bono ( in Fairness <strong>and</strong> Right)Ex aequo et bono st<strong>and</strong>s outside the framework of law. If theuse of a set of legal rules is unable to deliver justice, or if thereare no such applicable rules to allow the dispensing of justice,ex aequo et bono provides both its own ends, means <strong>and</strong>justification for use. Under Article 38(2) of the ICJ's Statute,the ICJ is empowered, with the consent of parties appearingbefore it, to decide the case not by the application of law butrather by consideration of socio-economic, cultural <strong>and</strong>political factors. Until now, no case has been decided on such abasis by the ICJ or PCIJ, but the decision of an administrativetribunal of the <strong>International</strong> Labour Organisation based uponthe application of the principle of ex acquo et bono <strong>and</strong> notbased on any specific rule of law was upheld by the ICJ. Thetribunal decided a case by examining the appropriate level ofdamages, ex aequo et bono to fix what the court described as105 Ibid.106 Article 6, 36 ILM (1997) p. 704.measures of compensation. 107 The failure to use this clause38(2) demonstrates the reluctance of states to confer unbridleddiscretion on tribunals to avoid wholly arbitrary decisions. Inorder to invoke this Article specific consent from the party isrequired.Ex aequo et bono was also evaluated by the PCIJ in the FreeZone case (1929) between Switzerl<strong>and</strong> v. France, on the issueof free trading zone rights under the Treaty of Versailles 1919.France challenged such a right on the basis that a clauseabrogating those parts of the Treaty was agreed to bySwitzerl<strong>and</strong>. Under the arrangement, Swiss citizens were ableto do business in French territory surrounding Geneva withoutpayment of customs duties. The parties formed a specialagreement whereby the PCIJ would first determine the meaningof the clause, failing a private resolution of the dispute, <strong>and</strong>"settle" all outst<strong>and</strong>ing questions. The Court found that theclause did not abolish the regime in regard to the opportunity tosettle disputes if the disputants failed to settle the dispute bythemselves. The court rejected the French claim that a specialagreement empowered the court "to settle all questions". 108However, it seems that recourse to this branch of equity isignored by the community of nations.3.7 Equity for Scarce Resource AllocationIncreasing innovation in science <strong>and</strong> technology enables statesto harness resources from the deep ocean, the Continental Shelf<strong>and</strong> EEZ, which eventually gave birth to new internationalconflicts. There were no specific rules applicable in suchcomplicated circumstances, so equity embraced a newdimension to accommodate the interests of all concerned in acareful manner. Equity brings important advantages to this task,107 Supra note 69, p. 570; also see ICJ Reports 77, (1956), pp. 56-100.108 Free Zone Upper Savoy <strong>and</strong> the District of Gex, PCIJ Reports, (1930)pp. 10, 34, 40.
Equitable Utilisation / 141 142 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiaaffording judges a measure of discretion, within a flexiblestructure <strong>and</strong> commensurate with the uniqueness of eachdispute of scarce resource allocation. As will be illustratedbelow, the ICJ has advocated the formula for equitable results<strong>and</strong> equitable sharing in the interpretation of equitableutilisation. It has been said that without the principle of equity,the allocation <strong>and</strong> sharing of such resources is not possible, <strong>and</strong>a great disaster of conflicts has been prevented by itsapplication. So far, three models of equitable allocation haveemerged to this end. 109 The first model is that of correctiveequity, <strong>and</strong> the second that of broadly conceived equity. Bothof these models displace strict law but are still rule based,evolving into a set of principles for the accomplishment ofequitable allocation. The third model of common heritageequity sets out rules for the exploitation of resources byensuring the conservation of humankind’s common patrimony.<strong>Application</strong> of equity in this area will make it easy tounderst<strong>and</strong> <strong>and</strong> apply equity in IWL.3.7.1 Corrective Equity in Trading ArrangementsCorrective equity has played a substantial role in providingjudicious treatment <strong>and</strong> justice to all nations. It seeks to providefairness in the sharing of resources underneath the sea, thecontinental shelf <strong>and</strong> from the open sea. 110 The use of equityhas been long executed in order to get a fair benefit <strong>and</strong>protecting the interests of developing nations in internationaltrade <strong>and</strong> commerce area. Similarly, it seeks to protect the rightof developing nations in the international trading system,within the framework of GATT (now WTO), by providing thebasic rules of world trade. 111 The GATT includes a mechanismfor a generalised system of preference (GSP) in order tointroduce the notion of fairness into the international trading109 Supra note 69, p. 572.110 Ibid.111 Ibid. See GATT document in 55 UNTS, (1947) p. 187.regime. The other provision is that of the Most FavouredNations (MFN) clause, which guards against any negativeimpact of trade on the legitimate rights of developing nations.The Lome Convention 112 sought to inject equity into the globalcommodity market to protect the interests of developing <strong>and</strong>weak nations through the creation of a compulsory fund for thestabilization of export earning called STABEX. Under thissystem, a country is eligible for the international stabilisation ofthe price of a product representing at least 5% of its total exportearnings in the year preceding the application for STABEXassistance. Such export earnings from the product must drop atleast 4.5% from the average value calculated over a six-yearreference period for STABEX aid to become operative. 113 Fromthe point of view of protecting the interests of developing <strong>and</strong>weak nations, the above mentioned arrangements areparamount in promoting the integration <strong>and</strong> participation ofnations in a fairer international trade system. Equity is at itsheart. The European Union <strong>and</strong> the US have provided specialrights <strong>and</strong> facilities to developing nations as trading partners. 114Hence, the notion of equity favours weak <strong>and</strong> vulnerablenations that are not fully able to compete in the internationalarena. 115 Special consideration is given to such nations in orderto safeguard their interests, <strong>and</strong> this concept can be utilised inIWL issues by providing priority to the poorest countries. In the112 Supra note 69, p. 573-574.113 There are four versions of the Convention, i.e., Lome I, II, III, IV, forthe enhancement of fairer trading regime.114 Ibid. Also see Fourth ACP-EEC Convention <strong>and</strong> Final Act in 29 ILM(1989), p. 783.115 “The EU has provided special quotas for sugar exports from the leastdeveloped states”, The Rising Nepal, August 9, (2002); also see staff,“Trade is Aid” The Kathm<strong>and</strong>u Post 25 February, 2003. The UnitedStates has provided 38 sub-Saharan African states a duty free quota ontheir exports of Apparels <strong>and</strong> Textile Products under the provision ofthe African Growth <strong>and</strong> Opportunity Act, 2000. Nepal is alsoexpecting such facility on its garments in the US market <strong>and</strong> Australiahas made its market duty free <strong>and</strong> quota free for 49 l<strong>and</strong>lockedcountries <strong>and</strong> East Timor from June 2003.
Equitable Utilisation / 143 144 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiaabsence of a law protecting the interests of developingcountries in the above situation, equity has played a vital role instrengthening their interests in international trade <strong>and</strong> business.3.7.2 Corrective Equity as Analysed to ContinentalShelf AllocationIn the equitable delimitation of the continental shelf underspecial geographical <strong>and</strong> hydrological circumstances, correctiveequity has been a milestone in ensuring fair justice <strong>and</strong> theprotection of the national interests. Initially, such disputes wereresolved by application of the conventional rule ofequidistance, under article 6(2) of the 1958 Geneva Conventionof the <strong>Law</strong> of the Continental Shelf. The application of this rulerequires states to render agreement applying the equidistanceformula. This rule, however, also contained an ‘escape clause’,allowing delimitation to depart from the equidistant line under'special circumstances’. This is an example of correctiveequity. 116 Such a formulation of equity was implemented in the1969 North Sea Continental Shelf Cases between Germany v.Denmark <strong>and</strong> the Netherl<strong>and</strong>s. 117 The court, in its decisionrejected the contention of the Danes <strong>and</strong> the Dutch, which werebased on the equidistance principle. The German contentionbased on a just <strong>and</strong> equitable share of the shelf was thatequidistance has no inherent link either to the nature of theshelf or to any principle of absolute proximity or adjacency,<strong>and</strong> was too sparse <strong>and</strong> inconclusive to merit a conclusion onthat principle alone. Corrective equity has since crystallizedinto a customary norm. The court in a similar vein wrote,“such delimitation must be affected by agreement inaccordance with the equitable principle … by takinginto account all the relevant circumstances...” 118116 Convention on Continental Shelf (1959) 15 UNTS, p. 471, 499 UNTS,p. 311.117 3 ICJ Reports (1969) pp. 47-53.118 Ibid.Considerations of equity form part of the underlyingmoral basis for rules of law. In this sense equity maybe regarded as a material source of law, but not as aformal source, nor in itself constituting a legal rule.Some circumstances relate to the nature of geology,the desirability of maintaining the unity of depositsof natural resources, <strong>and</strong> proportionality, (which isdefined as the attainment of a reasonable relationshipbetween the extent of a state’s continental shelf <strong>and</strong>the length of its coastline). 119 In another case decidedby an arbitration tribunal, the Anglo-FrenchContinental Shelf case, the Tribunal, in seeking tomaintain equity, held the view that in the particularcircumstances, departure from the equidistance rulewas essential in order to ensure equity. It stressedthat the proportionality principle should not govern,but merely correct the delimitation. 120 The Tribunalseemed to adopt a notion of fairness <strong>and</strong> yet stillcontain it within the guiding rule of equidistance. 121In the Fisheries Jurisdiction Case of 1974, (UK v. Icel<strong>and</strong>), adispute had arisen on account of Icel<strong>and</strong>’s unilateralprolongation of her fisheries zone to 50 nautical miles from thebase line. ICJ Reports, (1974) pp. 1-70. 122 The British Governmentsubmitted the case to the ICJ asking the court to adjudge <strong>and</strong>declare such action illegal <strong>and</strong> safeguard the UK’s rights offishing in that area. Icel<strong>and</strong> objected to the court's jurisdiction.In its decision, 123 the court declared that the Icel<strong>and</strong>icRegulation of 1972 constituting a unilateral extension of119 Ibid. pp. 50-52.120 Continental Shelf Case, (Arbitration Tribunal) 54 ILR, (1975) pp. 6-124.121 Supra note 69, pp. 578-580.122 ICJ Reports, (1974) pp. 1-70.123 Ibid.
Equitable Utilisation / 145 146 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South AsiaIcel<strong>and</strong>’s exclusive fishing rights to the 50 nautical mile limitwas illegal. The court held that:"the most appropriate method for the solution of thedispute was clearly that of negotiation with a view todelimiting the rights <strong>and</strong> interests of both parties <strong>and</strong>regulating equitably such questions as those of catchlimitation,share allocations <strong>and</strong> related restrictions.The obligation to negotiate followed from the verynature of the respective rights of the parties <strong>and</strong>corresponded to the provisions of the UN Charterconcerning the peaceful settlement of disputes. Thecourt could not accept the view that the commonintention of the parties was realised by negotiatingthroughout the whole period covered by the 1973interim agreement. The task before them would be toconduct their negotiations on the basis that such mustbe in good faith by paying due regard to the legalrights of the other <strong>and</strong> to the facts of the particularsituation <strong>and</strong> to the interests of other states withestablished fishing rights in the areas." 124This judgement lends credence to the view that cooperation,good faith <strong>and</strong> good neighbourly relations are the best means toensure maximum benefits from shared resources. The judgmentcorresponds to the obligation of a watercourse state endorsedby Articles 5 <strong>and</strong> 7 of the UNCIW. 1253.7.3 Broadly Conceived Equity in Continental Shelf<strong>Application</strong>The states negotiating the third <strong>Law</strong> of the Sea Conference(LOSC) in 1973 studied the jurisprudence so far developed bythe international courts <strong>and</strong> tribunals <strong>and</strong> found that the basictenets of equity had been applied. Taking note of this, the124 Ibid.125 36 ILM (1997), 162, para. 67-71, p. 189.Conference went somewhat further than the ICJ, <strong>and</strong> developeda formula of equitable principles for the delimitation ofmaritime zones. In so doing, during difficult <strong>and</strong> protractednegotiations the parties attempted to 126 maintain a balancebetween equity <strong>and</strong> equidistance. The Informal SingleNegotiation Text (ISNT) of 1975 proposed that:“delimitation of the continental shelf betweenadjacent or opposite States shall be affected byagreement in accordance with the equitableprinciples, employing, where appropriate, themedian or equidistant line, <strong>and</strong> taking account ofall relevant circumstances." 127The attainment of an agreement on this median line formula byall member states was still a formidable task, because numerousisl<strong>and</strong> nations were sceptical, suspecting that the preference forequity would jeopardise their position in shelf delimitation.According to their view, the median line formula is the bestway to serve their interests. They argued instead for greateremphasis on equidistance, but conceded that the method couldnot be applied in the event of special circumstances. 128 As aresult of more negotiations to arrive at a broader agreement onthe text, several revisions were made to the text toaccommodate <strong>and</strong> reconcile the interest of those nations.Finally, the Ninth session (1980) produced a balancedformula: 129"the delimitation of the continental shelf between Stateswith opposite or adjacent coasts shall be affected by126 Supra note 69, p. 581.127 127 14 ILM, 682, (1980), 728, Single Negotiating Text; also see B. H.Oxman," The Third United Nations Conference on <strong>Law</strong> of the Sea: theEight Session” 74 AJIL, (1980) p. 32.128 Ibid. p. 30-32.129 B. H. Oxman, "The Third United Nations Conference on the <strong>Law</strong> ofthe Sea: The Ninth Session" 1980, 75 AJIL, (1981) pp. 211& 231.
Equitable Utilisation / 147 148 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiaagreement in conformity with international law. Such anagreement shall be in accordance with equitableprinciples, employing the median or equidistant line,where appropriate, <strong>and</strong> taking into account allcircumstances prevailing in the area of concern.” 130However, following some tension, the proponents of equityfinally prevailed at the Tenth Session. Article 83(1) of theLOSC, when opened for signature in 1982, read:"the delimitation … shall be affected by agreementon the basis of international law… in order toachieve an equitable solution.” 131Since then the ICJ, in deciding cases relating to the continentalshelf <strong>and</strong> its allocation, have gone further than this earlierstance. Equity has become the core rule of LOSC as applied bythe ICJ on issues of equitable delimitation <strong>and</strong> allocation ofresources. This doctrinal shift, in which a remarkable degree ofdiscretion was exercised, can be seen in the case of Tunisia v.Libya <strong>and</strong> will be analysed below. 132 The decision was based onthe equitable principles stating:"the delimitation is to be effected in accordance withequitable principles <strong>and</strong> taking into account of all therelevant circumstances, so as to arrive at an equitableresult. … the area of continental Shelf to be found toappertain to other Party not extending more than 200miles from the coast of the party concerned, no criterionfor delimitation of shelf areas can be derived from theprinciple of natural prolongation in the physicalsense.” 133130 UN conference on the <strong>Law</strong> of the Sea, Draft Convention of <strong>Law</strong> of theSea, 19 ILM, pp. 1129, 1174, July 28-August 29, (1980).131 Ibid.132 ICJ Reports, (1982) pp. 58-62.133 Ibid.In consequence, an equitable result may be arrived at bydrawing, as a first stage in the process, a median line, everypoint of which is equidistant from the low-water mark of therelevant coasts of the disputing parties. The initial line is thensubject to adjustment in light of the above mentionedcircumstances <strong>and</strong> factors. 134In the decision in the Tunisia v. Libya case, the court made aforward leap. It also rejected socio-economic factors indetermining the case. Tunisia’s argument was that Libya earneda huge <strong>and</strong> unfair income from offshore oil. The court refusedthe contention <strong>and</strong> held the view that a “country might be poortoday <strong>and</strong> become rich tomorrow as a result of an event such asthe discovery of a valuable economic resource.” 135In 1984, a case arose concerning the delimitation of themaritime boundary in the Gulf of Maine area, the USA v.Canada, over how to share the benefits of the exclusiveeconomic zone <strong>and</strong> areas beyond in the high seas. In this case,the court ruling on the applicable principles <strong>and</strong> rules ofinternational law states:"no maritime delimitation between states with oppositeor adjacent coasts may be affected unilaterally by anyone of those states. Such delimitation must be sought<strong>and</strong> effected by means of an agreement, followingnegotiations conducted in good faith <strong>and</strong> with a genuineintention of achieving a positive result. Where,however, such an agreement cannot be achieved,delimitation should be effected by recourse to a thirdparty possessing the necessary competence. In eithercase, delimitation is to be affected by the application ofequitable criteria <strong>and</strong> by the use of practical methodscapable of ensuring, with regard to the geographic134 ICJ Reports, (1984) pp. 31-34, para. 76-79.135 ICJ Reports, (1982) pp. 77-78.
Equitable Utilisation / 149 150 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiaconfiguration of the area <strong>and</strong> other relevantcircumstances, an equitable result". 136The ICJ again adhered to the same concept of equitableallocation as in the case of Libya v. Malta (1985), emphasisingthe need to arrive at an equitable result along withproportionality as one of the governing principles of equity.The court rejected Malta’s claim regarding its lack of energyresources, the needs for fishery resources, <strong>and</strong> its requirementsas a developing isl<strong>and</strong> state. It also rejected Libya’s contentionthat the vastly larger size of its l<strong>and</strong>mass was a factor relevantto the delimitation, <strong>and</strong> held that equitable utilization was theappropriate rule in the case. 137The word ‘proportionality’ has also become one of thefundamental elements of equity. From its use, the idea ofbroadly conceived equity can be achieved. For example, in anarbitration case1985 the Guinea v. Guinea-Bissau MaritimeDelimitation, the Tribunal held to two equitable considerations.Firstly, to ensure that, as far as possible, each state controls themaritime territories opposite its coasts <strong>and</strong> their vicinity.Secondly, the Tribunal cited the need to ensure that othermaritime delimitations already made or those still to be made inthe area be given due regard. 138 This decision is capable oftaking into consideration the interests of both states so that theapplication of the principle of broadly conceived equity resultsin significant redistribution of resources.3.7.4 Broadly Conceived Equity in ConventionalArrangementsThe principles used to delimit <strong>and</strong> allocate the resources of thesea <strong>and</strong> the UNCIW are similar. Both instruments have taken136 ICJ Reports, (1984) para. 112.137 ICJ Reports, (1985) pp. 13-41.138 Maritime Delimitation, 77 ILR, pp 636-685, (1988) (Ct. of Arb.).the notion of broadly conceived equity a step further than thejurisprudence relating to continental shelf delimitation,explicitly calling on states to take socio-economic needs intoaccount whilst they are allocating such resources. 139 Furtherradical steps are being taken in respect of access to exclusiveeconomic zones <strong>and</strong> the issues of reasonable <strong>and</strong> equitableshare for beneficial use of an IWC.The LOSC in its provisions dealing with state access to EEZs,seeks to provide for the distribution of an area surplus resourcesin accordance with equitable principles that take into account,inter alia, economic need. The provisions relate to the rights ofa l<strong>and</strong>locked state to participate, on an equitable basis, in theexploitation of an appropriate part of the EEZ of coastal statesof the same region or sub-region. 140 States participating inresource utilisation should take into account the followingmatters: 141“1. The need to avoid effects detrimental to fishingcommunities or fishing industries of the coastal state;2. The extent to which the l<strong>and</strong>-locked state is alreadyentitled, through agreement, to exploit the living resourcesof the exclusive economic zone of the coastal state;3. The need to avoid disadvantaging any one coastal state inparticular; <strong>and</strong>4. The nutritional needs of the populations of the respectivestates.”The Convention also provides preferential rights of access, togeographically disadvantaged states determined by the samecriteria. On the other h<strong>and</strong>, the UNCIW provides that the rightto use such water is coupled with an obligation to participate inthe “use, development, <strong>and</strong> protection” of the watercourse in139 36 ILM (1997), pp. 700-720.140 21 ILM- 1982, LOSC, p. 1283.141 Ibid. p. 1284.
Equitable Utilisation / 151 152 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia“an equitable <strong>and</strong> reasonable manner”, which should take intoconsideration the geographic, hydrographic, hydrological,climatic <strong>and</strong> other factors of a natural character (as explainedabove in Article 6 of UNCIW). These include the social <strong>and</strong>economical needs of the watercourses states, existing <strong>and</strong>potential uses of resources, the effects of the use in onewatercourse system, conservation, protection, development <strong>and</strong>economic use of the water resources <strong>and</strong> the availability ofalternatives. 1423.7.5 Common Heritage EquityThe common heritage of mankind is related to the rights ofpatrimony, not only to a certain state or group of states but toall nations <strong>and</strong> peoples. This includes natural <strong>and</strong> geographicalelements, such as clean environment, water, ocean, airspace,Antarctica, <strong>and</strong> the Moon, which are required for the existence<strong>and</strong> sustenance of human beings <strong>and</strong> nature, <strong>and</strong> are to beprotected, preserved <strong>and</strong> sustained for the present as well asfuture generations. There are conventional arrangements, theLOSC provision relating to the seabed authority <strong>and</strong> the UNMoon Agreement, 143 explicitly seeking to regulate this field ofinternational law.The LOSC established (Article 156) an <strong>International</strong> DeepSeabed Authority to manage <strong>and</strong> distribute equitably thebenefits derived from exploitation of the common heritageelement of marine resources. 144 The Authority is analogous to acorporation, having been established to facilitate exploitation ofan asset (the deep seabed) for the benefit of mankind.Recognising the right of a coastal state in its EEZ, theConvention requires the coastal state to contribute to theAuthority at least a fraction of the benefit derived from mining142 Article 5, 6, 7, 8 & 20-25 of the UNCIW.143 18 ILM (1979), pp. 1434- 1441.144 Supra note 140, p. 1298.in these areas. After five years of production, this amounts to1% of the value of the production escalating by 1% eachsubsequent year until the twelfth year. It stabilises at 7%, theamount being disbursed to the parties to the conventionaccording to 'equitable sharing criteria', taking into account theinterests <strong>and</strong> needs of developing states, particularly those ofthe least developed <strong>and</strong> l<strong>and</strong> locked states. 145 This systemsimply seeks to regulate the EEZ <strong>and</strong> a certain proportion of theaccrued benefits are to be distributed to all nations equitably;particularly to economically weak, developing, <strong>and</strong> l<strong>and</strong>lockednations. It is a good example of distributive justice in sharingthe benefit from a common heritage.The UN Moon Agreement, which opened for signature in 1979,also includes elements of common heritage equity. 146 Theagreement emphasises the conservation of the Moon, <strong>and</strong> seeksto facilitate the exploitation <strong>and</strong> equitable allocation of itsresources. It states:"the moon <strong>and</strong> its natural resources are the commonheritage of mankind … exploration <strong>and</strong> use of themoon … shall be carried out for the benefit <strong>and</strong>interest of all countries”. 147The agreement calls on states to devise a regime to govern theexploitation of the moon with the purpose of facilitating theorderly development, rational management, <strong>and</strong> equitablesharing of its resources. States are prohibited from causingpollution or any other acts disturbing the moon's environment,<strong>and</strong> are obliged to 'pay due regard' to the needs of futuregenerations.145 Article 82, LOSC, Ibid. p. 1286.146 18 ILM (1979) p. 1434, Agreement Governing the Activities of Stateson the Moon <strong>and</strong> Other Celestial Bodies- hereafter the MoonAgreement.147 Ibid. pp 1435- 1438.
Equitable Utilisation / 153 154 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South AsiaThe 1991 Madrid Protocol to the Antarctica Treaty, signed bytwenty-four states, provides that the environmental or scientificinterest in the continent represents a form of common heritageequity, in which conservation is paramount. 148 The pact departsfrom the mercantile model of common heritage equity,assuming the role of a trustee pledged to hold this asset in trustfor the benefit of human kind. This concept is taken from aprotocol to the 1959 Antarctica Treaty that banned nuclear <strong>and</strong>military activity, suspended competing claims by sevensouthern hemisphere states <strong>and</strong> established rules for scientificresearch. 149 This Protocol seeks protection of the environmentas a 'fundamental consideration' in planning <strong>and</strong> conducting allactivities on the continent, <strong>and</strong> bans all mineral exploitation forat least fifty years, as such activities would severely damage thesanctity of the Antarctic environment. 150The right of the yet to be born is not an idea of recent origin ininternational law. Such feelings have emerged <strong>and</strong> beendeveloped in the international arena for over a hundred years.The idea was evident in the Bering Sea Fur Arbitration wherethe USA had argued that it was conserving the seals in thecommon interest of mankind. 151 French has argued since thenthat the notion of protecting the environment for present <strong>and</strong>future generations has appeared occasionally in internationalenvironmental law, for example the <strong>International</strong> Conventionfor the Regulating of Whaling 1946, 152 the 1968 AfricanConvention on the Conservation of Nature <strong>and</strong> NaturalResources, 153 <strong>and</strong> the 1972 World Heritage Convention. 154Each instrument stipulates a requirement to protect148 Supra note 69, p. 593.149 Ibid.150 Ibid. Also see 29-30 ILM (1991), pp. 1462-1486.151 Supra note 67, p. 10478.152 161 UNTS, 1946, p. 72.153 1001 UNTS, 1968, p.4.154 11 ILM 1973, p. 1358.environmental resources for present <strong>and</strong> future generations. 155Since then, the notion has become an almost indispensable partof major environmental instruments. 156 For example, thepreamble of the 1998 Statute of the <strong>International</strong> CriminalCourt states,“an international criminal court is required for the sakeof present <strong>and</strong> future generations.” 157The goal of the ICC is to protect present <strong>and</strong> future generationfrom cruel <strong>and</strong> inhuman brutality.3.8 Equity: an Integral Aspect of SustainableDevelopmentThe Brundtl<strong>and</strong> Report is commonly viewed as the point atwhich sustainable development became a broad global policyobjective. Equity has been a milestone in the preservation <strong>and</strong>protection of the environment by strengthening the idea ofsustainable development. The main achievement of the UnitedNations Conference on Environment <strong>and</strong> Development(UNCED) was the adoption of the equitable principle at the155 Ibid.156 a. the World Charter for Nature 1982 in its fifth paragraph provides '… man must acquire knowledge … which ensures the preservationof species <strong>and</strong> eco-systems for the benefit of present <strong>and</strong> futuregenerations'.b. the Madrid protocol on Antarctica, 1991 provides in the seventhpreambular paragraph: "convinced that the development of acomprehensive regime for the protection of the Antarcticenvironment <strong>and</strong> dependent <strong>and</strong> associated systems is in the interestof mankind as a whole …".c. the 1972 Stockholm Declaration in principle 1 states that verynotion.d. whilst in the Rio Declaration in principles 3 provides, "present <strong>and</strong>future generations have both developmental <strong>and</strong> environmentalneeds; apart from this, every document adopted at Rio, bear thisnotion explicitly . Birnie <strong>and</strong> Boyle, pp. 11, 16 & 4.157 37 ILM (1998), p. 999.
Equitable Utilisation / 155 156 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiaheart of the negotiation process. That phrase appears in each(UNCED) document. The main achievement of the entireprocess is the victory of the principle of equity in majornegotiations between the rich <strong>and</strong> poor nations. Weiss hasrightly observed that"the dominant issue in international environmental lawfor the 1990s is likely to be the one of equity. … whopays whom, how much to clean up the environment orto develop in an environmentally sustainable way". 158There were altogether five texts at the Rio Conference in 1992,of which two (Framework Convention on Climate Change,United Nations Convention on Biological Diversity) are legallybinding. It is notable that all the documents refer to the term'equity'. 159 It is apparent that the international community reliedheavily on the word ‘equity’ in all its meanings, <strong>and</strong> it wastaken as an umbrella concept to effectively pave the way foragreements in the area of providing finance <strong>and</strong> technology tothe South from the North within a comprehensive <strong>and</strong> globalframework of recognition <strong>and</strong> commitment to completedevelopment work in a sustainable manner. Moreover, recentenvironmental treaties have relied heavily on the element ofequity. For example, Articles 3 (1), 4 (2) a <strong>and</strong> 11 (2) of theframework Climate Change Convention, 1992, 160 containsimilar references to equity in securing the contribution of158 28 ILM (1989), p. 1362: introductory note.159 P. W. Birnie <strong>and</strong> A. Boyle, Basic documents on <strong>International</strong> <strong>Law</strong> <strong>and</strong>the Environment, Oxford: Clarendon Press, 1995, pp. 395-405 & 252-274. The Rio Declaration talks of a new <strong>and</strong> equitable partnership, <strong>and</strong>the right to development having to be fulfilled so as to equitably meetthe development <strong>and</strong> environmental needs of present <strong>and</strong> futuregenerations: principle 3 Rio Declaration. Agenda 21 highlights the factthat the development of a new global partnership was ‘inspired by theneed to achieve a more equitable world economy’ paragraph2.1,Agenda 21. The Forest Principles states that benefits should beshared by all states. (Principle1(b)).160 Ibid.developed state parties to reduce green house gas emissions <strong>and</strong>in the governance of the financial mechanism. Similarly,Articles, 8 (j), 15 (7) of the United Nations Convention onBiological Diversity, 161 stipulate the use of the term ‘fair <strong>and</strong>equitable sharing of benefits’ arising from the use of geneticmaterial between the state permitting the research <strong>and</strong> the statefrom which the material originates. These benefits include theresults of subsequent research <strong>and</strong> development, 'commercial<strong>and</strong> other utilisation of genetic resources' <strong>and</strong> the results <strong>and</strong>benefits arising from bio-technologies. Even though there was abroader consensus for achieving equity <strong>and</strong> equitable results,nothing substantive appears to have yet materialised in terms ofaction on the ground. With regard to the meaning of equity inthe Convention, S<strong>and</strong>s has described the actual situationprevailing over the period:“Little consideration was given … to what the conceptmeans or to its consequences when applied to aparticular set of facts. Indeed, the way it wassometimes referred to suggest that some of its mainproponents had little underst<strong>and</strong>ing of its prior use ininternational law.” 162In my view, the meanings of equity <strong>and</strong> equitable utilisationhave been tested on numerous occasions in several spheres.Hence, UNCED does not need to have its own definition. Onthe lack of any precise definition of equity <strong>and</strong> equitableutilisation, French has argued that 163 there are four interrelatedreasons as to why the international community was so eager touse a term that had so far received little usage in internationalenvironmental law. Firstly, the text agreed that UNCED wasnot simply concerned with the issue of environmentalprotection, but rather, the much broader topic of sustainable161 Ibid.162 P. S<strong>and</strong>s, "<strong>International</strong> <strong>Law</strong> in the field of Sustainable Development"(1994) 65 BYIL, p. 340.163 Supra note 67, pp. 10475-77.
Equitable Utilisation / 157 158 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiadevelopment. Secondly, flexibility was the concern then toensure that there was no hindrance at the time to reaching anagreement, so that the definition <strong>and</strong> broader terms would besorted out later by convention of the parties. Thirdly, there wassufficient reason for states to agree to disagree on thecontroversial issues laid aside for resolution in the future.Fourthly, the use of the term “equity” at UNCED allowedinternational environmental law to integrate more fairly theneeds <strong>and</strong> interests of developing states, particularly theobligation that requires equitable representation within UNbodies or other institutions, or the equitable sharing of benefits.There is no clear-cut definition of equity <strong>and</strong> it has beenconsidered as a sense of fairness <strong>and</strong> justice. From thisperspective, equity does mean greater support <strong>and</strong> co-operationbetween North <strong>and</strong> South in achieving sustainabledevelopment. Such co-operation unequivocally impliestechnological <strong>and</strong> financial co-operation. The whole endeavourof UNCED with respect to North <strong>and</strong> South concentrated ontransferring more aid <strong>and</strong> technology from North to South. 164Moreover, after the increasing advocacy for the NIEO by theSouth, the UNGA has adopted several non-binding documents,such as the 1974 Declaration on the Establishment of the NIEO<strong>and</strong> the Charter on Economic Rights <strong>and</strong> Duties of States(CERDS), as an endorsement of the earlier principle. Bothdocuments set out pre-conditions to the achievement of greaterjustice <strong>and</strong> fairer economic arrangements in the internationalsystem. This was also supported by the ILA 1986 Seoul164 Supra note 26, pp. 108-111. At the special session of the UNGA, theGroup of 77 nations called for discussion on the problems of rawmaterials <strong>and</strong> development, <strong>and</strong> put their case boldly <strong>and</strong> forcefully,accusing the developed nations of creating an unjust, <strong>and</strong> aninconsistent system for them. They passed two resolutions, 3201 <strong>and</strong>3202, containing a declaration <strong>and</strong> programme of action on theestablishment of the New <strong>International</strong> Economic Order, <strong>and</strong> an actionplan to carry out this proposal. It was severely criticised <strong>and</strong> developedstates refused to accept it.Declaration on the progressive development of principles ofpublic international law relating to a New <strong>International</strong>Economic Order. 165The North had earlier agreed to provide 0.7% of their GNP inODA to the developing countries during the Rio Conference1992. In addition to that GEF was restructured (1992) in orderto achieve the target of sustainable development in numerousUNCED documents as a commitment to co-operation. 166 Afterits establishment, the GEF contributed enormously byproviding loans to developing countries. 167 As French hasobserved,“the use of equity in environmental agreements <strong>and</strong>soft law instruments reflects a broader attempt by theinternational community to incorporate the interests ofdeveloping states into environmental law <strong>and</strong> policy.The introduction of differential st<strong>and</strong>ards betweendeveloped <strong>and</strong> developing states, <strong>and</strong> the provision offinancial <strong>and</strong> technological assistance, are otherexamples of the same trend". 168In a broader sense, the words “equity” <strong>and</strong> “equitable” assist inensuring equality in achieving the same levels of development<strong>and</strong> prosperity to all people in the developing states as areenjoyed by the people of the developed states. The main basisfor this is that environmental sustainability required primeconsideration to secure the rights of future generations as wellas of the present generation. In order to reduce the disparitybetween North <strong>and</strong> South in terms of living st<strong>and</strong>ards <strong>and</strong>provision of basic amenities of life, the interpretation of equity165 Ibid. p. 112-130.166 Supra note 159, p. 739.167 Ibid. p 737 - 40% to biodiversity, 40-50% to global warning, <strong>and</strong> 10-20% to fresh water resources have been allocated.168 D. French, “Developing States <strong>and</strong> <strong>International</strong> Environmental <strong>Law</strong>:The Importance of Differentiated Responsibility” (2000) 49 ICLQ, pp.35-60.
Equitable Utilisation / 159 160 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiadeserves special attention. Thus, equity can be considered ameans to bridge the chasm between the two groups of nationsto achieve justice <strong>and</strong> sustainable development. This is equallyimportant in ensuring peace, prosperity <strong>and</strong> the sustainabledevelopment of the earth, with currently more than six billionpeople <strong>and</strong> with many more people to replace them in the yearsto come. 169 It has become fashionable to quote the word“equity” in most treaties, resolutions, conferences, <strong>and</strong>declarations, joint communiqués <strong>and</strong> so on in political spheresas the meeting point for states with diverse interests <strong>and</strong>agendas.The idea <strong>and</strong> prominence of equity thus implies an appreciationby the world community that prosperity <strong>and</strong> development inone part of the globe is not sufficient to maintain the worldorder. Unbalanced development in several regions could pose athreat to the peace <strong>and</strong> security of the world. The otherrealisation is that the level of development achieved in the pasthas been at the expense of the environment, bringing manyproblems such as, climate change, ozone layer depletion, <strong>and</strong>pollution on l<strong>and</strong>, oceans <strong>and</strong> within fresh water resources. 170In order to carry out the remaining development works in theSouth, pursuant to experience gained in the North, manylessons should be learned to avoid repeating the North’smistakes. The North too must reverse its profligateconsumption of resources. In the meantime, the development ofthe South must not be discouraged or hindered, but carried outby integrating environmental concerns within the framework ofsustainable development. In doing so, the North must cooperateby all means possible with the South in dealing with the169 P. Brown & J. Vidal, “End seas of poverty” , The Guardian, 27 August2002, John Pronk, Envoy of UN Secretary General to the WSSD isquoted as saying that the poverty of developing countries should beaddressed by the help of developed states, p. 3.170 Supra note 159, p. 340.broader interest of a world order characterised by the balanceddevelopment of all nations. To achieve this, the developedstates should increase their ODA contributions. 1713.9 Drainage Basins <strong>and</strong> Diversion of WatersThe evolution of the concept of the drainage basin is significantin this field, in order to fulfil the increasing water requirementfor states. 172 It should be recalled that the first book published(1931) relating to this area is by Smith, who held the view thatthe drainage basin concept must be followed when developing<strong>and</strong> apportioning the benefits from shared water resources. 173The drainage basin concept considers the entire river basin as asingle unit irrespective of political boundaries. US PresidentTheodore Roosevelt advocated this principle."each river system, from its headwaters in the forestto its mouth on the coast, is a single unit <strong>and</strong> shouldbe treated as such". 174Later, the 1911 Madrid Declaration 175 of the Institute of<strong>International</strong> <strong>Law</strong>, in its preamble, recognised the 'permanentphysical dependence' of co-basin states as a principle ofinternational law. Several institutions, such as the ConventionRelating to the Development of Hydraulic Power as adopted bythe Conference of Communications <strong>and</strong> Transit at Geneva in171 Supra note 90, p. 63: following the Second World War, the US gaveaid of almost 2% (100 billion a year) of its GNP to Europe for threeyears. But the USA at present is giving less then 0.7% in aid, most ofthis goes only to Israel, Egypt, Indonesia, <strong>and</strong> China. Jacobs hassuggested increasing the North’s aid.172 C. B. Bourne, "The Development of <strong>International</strong> Water Resources:The Drainage Basin Approach" (1969) in 47 CBR, p. 64.173 Supra note 3, p. 31.174 Supra note 172 p. 64.175 D. A Caponera (ed), The <strong>Law</strong> of <strong>International</strong> Water Resources, Rome:FAO Legislative study no 23, 1980, p. 274.
Equitable Utilisation / 161 162 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia1923, 176 the Seventh Montevideo Conference of Pan-Americanstates in 1933, 177 <strong>and</strong> the resolution of the Inter-American BarAssociation at Buenos-Aires in 1957 all supported thisnotion. 178 The idea of the drainage basin as a single unit,together with the idea that the interventions of basin statesshould not be contrary to the basin-wide spirit, have invokedthe interest of the international community. They have nowbeen recognised as part of international law. These conceptshave been codified in the1966 Helsinki rules <strong>and</strong> the UNCIW,at its Dubrovnik Meeting in 1956, adopted a statement ofprinciple:"so far as possible, riparian states should join eachother to make full utilization of waters of a river bothfrom the view point of the river basin as an integratedwhole, <strong>and</strong> from the viewpoint of the widest varietyof uses of the waters, so as to assure the greatestbenefit to all". 179This resolution, along with the 1958 New York Convention ofthe ILA formed the basis of the Helsinki Conference of 1966,which adopted the Helsinki Rules on the Uses of Waters of<strong>International</strong> Rivers. 180 The development of the drainage basin<strong>and</strong> the equitable utilisation rules, emerged from a fertileconcept, that of ‘community of interest’. According to thejudgement of PCIJ in the Oder River case, the community ofinterest in a river is the basis of common legal rights of cobasinstates <strong>and</strong> the foundation of IWL. 181176 Ibid. p. 45.177 Ibid. p. 204.178 Ibid. p .317.179 Ibid. p. 287, Report of the Forty Seven Conference of the ILA held atDubrovnik, (1958), pp. 241-243.180 Report of the Fifty Second Conference of the ILA held at Helsinki,(1966), pp. 484-532.181 River Oder judgement, PCIJ series (1937), pp. 221-222.There are several arguments <strong>and</strong> facts that do not alwayssupport the norm of drainage basins as indivisible geographicalunits. Exceptions occur in two ways: one by naturalphenomenon like earthquakes, volcanic eruptions, l<strong>and</strong>slides,soil erosion or where the river itself changes course. 182 Theother includes human-induced processes like intra-basindiversion of water that has been allowed in severalcircumstances. In the US, there are several examples of hugewater transfers between basins, which have been permitted bythe Supreme Court in several circumstances. 183 In Israel,Turkey, Russia, India <strong>and</strong> China, huge diversion structures arestill are being constructed.An example of inter-basin diversion in international rivers hasbeen provided for by agreement, as in Article 3 of the 1945agreement between Austria <strong>and</strong> Yugoslavia dealing with theDrava River. 184 Article 1 of the 1957 Treaty betweenSwitzerl<strong>and</strong> <strong>and</strong> Italy concerning the Spol River 185 alsoprovides for such diversion management. Article VI of theBoundary Water Treaty of 1909 between USA <strong>and</strong> Canadaconcerning the St. Mary <strong>and</strong> Milk rivers has also allowed fordiversion. 186 Diversion into the Maine River had been carriedout in 1860. Other examples of international diversions are theIsraeli undertaking to take water from Lake Tibris through acanal <strong>and</strong> pipeline to the Negev Desert, <strong>and</strong> Chile's diverting ofsome of the waters of the Luca River, which flows from Chileinto Bolivia, into a national drainage basin. 187 There were also182 Supra note 172: The Great Lakes drainage followed southward first viathe Mississippi river during the Pleistocene period <strong>and</strong> later via theRome outlet into the Hudson river <strong>and</strong> then again changed to the St.<strong>Law</strong>rence river. The Kosi river in Nepal has moved 112 km eastwardduring the past 130 years.183 283 U. S. 336 (1931), p. 336.184 227 UNTS, 1954, p. 128.185 36 LNTS, 1925, p. 77.186 Supra note 172, p. 72-73.187 Ibid. p. 71-72.
Equitable Utilisation / 163 164 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiadisputes between the USA <strong>and</strong> Canada about the Canadianproposal for diverting the Columbia River water through theFraser Diversion Scheme, <strong>and</strong> this was not implemented. 188 TheLake Lanoux case provides a good illustration of a diversion inwhich the Arbitral Tribunal rejected Spain’s argument <strong>and</strong> heldthat a diversion followed by restitution was not contrary to thetreaty provision <strong>and</strong> international law. 1893.10 The Right of a State to Utilise Water in its ownTerritoryEvery state does have the right to utilise the waters within itsterritory; however, this right is not unlimited <strong>and</strong> unconditional.Each state can use the waters in such a way that it does notinjure the other watercourse states on account of its utilisation.Court judgments such as the Lake Lanoux Arbitration, <strong>and</strong> theverdict on the diversion of waters from the Meuse casesupported this view explicitly. In U.S. inter-state water cases,such as Connecticut v. Massachusetts, New Jersey v. New York,<strong>and</strong> Kansas v. Colorado, the right of states to utilise waters intheir territory has been safeguarded <strong>and</strong> advocated (which hasbeen evaluated already). However, the first precondition tosuch utilisation is that it must not be injurious or harmful to theother basin states, <strong>and</strong> that the share one is entitled to must notbe exceeded. 190 The idea of not causing injury as enunciated inthe Trial Smelter case sic utre tuo ut non atianum laedas(analysed above) is one of the foundations of this idea.As discussed earlier, Article 4 of the Salzburg Resolution of theILI in 1961 completely prohibits any utilisation that mightcause injury, as did the Declaration of Montevideo, the 1957188 R. W. Johnson, “The Columbia Basin” in Q. Garreston, R. Hayton &C. Olmstead (eds), The <strong>Law</strong> of <strong>International</strong> Drainage Basins, NewYork: Ocena Pub, 1967, pp. 202-220.189 24 ILR (1961) p. 101.190 Supra note 6, pp. 190-191.Buenos Aires Resolution, <strong>and</strong> the Madrid Declaration, 1911. 191Articles IV <strong>and</strong> V 192 of the Helsinki Rules <strong>and</strong> Articles 5, 6, 7,20, 22, <strong>and</strong> 24 of the UNCIW reaffirm these ideas.The report of the Nile Commission, which was embodied in the1929 Nile Waters Agreement between Egypt <strong>and</strong> Sudan,protects only the efficient utilisation of waters from seriousinjury by the acts of co-riparian state. 193 The approach that onlyefficient utilisation is to be protected under international lawwas somewhat diluted by the Rau Commission in 1939,regarding the disputes between Punjab <strong>and</strong> Sind. A commissionheaded by Sir Bengal Rau, recommended that the Sind shouldtransform its wasteful inundation canal system into a weircontrolledone, <strong>and</strong> that Punjab should allow Sind three years todo so before starting its own project, <strong>and</strong> Punjab shouldcontribute to the cost of the barrage necessary to make theconversion of the canals in Sind. 194 The American experienceillustrated by the Supreme Court decision in Wyoming v.Colorado supports this notion of useful <strong>and</strong> beneficialutilisation. 195Article 2 of the 1933 Declaration of Montevideo, provides that“… no state may, without the consent of the otherriparian State, introduce into watercourses of aninternational character, for the industrial oragricultural exploitation of their waters, anyalteration which may prove injurious …” 196191 Ibid. pp.195-202.192 Article 4 of the Helsinki Rules 1966, <strong>and</strong> the UNCIW, Article 6prescribes the conditions prerequisite for Article 5.193 Supra note 6, p. 214.194 Ibid. p. 215: the Commission found that the upstream project would infact cause material injury to Sind's inundation canals which wereoperable only at times of flood, <strong>and</strong> it was the method of irrigation <strong>and</strong>not the volume of water used that was the source of the problem.195 Ibid. pp. 217-218.196 Ibid. p. 223; also see the Seventh <strong>International</strong> conference of OAS atsupra note 174, p. 204.
Equitable Utilisation / 165 166 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South AsiaArticle 3 states in the case of damage referred to in theforegoing Article, an agreement of the parties shall always benecessary. In the case of any injury, the states concerned mustinvolve themselves in negotiation <strong>and</strong> seek out a satisfactoryresolution of the dispute by paying reparation for the injury. Forinstance, India paid compensation to Pakistan when Pakistan’sirrigation network was disrupted by partition <strong>and</strong> theconstruction of an irrigation network was required inPakistan. 197In the 1872 Helmond case, such rights <strong>and</strong> obligations wereprovided to both states. 198 Nonetheless, Iran challenged thedecision <strong>and</strong> it has not been applied yet. In the inter-statedispute between Aargau <strong>and</strong> Zurich, the Federal Court ofSwitzerl<strong>and</strong> in its decision of 1878, upheld the principle ofequality of right for both states over their commonwatercourse. 199The German Federal Court, in the case of Wittenberg <strong>and</strong>Prussia v. Baden in 1927, decided that a state is under "the dutynot to injure the interest of other states". 200 The disputes wereresolved later by mutual agreement. In 1913, the AustrianCourt, the Imperial Royal Administrative Court, in the Leitha197 Ibid. p. 231.; also see supra note 63, p 208-The Indian contributionwas fixed at US$ 174 million, <strong>and</strong> around US$ 800 million wasallocated by western governments for the Indus Development Fund.198 Ibid. p. 235-36; also see II YBILC (1974), pp. 233-234.199 Schindler, "The Administration of Justice in the Swiss Federal Court in<strong>International</strong> Disputes" (1921) in AJIL, pp. 169-172: A license to builda hydro-electric plant on the Jonalach River was given under Zurichlaw, on the consideration that a certain sum of money deposited in abank be used to indemnify persons whose existing uses downstreammight be injured by the new works. The work diminished the flow todownstream Aargau which led to Aargau complaining to the FederalCourt to declare the former concession invalid. The court called uponthe parties to utilise waters as such way that did not create any harm orcut the entitlement of other cantons.200 Annual Digest of Public <strong>International</strong> <strong>Law</strong> Cases, (1927) p. 128.River Case, however, rejected the Hungarian citizens’ claimthat diversion of the Leitha waters inside Austria was aviolation of customary international law. 201 The concept of notcausing injury or any harm to the other basin states was alsoaffirmed in the Franco-Italian dispute over the use of the RojaRiver water. 202In a recent case concerning the construction <strong>and</strong>implementation of the Gavcikovo-Nagymaros dam, the ICJ heldthe view that the operation of Variant C by Slovakia, tomitigate the harm caused by non-implementation of the Treatyby Hungary, where 80% of the waters were diverted, ignoringHungary's legitimate interest in it, was illegal. 203 Thus, for itsillegal work Slovakia was required to pay compensation toHungary for having adversely affected Hungary’s reasonable<strong>and</strong> equitable entitlement over the beneficial use of thosewaters. In the Corfu Channel case, the ICJ adjudged thatrespect for territorial sovereignty is an essential cornerstone ofinternational relations. Albania was held responsible for thedamages incurred by the British vessels <strong>and</strong> crew, <strong>and</strong> it wasrequired to give notification of the mines lying beneath thesurface of the sea, where the accident had happened. 204In the context of state practice, a co-riparian state has a right toutilise the waters within its territory on the condition that such201 Annual Digest of Public <strong>International</strong> <strong>Law</strong> Cases, (1940) pp. 594-595.202 Annual Digest of Public <strong>International</strong> <strong>Law</strong> Cases, (1938-1940) p. 120.203 37 ILM (1998), pp. 168-239.204 ICJ Decision on Corfu Channel case, (1949), ICJ Reports, p. 4, "thecourt draws the conclusion that the laying mines of the minefield couldnot have been accomplished without the knowledge of Albania. Asregard the obligations resulting for her from this knowledge, they arenot disputed. It was her duty to notify shipping <strong>and</strong> especially to warnthe ship proceeding through the strait on October 22, of the danger towhich they were exposed. In fact, nothing was attempted by Albania toprevent the disaster, <strong>and</strong> these grave omissions involve herinternational responsibility”.
Equitable Utilisation / 167 168 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiautilisation must not cause any harm to other co-riparian states.With few exceptions state practice, treaty regimes <strong>and</strong> judicialpronouncements all suggest that the right to use waters in one’sown territory is restricted <strong>and</strong> conditional in the sense thatstates must first fulfil their obligation. 205 This constitutes statepractice <strong>and</strong> opnio juris sufficient to make it customaryinternational law.3.11 Water as a Political WeaponWater has been used as a political weapon in order to advanceinterests of individual states on numerous occasions. As hasbeen seen, Egypt has shown its interest in allowing Israelaccess to waters of the Nile so as to resolve the Palestineproblem <strong>and</strong> liberate Jerusalem from Israeli rule for political,religious <strong>and</strong> cultural reasons. Israel objected to this offer bystating that it was not ready to trade Jerusalem for Egyptianwater. 206 Jordan recognised the Israeli rights to the Jordan Riverwaters in return for the latter acquiescing in Jordan’sprocurement of American weapons. 207 Syria withdrew itssupport to the Kurds fighting inside Turkey in lieu ofuninterrupted flow of the waters of common rivers. 208Bangladesh allowed India use of shared waters in return forIndia denying support for guerrillas who were carrying out205 M. Picasso Botto, "The Amazon Cooperation Treaty: A Mechanism forCooperation <strong>and</strong> Sustainable Development" in A. K. Biswas, N.Cordero Benedito, P.F. Brague & C. Tortagdu (eds) in Management ofLatin American River Basin: Amazon, Plata, <strong>and</strong> Sao Francisco,Oxford: Oxford University, 1996, pp. 86-93 & 120-121. TheTennessee, Loire, Ganges, Mekong, Zambezi, Plata, <strong>and</strong> Amazon riverbasins works were carried out in the similar way.206 Supra note 13, p. 57.207 Ibid. p. 49.208 M. Murakami, Managing Water for Peace in the Middle East:Alternative Strategies, Tokyo: United Nations University, 1995, p. 23.attacks on Bangladesh from India. 209 Turkey has proposed anambitious, complex <strong>and</strong> mammoth water transfer project fromthe Sehan <strong>and</strong> Ceyhan rivers to several Arab countries, in orderto solve their acute water shortage problems by transportingwater through a pipeline across thous<strong>and</strong>s of kilometres. If thisproposal succeeds, Turkey will have a dominant position in theMiddle East (ME). 210 The proposed Fraser River Diversion inthe Columbia Basin by Canada compelled the USA to agree onthe downstream issues raised earlier, which led to theconclusion of the Columbia Treaty 1961. 211Peter Glecik, an expert on water <strong>and</strong> conflict, has suggestedthat water has played a role in international conflict in history,<strong>and</strong> will in the future too. He talks about 'war against nature'rather than calling it “war caused by water related disputes.” 212It is also increasingly argued that the availability of fresh waterhas become a part of human rights, because water, like oxygen,is a primary need of human beings for their existence. 213 Theright to water <strong>and</strong> its linkage with human rights has beenwidely discussed <strong>and</strong> recognised as a basic human right, <strong>and</strong> is209 Supra note 49 (Crow), pp. 122-123.210 Supra note 14, p. 78-79: Turkish President Ozal in 1987 suggested thata pipeline could be constructed in the Seyhan <strong>and</strong> Ceyhan rivers in thesouthern Turkey to deliver water to Sharjah in UAE <strong>and</strong> to Jeddaha onthe Red sea. Such a pipeline would carry 3.5 thous<strong>and</strong> metres per day.The estimated cost of this has been put at US$ 20 billion. A secondsuggestion, made public in 1991 was that a mini-pipeline be built as faras Jordan; using the waters of the Goksu or Manaugat rivers west ofthe Sayhan <strong>and</strong> Ceyhan rivers.211 R. W. Johnson, "the Columbia Basin" in A.H. Garretson, et.al (eds),The <strong>Law</strong> of <strong>International</strong> Drainage Basins, New York: Ocena Pub.,1967, pp. 205-210.212 http://www.worldwaterforum.org/index2.html.213 Ibid. It was discussed by the World Water forum 2002 that a waterright is human right <strong>and</strong> international law should treat it in this sense.See S. McCaffrey, “A Human Right to Water: Domestic <strong>and</strong><strong>International</strong> Implications” (1992) in 5 GIELR, pp. 1-23.
Equitable Utilisation / 169 170 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiaassociated with the right to development of states in the 21 stcentury. 214 McCaffrey has argued that the right to life stipulatedin the <strong>International</strong> Covenant of Political Rights, UniversalDeclaration of Human Rights <strong>and</strong> also economic rights areinextricably interwoven with human rights issues. Moreover, healso suggested that the right of a state to receive an unhinderedflow of water from shared watercourses is also linked withthese human rights. 215 With respect to the relation betweenpeace <strong>and</strong> water in the case of the ME, it is a widely recognizedfact that without the settlement of water sharing <strong>and</strong> allocationissues in the ME peace will not possible. 2163.12 Recent Developments on Equitable UtilisationThe Gacikovo-Nagymaros case, decided by the ICJ in 1997, 217<strong>and</strong> the 1997 UNCIW have confirmed equitable utilisationwithin the rules of IWL. Most bilateral treaty agreements havefocussed on equitable sharing of benefits, particularly thosetreaties which were made after the 1990’s. 218214 Ministerial Declaration of the Hague on Water Security in the 21stcentury 22 March (2000), Second World Water Forum held in theHague, Para 1; also see supra note 212 (McCaffrey).215 H. Smets, “The Right to Water as a Human Right” (2001) in 5 EP&L,pp. 248-250.216 Supra note 208, King Abdullah of Jordan <strong>and</strong> Soviet President MikhailGorvachov stressed the point during the Hague water conference thatthe Middle East problems <strong>and</strong> its relation to water: "no nationalsolution will solve our water problems, there has to be internationalinvolvement; the water shortage in the Middle East has the potential toresult in war if not resolved in next 10 to 15 years”.217 37 ILM (1998), pp. 179-191, “Hungary, in the treaty of 1977 hadconsented to share benefits from the utilisation of Danube water, butnot to be forfeited its basic rights to an equitable <strong>and</strong> reasonablesharing of the resources of an international watercourse”.218 Mekong, Ganges treaty between Bangladesh <strong>and</strong> India, <strong>and</strong> theMahakali treaty between Nepal <strong>and</strong> India.Besides this, the Water Resources Committee (WRC) of theILA, which has continued its work on the non-navigational usesof international watercourses, has adopted an article on‘Adequate Stream Flow’ at its 1998 Rotterdam meeting <strong>and</strong> aconsolidation of the ILA Rules on <strong>International</strong> WaterResources 1966-1999 at its meeting in Italy in June 1999. In itspursuit of the Helsinki Rules 1966 <strong>and</strong> the Settlement of<strong>International</strong> Water Disputes, the WRC has continued its study,<strong>and</strong> the recently held Vienna meeting worked on strengtheningthe Rules. 219 The general principles of Article 3 of theCampione Consolidation on the Rules on <strong>International</strong> WaterResources accommodate this rule. 220 In the article on AdequateStream Flows, it stipulates:"consistent with the principle of equitable utilisation,basin states shall, individually <strong>and</strong>, where appropriate,in co-operation with other basin states, take allreasonable measures to ensure stream flows areadequate to protect the biological, chemical <strong>and</strong>physical integrity of international watercourses,including their estuarine zones". 221There are increasing environmental considerations in the use ofIWC. For example to implement large water projects,construction of a dam is unavoidable; but many dams <strong>and</strong>reservoirs are failing to realise the objectives for which theywere built. The reasons may be technical, environmental orsocial. Some appear to be inflicting more harm than realisingthe bounties they were initially supposed to generate, as isindicated in the report of the World Commission on Dams219 www.ila-hq.org.220 Article 3 states: "each basin state is entitled, within its territory, to areasonable <strong>and</strong> equitable share in the beneficial uses of the waters of aninternational drainage basin". ILA booklet on the London conference2000, Water Resources Committee, p. 4.221 Ibid. p. 2.
Equitable Utilisation / 171 172 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia(WCD). 222 For example, the Aswan dam in Nile <strong>and</strong> Farakka inIndia have inflicted damage to the environment. Jackson hasrightly observed that the notion of Third World leaders inrelation to environmental protection <strong>and</strong> its relation withdevelopment is that environmental problems can only betackled when poor countries have achieved a certain level ofprosperity. Moreover he gave an example that the first IndianPrime Minister, Mr Nehru, described dams as the temples ofmodern India <strong>and</strong> saw them as a symbol of national pride. 223More than 57% of all dams are in India <strong>and</strong> China. 2243.13 The Role of Joint Commissions in IWCThe idea of treating an IWC as a single unit, ignoring thepolitical boundaries, requires mechanisms that bridge the gapbetween sovereign nations. To pursue this notion, the creationof an agency which is independent of governments <strong>and</strong> able toresolve issues of common concern is essential. The earlywritings of jurists that contributed to the development of thisconcept have been immensely beneficial. For example, Smithenunciated the idea in the 1930s, <strong>and</strong> was supported by222 WCD, Dams <strong>and</strong> Development: A Framework for Decision Making,Earthscan, London, (2000), pp. 8-10. 40 to 80 million people weredisplaced by these dams, people’s health <strong>and</strong> livelihood have oftenbeen put at risk <strong>and</strong> adequate compensation has not been granted. Thishas also caused severe damage to the environment. In two years, thecommission undertook studies of 11 large dams in five continents,surveyed 150 dams in 56 countries, conducted 17 thematic reviewsalong five dimensions of the debate, as well as four regionalconsultations <strong>and</strong> attracted 947 submissions form 97 countries. Alsosee W. Barnaby, “Re-routing World Waterways”, in The Times,December 1 (2000), p. 26.223 B. Jackson, Poverty <strong>and</strong> the Planet: A Question of Survival, London:Penguin, 1994, p. 10.224 Supra note 222, pp. 40-42; also see A. Roy, “The People vs the God ofBig Dams”, The Times of India, 25 October (2000), p. 15.Andrassy, Laurterpacht <strong>and</strong> others. 225 The ILI in its 1911Resolution recommended the establishment of a JointCommission as an advisory body to carry out projects on suchbasins. 226 This idea was also advocated at the Seventh<strong>International</strong> Conference of American States held atMontevideo in 1933. An early Joint Commission to undertakesuch a special responsibility (to determine the best sites forbuilding locks on the Meuse) was constituted in 1785 betweenGermany <strong>and</strong> the Netherl<strong>and</strong>s. 227 Since then, water conflicts<strong>and</strong> disputes have been mitigated <strong>and</strong> resolved through thecreation of bi-national bodies that have greatly contributed tothe equitable resolution of water disputes. The roles of suchcommissions, committees or groups have always remainedcatalytic <strong>and</strong> commendable. 228The reasons for the success of joint bodies are multidimensional.They include neutrality, expert knowledge on thesubject <strong>and</strong> a strong will to seek out a sound <strong>and</strong> acceptableresolution under special circumstances. The tremendoussuccess of such commissions can be seen in practice in themajor river basins. 229 More than 300 IWCs have come intobeing after the rupture of the former Soviet Union <strong>and</strong>Yugoslavia; the numbers are increasing. For most of thewatercourses concerned such commissions are already in place.It is therefore argued that the establishment of a commissioncould contribute to the resolution of any impasse, however long<strong>and</strong> complicated a dispute may be. The constitution of such a225 L. A. Teclaff, The River Basin in History <strong>and</strong> <strong>Law</strong>, the Hague:Martinus Nijhoff, 1967, p. 152.226 Supra note 198, p. 275: Article 7 suggests appointing a JointCommission.227 Supra note 225.228 Even complex issues have been resolved by such entities, for example,by the commissions between Canada <strong>and</strong> the USA, Mexico <strong>and</strong> USA<strong>and</strong> even between arch rivals India <strong>and</strong> Pakistan.229 T. <strong>Upreti</strong>, "The Role of Joint Commission in <strong>International</strong><strong>Watercourses</strong> Issues" The Kathm<strong>and</strong>u Post, 22 July (2001).
Equitable Utilisation / 173 174 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiacommission could be varied, involving bureaucrats, politicians<strong>and</strong> even heads of state. 230 The Mahakali River Treaty 1996between Nepal <strong>and</strong> India, envisages such a joint commission.Despite this, the commission has yet to materialize, <strong>and</strong> neitherthe finalisation of DPR nor the disputes over inundationbetween the two countries have been resolved.The <strong>International</strong> Waterways Commission of 1905 (laterreplaced by the Joint Commission established under the Treatyof 1909 between Canada <strong>and</strong> the USA) 231 is a better example.This Treaty is a l<strong>and</strong>mark event in the development <strong>and</strong>resolution of serious disputes over the use of waters between apowerful state <strong>and</strong> a weaker neighbour. This Treaty providesthat in the event of an injury, the party that inflicts such injuryshould negotiate to abate <strong>and</strong> mitigate such injury or payreparation for it. The commission has quasi-judicial authority toadminister <strong>and</strong>, conduct research <strong>and</strong> investigations as well aspublic hearings. This is possible through political will, eventhough the physical conditions of both states differ, <strong>and</strong> theirinterests vary. Article VII of this Treaty establishes the IJC withsix commissioners, three appointed by each of the CanadianPrime Minister <strong>and</strong> US President. Without the consent of theIJC, no water projects are possible in the IWC. 232 Moreover,every complex issue has been resolved through it. It is the bestexample of the sharing <strong>and</strong> allocation of mutual benefits from ashared watercourse using the mechanism of an IJC.The <strong>International</strong> Boundary <strong>and</strong> Water Commission (IBWC) isa mechanism created by the USA <strong>and</strong> Mexico under a 1944230 Supra note 225, p. 140-141: The Upper Volta River Authority, isheaded by the President of the Ghana, although it is a nationalauthority.231 D. LeMarqu<strong>and</strong>, "The <strong>International</strong> Joint Commission <strong>and</strong> ChangingCanada-United States Boundary Relations" (1993) in 33 NRJ, p. 62,also see D. J. Allee, "Subnational Governance <strong>and</strong> the <strong>International</strong>Joint Commission: Local Management of United States <strong>and</strong> CanadianBoundary Waters” (1993) 33 NRJ, pp. 133-151.232 Ibid. pp. 65-67.Treaty. <strong>Its</strong> jurisdiction is more limited in many respects than theUSA-Canada IJC. Nevertheless, it has made an immensecontribution to the resolution of conflict <strong>and</strong> reconciled theinterests of both nations. The implementation of the treaty’sprovisions is its basic duty. The commission consists of twonational sections. A single commissioner, who must be anengineer, heads each section. Experience suggests that publicdem<strong>and</strong> in both countries is for the jurisdiction of thecommission to be exp<strong>and</strong>ed to enable it to cover a wider rangeof issues. 233The creation of a Joint Commission in Europe took place in theearly Nineteenth century. Several commissions exist withjurisdiction over the Rhine, Danube <strong>and</strong> Meuse Rivers. For theNile basin, the Nile Commission is in place; for the Indus, thereis a Joint Commission, which has successfully worked evenduring times of war between the arch-rival states. 234 There areseparate multilateral projects for the Mekong, SADC, Amazon<strong>and</strong> so on, which are also administered <strong>and</strong> implemented ofcommissions. The results show that the creation of a JointCommission or a committee in order to successfully implementtreaty provisions <strong>and</strong> enhance co-operation in using the watersof an IWC for mutual benefits is essential.The tremendous success of such commissions <strong>and</strong> their smoothworking is well exhibited in the Sc<strong>and</strong>inavian states. Russia<strong>and</strong> Finl<strong>and</strong> set up the Joint Frontier Commission in 1964. TheFinl<strong>and</strong>-Sweden Frontier Rivers Commission was set up in1971 by the Boundary Rivers Agreement, as was the Finish-Norwegian Frontier Rivers Commission. As argued by233 S. Mumme, "Innovation <strong>and</strong> Reform in Transboundary ResourceManagement: a Critical Look at the <strong>International</strong> Boundary <strong>and</strong> WaterCommission, United States <strong>and</strong> Mexico" (1993) in 33 NRJ, p. 103, alsosee H. InGram & D. R. White, "<strong>International</strong> Boundary <strong>and</strong> WaterCommission: An Institutional Mismatch for Resolving TransboundaryWater Problems" 33 NRJ, et al., pp. 153-154.234 Supra note 17 (Soffer), p. 250.
Equitable Utilisation / 175 176 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South AsiaFitzumaurice, 235 the Finnish-Swedish Commission is workingas a national entity in both nations without any problem. It isfunctioning as a court <strong>and</strong> administrative organ in both states,to the exclusion of national courts <strong>and</strong> administrative organs.This may only be possible where the judicial systems,procedures <strong>and</strong> existing law are as close they are in both thesecountries. Fitzumaurice further argued that this legal proximityallows a solution that may be called 'merged sovereignty'. Inseveral respects, it represents the best example of internationalco-operation, one that has positively honoured the rights ofindigenous people. The Sami people’s inherited rights overreindeer <strong>and</strong> fishing have been protected <strong>and</strong> enhanced.However, the Joint River Commission between India <strong>and</strong>Bangladesh established under a 1977 agreement, which waslater upgraded to Ministerial level, failed to obtain itsobjectives due to the differences of opinion on how to augmentflow in the dry season. This prevented the Commission fromobtaining the objectives set out on its establishment. 2363.14 ConclusionsThe importance of equity in the modern world is paramount.The application of it in political, socio-economic, trade <strong>and</strong>environmental issues has become a common dimension. <strong>Its</strong> linkwith politics creates a truly democratic system. Similarly, in theenvironmental dimension, it secures healthy environmentalrights for both present <strong>and</strong> future generations. In the area oftrade, commerce <strong>and</strong> economics, equity has become an explicitlink for vouchsafing the judicious economic rights ofdeveloping nations to participate in a healthy <strong>and</strong> equitableeconomic <strong>and</strong> international trade system. Thus, equity bridges235 Supra note 1, p. 461.236 S. M.A. Salman & K. Uprety, Conflict <strong>and</strong> Cooperation on SouthAsia’s <strong>International</strong> Rivers: A Legal Perspective, the Hague: Kluwer<strong>Law</strong>, 2003, pp. 151-159.the gap between wealthy <strong>and</strong> poor nations reconciling thedivergent interests of the developing <strong>and</strong> developed nations.In the legal sphere, equity can be used to administer fair <strong>and</strong>rational justice to all people of the world. Moreover, itsapplication here is to ensure fairness <strong>and</strong> justice, <strong>and</strong> to addressthe interests of the contestant parties. <strong>Its</strong> application is mostappropriate wherever there are legal lacunae, rigidity orinability to resolve issues related to particular exigencies. It canbe argued that without recourse to equity, a proper <strong>and</strong> justadjudication of IWL disputes is not possible. As a principlerelied upon on numerous occasions, it has been recognised bythe majority of treaty regimes <strong>and</strong> both supported <strong>and</strong> advancedby courts <strong>and</strong> tribunals, municipal <strong>and</strong> international. Mostwritings of the publicists support the notion that equity hasbeen assimilated into IWL. However, the obligation not tocause any harm or deprive other watercourse states of theirrights always binds states in each circumstance. Eachwatercourse state must always comply with this duty, whichimplies that a use is inequitable if it inflicts any injury orharm. 237However, the said rules are by no means complete <strong>and</strong>universally accepted. There are many matters which are stillcontentious 238 <strong>and</strong> particularly criticised by some upstream <strong>and</strong>downstream states alleging that the reasonable <strong>and</strong> equitablerule favours the other. Perhaps, Jennings may be right to argue237 Commentary, YBILC, (1984), pp. 340-341.238 Supra note 1: Fitzmaurice has argued that paragraph 1 <strong>and</strong> 2 of Article7 are conflicting; also see, UN Doc.A/C.6/51NVW/CRP.94,A/C.6/51/SR.62, April 4, 1997: During the UNGA discussion on theinstrument, France criticized the draft, stating the haste in negotiationshad created serious procedural discrepancies, <strong>and</strong> imbalance betweenup <strong>and</strong> downstream states with many ambiguities. Ethiopia abstained,stating that the draft favours downstream states at the price of upstreamstates.
Equitable Utilisation / 177 178 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiathat “water resources law is surely not ripe for codification.” 239Special Rapporteur McCaffrey has rightly observed that despitesome of the reservations made by member states, the UNCIWis the first legally binding framework instrument with universaljurisdiction, which would contribute to the attainment of thegoals of the Charter of the United Nations (for the peacefulresolution of disputes) by its successful codification <strong>and</strong>progressive development of the rule in international law. 240 Inthe meantime, it must be acknowledged that there is nouniversally accepted definition of equity <strong>and</strong> equitableutilisation. Therefore, there is a lack of unanimity on when <strong>and</strong>how to apply its provisions in circumstances of uniquegeographical, hydrological, or political conditions, <strong>and</strong> there isa large loophole for manoeuvring, which poses a formidablechallenge to codification. Equity has provided court’s withmuch needed flexibility, a flexibility that has already enabled itto reach decisions in matters involving the disparate claims ofdeveloped <strong>and</strong> developing countries over such resources. 241Regarding to significance of equity, however, Higgins cautions,“the general principle of equity <strong>and</strong> proportionalityare meant to oil the wheels of decision-making butwe should be sceptical. The concept of equity,designed to be an aid to decision-making, carrieswith it serious problems.” 242It has been argued that equitable utilisation is the best tool forachieving justice in shared resources, <strong>and</strong> is the best possiblemeans of resolving conflicts. In practice, however, it has far239 R. Jennings, “Keynote Address” in Resolution of <strong>International</strong> WaterDisputes, the <strong>International</strong> Bureau of the Permanent Court ofArbitration (ed), the Hague: Kluwer <strong>Law</strong>, 2003, p. 26: he has arguedthat technical experts also should have been included in thecodification process.240 J. R. Crook & S. C .McCaffrey, "The United Nations Start Work on a<strong>Watercourses</strong> Convention" (1997) in 91 AJIL, pp. 374 – 377.241 Ibid.242 Supra note 76, p. 237.reaching implications with several inherent difficulties. Weak<strong>and</strong> vulnerable countries are in a precarious position in utilisingthese resources due to the numerous obstacles, such as a lack ofcooperation by other watercourse states, lack of capital ortechnology, <strong>and</strong> international reluctance towards anymeaningful cooperation in utilising shared resources. Yetobtaining an integrated <strong>and</strong> holistic approach, good faith,cooperation <strong>and</strong> joint management (including the use of theequitable utilisation rule) appears the best way to maximise thebenefits. 243 Multilateral investment agencies such as the WorldBank, other development banks, UNDP, IMF, GEF, <strong>and</strong> thedeveloped nations must play a more creative role, followingthat played by the World Bank in resolving the disputes overthe Indus Water Treaty. 244 In order to accommodate <strong>and</strong>address the issues of weak <strong>and</strong> vulnerable nations, someconcessions have already been given by instruments orinstitutions such as LOSC, GATT & WTO, 245 the EU, 246 <strong>and</strong>243 A. M. Duda & Mohamed T. El-Ashry, "Addressing the Global Water<strong>and</strong> Environment Crisis Through an Integrated Approach to theManagement of L<strong>and</strong>, Water <strong>and</strong> Ecological Resources" March 2000,in 25 WI, p. 116.244 A. K. Biswas was of the view that the leadership shown by Mr Black,the then President of the World Bank in resolving the Indus treatyshould be followed by other executives of the numerous agencieswhich would be able to achieve broader development <strong>and</strong> equitablesociety.245 Some quota free <strong>and</strong> tariff free entrance for the least developedcountry’s products <strong>and</strong> other concessions have been offered in theFourth Ministerial meeting that took place in Doha in 2001. Also see S.P. Subedi, “The Road from Doha: The Issues for the DevelopmentRound of the WTO <strong>and</strong> The Future of <strong>International</strong> Trade” (2003), in52 ICLQ, p. 426-46.246 Staff, “European Union provides sugar quota”: The Kathm<strong>and</strong>u Post16 April 2003, Under the EBA Scheme the EU has given quotastotalling 4400 ton of raw sugar to Nepal <strong>and</strong> some other l<strong>and</strong>-lockedstates have also received such a quota, which will be tremendouslybeneficial to them. For example, Nepal is making a profit of Rs 30million from this transaction <strong>and</strong> looking to increase sucharrangements in the future.
Article 6 of the Rio Declaration asserts that special priority willbe given to developing nations. 247 Such concessionaryarrangements for this group of nations from the donor agencies<strong>and</strong> the western nations are most essential. 248 These notionsshould be implemented in a milieu where every player mustcome forward voluntarily rather than with compulsion.The forthcoming chapter will focus on issues related to Nepal.The problems, prospects <strong>and</strong> way ahead will be analysed in thelight of IWL in general, <strong>and</strong> in the context of bilateral <strong>and</strong>regional aspects in particular. The pertinent issues will beevaluated in order to explore avenues for the resolution ofexisting problems.•Equitable Utilisation / 179 180 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia247 Principle 6 (Rio Conference) provides special concessions todeveloping countries. Similarly, principle 7 provided common butdifferentiated responsibility between poor <strong>and</strong> rich nations.248 Supra note 115, pp .83-157; also see third UN Conference on the LeastDeveloped Countries in Brussels at www.undp.org/mdg/goals8.pdf.For the eradication of poverty by the year 2015 in the above rankcountry’s targets have been set out.
180 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 1814.1 IntroductionChapter- FourProspects <strong>and</strong> Problems ofNepalese Water ResourcesNepal is a l<strong>and</strong>locked country surrounded on the south, east <strong>and</strong>west by India <strong>and</strong> on the north side by Tibet (a region ofChina), <strong>and</strong> comprising an area of 147,181 square kilometres.The country has three broad ecological zones consisting of 43%mountains, 30% hills <strong>and</strong> 27% plains. 1 Her population is 25million, of whom 85% live in rural areas <strong>and</strong> 42% live belowthe extreme poverty line. The Nepalese economy is based onagriculture: about 90% of the people’s occupations depend onit, <strong>and</strong> agriculture is largely rain-fed, due to the rugged, harsh<strong>and</strong> steep hills; only one sixth of the total l<strong>and</strong> area is suitablefor cultivation, of which about 41% is irrigated. 2There are about 6000 rivers <strong>and</strong> rivulets in Nepal, having a totaldrainage area of 194,471 square kilometres, 45.7% of whichlies in Nepal. There are 33 rivers whose drainage area exceeds1000 sq km. Rivers in Nepal can be typically classified in threetypes depending on their discharge. The Kosi, G<strong>and</strong>aki, Karnali<strong>and</strong> Mahakali river systems originate in the Himalayas <strong>and</strong>carry snow-fed flows with significant discharge even in the dryseason. 3 The Mechi, Karnali, Kamala, Bagmati, West Rapti <strong>and</strong>1 S. N. Bastola, Water Resources Development of Mighty HimalayanRivers, Kathm<strong>and</strong>u: Sunil Bastola, 1994, p. 61.2 His Majesty's Government, Water <strong>and</strong> Energy Commission Secretariat,(HMG/N-WECS) Water Resources Strategy Nepal, Kathm<strong>and</strong>u,WECS, (2002), p. 14.3 Ministry of Water Resources, HMG/N (MOWR), Waters ResourcesDevelopment in Nepal, Kathm<strong>and</strong>u: 1985, p. 1.Babai rivers originate in the midl<strong>and</strong>s or Mahabharat range ofmountains <strong>and</strong> are fed by precipitation as well as by groundwater regeneration. These rivers are also perennial but arecharacterised by a wide seasonal fluctuation in discharge. Apartfrom these river systems, there are large numbers of smallrivers in the Terai, which originate from the Southern Siwalikrange of hills, <strong>and</strong> are seasonal with little flow during the dryseason, but are characterised by flash floods during themonsoon. Most of the rivers originate from the Himalayanrange within Nepal, while some originate from the TibetanPlateau; all these rivers drain southwards to the Ganges 4 inNorthern India <strong>and</strong> ultimately into the Bay of Bengal. TheMechi <strong>and</strong> Mahakali rivers form the eastern <strong>and</strong> westernboundaries with India <strong>and</strong> the other rivers flow to India, beingtransboundary in nature. The total average annual runoff intoNepal's rivers is estimated to be 200,000 million cubic metresoriginating from areas within the country; the catchment areasfrom Nepal alone make up about 45% of the long-term averageannual flow of the Ganges basin <strong>and</strong> contribute over 70% of theGanges flow during the driest months. 5With regard to climate, Nepal lies just beyond the northernlimit of the tropic. There is a very wide range of climate, fromthe summer tropical heat <strong>and</strong> humidity of the Terai to the colderdry continental climate in the middle, <strong>and</strong> the alpine winterclimate throughout the northern mountainous region. Theamount of precipitation <strong>and</strong> the temperature range varyconsiderably because of the exceptionally rugged terrain, <strong>and</strong>large variations in altitude. 6 Nepal has two rainy seasons: onefrom June to September when the south-west monsoon bringsabout 80% of the total annual rainfall, <strong>and</strong> the other in winter,accounting for the rest of the rainfall. About 64% of the rainfall4 P. Shumsher J. B .Rana, “Nepal-India Relations: Water Resources” inL. R. Baral (ed), Looking to the Future: Indo-Nepal Relations inPerspective, New Delhi: Anamol Pub., 1996, pp. 206-212.5 Ibid.6 Supra note 2.
182 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 183immediately becomes surface runoff; out of the remaining 36%,some is retained in the form of snow <strong>and</strong> ice in the highHimalayas, while some percolates through the ground as snow<strong>and</strong> groundwater, <strong>and</strong> some is lost by evaporation <strong>and</strong>transpiration. The water retained in the form of snow feeds therivers during the dry season. 7The available hydrological data reveals the estimated annualrunoff into the rivers of Nepal to be 220 billion cubic metres,with the average annual precipitation being 1530 mm per year. 8The influence of heavy rain during the monsoon causes widefluctuations in river flow, l<strong>and</strong> erosion <strong>and</strong> l<strong>and</strong>slides, which isaggravated by the extreme topographic relief <strong>and</strong> fragilegeological construction of the country. These factors cause therivers to carry high sediment loads during high flows.Moreover, the snow <strong>and</strong> glacier melt also brings heavy loads ofsediment during summer months, which is considered animportant factor determining the extent of water-related hazardsin the downstream territory. 9Nepal possesses energy in the form of hydropower <strong>and</strong>firewood; no other energy resources have been discovered insignificant quantities (e.g. coal, oil, gas). Hydropower offershuge potential, but so far only 20% of the population haveaccess to electricity. Several studies suggest that Nepaltheoretically has 83000 MW of hydropower potential, morethan the combined total produced by the United States, Canada<strong>and</strong> Mexico, of which about 43000 MW is presently consideredeconomically viable to harness. 10 Despite the abundance ofwater resources, only about one third of the population has got7 Ibid.8 C.K. Sharma, A Treatise on Water Resources of Nepal, Kathm<strong>and</strong>u:Sangita Sharma, 1999, p. 33.9 C. P. Sinha, "Sediment Management; A Co-operative Indo-NepalVentures" (1994) in 4 Water Nepal, pp. 158-163.10 S. P. Subedi, “Hydro-Diplomacy in South Asia: The Conclusion of theMahakali <strong>and</strong> Ganges River Treaties” (1999) in 93 AJIL, p. 954.access to safe water, <strong>and</strong> only 42% of the net calculated l<strong>and</strong>has been irrigated so far. 11This chapter aims to discuss <strong>and</strong> analyse the abundance of thewater resources in Nepal, their significance for the country’ssocio-economic development, <strong>and</strong> associated legal issues fromthe perspective of IWL. Furthermore, issues inextricablyintertwined with the transboundary freshwater resources,(ranging across hydrological, geographical, political, socioeconomic,<strong>and</strong> technical fields) will also be dealt with in thelight of existing legal principles <strong>and</strong> practices. The issues ofbilateral Indo-Nepal co-operation <strong>and</strong> of regional cooperationwith Bangladesh <strong>and</strong> Bhutan will also be covered, with a focuson water resource issues. These issues will be criticallyanalysed in the light of the previous chapter’s discussion ofequity4.2 Potential for Nepalese <strong>Watercourses</strong>Nepal is endowed with immense water resource’s potential,which, if utilised properly would be a boon both for herself <strong>and</strong>for countries further downstream. The benefits could be appliedto several spheres, namely hydropower generation, theextension of irrigation facilities, <strong>and</strong> particularly navigation,which is crucial for the l<strong>and</strong>locked countries of Nepal <strong>and</strong>Bhutan <strong>and</strong> the north-eastern states of India, which couldaccess the sea via Bangladeshi territory. Moreover, floodcontrol, industrial, recreational <strong>and</strong> other benefits arepossible. 12 However, the reality is that in order to gainmaximum benefits, such transboundary resources should bedeveloped in a holistic <strong>and</strong> integrated manner ignoring nationalbarriers. This is because, due to the nature of these rivers <strong>and</strong> ofthe geography of the area, the optimum site for the barrage (a11 Supra note 2. pp. 13-14.12 B. Crow, A. Lindquist & D. Wilson, Sharing the Ganges: The Politics<strong>and</strong> Technology of River Development, New Delhi: Saga Pub., 1995,pp. 218-237.
184 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 185structure for storing water) might be in one state (e.g. Nepal),the benefits could be accrued in other states (e.g. India <strong>and</strong>Bangladesh), <strong>and</strong> such benefits could be shared by yet morestates. 13 The principle of equity can dictate how this may beproperly resolved.It has been proved in several parts of the world that basin-widedevelopment of water resources could provide immensebenefits to all riparian nations/states, e.g. the Tennessee ValleyAuthority (USA), the Damodar Valley Corporation (India), theAmazon (Latin America), the Columbia (USA-Canada), theMekong (four states of southeast Asia), <strong>and</strong> likewise manyother IWC’s in various locations. This is so not only fortechnical reasons,however, but also for a multiplicity of socio-economic, legal,political <strong>and</strong> other inextricably linked reasons. The concept of‘drainage basin’ 14 or ‘watercourse’ 15 has been developed forthese reasons, as has the concept that a watercourse should beregarded as a single unit regardless of political borders. 16 In thebilateral sphere, the successful <strong>and</strong> renowned model of cooperationbetween the USA <strong>and</strong> Canada in regard to theColumbia River Treaty has been repeatedly put forward as onebasis for other such co-operative models. Hence, Indo-Nepalwater resources offer opportunities <strong>and</strong> challenges for overalldevelopment. 17From past experience in south Asia, the states concerned onlybecome involved in order to protect <strong>and</strong> preserve their own13 D. Gyawali, “Himalayan Waters; Between Euphoric Dreams <strong>and</strong>Ground Realities” in K. Bahadur & M. P. Lama (eds), NewPerspectives on India-Nepal Relations, New Delhi: Har-An<strong>and</strong>a Pub.,1995, p. 256.14 Article 1 Helsinki Rules in Report of the ILA, (1966), pp. 484-485.15 Article 1 of the UNCIW, 36 ILM, (1997), p. 721.16 H. A. Smith, The Economic Use of <strong>International</strong> Rivers, London: P.S.King & Son, 1931, p. 121.17 B. C. <strong>Upreti</strong> , Politics of Himalayan River Waters, New Delhi: NiralaPub., 1993, pp. 84-88.national interest at the cost of those of other states, <strong>and</strong> toattempt to maximise their own advantage whilst ignoring theneeds of others. Weak <strong>and</strong> vulnerable states are always thelosers, because of their lesser capability in the diplomatic,strategic, economic <strong>and</strong> other spheres. Good examples are theconstruction of the Farakka Barrage by India, the Aswan Damby Egypt <strong>and</strong> the Three Gorges Dam currently underway inChina; 18 all of these projects are obviously against the letter <strong>and</strong>spirit of IWL. No state or organisation was actually able to stopthis kind of illegal construction. At the same time weakernations, such as Nepal, Bangladesh <strong>and</strong> Ethiopia, are prohibitedfrom enjoying equitable utilisation of their own resources dueto the complications of IWL, a problem which will be analysedbelow. As to the relationship that India has had with Nepal <strong>and</strong>with Bangladesh in the sphere of water resources, its nature hasnot always been friendly or even satisfactory, when consideringthe Sarada, Kosi <strong>and</strong> G<strong>and</strong>ak projects in the former case, <strong>and</strong>the Farakka Barrage in the latter. 19 However, by consideringthese issues in the light of the concept of equity in waterresource utilisation, the divergent interests of all riparian statescan be addressed, thus enhancing the prospects of constructive<strong>and</strong> meaningful co-operation in the future.The case of Nepalese water resource development is unique incomparison with the circumstances in other countries; Nepalhas huge water resources available with a tiny l<strong>and</strong> arearequiring irrigation <strong>and</strong> a very low dem<strong>and</strong> for hydroelectricity.Conversely, India has got a huge territory but sufficient water isnot available during the dry season, either for herself or forBangladesh. However, development of these resources could beundertaken for the benefit of the region, for which co-operationamong the nations of south Asia is essential. On the contrary,the dem<strong>and</strong> for water, particularly in the dry season indownstream countries is acute, meaning that a regulated flow of18 www.internationalwaterlaw.org “China completes Three GeorgesDam.”19 Supra note 17, pp. 106-115.
186 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 187water during the dry season, hydroelectric power, <strong>and</strong> floodcontrol during the wet season, are absolutely essentialrequirements to India <strong>and</strong> Bangladesh. 20Besides this, fundamental benefits could accrue to Nepal aswell, in particular from co-operation over navigationalfacilities, giving access to <strong>and</strong> from the sea, an essentialrequirement so that Nepal can diversify her trade in a morecompetitive way. 21 Nepal had repeatedly called for such access,which she is entitled to by international law, but of which shehas been deprived. In order to maximise the benefits, anintegrated <strong>and</strong> holistic approach needs to be undertaken inNepal, for example in watershed management, <strong>and</strong> afforestationin the Siwalik <strong>and</strong> the hills of the Himalayas, which wouldsignificantly reduce the silt <strong>and</strong> sediment that causestremendous loss <strong>and</strong> damage to territory downstream. As aresult of this approach, all nations involved would benefit. 22 Anexample of this is the Indo-Bhutan co-operation in the Chukhaproject, which enormously benefited both nations. 23Additionally, there are several projects under review forimplementation. Primarily, these are the hydroelectric projects:(1,020 MW) the Tala Project on the Wangchu downstream ofChukha, the Chukha II, the Sunkosh High Dam Project (1525MW), the Chukha III (900 MW) <strong>and</strong> the Mannes High Dam20 B. G. Vergeese & R. R. Iyer (eds), Harnessing the Eastern HimalayanRivers: Regional Co-operation in South Asia, New Delhi: KonarkPub., 1994, p. 267.21 C. K. Sharma, Water <strong>and</strong> Energy Resources of the Himalayan Block,Kathm<strong>and</strong>u: Sangita Sharma, 1983, p. 377.22 B. G. Vergeese, Waters of Hope, New Delhi: Oxford & IBH Pub.,1990, p. 347.23 Supra note 17. pp 199-200: the 336 MW hydropower project jointlyundertaken by means of Indo-Bhutan co-operation provides a goodexample, in which India provided 40% of the project cost as assistanceto Bhutan <strong>and</strong> the remaining 60% as an investment on 50/50 ownershipof the joint investment project. The electricity generated is beingexported to India as a result of which a huge amount of money, 40crore annually, has accrued to Bhutan as revenue from which hereconomy has benefited.project (2800 MW), <strong>and</strong> apart from these India’s strategy todivert the Brahamputra into any or all of the Torsa, Raidak, theSunkosh <strong>and</strong> Manes rivers in Bhutan, schemes which are underdiscussion. 24 Due to the income of Chukha I, a 336 MWproject, <strong>and</strong> other projects in the pipeline, Bhutan is emergingas one of the wealthiest nations, in terms of per capita income,in south Asia. 25 Such cooperative arrangement for the mutualbenefits of India <strong>and</strong> Nepal is the need of the hour <strong>and</strong> fromsuch cooperation other nation also could benefit.4. 3 History of Water Resource Development:Indo-Nepal RelationsNepal's water resource development dates back to the Exchangeof Letters of 1920 with the then British Government in Indiaregarding the construction <strong>and</strong> operation of the Sarada BarrageProject. This was the first international agreement in thesubcontinent in modern time. 26 Through the Exchange ofLetters of 1920, Nepal agreed to transfer 4093.88 acres of herl<strong>and</strong> on the east bank of the Mahakali river to India so thatIndia could build the Sarada Barrage across the river to regulatethe waters for irrigation. In exchange for the l<strong>and</strong>, Nepalreceived an equal amount of l<strong>and</strong> elsewhere. In addition, Indiaagreed to provide Nepal with a supply of 460 cusses of water<strong>and</strong>, provided the surplus was available, a supply of up to 1000cusses from the Sarada canal should cultivation exp<strong>and</strong> at anytime in the future. 27 This project was initially undertaken toprovide irrigation facilities in the Indian state of Uttar Pradesh24 B. Subba, “Tapping Himalayan Water Resources: Problems,Opportunities <strong>and</strong> Prospects from a Bhutanese Perspective” (1994) in 4Water Nepal, p. 210; also see R. S. Kharat, Bhutan in SAARC: Role ofa Smaller State in a Regional Alliance, New Delhi: South Asian Pub.,1999, pp. 97-99.25 B. Subba, Himalayan Waters, Katm<strong>and</strong>u: Panos south Asia, 2001, p.204.26 N. D. Gulhati, Development of Inter-State Rivers: <strong>Law</strong> <strong>and</strong> Practicesin India, New Delhi: Allied Pub., 1982, p. 166.27 Supra note 20, p. 201.
188 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 189(UP) at her own cost <strong>and</strong> initiative, <strong>and</strong> so it was natural forIndia to accrue benefits for herself. However, an assessment ofthe treaty provisions seems to indicate that much of the benefitswent to India inequitably, since Nepal swapped its ownterritory with India to make this project feasible; sucharrangements are rarely encountered in international water caselaw elsewhere.Another water resource project involving Indo-Nepal cooperation,the first to be undertaken after the independence ofIndia, was the Kosi Project Agreement, being a multipurposescheme including hydropower generation (20,000 KW).However, a major component of the project was flood control<strong>and</strong> irrigation, the so-called "sorrow of Bihar" 28 , whichannually caused tremendous loss of lives <strong>and</strong> property severaltimes mainly in India, but also in Nepal. The project wasconceived <strong>and</strong> several studies were undertaken from 1946;however, by 1954 it was considered urgent to implement theproject in order to eliminate <strong>and</strong> mitigate the recurrent <strong>and</strong>devastating effect of the Kosi flood during the monsoon season.The Kosi scheme consisted of a canal system, flowing channelson both sides, a barrage across the river <strong>and</strong> a hydro station.The barrage consisted of 56 gates <strong>and</strong> was 3770 feet long. Thepurpose of its construction of the barrage was to minimise theerosion of soil <strong>and</strong> deposit of silt. 29 For the project,embankments were constructed on both sides of the riverextending for about 130 km downstream almost up to theconfluence of Kosi with the Ganges, to ensure flood protectionof approximately 280,000 ha of l<strong>and</strong>; a diversion structure wasalso built for a network of canals to provide irrigation to a totalof 1,150,000 ha of l<strong>and</strong>. 30 However, the project was seriouslycriticised at all levels in Nepal, the complaint being that it was asell out of national property for India’s benefits <strong>and</strong> thatnothing had been obtained for Nepal in return for a hugeexpenditure of resources. Political unrest <strong>and</strong> generalresentment within Nepal resulted from this outcry. Eventually,India agreed to reconsider, 31 <strong>and</strong> the revised agreement inwhich some of Nepal’s concerns were accommodated wassigned on 19 December 1966. Thus, in view of the assurance ofthe then Indian Prime Minister Lal B. Sastri, Nepal agreed toresume work on the project. Pursuant to the revised agreement,some arrangements were changed to assure Nepal's 32 benefit:• Any construction or other undertaking by India inconnection with the Kosi Project was to be planned <strong>and</strong>carried out in consultation with the NepaleseGovernment. Nepal was to provide facilities to theIndian officials necessary for surveys <strong>and</strong> investigationsinside the project area, for the maintenance <strong>and</strong>operation of the project.• The l<strong>and</strong> needed for construction works was to beleased to the Indian government in return forcompensation payments.• It was agreed that Nepal should have the right towithdraw water from the Kosi <strong>and</strong> its tributaries as <strong>and</strong>when required.• The Government of Nepal would be entitled to obtainfrom India, for use in Nepal, up to 50% of the totalhydroelectric power generated by any powerhousesituated within a ten-mile radius of the barrage site.• The l<strong>and</strong> acquired <strong>and</strong> leased to India, which wasinitially given for an unlimited period, was now to be28 Ibid.29 Ibid. pp 95-98; also see supra note 17, pp. 200-202.30 T. Prasad, "Comprehensive Water Resources Development in Indo-Nepal Region: Perspectives <strong>and</strong> Prospects” presented at a conferenceon Large Scale Water Management held in Kathm<strong>and</strong>u, 1997, p. 18.31 Ibid. Also note that the Indian Power <strong>and</strong> Irrigation Minister, K. L. Raogave assurances that the Treaty would be revised in 1962-63 during hisvisit to Nepal <strong>and</strong> in 1965 during the visit of Prime Minister Lal B.Sastri visit this was again assured, supra note 17, pp. 100-101.32 Ibid. pp. 100-102.
190 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 191given for 199 years, during which sovereign rights <strong>and</strong>territorial jurisdiction would be retained by Nepal. 33From the legal viewpoint, significant changes were made in theagreement, such as the right to divert water from the tributaries,Nepal’s involvement in the project implementation, <strong>and</strong>, lessbeneficially, the lease for l<strong>and</strong> prescribed for 199 years. Despitethis, even after the revised agreement <strong>and</strong> its execution, theoriginal intention to bring these benefits to Nepal has not fullymaterialised. The Chatra Inundation Canal which was proposedto irrigate 66,000 ha of l<strong>and</strong> in Nepal, has in the event only ledto the irrigation of 10,000 ha. Moreover, it was felt thatirrigation <strong>and</strong> flood control benefits to Nepal from the projectwould have been greater had the barrage site been locatedfurther upstream at Barahkesthra, as initially designed, butwhich was later changed to the Indo-Nepal border point. 34 Ithas been argued that in order to take maximum benefits fromNepal’s water resources, India had applied pressure <strong>and</strong> usedbargaining tactics, constantly pushing Nepal to agree on theKosi project for the period of 199 years, in exchange for a trade<strong>and</strong> transit treaty renewable every 5 years (somethingunprecedented in world history), whereas the life of a waterresources project is normally considered to be 50 years. 35The G<strong>and</strong>ak Project Agreement (1959) is the third agreementthat was constructed to bring India benefits, i.e. flood control,irrigation <strong>and</strong> hydropower. On the G<strong>and</strong>ak, a barrage wasconstructed on a reach of the river, which forms the boundarybetween India <strong>and</strong> Nepal. The project was to provide irrigationto a gross comm<strong>and</strong> area of 1,340,000 ha in Bihar, 500,000 hain Uttar Pradesh (both Indian States), <strong>and</strong> 63,000 ha in Nepal.33 II YBILC 1974, p.p. 102-103. In the revised agreements Clause 1, 2, 3,4 (I & II), 5, 10 & 15 were amended.34 B. G. Verghese, R. R. Iyer, P.K. Ahamad, B. B. Pradhan & S.K. Malla(eds), Converting Water Into Wealth: Regional Co-operation inHarnessing the Eastern Himalayan Rivers, New-Delhi: Konark Pub.,1994, pp. 31-33.35 Supra note 8, p. 259.Utilising the head available on the main western canal, ahydropower plant of 15 MW was also provided for in theproject as a secondary benefit. 36 The fate of this agreement wasalso similar to that of the Kosi agreement: it was heavilycriticised by Nepali politicians. Subsequently both partiesagreed to revise this agreement; after its revision, some morebenefits were given to Nepal. Nonetheless, in relation to thecriticism, it has also been argued that in those projects India hasinvested a huge amount of money, manpower <strong>and</strong> technology,<strong>and</strong> that it is therefore natural that she should accrue morebenefits than Nepal. 37 To some extent, the argument is valid;however, Nepal’s interests cannot be ignored entirely.The road bridge constructed under this project, for which Nepalwas assured of a locking arrangement for facility of riverinetraffic across the barrage free of any tolls, has proved to be aprovision that has so far remained mere theory, as no inl<strong>and</strong>water navigation was developed. The other fundamentalrecognitions of Nepal’s rights which were accorded enabled herto make upstream withdrawals. In the view of many Nepalese,Nepal was again cheated <strong>and</strong> exploited. Sharma, a prominentgeologist, maintained that:"…had Nepal been economically strong, it wouldhave constructed the entire system <strong>and</strong> sold thebenefit at a fair price to India by utilising herterrain as a resources site…". 38Nepal’s concern <strong>and</strong> objections are underst<strong>and</strong>able, as thepromises made in these treaties were never fulfilled by India;for example the Chatara canal under the Kosi agreement, whichremains defunct <strong>and</strong> which Nepal had to renovate with an IDAloan after she took over its operation in 1976, <strong>and</strong> thenavigation facility as stipulated in the G<strong>and</strong>ak agreement,which was never undertaken. Similarly, the hydro generation36 Supra note 17, pp. 102-108.37 Ibid. p. 107.38 Supra note 21, p. 280.
192 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 193from the Kosi project was never carried out. Furthermore, Indiaobjected to Nepalese projects such as the Kanakai MultipurposeProject (38 MW) funded through Asian Development Bankassistance, the Maulghat 38 MW hydropower project, <strong>and</strong> theSikta, Babai <strong>and</strong> Rapti irrigation projects, stating that theywould affect its existing consumptive rights. 39 On the otherh<strong>and</strong>, India developed several irrigation projects, damming therivers along the Nepal border without providing the requisiteinformation; consequently these projects have submerged largepart of Nepalese territory. 40 Hence, these illegal activitiescaused significant harm to Nepal. Furthermore, the donorswilling to lend money to Nepal to develop a water projectrequired Indian consent, whilst in the case of India, they neverasked for Nepalese consent or even furnished any informationabout the above projects. 41 From a legal st<strong>and</strong>point, Nepal’sentitlement to “equitable <strong>and</strong> reasonable use” has beenexplicitly denied in these treaties, contrary to the principles ofArticles IV <strong>and</strong> V of the Helsinki Rules <strong>and</strong> Articles 5, 6 <strong>and</strong> 7of the UNCIW. For example, Nepal’s share of irrigation wasless than 3% of the total area watered by the Kosi <strong>and</strong> theG<strong>and</strong>ak Scheme. 42 Nevertheless, from an academic <strong>and</strong> legalpoint of view, one-sided criticism of these treaties does notfacilitate future development, <strong>and</strong> due credit should be given forthe fact that these agreements were carried out with sovereignconsent <strong>and</strong> incorporated subsequent amendments accordingly.39 D. R. P<strong>and</strong>ey, Nepal’s Failed Development: Reflections on the Mission<strong>and</strong> the Maladies, Kathm<strong>and</strong>u: Nepal South Asia Centre, 1999, pp.336- 340.40 Supra note 22, pp. 340-341.41 Staff, “the World Bank discriminates us”, The Kathm<strong>and</strong>u Post 6,2002; stated that the World Bank had lent the money to the Indian stateof Uttar Pradesh to develop an irrigation project but did not evenprovide notice to Nepal (this information was provided by S. N. Paudelin a seminar on 5/8/2002, “Riparian consent <strong>and</strong> the World Bank”,Kathm<strong>and</strong>u); on the other h<strong>and</strong>, it has sought Indian, Bangladeshi <strong>and</strong>Chinese consent for lending money to a Power Development Fund inNepal. Later, US $80 million fund was provided <strong>and</strong> no objectionswere made.42 Supra note 25, pp. 192- 193.A fourth treaty is the 1996 Treaty concerning the IntegratedDevelopment of the Mahakali River Including Sarada Barrage,Tanakpur Barrage <strong>and</strong> Pancheswar Project. This is the firsttreaty to accommodate, in principle, the interests of bothnations equitably. However, its execution has also beenhindered <strong>and</strong> not as much progress has been made as wasexpected during its conclusion. The Mahakali treaty includesthree components: the Sarada Barrage, the Tanakpur Barrage<strong>and</strong> the Pancheshwar Project. The first two projects havealready been executed by India at Mahakali on the Indo-Nepalborder at her own cost. For her contribution to the TanakpurBarrage, Nepal was provided with a supply of 1000 cusecs ofwater in the wet season <strong>and</strong> 300 cusecs in the dry season, <strong>and</strong>an annual supply of 70 million kilowatt-hours of energy on acontinuous basis, free of cost. India is to construct the headregulator <strong>and</strong> the waterways as well as the transmission line upto the Nepal border. The waters of the Mahakali River from theSarada canal <strong>and</strong> from the Tanakpur Barrage have beenincorporated in this treaty, replacing all such previousagreements. 43 However, the Mahakali treaty has not yet beenimplemented <strong>and</strong> the criticism is made that the intention ofIndia was never to execute the Pancheswar project, but rather toensure the continuity of the defunct Sarada benefits <strong>and</strong> legalisethe contentious Tanakpur project, which was constructedentirely for Indian benefit, ignoring Nepal’s legitimate halfentitlementwith respect to such a boundary river. Furthermore,the constitution of a Mahakali Commission comprising anequal number of members from each country, shall be guidedby the principles of equality, mutual benefits <strong>and</strong> no harm toother party which would be responsible for implementing thetreaty, is vital. However, such commission has not yet beenconstituted.The provisions of this treaty constitute the first time that, in achanging context, India is willing to join h<strong>and</strong>s with Nepal in43 36 ILM (1997) pp. 533-535; also see supra note 39, p. 336.
194 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 195the development of water resources for the common benefit ofher people, <strong>and</strong> according to the principles of equity. Thoseprinciples were incorporated in the Mahakali treaty, which wasable to accommodate the divergent needs <strong>and</strong> interests of bothriparian nations. Nevertheless, due to disputes over theinterpretation of Article 3 of the said treaty, which provides forexisting consumptive use, Nepal’s consumptive use has beenspecifically defined in the treaty, whilst India’s consumptiveuse was not defined, <strong>and</strong> in the later stages was disputed (Nepalrecognised 248 cusecs while India argued for another 201cusecs), against the spirit of the treaty. Thus, the finalisation ofthe Detailed Project Report (DPR) could not be agreed upon,irrespective of numerous meetings held on several levels. It wasenvisaged in the treaty that the DPR should be finalised withinsix months of the ratification of the treaty; however, due to theposition taken by both states, it seems that it may take eightyears to finalise the DPR, which demonstrates the complexitiesassociated with it.It should be understood that early arrangements concerning thesharing of the Mahakali river were carried out under the SaradaBarrage agreement of 1920, but that due to its possible nonfunctioning,the river’s management was embodied in theMahakali treaty which replaced it. Simultaneously, the secondcomponent was the Tanakpur Barrage, which must beconsidered separately; however, the treaty providesarrangements in relation to the sharing <strong>and</strong> allocation of itsbenefit. Thus, the Mahakali river is to be developed in anintegrated manner so as to maximise the total net benefit fromsuch development. Either party should be entitled to equalbenefits <strong>and</strong> will thus share the costs in proportion to the shareof benefit which they actually receive. 44 The treaty has44 F. Marty, “The Pancheshwar Multipurpose Project on the MahakaliRiver (India-Nepal)” in P. Lang, (ed), Managing <strong>International</strong> Rivers:Problems, Politics <strong>and</strong> Institutions, Bern, European Academic Pub.,2001, pp. 161-219; also see A. B. Thapa, “Pancheshwar ProjectDownstream Benefits” (2003) in 23 Spotlight, July 11-17, pp. 1-3.recognised that the Mahakali is a boundary river on majorstretches, <strong>and</strong> to conclude a treaty on a boundary river on thebasis of equal partnership, it has defined their obligations,corresponding rights, <strong>and</strong> duties with regard to utilisation of thewaters of the said river. 45It is argued that this treaty provides a false impression that thetwo governments have taken a 'basin approach', because infuture the only project work which will be carried out is thePancheshwar Multipurpose Project (PMP); furthermore, otheroptions are negligible, except the Pancheshwar Barrage. 46Basically, the treaty establishes four main principles for design<strong>and</strong> implementation of the PMP. 47 The first principle is that thePMP will be designed to produce the maximum net benefits forboth countries in the forms of power generation, irrigation use,<strong>and</strong> flood control. The second principle of the project is that itwill be carried out in an integrated manner <strong>and</strong> the benefits willbe shared equally. The third principle is that both countriesshare the cost equally in proportion to the benefits accruing toeach. Finally the fourth principle is that a share of Nepal'senergy (half of the 6,480 MW) will be sold to India <strong>and</strong> itsprice shall be mutually agreed upon between the parties basedon the avoided cost principle. Generally, avoided cost refers tothe replacement cost of alternatives (thermal or nuclear). Thisobviously sets the maximum price of the cost of generation <strong>and</strong>transmission to the Indian border. A compromise suggested byNepal as a fair price is the sum of India’s current thermalreplacement cost <strong>and</strong> Karnali’s generation cost, divided bytwo. 4845 S. M. A. Salman & K. Uprety, "Hydro Politics in South-Asia: AComparative Analysis of the Mahakali <strong>and</strong> the Ganges Treaties"(1999) in 39 NRJ, p. 313; also see S. M. A. Salman & K. Uprety,Conflict <strong>and</strong> Cooperation on South Asia’s <strong>International</strong> Rivers: ALegal Perspective, the Hague: Kluwer <strong>Law</strong>, 2003, pp. 101-118.46 Article 3, 36 ILM, (1997), p. 537.47 Ibid. p. 533.48 D. Gyawali, Water in Nepal, Kathm<strong>and</strong>u: Himal Books, 2001, pp. 53-65.
196 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 197However, it has been argued that the treaty has attempted tofollow a model based on the principle of 'equitable utilisation'<strong>and</strong> 'no harm' principles. 49 Nonetheless, whether these conceptsare genuinely embodied is not clear, due to the ambiguityreflected in Articles 3 <strong>and</strong> 5 (1) as well as paragraphs 3 <strong>and</strong> 6 ofthe exchange of letters of the Mahakali treaty. The contentiouspart is the wording of 'respective consumptive use of the watersof the Mahakali River' without actually specifying the nature ofthe use. In the meantime the exchange of letters (exchange ofletters with this treaty), in paragraph 3 (b), contains somerestrictions as to the notion of equal entitlement, stating that:“it is understood that Paragraph 3 of Article 3 of theMahakali Treaty precludes the claim, in any form,by either party on the unutilized portion of theshares of the waters of the Mahakali River of thatParty without affecting the provision of thewithdrawal of the respective shares of the waters ofthe Mahakali River by each party under thisTreaty”.These provisions do not guarantee that equal entitlement ofwater, from a Nepalese st<strong>and</strong>point, should be half of the totaluse for each country. The term “existing consumptive use” is akey phrase adding to the confusion, whereas Article 5.1, whichstates that the “water requirements of Nepal are to be givenprime consideration”, contradicts the other provisions <strong>and</strong>creates ambiguity. It is obvious that India's consumptive use ishigher than Nepal’s which may impact on Nepal's plans toforgo part of her water entitlement in return for bearing aproportionately lower share of the costs of non-hydrocomponents. 50 That is to say, the treaty provides that the cost ofthe project will be shared proportionately to the benefits; ifIndia is able to define maximum existing use, the remainingwater use cost will be lower; this is the obvious reason for the49 Supra note 45, p. 111.50 Supra note 44, pp. 322-323.wrangling over the definition of consumptive use. However,Article V of the Helsinki Rules <strong>and</strong> Article 6 of the UNCIW,both state that existing use is only one of the factors to beconsidered in determining whether or not any specific use isequitable. Thus it seems, however, that the emphasis ondefining much quantum of water in terms of consumptive usemay not serve India’s interests as well as might have beenthought.The author had an opportunity to work as a member of aNepalese delegation to India in 1997 <strong>and</strong> 1998. In thenegotiations, Indian insistence on maintaining the existingvolume of water use at <strong>and</strong> beyond 160 km within herterritories was considered an illegitimate argument from thest<strong>and</strong>point of IWL, <strong>and</strong> Nepal has asserted this view. 51 Forinstance, 160 kilometres down from the Indo-Nepal border,India had diverted waters from the same river through anauxiliary canal, for which they (Indian) are claiming all existingconsumptive use, <strong>and</strong> expecting Nepal to recognise this. This isquestionable from a legal <strong>and</strong> political pointview. Nepal cannotbe expected to negotiate over issues so far from her border,within Indian territory, which is not part of the main Saradacanal, <strong>and</strong> could never raise the issues in time for theconclusion of this (Mahakali) treaty. On the contrary India wasalways raising the level of the aforementioned consumptiveuse, which Nepal has not debated; the dispute is about 201cusecs of water. 52 The argument put forward by Indiapertaining to the existing use 160 km below the border istantamount to supporting the absurd proposition that becausethe Farakka diversion of about 44,000 cusecs (although not forthe purpose of consumptive use) constitutes the consumptiveuse since 1975, that too must be guaranteed by Nepal.51 Nepal has insisted that she cannot negotiate with the resource which isnot in her jurisdiction or sovereignty.52 Supra note 10 p. 957.
198 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 199However, it can be concluded that the water resources of Nepal,which are of bountiful proportions <strong>and</strong> have great potential, ifdeveloped in a holistic, integrated way, with a regionalperspective, could lead to the entire region, including Nepal,becoming as Kuwait is to the Middle East, with water being, asit were, the oil. This notion is widely believed in the region.The other point is that if the former treaties, as described above,do not address Nepal’s interests, or are not being implementedas per the treaty provisions, they should be renegotiated fortheir better implementation, or otherwise abrogated. If they areagainst the principles of the UNCIW <strong>and</strong> Article 64 of theVienna Convention on the <strong>Law</strong> of Treaties 1969, such treatiescan be abrogated or may be declared to have automaticallycome to an end. 53 There are several examples of this kind ofabrogation, renegotiation <strong>and</strong> conclusion of new treaties in theinternational arena as well as in interstate practice. Forexample, the Indian state of Punjab’s Legislative Assemblyrepudiated a 1981 agreement with Haryana on April 23 1982,stating that it did not safeguard its interests; as a result theRavi-Beas Waters Tribunal (Erdi Tribunal) was constituted bythe Indian federal government. 54 In another state, the Jammu<strong>and</strong> Kashmir Legislative Assembly also asked the Indiangovernment to abrogate the 1960 Indus Treaty because it didnot protect its interests properly <strong>and</strong> fairly. However, thisrequest was denied by the latter. 55 In the USA, the state ofArizona did not ratify the Colorado River Compact which ithad negotiated <strong>and</strong> to which it had agreed to be a party; the casewas later decided by the US Supreme Court, invoking theequitable apportionment principle. 56In the international arena, the Nile treaty of 1929 was annulledby Sudan <strong>and</strong> a new treaty was concluded in 1959. 57 However,Hungarian termination of a 1977 treaty with Czechoslovakiapertaining to the sharing of benefits from the Danube riverwaters was declared illegal by the ICJ. 58 Similarly, Pakistan hasunilaterally repudiated the May 4, 1948 agreement with India,regarding the payment of compensation for obtaining acontinued flow of waters from the former, stating that thisagreement was concluded under such compulsion that it couldnot refused. 59 From the viewpoint of international law, it isdemonstrated above that if an agreement is not serving theinterest of one party, due to changed circumstances or in othersimilar situations there is a way out, enabling the negotiationfor a new agreement or the revising of an existing one.Furthermore, from the viewpoint of Convention on the <strong>Law</strong> ofthe Treaties every state has a right to protect <strong>and</strong> preserve itsown interest; for example if a treaty is not beneficial, it can beexchanged for a new one. 60 But it should be understood thatwithout bilateral agreement, replacement, amendment <strong>and</strong>change of a treaty is not possible. Any arrangement can be donein bilateral consent <strong>and</strong> agreement except in uniquecircumstance for example, the impossibility of performance ofthe treaty or the occurrence of a fundamental change ofcircumstances or the material breach of the treaty etc. However,53 8 ILM (1969), p. 679; also see M. Patker, “Review all Unequal Indo-Nepal Water Treaties” in the Kathm<strong>and</strong>u Post, 11 December 2002: Aargument to renegotiate all treaties between Nepal <strong>and</strong> India.54 B. R. Chauhan, Settlement of <strong>International</strong> <strong>and</strong> Inter State WaterDisputes in India, Bombay: N. M. Tripathi Ltd., 1992, p. 284.55 M. Paukert, “The Indus Umbilical” in Himal South Asian, July (2002),pp. 1-4.56 F. J. Trelease, “Arizona Versus California: Allocation of WaterResources to People, States <strong>and</strong> Nations” in P. B. Kurl<strong>and</strong> (ed),Supreme Court Review, Chicago: 1963, pp. 158-205.57 II YBILC (1974), p. 65.58 37 ILM (1998), pp. 162-202.59 R. K. Baxter, “The Indus Basin” in A. Garretson, et al (eds), The <strong>Law</strong>of <strong>International</strong> Drainage Basins, New York: Oceana Pub., 1967, pp.456-457; also see L. Caflisch, “Unequal Treaties” (1992) in 35 GYBIL,pp. 520-80.60 Articles 39, & 54 of the Vienna Convention on the <strong>Law</strong> of Treaties, 8ILM (1969), pp.694 & 699.
200 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 201it is not the area of this research. Article 3 of the UNCIWsuggests that state may adjust <strong>and</strong> harmonize existingagreements <strong>and</strong> Article 3 (1) suggests that states should enterinto new agreements in which they can adjust the provisions ofthe convention. As argued by Caflisch, this provides states withcomplete freedom in the matter. 614. 4 Bilateral Relations with IndiaThe nature of Indo-Nepal relations is unique, there being nocomparable relationship between any two other nations. 62Nepal is between the giant states of Asia, described perfectly bythe late King Prithivi Narayan Shah, the Great, as “a yambetween two boulders.” The Himalayas have since the time ofthe British Raj, been regarded as a second frontier under the“Himalayan Frontier Policy” <strong>and</strong> used to keep Nepal within thesphere of influence of India. For these reasons, India has used avariety of measures, including the granting of transit facilities(the provision of services <strong>and</strong> facilities to export <strong>and</strong> importbusiness through her territory, <strong>and</strong> free access to <strong>and</strong> from thesea) as a political tool <strong>and</strong> as leverage, to ensure that Nepalremains within the broader Indian security framework. 63At times the special relationship has deteriorated <strong>and</strong> seriousconflict has arisen, particularly during the trade <strong>and</strong> transitimpasse in 1989. It is evident that India always emphasised asingle trade <strong>and</strong> transit treaty, disregarding Nepal's dem<strong>and</strong> for61 L. Caflisch, “Regulation of the Uses of <strong>International</strong> Waterways: TheContribution of the United Nations” in M. I. Galssener (ed), UnitedNations at Work, Westport, CT: Praeger, 1998, pp. 1-26.62 S. D. Muni, Foreign Policy of Nepal, New Delhi: National Pub., 1973,p. 67-96; also see S. D. Muni, India <strong>and</strong> Nepal: A ChangingRelationship, New Delhi: Konark Pub., 1995, pp. 31-60.63 S. P. Subedi, "Indo-Nepal Relations: the Causes of Conflict <strong>and</strong> TheirResolution" in S. K. Mitra <strong>and</strong> D. Rothermund (ed), Legitimacy <strong>and</strong>Conflict in South-Asia, New Delhi: South Asia Institute, ManoharPub., 1997, pp. 220.a separate transit treaty of unlimited period. 64 India virtuallyimposed an economic blockade in 1989 by closing all but twoof the 21 trade routes, <strong>and</strong> 13 of the 15 transit routes alreadyused by Nepal to carry out her international trade under the1978 transit treaty. It is worth mentioning that March 1989 wasthe time when Nepal's 1978 trade <strong>and</strong> transit treaty was aboutto expire; the preparations for the signing of the new tradetreaty were almost ready, <strong>and</strong> it was awaiting formal signing bythe ministers of the two countries when renewal of the treatywas unexpectedly refused by India only days before theappointed date.The reasons advanced by India for its reluctance werefivefold: 65 the introduction of a work permit scheme for Indiansseeking employment in Nepal; the alleged mistreatment byNepal of Indians living in Nepal; the non-withdrawal by Nepalof additional tariffs imposed on Indian goods; the import ofcertain weapons by Nepal from China in June 1988; <strong>and</strong> thealleged lack of Nepal's whole-hearted co-operation incontrolling the unauthorised trade between the two countries.Nepal had explicitly rejected these allegations as baseless <strong>and</strong>pointed out that India's action in regard to economic blockades<strong>and</strong> her reluctance to continue the utilisation of existing trade<strong>and</strong> transit facilities, curtailing 21 trade routes to two <strong>and</strong>closing 13 out of 15 transit routes, was a blatant violation ofcustomary international law. 66 The conflict continued for over ayear, but after the change of the political system in 1990, when64 Ibid. pp 220-241: in Indo-Nepal bilateral relations, it was only in 1978that India agreed to a separate transit treaty for a 10 year period, whichexpired in 1988; at the last moment India rejected the continuation ofthe earlier arrangement, alleging that Nepal was not complying withthe provisions of the 1950 Peace <strong>and</strong> Friendship Treaty <strong>and</strong> itssubsequent Letters of Exchange.65 S. Subedi, “Transit Arrangement Between Nepal <strong>and</strong> India: A Study in<strong>International</strong> <strong>Law</strong>” (1997) in D. Hodder, S. J. Lloyd <strong>and</strong> K. McLachlan(eds), 2 Geopolitics <strong>and</strong> <strong>International</strong> Boundaries, London: FrankCass, p. 175.66 Ibid. pp. 175-176.
202 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 203a multi-party democracy was restored in Nepal, followed by theinstallation of a new government, the two governments agreedto restore the status quo ante of April 1987 in matters of trade<strong>and</strong> transit. 67To analyse <strong>and</strong> evaluate Indo-Nepal relations, a study ofseveral treaty arrangements is essential, enabling anunderst<strong>and</strong>ing of the reality on the ground. There are threemajor bilateral instruments concluded by India <strong>and</strong> Nepal,supposedly to protect the former’s security concerns: the 1950Peace <strong>and</strong> Friendship Treaty, the 1965 Arms AssistanceAgreement, <strong>and</strong> the 1990 Joint Communiqué. The backgroundto the timing of the conclusion of each of these treaties isinteresting; on each occasion the Nepalese Government waseither in crisis or about to fall, or there was merely a caretakerGovernment in place. In principle <strong>and</strong> practice, suchgovernments do not normally have the right to conclude atreaty of this kind, that is to say one which is vital <strong>and</strong> has farreachingimplications. 68 It is considered that the conclusion ofeach of these treaties was carried out despite the fact that therewas no authority within the existing government, because inpractice such agreements had been concluded in the hope ofsecuring foreign support, either to remain in power or to winthe forthcoming election. However, the 1950 Treaty of Peace<strong>and</strong> Friendship, <strong>and</strong> the Exchange of Letters (on the same day),undermined Nepal's sovereignty <strong>and</strong> territorial integrity, statingthat the defence <strong>and</strong> security of Nepal would be dealt withjointly, <strong>and</strong> that arms <strong>and</strong> ammunitions should only be obtainedafter giving prior notice to India. 69 In regard to the economy<strong>and</strong> to commerce, each government was to treat citizens of theother country as their own nationals, allowing them toparticipate in the industrial <strong>and</strong> economic development of thecountry, by granting them, on a reciprocal basis, rights to67 Supra note 63, p. 221.68 Ibid. p. 222.69 Ibid. Article I of the treaty <strong>and</strong> paragraph 1 of the letter.property ownership <strong>and</strong> participation in trade <strong>and</strong> commerce,free movement, <strong>and</strong> other privileges of a similar nature. 70From several perspectives the treaty is defunct <strong>and</strong> outmoded,<strong>and</strong> Nepal has repeatedly requested its repeal <strong>and</strong> formulationof a new one. It is understood that both governments agreed todevise the new treaty, <strong>and</strong> the work is proceeding at foreignsecretary level; however, expected progress has not beenachieved <strong>and</strong> it is alleged that this is due to India. 71 The Indianposition about the 1950 treaty is that she insists on acontinuation of it, albeit with some modifications, if necessary,to accommodate Nepalese concerns. India claims that it wouldbe detrimental to Nepal if the special relationship with her wereto be ab<strong>and</strong>oned, as economic, trade <strong>and</strong> transit relations couldthereby be devastated. 72With regard to the 1990 Joint Communiqué, which restored thestatus quo ante of the earlier trade <strong>and</strong> transit arrangement,India succeeded in getting more concessions from a painstrickenNepalese government, such as the removal of the workpermit arrangements for Indian nationals working in Nepal,trade favours, the introduction of the concept of common riversapplying to water resources that belong to Nepal, theaccommodation of India’s security concerns, <strong>and</strong> so on. 73 Nepalwas equally responsible for agreeing to these provisions despitethe fact that restoration of the facility of access to <strong>and</strong> from thesea is a right under customary international law <strong>and</strong> no70 Articles VI <strong>and</strong> VII of the treaty.71 A. Mukariji, “Nepal is Destablization the Name of the Game?”,Ayanjit Sen (ed), India’s Neighbour: Problems <strong>and</strong> Prospects ,NewDelhi: Her-An<strong>and</strong> Pub., 2001, p. 116.72 K. Natawar Singh, “An Agenda for Talks with K. P Bhattarai” TheTimes of India, 7 June 1990.73 Supra note 63, pp. 230-232; also see S. P. Subedi, “The United Nations<strong>and</strong> the Trade Transit Problems of L<strong>and</strong>-Locked States” in M. IGlassener (ed), The United Nations at Work, Westport, CT: Praeger,1998, pp. 134-160.
204 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 205concession at all. 74 However, the new transit treaty of 1991endorsed the provisions of the1978 treaty, which dilutedNepal’s right of access to <strong>and</strong> from the sea on the principle ofreciprocity, creating more trouble for Nepal in the need forfurther bargaining, a point which Subedi addresses as follows:“But if a bilateral transit treaty concluded nearlyten years after the conclusion of LOSC stillembodies the principle of reciprocity it could beregarded, from international legal point of view, asdisastrous. 75Whilst other l<strong>and</strong>locked nations have been able to enjoy suchrights for a long time, Nepal is still being asked for reciprocity,which is just a bargaining ploy with a view to accruing Nepal’simmense water resources. For instance Switzerl<strong>and</strong> has accessto the sea via four countries, while Austria, Czechoslovakia,<strong>and</strong> Hungary each enjoy transit through two neighbouringstates <strong>and</strong> Luxemburg enjoys transit facilities through Belgium.Furthermore, Switzerl<strong>and</strong> has direct access from Basel to theNorth sea via the Rhine, while the Danube is an importantmeans of transit for Austria <strong>and</strong> Hungary. Similarly, Paraguayis especially favoured, in that Asuncion is linked by the Parana-Paraguay river system to major ports at Buenos Aires <strong>and</strong>Montevideo. 76 Moreover, several instances of breaches of the1950 treaty by the Indian side have occurred, such as India’sfailure to consult Nepal about the war with China in 1962, <strong>and</strong>with Pakistan in 1965 <strong>and</strong> 1971. India deported some of theNepalese permanently living in Assam <strong>and</strong> Meghalaya, <strong>and</strong>74 Ibid. The Barcelona Convention <strong>and</strong> Statute on Freedom of Transit(1921), the High Convention (1958), The Convention on the <strong>Law</strong> ofSea (1982) are the main instruments concerning L<strong>and</strong>-locked states.75 Supra note 65, p. 190; also see A. Sarup, “Transit Trade of L<strong>and</strong>-Locked Nepal” (1972), in 2 ICLQ, pp 277-306.76 S. C. Vascianne, L<strong>and</strong> Locked <strong>and</strong> Geographically DisadvantagedStates in <strong>International</strong> <strong>Law</strong>, Oxford: Oxford University, 1990, pp. 6-7.introduced a permit system for Nepalese to enter Sikkim <strong>and</strong>other parts of India. Hence the treaty has become defunct. 77Some of these charges have been denied by India.On the positive side, M. Dubey, an eminent scholar <strong>and</strong> formerforeign secretary of the Government of India has recommendedthat regarding the sharing of the benefits of natural resourceswith Nepal, he saw no problem; he argued that India alonecould provide funding for these water projects. He articulatedan idea concerning downstream benefit, using as an examplethe Dhiang Dam, which India claimed would bring down theflood level in India <strong>and</strong> Bangladesh by one metre, which leadsone to question how India can deny that dams in Nepal willalso provide flood relief to her own territory. However, Dubeydebated concerning the dem<strong>and</strong> for abrogation of the 1950treaty <strong>and</strong> maintained it would mean devastating consequencesfor Nepal. 78The situation prevailing on the ground in Nepal must beunderstood at this juncture. The Nepalese leaders should not beforever seeking India’s blessing, which seems to be a basicfeature of Nepalese politicians, intent on protecting their owninterests. They should rather formulate national consensus onmajor issues <strong>and</strong> the principle of non-reciprocity as embodiedin the Gujral Doctrine, which advocated good neighbourlyrelations with no reciprocal advantage from small neighbours,77 His Majesty's Government, Nepal, Department of Printing <strong>and</strong>Communication 1989: India-Nepal facts <strong>and</strong> chronology of theproblem, p. 78; also see the then Nepalese Prime Minister K.N. Bista'sinterview in The Rising Nepal, 25 June (1969).78 M. Dubey, "Some Reflection on Indo-Nepal Relations" in L. R. Baral(ed), Looking to the Future: Indo-Nepal Relations in Perspective, NewDelhi: Anmol Pub., 1996, pp. 47-58.
206 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 207<strong>and</strong> can generate unprecedented goodwill <strong>and</strong> additionaleconomic benefits to Nepal. 794.5 Impact of Bilateral Relations in the WaterResources SectorIt is natural for sectoral issues to be influenced by the majorpolitical relations between the nations, <strong>and</strong> the whole gamut ofIndo-Nepal relations has been influenced by politicalrelationships. India has time <strong>and</strong> again complained <strong>and</strong> assertedfull implementation of the 1950 treaty, its related Letter ofExchange, <strong>and</strong> the Arms Dealing Agreement of 1965. She hasexplicitly expressed unhappiness <strong>and</strong> dem<strong>and</strong>ed the withdrawalof work permits imposed on Indian nationals, elimination ofanti-India activities from Nepal’s soil, <strong>and</strong> the protection oflives <strong>and</strong> property of Indian-origin people living in Nepal;furthermore she has pushed for most favourable treatment forIndia’s trade <strong>and</strong> business, arguing against the imposition ofany type of tariff. 80 Furthermore, Nepal has been required toemploy Indian firms <strong>and</strong> consultants in any global tendercarried out with donor co-operation, <strong>and</strong> rely upon them toimport arms, ammunition etc. <strong>and</strong> to regulate <strong>and</strong> executeNepal’s foreign policy in harmony with their own wishes. Thisis against the Charter of the UN 81 <strong>and</strong> is simply not possible foran independent nation, because of her divergent needs,interests, <strong>and</strong> aspirations. As regards the problem of harnessingthe Himalayan Rivers, Verghese <strong>and</strong> Iyer, both Indian writers,79 P. D. Kaushik, “Indo-Nepal Relations <strong>and</strong> Gujral Doctrine- Bouquets<strong>and</strong> Brickbats” in India <strong>and</strong> Nepal: Big Power-Small Power Relationsin South Asia, M. D. Dharmdasani (ed), New Delhi: South Asian Pub.,2001, pp. 55-62; also see B. C. <strong>Upreti</strong>, Uneasy Friends: Readings onIndo-Nepal Relations, New Delhi: Kalinga Pub., 2001, p. 186.80 Supra note 65, pp. 175-180.81 D. J. Harris, Cases <strong>and</strong> Materials on <strong>International</strong> <strong>Law</strong>, London:Sweet & Maxwell, 1998, Article 1 (2) & Article 2 of the Charter, p.1048.has stated that co-operation amongst riparian partners is theonly answer for all south Asian societies. 82Therefore, any sector’s relations can not be developed inisolation, rather they should form part <strong>and</strong> parcel of the entiregamut of relations. India’s diplomatic policy is to useeverything as a bargaining point or a political tool to ensure thatshe obtains maximum benefit from Nepalese water resources;from Nepal’s viewpoint, there are several issues that need to beresolved, e.g., transit <strong>and</strong> trade issues, security concerns <strong>and</strong>equitable utilisation of her IWC. Although some suggest,requiring in abrogating Nepal’s treaty relations with India, theaffirmed position of Nepal <strong>and</strong> they are advocated by the authoris that whatever has been already agreed or concluded in earliertreaty instruments should be properly implemented; her wish issimply to attain equitable benefits from the resources availablein any new treaty arrangements. For this to be achieved, theattitude of India hitherto should be reversed. 83It can be argued that to establish excellent relations with Nepal,India must first open-heartedly offer an unconditional transittreaty of unlimited period based on customary international law<strong>and</strong> in line with other European l<strong>and</strong>locked countries enjoyingsuch rights. It is worth noting here that Nepal's dream of accessto the sea, only possible through India, has not yet materialised,but rather has received a setback in March 1956, when Indiaofficially denounced the Barcelona Convention of 20 April1921, <strong>and</strong> the Statute on the Regime of Navigable Waterwaysof <strong>International</strong> Concern, <strong>and</strong> further hampered navigation bycompleting the Farakka Barrage project. 84 Additionally, Indiahas been unwilling to consider any suggestion of a Nepal-Bangladesh navigation link through the strategic Siliguricorridor, which would be a milestone in facilitating Nepalese82 Supra note 20, p. 172.83 Supra note 61, pp. 120-133.84 Supra note 21, p. 278.
208 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 209trade <strong>and</strong> industry. 85 Nepal exchanged l<strong>and</strong> to facilitate theSarada Project in 1920 <strong>and</strong> provided l<strong>and</strong> to facilitate theTanakpur project; now it is India’s turn to provide this facilityon a reciprocal basis. Nepal’s view is that, instead of thepoliticisation of these issues, they should be tackled as tools ofeconomic development. Even after the ratification of theMahakali Treaty, the Nepalese parliament issued a strictureagainst the spirit <strong>and</strong> letter of the treaty which tied the h<strong>and</strong>s ofthe government, preventing them from finalising the DPR <strong>and</strong>implementing the treaty pursuant to the treaty provisions. 86Moreover, India has flatly refused to acknowledge thesestrictures <strong>and</strong> is holding to the treaty arrangement. 874. 6 Negotiations on Water Resources ProjectsIn order to grasp the unique opportunities afforded by Nepalesewater resources, Nepal alone does not have the capacityeconomically, technologically, or in skilled manpower, noreven the consumer dem<strong>and</strong> to absorb such huge benefits. Onthe other h<strong>and</strong>, neither is India alone able to utilise thoseresources without meaningful co-operation from Nepal,because Nepal offers an ideal location for project construction,namely the Siwalik gorges of the Himalayan foothills; this siteadditionally enables construction of short transmission lines toan area where the need for hydropower is acute. Such a uniquelocation offers tremendous benefits in mitigating flood hazards,85 Ibid. p. 136: an alternative is through a 16 kilometre long tunnel linkoriginating from the eastern part of Nepal, passing through India at adepth of 300 metres <strong>and</strong> coming out at the western border ofBangladesh; also see G. D. Shrestha, "Himalayan Water: Need forPositive Indo-Nepal Co-operation" (1994) in 4 Water Nepal, p. 272.86 Stricture adopted by the parliament subsequent to ratification containsfive conditions of which the second directs the government not torecognise consumptive use of the second lower Sarada Project, <strong>and</strong> thethird seeks to resolve the status of Mahakali River <strong>and</strong> also to resolvethe longst<strong>and</strong>ing border issue in the Kalapani area. These instructionswere provided on 2054/4/12 Nepalese calendar date.87 Supra note 48, pp. 53-65.the augmentation of water flows in the dry season, hydropower,irrigation <strong>and</strong> navigation facilities. 88 The water talks betweenthe two countries have always been dominated by their politicalrelationship. Whenever the general atmosphere of politicalrelations between the two countries has not been encouraging,the water talks have not yielded any result, but ratherintensified bitterness instead of enhancing progress. On the oneh<strong>and</strong>, Nepal is very suspicious of India’s attitude, on the basisof past experience concerning Kosi <strong>and</strong> G<strong>and</strong>ak; on the otherh<strong>and</strong>, India is alleging that Nepal is not really interested indeveloping those vast resources for the mutual benefits of thepeople of both countries. 89There are several projects which have been identified for betterco-operation; of these, the Karnali Multipurpose Project (KMP)is one of the biggest <strong>and</strong> most attractive, at 10,800 MW. Thetwo countries have been discussing this project for the last fortyyears <strong>and</strong> a number of feasibility studies <strong>and</strong> surveys have beenconducted. Apart from power generation, this project isenvisaged to control flood <strong>and</strong> sedimentation problems in theKarnali river basin. From these studies, the project cost was $4.4 billion at 1989 prices. 904. 7 Associated Multi-Disciplinary ComplicationsThere are interconnected issues which need to be resolvedbefore initiating a water resource project. The completion ofany such project takes much time <strong>and</strong> investment, <strong>and</strong> severalother issues must be dealt with simultaneously, includingenvironmental aspects, seismicity, socio-economics,88 Supra note 13, p. 256.89 Supra note 21, p. 280, C. K. Sharma, an eminent scholar, has pointedout that "now the situation (after the Kosi <strong>and</strong> the G<strong>and</strong>ak agreements)is such that no politician or bureaucrat will ever dare to stake his career<strong>and</strong> fame on dealing with the sensitive issue of water resources, whichinvolves the question of sharing between <strong>and</strong> among riparian states.”90 Supra note 22, p. 344.
210 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 211rehabilitation <strong>and</strong> resettlement. In the Nepalese scenario, thefirst question which confronts the planner <strong>and</strong> policy maker iswho will purchase the electricity. India is the sole buyer so far<strong>and</strong> without her agreement Nepal cannot export to Bangladeshor Pakistan. Evidently, other optional markets such as China,must be researched. The other issue is whether by building adam in the upper riparian country, the flood problem can bereduced <strong>and</strong> low water flow increased for irrigation benefit ofthe lower riparian country. The upper riparian state must bepaid by this beneficiary proportionately on the basis of benefitsfrom the construction of a dam <strong>and</strong> basin management,similarly to the case of the Columbia River Treaty. 91 It shouldbe noted that through building a dam, the upper ripariancountry may obtain hydropower benefit, but will submerge herl<strong>and</strong> <strong>and</strong> lose other wealth, flora, fauna, fish stocks, <strong>and</strong>biological diversity; there will also be a need for rehabilitation<strong>and</strong> resettlement of the peoples etc. Moreover, after about fiftyyears such sites will be unable to give benefits as a result of thesedimentation, <strong>and</strong> any chance to reuse them is lost for ever. 92The position of the lower riparian country, however, will bedifferent to that of the upper riparian one; she will be moreconcerned about regulating <strong>and</strong> increasing low flow, aboutflood control, <strong>and</strong> about extra irrigation costs. For example, inthe case of the KMP, India is refusing to share irrigation <strong>and</strong>flood control benefits, stating that she had already constructed acomplete flood protection project along the Karnali by building<strong>and</strong> maintaining embankments on either side of the river athuge cost. 93 However, in practice, these embankments are notable to eliminate or check flood damage in other than normalyears; construction of reservoirs is more successful inimpounding flood waters, such as in the Yangtze River in91 K. Prasad, “Priority <strong>and</strong> Institutional Development” (1994) in 4 WaterNepal, p. 221.92 Supra note 21, p. 284.93 Supra note 22, p. 345; also see supra note 21, p 284.China. 94 Furthermore, it has been established that even afterconstruction of these embankments, the havoc caused byflooding has not often been mitigated or reduced; on thecontrary, there has been tremendous loss of life <strong>and</strong> propertyfrom the flood water draining from Nepal during the recentrainy season. It is a proven fact that in Bihar the embankmentcontributed much more to flood damage than it did to anyprotection, <strong>and</strong> during the peak flood period people actuallydestroyed the so-called flood protection measures in order toprotect their lives <strong>and</strong> property. 954.8 Problems <strong>and</strong> Prospects of Nepalese WaterResourcesIn Nepal, it is a known fact that the development of the countrydepends upon the utilisation of her vast water resources, <strong>and</strong>also upon tourism. It is also known that in the past, whateverwater projects were carried out in co-operation with India,Nepal did not adequately benefit. It was reported by one author,B. C. <strong>Upreti</strong>, that King Birendra of Nepal himself onceremarked that his country had been cheated by India in the caseof the Kosi <strong>and</strong> G<strong>and</strong>ak. 96 In political elections in Nepal, waterissues have always been a 'hot potato'. It was evident that afterthe conclusion of the Memor<strong>and</strong>um of Underst<strong>and</strong>ing (MOU)in connection with the Tanakpur Barrage, the Nepali CongressGovernment became the target of much political criticism fromwithin Nepal. The dispute was referred to the Supreme Court,which declared that the said MOU is a kind of treaty whichdealt with the sharing <strong>and</strong> allocation of national resources;hence it falls within the provisions of the constitution of theKingdom of Nepal, 1990, Article 126, <strong>and</strong> needs to be ratifiedaccordingly. 9794 A.B. Thapa, “Kosi Floods” in 21 Spotlight, Nepal, September, (2002).95 Supra note 48, pp. 87-135.96 Supra note 17, p. 110.97 Judgement of the Nepalese Supreme Court in the case of B. K Neupanev. His Majesty's Government (8 May, 1995), Nepal, including theCouncil of Minster <strong>and</strong> Ministry of Water Resources.
212 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 213It is clearly envisaged in the Ninth (1997-2002) as well as theTenth Plan (2003-2008) that both poverty eradication <strong>and</strong>infrastructure development will be accomplished by means ofthe effective <strong>and</strong> efficient utilisation of water resources.Furthermore, bilateral <strong>and</strong> regional co-operation will beenhanced in order to achieve these goals; small <strong>and</strong> mediumhydroelectric projects should be carried out to meet domesticneeds, whereas mega-projects will be undertaken to exportpower to the neighbouring countries with other downstreambenefits being shared. 98 The Nepalese government adoptedpolicies <strong>and</strong> made laws in this context, 99 <strong>and</strong> also adopted awater resources strategy recently. 100 The strategy sets out indetail the proposed use of these resources for povertyalleviation <strong>and</strong> infrastructure development, by exportinghydroelectricity from the mega projects, alongside domesticconsumption from medium <strong>and</strong> small projects, <strong>and</strong>implementation of these resources in the spirit of bilateral aswell as regional co-operation. 101Under the existing arrangement between India <strong>and</strong> Nepal, up to100 MW of electric power may be traded (in either direction)between the two countries according to requirements. Nepal iswilling to increase this figure to 150 MW, by including power98 His Majesty's Government, Nepal , The Ninth Plan, Kathm<strong>and</strong>u, 1998,pp. 89-92; also see N. K. Sharma, Planning <strong>and</strong> Development in Nepal<strong>and</strong> the Tenth Plan, Kathm<strong>and</strong>u: Pairibi Pub., (Nepali version), 2003,p. 119.99 Hydropower Development Policy (2049), Irrigation Policy (2060),Industrial Policy (2049), Foreign Investment <strong>and</strong> One Window Policy,(2049), Establishment of Power Development Fund from the WorldBank /HMG joint Fund, membership of MIGA <strong>and</strong> New YorkConvention on Foreign Arbitration Award 1958.100 Supra note 2, p. 36.101 Ibid. p. 115: from private sector involvement, the Khimti (60 MW) <strong>and</strong>the Bhotekosi (36 MW) projects were implemented; similarly,Indrawati (5 MW) has been developed <strong>and</strong> also west Seti (750 MW),which is an export oriented project, has been in the implementationstage.generated from the Kali G<strong>and</strong>aki A project. 102 However, themajor obstacle to Nepal’s export potential is the noncooperativeattitude of the buyer 103 <strong>and</strong> the expense of electricitygeneration. 104 If it cannot be harnessed at a competitive price,the chances of export are nil. Private sector involvement maybe required in order to achieve efficiency <strong>and</strong> competitivetargets. 105 In the Nepalese context, the Independent PowerProducers (IPP) are generating around 100 MW of electricity<strong>and</strong> the NEA, a governmental entity, has an expensive PowerPurchase Agreement (PPA), about 7 US Cents/kWh; such anexorbitant price would make it unable to use or export power.Even Pakistan has paid the IPPs 6.5 US cents/kWh <strong>and</strong> is notable to export to India at the same price. Therefore, the pricingpolicy needs to be reviewed. 106In the existing Nepalese energy situation, only 1% of totalenergy consumption comes from hydro-electric source, 68%from wood fuel, 15% from agricultural residues, 8% fromimported petroleum products <strong>and</strong> 8% from cow dung <strong>and</strong> coal.Under these circumstances, in order to mitigate the adverse102 The MD of NEA set forth his plan of exporting 150 MW ofhydropower to India; Staff, “NEA exporting electricity to India”, TheKathm<strong>and</strong>u Post, 16 August 2002; also see A. B. Thapa, “UncertainFuture” in 22 Spotlight, 14-20 March (2003).103 “Nepal-India Power Trade”: while Nepal negotiated to sell her extraelectricity after the completion of the Kalig<strong>and</strong>aki A project, Indiaoffered Rs 2.50 per unit, which is far below the generation price <strong>and</strong>also below the market rate in India. 22 Spotlight, March 21-27, (2003).104 Supra note 25, p. 179: the cost per KW of installing mini-hydro plantsvaries from a low of around US $ 350 in Pakistan to a high of US $2,000 in Nepal; also see D. Gywali, “Himalayan Waters: BetweenEuphoric Dreams <strong>and</strong> Ground Realities” in K. Bahadur & M. P. Lama(eds), Nepal Perspectives on Indo-Nepal Relations, New Delhi: Har-An<strong>and</strong> Pub., 1995, p. 253; due to the international consultant <strong>and</strong>contractor investment, Nepalese hydropower generation is four to fivetimes more expensive on a per KW basis than it is in India or Bhutan.105 Ibid.106 S. B. Pun, “The Evolving Role of the Public <strong>and</strong> Private Institutions inthe Nepalese Power Sector” in Annual Report of Water <strong>and</strong> EnergyCommission Secretariat, (1999) pp 38-49.
214 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 215impact on the environment <strong>and</strong> to improve the balance ofpayments situation, development of hydropower is essential. 107Keeping all the above facts in view, together with the risingdem<strong>and</strong> for electricity in northern India due to rapidindustrialisation there, with an approximate deficit of 30,000MW predicted for the year 2005, Nepal would benefit ifhydropower could be generated <strong>and</strong> exported to the powerhungryregions of that country. In addition, by developing largeexport-oriented multipurpose projects such as Pancheshwar,Karnali, <strong>and</strong> Saptakosi, about 22,000 MW of electricity can begenerated. Steps should be considered to enable the extractionof economic benefits from the export of power <strong>and</strong> theprovision of irrigation <strong>and</strong> navigation facilities to India <strong>and</strong>Bangladesh. 108The truth about India is that she has utilised almost every dropof available water for irrigation, beyond the Nepal-India border,by constructing huge reservoirs <strong>and</strong> systems of irrigationnetworks, concerning which she has never provided Nepal withthe requisite information. Such reservoirs have virtuallysubmerged Nepalese l<strong>and</strong> in several areas, 109 namely Banke,Kapilvastu, Rapti, Dang, Rup<strong>and</strong>ehi, Rautahat, Mahotari <strong>and</strong>Mahendranagar. Except for taking a few mitigatory steps insome areas, 110 she has neither compensated Nepal nor givenassurances that she will not repeat such harmful projects in the107 Supra note 98, p. 498.108 Ibid. p. 498-499.109 Supra note 39, p. 340.110 Supra note 22: In relation to the submergence of the entire territory of 16 VDC in BankeDistrict, as an effect of the Laxmanpur barrage, both governments have undertakenmitigation efforts, such as constructing embankments in the affected areas. However,such work so far seems ineffective in averting or mitigating the inundation caused by thebarrage. Also see staff, “the joint St<strong>and</strong>ing Committee on Inundation Problems Fail toresolve problems”, in the Kathm<strong>and</strong>u Post, 13 August, 2003, constituted by the PrimeMinisters of both countries to resolve the flood problem, held a meeting recently inwhich Nepal proposed either the dismantling of the bunds or payment of sufficientcompensation. This was refused by India <strong>and</strong> no resolution was agreed; rather, the Indianside even refused to acknowledge the issue of inundation of huge areas of Nepaleseterritory, even after a site tour <strong>and</strong> the presentation of data on flood waters. In Rato <strong>and</strong>Kh<strong>and</strong>o river embankments are being constructed in which India has provided money.years to come. On the contrary, it seems that she is constructingdozens of such reservoirs <strong>and</strong> barrages beyond the border point,the back-up water of which will naturally submerge a hugechunk of Nepalese territory. In essence, she never follows theprinciple of ‘equitable utilisation’ <strong>and</strong> the ‘no harm rule’,rather, she has always behaved against these norms, <strong>and</strong> alsoagainst the existing trend currently adopted even in interstatedisputes within India. 111 The Indian projects which wereconstructed without giving information <strong>and</strong> notice as requiredby international law <strong>and</strong> practice are in obvious breach ofArticles 5-9 of the UNCIW.Several diplomatic initiatives were made by Nepal, <strong>and</strong> noteswere also sent to India. Furthermore, negotiations were held towipe out such illegal acts, but no tangible result has so far beenachieved. Nevertheless, a different view of Indian’s positionseems to be reflected in a statement by the Indian State ofBihar’s Water Resources Minister who is quoted as saying thatfor whatever area was submerged due to the G<strong>and</strong>ak Barrage inAugust 2002, the Indian government would pay compensationto Nepalese farmers. 112Nepal has a maximum potential requirement to irrigate only 3.2million hectares, but has a far greater abundance of wateravailable; whereas the downstream countries have large areasof l<strong>and</strong> to irrigate, but only limited water available with whichto do so. 113 So far, India, being an economically advancedcountry, has developed <strong>and</strong> used almost all feasible projects,whilst Nepal still needs to use such waters, <strong>and</strong> is hinderedfrom developing any projects due to Indian objections <strong>and</strong> nonco-operation. Whether or not it is justifiable in internationallaw, Nepal, the poorer country as the upper riparian state, isprohibited from utilising her own resources, whereas the lower111 Supra note 52, pp. 313-316.112 Staff, “Nepal to receive compensation from India”, in The Katm<strong>and</strong>uPost 12 August, 2002.113 Supra note 1, p. 55.
216 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 217riparian state has already utilised every drop of water. Thesituation can be equated with those of the Nile, the Euphrates,the Tigris, <strong>and</strong> the Jordan. Moreover, when the under-resourcedcountry wishes to develop a water project, she needs to take outa loan from the donors, who will not lend the money unlessthey obtain a positive response from the other riparian state.The above is a clear instance of non co-operation; thesignificance of bilateral or regional co-operation is wellexplained by Verghese, an eminent Indian scholar, whoasserted that delay is tantamount to denial:"Nepal would be unwise to rehearse ancient grudges,some of them exaggerated, for little purpose <strong>and</strong>India would do well to be less over-bearing onoccasion <strong>and</strong> to deal with Nepal in a more relaxed<strong>and</strong> underst<strong>and</strong>ing fashion". 114There is no basic conflict of interest between the two countries<strong>and</strong> India can afford to be generous in dealing with her smallneighbour. Any delays in developing Nepal's vast waterresources are contrary to the Kingdom's own best interests, <strong>and</strong>equally denies India the optimal way of developing her sharedwater resources. Nepal's trade deficit with India could be morethan offset by exporting electricity <strong>and</strong> the other benefits fromwater to India in the first place <strong>and</strong> then, with the developmentof an international grid, to Bangladesh <strong>and</strong> Pakistan. Islamabadis no more distant from the Chisapani (Karnali) dam thanKolkota from the proposed Dihang dam in Arunchal (a far eastIndian state). 115As to types of power station, the hydroelectric-thermal mix,which should ideally be around 40/60, has been allowed toswing towards thermal but must be restored over the next two114 Supra note 22, p. 351.115 Ibid. Also see South African Power Pool, common electricity for 14African states at www.eia.doe.gov/emev/cabs/sadc.html.decades. It is a proven fact that the environmental cost ofthermal power stations, especially those fuelled by coal, is notproperly calculated in this area; current concern with climatechange <strong>and</strong> global warming on account of accumulatinggreenhouse gases in the atmosphere should dictate a greaterdependence on renewable energy sources. Negativeenvironmental effects could be reversed by the use of theseclean energy sources, which must be taken into account.Unfortunately, efforts at the recent WSSD at Johannesburg toencourage the use <strong>and</strong> generation of renewable energy, <strong>and</strong> theprovision of such facilities to people who are not enjoying it,have not been adopted. 1164.9 Projects of Bilateral InterestA. The Karnali (Chisapani) ProjectThis project is the third biggest multipurpose water resourcesproject in the world, with a 10,800 MW hydroelectriccapacity. 117 Furthermore, from it will come a hugeaugmentation in the amount of water, leading to flood control<strong>and</strong> increased water flow, alleviating the chronic Indo-Bangladesh problem of poor dry-season flow. The twocountries have been discussing the Karnali Project for the lastforty years, <strong>and</strong> a number of feasibility studies have beenundertaken, the latest one by the joint American-Canadian firm,the Himalayan Hydro Development Co-operation (HHDC),concluded in 1989. In the Karnali high dam project, the studieshave led to 32 volumes of reports. After building a dam, it isestimated that the project will yield a profit of $ US 8 billion116 P. Brown & J. Vidal, “Summiteers plant their flags in the foothills”,Sept. 4, 2002, p. 13.The Guardian.117 The largest is the Three Gorges project in China 25,000 MW <strong>and</strong> thesecond is the Itaipu project jointly developed by Brazil <strong>and</strong> Paraguay12,550 MW, see www.solar.coppe.ufrj.bu/itaipu.html.
218 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 219within 30 years. 118 Nepal has already spent a huge amount ofmoney on these studies. 119 A series of talks <strong>and</strong> negotiationsbetween Nepal <strong>and</strong> India were held at a high level, <strong>and</strong> at atechnical level as well. It is worth noting that India hadreiterated its willingness to co-operate in the Karnali Project<strong>and</strong> also agreed to purchase surplus energy generated from it.Subsequently, on 4 February 1983, India <strong>and</strong> Nepal agreed toexecute three major multipurpose projects: Karnali,Pancheshwar <strong>and</strong> West Rapti; this was considered to be a majorbreakthrough in the field of bilateral co-operation in the waterresources sector, but nothing was achieved because Indiarefused to recognise some of the benefits recommended by theconsultant, particularly from flood control <strong>and</strong> irrigation. 120In addition to the above, the seventh meeting of the Karnali CoordinationCommittee (KCC), held in December 1988, showedserious differences over the sharing of the costs <strong>and</strong> benefits,<strong>and</strong> other components of the project; consequently, no tangibleagreements were possible. 121 Many governments over the pastfifteen years indicated great interest in the projects, <strong>and</strong> severaltalks were held; for example, the HHDC reports were thesubject of frequent discussion <strong>and</strong> a severe difference ofopinion emerged between the Nepali <strong>and</strong> Indian delegates.India has expressed a preference for a lower dam at Chisapanithat might yield around 7000 MW of electricity, <strong>and</strong> at areduced cost which would be easier to finance. She hasindicated two or three other upstream projects on the Karnalithat could be taken up, which, it is argued, would be morebeneficial, <strong>and</strong> needed in order to yield more energy. Moreover,a lower Karnali dam is also seen to pose less of a seismic118 Supra note 8 p. 328; also see supra note 20, p. 203.119 Supra note 21 pp. 203-204.120 Supra note 20, pp.203-204.121 Supra note 22, p. 344.problem <strong>and</strong> to cause less displacement of people. 122 TheIndian ideas remain unconvincing <strong>and</strong> seriously flawed from atechnical, legal <strong>and</strong> political point of view. The nonimplementationof the Karnali high dam, as observed by theeminent scholar <strong>and</strong> former Foreign Minster of Nepal, Shah,"furnishes a classical example of how the inherentweakness of a poor developing country renders ithelpless in the end against the interplay of variousforces represented by vested interest among thedonor countries <strong>and</strong> international agencies forfinancing. Nepal's much vaunted Karnali projectremains still unimplemented in spite of fourfavourable feasibility reports by internationallyreputed consulting agencies over a period of morethan two decades.” 123B. The Sapta Kosi High Dam ProjectIn Sanskrit, this river is called the Kausika <strong>and</strong> is one of thelargest tributaries of the Ganges. The Sapta Kosi river is thebiggest river basin in Nepal <strong>and</strong> is the third largest in Asia(after the Indus <strong>and</strong> Brahmputra); it has seven tributaries, 124some of them originating in Tibet <strong>and</strong> others in the Himalayanbelt by the Indo-China border. The catchment area is about25,600 sq km; the basin extends about 270 km from northwest122 The main objection from the Indian side was that the project area was20 miles within Nepalese territory <strong>and</strong> as such their control over solarge a base of power would be limited, <strong>and</strong> therefore security wasinadequate. Whereas in Nepal, some went so far as to ask 'will Nepalown the Karnali, or the Karnali own Nepal because of the magnitude ofthe project <strong>and</strong> about Nepal’s capacity to h<strong>and</strong>le it properly. Also seesupra note 4, pp.209-210.123 R. Shah, "Politics of Water Power in Nepal" (1994) in 4 Water Nepal,pp. 286-287.124 Supra note. 21, pp. 48-50. Name of these tributary rivers are, theTamur, the Arun, the Sunkosi, the Tamakosi, the Dudhkosi, theBhotekosi, <strong>and</strong> the Indrawati.
220 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 221to southweast <strong>and</strong> 145 km from northeast to southwest. 125 TheKosi is a mighty <strong>and</strong> notorious river, which has causedtremendous loss of life <strong>and</strong> property in the past. There isevidence that nearly 200 years ago, this river flowed 120 km tothe west <strong>and</strong> joined with the Mahan<strong>and</strong>a <strong>and</strong> Kankai. Thechannel of the Kosi used to pass by Purnea, an eastern city inthe Indian state of Bihar, but its present course is about 160 kmto the west of Purnea, having moved over an area of 10,500 sqkm, on which it has deposited silt <strong>and</strong> s<strong>and</strong>, also creatingswampy conditions in the old ab<strong>and</strong>oned channels. 126 Due tothe deposit of a huge quantity of sediment upstream, the Kosibarrage has led to a raising of the river bed; it is suspected thatthe barrage might be washed away or destroyed in theforeseeable future.There is another option for using this resource: the constructionof an east-west link canal up to Bangladesh’s Mahan<strong>and</strong>a river.This is a Bangladeshi proposal, which would providenavigation to Nepal <strong>and</strong> sufficient water for Bangladesh, <strong>and</strong>represents an excellent offer which would provide theopportunity for an alternative route of access to the sea. Indiawas suspicious about it, stating it could be a nexus between thetwo countries against her. In any event, it is not possible toimplement this idea without India’s co-operation, <strong>and</strong> India willnot yield on this matter, preferring to use it as a strong politicaltool by means of which she can preserve her interests regardingNepal. However, if India co-operates meaningfully, <strong>and</strong>undertakes her own programme for the Kosi high dam, it couldprove a boon for the entire region, <strong>and</strong> funds <strong>and</strong> technologymight be available to commission the project. 127 The Kosi highdam is essential to India more than to other riparian countries;in the Indian state of Bihar alone an average area of 450,000 ha<strong>and</strong> a population of 21 million is affected by floods every year.125 Supra note 8, p. 48.126 A. B. Thapa, "Urgent Need for Controlling Kosi Floods" 8 Water <strong>and</strong>Energy Commission Bulletin, (1997), pp. 7-10.127 Supra note 22, p. 379; also see supra note 12, p. 177.Erosion <strong>and</strong> floods in Nepal’s Himalayas have directconsequences in India. 128 Similar flood events took placerecently (July-August 2002), after which the Chief Minister ofthe Indian state of Bihar blamed Nepal for aggravating thesituation, a charge flatly denied by Nepalese technicians. 129The Kosi high dam is vital for the mitigation of devastation inIndia <strong>and</strong> Bangladesh, <strong>and</strong> India is approaching the GlobalInfrastructure Research Foundation of Japan for finance toimplement it. If Nepal <strong>and</strong> India agree, it could be implementedunder joint management, as was the case with the Itaipu,Yecreta <strong>and</strong> Columbia River projects. If this project can beundertaken, it alone would provide effective floodmodernisation benefits as well as the irrigation of up to 500,000ha in Nepal, even more in India, <strong>and</strong> 3,500 to 5,000 MW ofinstalled power capacity. Moreover, Bangladesh too can sharethe benefits derived from it, in terms of flood cushioning,power imports through grid transfer, <strong>and</strong> augmented water inthe dry season. The Kosi dam is one of seven Himalayanstorage projects in Nepal that Bangladesh has been insisting onfor some considerable time as an alternative means ofaugmenting the dry season flow in the Ganges. 130 It seems thatthe project will be started soon.4.10 The Tanakpur ControversyIn 1983, India completed the technical study for a 120 MWhydroelectric project on the Mahakali, to be built upstream ofthe Sarada barrage, on l<strong>and</strong> which was swapped with Nepal in1920. It also planned to drop the tailrace water (volume ofwater after generating electricity) (566 cumecs) from thehydroelectric plant straight into the Sarada canal (of 326128 Supra note 17, pp. 115-116.129 Staff, “Flood Devastation”, 2 August, 2002, The Rising Nepal.130 Supra note 44, p. 178-182; also see U. K. Verma, "Socio-EconomicRenaissance through Dynamic Indo-Nepal Co-operation in WaterResources Development" (1994) in 4 Water Nepal, pp. 140-142.
222 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 223cumecs capacity only), bypassing the old Sarada barrage. In thedownstream area of the project, the Mahakali Irrigation Projectin Nepalese territory was already in operation, which couldhave suffered adverse effects from such an upstream diversion.Without giving either due notice or any technical information toNepal, India carried out this project almost as if on a warfooting, irrespective of such obvious adverse effects. Nepalvoiced her concerns about the proposed project, but they werenot heard or the corrections implemented until the 1992 JointCommuniqué between the Prime Ministers of both countries,contrary to the rules of ‘equitable utilisation’ <strong>and</strong> ‘no harm’.Only in the Joint Communiqué was it agreed that the Tanakpurtailrace waters should be discharged upstream of the Mahakalibarrage so as not to affect existing consumptive use in Nepal. 131The Tanakpur barrage, a fait accompli once constructed,aggravated situations already controversial in Nepalese politicalcircles <strong>and</strong> serious questions were asked about the future ofIndo-Nepal relations. This was only settled after the conclusion<strong>and</strong> ratification of the Integrated Mahakali Treaty in 1996. The120 MW hydroelectric project lies below the proposedPancheshwar dam site <strong>and</strong> a little above the old Sarada barrageat Banbasa. A short 577 M long afflux bund (embankment orcauseway in India <strong>and</strong> Pakistan) (occupying some 2.9 ha ofl<strong>and</strong>) has been constructed, with the consent of the Nepalesegovernment (consent which was only sought retrospectively),tying the barrage to high ground in Nepal as a flood protectionmeasure. The afflux bund is in Nepal <strong>and</strong> remains underNepalese sovereignty. 132 However, as no amendments orcorrections were made to address Nepalese concerns <strong>and</strong>interests, no further co-operation was possible; this was a caseof a dichotomy of perceptions between two states. After a longdispute <strong>and</strong> general outcry in Nepal, several negotiations were131 S. C. McCaffrey, The <strong>Law</strong> of <strong>International</strong> <strong>Watercourses</strong>, Oxford:Oxford University, 2001, p. 348; also see D. Gyawali <strong>and</strong> O. Schwank,"Interstate Sharing of Waters Rights: An Alps-HimalayanComparison" (1994) in 4 Water Nepal, p. 234.132 Supra note 44.held <strong>and</strong> finally an agreement was concluded, with theMakhakali treaty of 1996.As a result of the conclusion of a new treaty <strong>and</strong> the inclusionof Tanakpur in it, Nepal has benefited from the project inseveral ways. She is being provided with 150 cusecs of water(from a 1000 cusec capacity). Additionally, Tanakpur had aregulator constructed in order to irrigate some 4,000 to 5,000hectares of l<strong>and</strong> in Nepal; an annual supply of 70 million KWhoursunits of energy ‘free of charge’ 133 was provided <strong>and</strong> aroad link was built from the barrage to connect with Nepal'seast-west highway at Mahendranagar. It should be possible forIndia to divert a full 1000 cusecs supply to satisfy Nepal’sdesire for water from this project (in contrast to the initialdiversion of 150 cusecs), once the Pancheshwar storage dam iscompleted.4.11 Issues of Downstream BenefitsWater diplomacy is indeed a very sensitive issue in the entireregion of south Asia; Nepal has come to underst<strong>and</strong> that waterresources are both a symbol of national identity <strong>and</strong> pride, <strong>and</strong>a source of economic potential. Thus, its utilisation has becomethe key strategy for the development of the nation. A precisedefinition of downstream benefits upon which all are agreedcannot be found; however, if any water resources projectactivities in the upper reach of an IWC yield any type of benefitto the lower reach of a catchment area or downstream country,these are called 'downstream benefits'. 134 In principle <strong>and</strong> inpractice, such benefits must be shared equally <strong>and</strong> equitably.Professors Bourne, McCaffrey <strong>and</strong> Utton hold the view that:“There is support for the existence of a principle ofdownstream benefits in customary international133 Ibid. The term ‘free of charge’ does not seem appropriate for Nepal’sentitlement.134 T. <strong>Upreti</strong>, "A Perspective on Downstream Benefits" in the Kathm<strong>and</strong>uPost, June 24, (2000), p. 10.
224 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 225law. Under the concept of equitable utilization,watercourse states are entitled to a reasonable <strong>and</strong>equitable share of the benefits of an internationalwatercourse. It would seem to follow, therefore,that when a watercourse state does or refrains fromdoing an act that confers a benefit on another statesharing the watercourse, the latter state is under anobligation to share the benefit equitably with theformer. The treaty practice of states supports theexistence of this principle of sharing benefit. As itis well known, the principle of downstream benefitsis dealt with explicitly in the Columbia Treaty (542U.N.T.S. 244). And many other treaties provide forthe return, either in kind or in cash, of a share of thebenefits received as a result of the acts done inanother state.” 135The damming <strong>and</strong> storage of flood <strong>and</strong> snow fed waters of theColumbia River in Canadian territory made it possible toaugment <strong>and</strong> regulate an enormous volume of water, fromwhich a series of hydropower stations were constructed toharness a huge amount of hydropower in US territory.Furthermore, flood damage was controlled, <strong>and</strong> substantialharm was thereby prevented. In addition, the regulated flow ofthe waters was used for irrigation in the US in times of need, toincrease agricultural productivity. However, a considerablechunk of Canadian territory was submerged by these reservoirs,<strong>and</strong> forests, flora <strong>and</strong> fauna were extinguished; also a bigamount of money was spent in order to construct thesestructures. The United States agreed to pay US $ 64 million fordownstream benefits accrued in their territory as a result of135 Report of the Panel on Nepal’s <strong>International</strong> Rivers, comment on “APosition Paper on The Rights, Duties <strong>and</strong> Obligations of Upper <strong>and</strong>Lower Riparian Countries for Sharing Water Resources” a PositionPaper of Nepal submitted to the Nepalese Parliament by a team headedby the author in 1998. Annex 2, pp. 2-5 (a copy of the report is one thefile with the author).Canadian storage; the power generated by these augmentedwaters was divided equally with Canada, <strong>and</strong> the Canadianshare was later bought by the US at the agreed price of US$254 million. 136 The money was provided to Canada in advanceso that she could undertake the works. The benefits accruingfrom these works were classified as power, flood control <strong>and</strong>irrigation <strong>and</strong> were each shared equally. However, it tookalmost twenty years to convince the United States about thesebenefits <strong>and</strong> conclude this treaty. 137Bourne, McCaffrey <strong>and</strong> Utton have given a few instances ofdownstream benefits from the several treaties concludedbetween riparian states. Those practices show that the conceptwas practised from the early nineteenth century, <strong>and</strong> has beenwidely recognised; as a result of such practice, it has becomethe rule of customary law. 138 Moreover, as further argued bythe above group of professors:136 R. W. Johnson, “The Columbia Basin” in A. Garretson, et.al (eds), The<strong>Law</strong> of <strong>International</strong> Drainage Basins, New York: Oceana Pub., 1967p. 228.137 Ibid. pp. 167-24; also see C. B. Bourne, “The Columbia RiverControversy” (1959), in 37 CBR, pp. 444- 472.138 Supra note 135: The authors refer to six examples: i) the 1919 Treaty ofVersailles gave France the exclusive right to use the Rhine for powerproduction in return for paying Germany one-half the value of the energyproduced; ii) the 1921 Barcelona Convention provides for sharing downstreambenefits, though where a state is required to improve or maintain a river, it isentitled to a reasonable contribution of costs; iii) a 1926 agreement betweenSouth Africa <strong>and</strong> Portugal allowed South Africa to make diversion works onthe Kunene River in Angola but required it to compensate Portugal (a 1969treaty between the parties also provided for a sharing of benefits from theconstruction of a dam); iv) the 1977 Rhine Chlorides agreement states that theNetherl<strong>and</strong>s is to pay a share of the cost to France of disposing of waste salts ina manner other than discharging them into the river (the authors note that “thisis a particularly striking example since it could be argued that France had aduty to avoid significant pollution harm to the Netherl<strong>and</strong>s apart from thetreaty”); v) the Lesotho Highl<strong>and</strong>s Project treaty requires South Africa to pay asignificant share of construction costs for works undertaken in Lesotho inreturn for downstream benefits; vi) the 1977 treaty between Czechoslovakia<strong>and</strong> Hungary (which was the subject of the Gavcikovo-Nagymaros case)provides for a dam <strong>and</strong> hydro plant to be located in Czechoslovakia (nowSlovakia) with Hungary to receive power <strong>and</strong> flood control benefits.
226 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 227“While treaty practice can be invoked in supportof the principle of downstream benefits where theact or the omission to act that confers the benefitswas done or not done at the request of thedownstream state, treaty practice does not exist tosupport the wider proposition that a downstreamstate is obliged to share benefits that it receivesfrom the acts or omissions of an upstream statethat it has not asked for or otherwise agreed to.The obligation to share downstream benefits,however, may exist under customary internationallaw even when these benefits have not beensolicited or agreed to. Logically, the obligationwould seem to be implicit in the principle ofequitable utilization; for, if benefits are to beshared equitably, it should not matter whether ornot they were sought by the beneficiary.Furthermore, a failure to share windfall benefitswould seem to be a case of unjust enrichment.This is not to say, however, that there may not bea difference between a case in which adownstream state has asked for a benefit <strong>and</strong> onein which it has not so asked; in the latter case,equity might dictate that the downstream state notpay as much as it would have to in the formercase.” 139Another example is provided by the Owen Falls Dam inUg<strong>and</strong>a, where Egypt has developed <strong>and</strong> supplied hydropowerto Ug<strong>and</strong>a at her own cost; however, the water augmented inthe reservoir was exclusively for her own use. In order tosupervise the water <strong>and</strong> power arrangements, a residentEgyptian engineer was provided for in the agreement betweenthe two states; in addition, electricity was produced for Ug<strong>and</strong>a,<strong>and</strong> reparation for resettlement paid to her, at Egypt’s expense,139 Ibid. p. 4.as a downstream benefit (accruing in this case to the upstreamcountry). 140Besides this, in India, even in the sphere of inter-state relations,the states of UP <strong>and</strong> Bihar, agreed to share both costs <strong>and</strong>benefits in proportion, in the jointly developed Muskh<strong>and</strong> DamProject. 141 The interesting fact about this project is that centralgovernment intervention was required in order to conclude thisagreement. Later, the states of Gujarat <strong>and</strong> Rajasthan alsoconcluded another agreement on cost sharing in the Bajaj SagarDam Project in 1966, in which Rajasthan agreed to pay anamount to Gujarat for work undertaken by the latter <strong>and</strong> thebenefit was shared by the former. 142 In 1975, the constructionof the Kadana dam submerged territory in Rajasthan, for whichGujarat paid compensation. In another dispute between Gujarat<strong>and</strong> Madhya Pradesh (MP) (both Indian states), over Narmadawaters in the Narmada Sagar dam, the Narmada Tribunalapplied this principle <strong>and</strong> as a result MP obtained downstreambenefits from Gujarat. 143Moreover, there is a further interesting example of sharingdownstream benefits with another sovereign state. India isplanning to construct the Dihang Dam in its far east, which, sheclaims, would bring down the flood level by one metre, withBangladesh substantially benefiting from the mitigation of theflood damage. Dubey, a former foreign secretary of the GOI,has questioned how India can deny Nepal payment fordownstream benefits resulting from Nepalese work whilst Indiais simultaneously bargaining with Bangladesh over this140 D. A. Caponera, “Legal Aspects of Transboundary River Basin in theMiddle East: The Al Asi (Orontes), The Jordan <strong>and</strong> The Nile” (1993)in 33 NRJ, pp. 654.141 Supra note 54, pp. 313-314.142 Ibid. pp. 314-315.143 Supra note 22 pp. 323-324.
228 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 229project. 144 This could in fact form the basis for negotiationsaimed at resolving one of the outst<strong>and</strong>ing issues between India<strong>and</strong> Nepal.In order to share the downstream benefits co-operation isessential. The prerequisite for achieving or sharing these kindsof broader benefits are co-operation, good neighbourlyrelations, <strong>and</strong> good faith between the riparian states. That is tosay, in the absence of any investment of money, effort ortechnology by the lower riparian country, if hard work <strong>and</strong>investment is put into any water resources project in a boundaryor transboundary watercourse, <strong>and</strong> such work yields any benefitto the downstream country (e.g. augmentation of water, floodmodernisation, navigation, power generation, recreation,fisheries), benefits must be paid for by the beneficiary inproportion to the cost <strong>and</strong> benefits. Avoided cost theory (amethod of allocating costs <strong>and</strong> benefits in water projects) willbe helpful in assessing benefits; as a case in point, it seems thatNepal is willing to sell power to India at the alternative thermalor nuclear replacement cost, plus generation cost. 145This issue has been recognised in India in principle as well asin practice. For example the Indian River Act of 1956, Section15 (4), has recognised the downstream benefit concept. ThisAct provides that in the preparation <strong>and</strong> execution of schemesby the Board it shall take into account the costs likely to beincurred in constructing <strong>and</strong> maintaining such works; <strong>and</strong> thecosts shall be allocated among the interested governments insuch proportion as may be agreed or, in default of agreement,“as may be determined by the Board having regard to thebenefits which will be received from the scheme by them.” 146In addition, a committee constituted by the Government of144 Supra note 78, pp. 51-57; also see R. Paisley, “Adversaries intoPartners: <strong>International</strong> Water <strong>Law</strong> <strong>and</strong> the Equitable Sharing ofDownstream Benefits” (2002) in 3 MJIL, pp. 280-300.145 Supra note 22, p. 282.146 Ibid.India has recommended that such benefits must be sharedbetween the states concerned; this report was submitted to theIndian government in 1961. 147 Furthermore, it seems that theIndian government has practised the idea of sharing the benefitsproportionately in the interstate sphere of India. The Ministryof Irrigation <strong>and</strong> Power wrote to all state Governments on April17, 1967, stating that the cost of multipurpose river valleyprojects should normally be allocated only to three functions:irrigation, power <strong>and</strong> flood control. The letter recommendedthe “facilities used” method of allocation of joint costs inpreference to the “alternative justifiable expenditure” or“separable costs, remaining benefits” methods. 148In the United States of America, the principles of downstreambenefits have also been practiced in the interstate sphere. Forexample, Section 10 (f) of the Federal Power Act, 1935,imposes on the Federal Power Commission the duty todetermine the benefits to downstream plants from upstreamstorage, <strong>and</strong> assess charges against those downstream plants. 149In fact, the United States has remained fertile l<strong>and</strong> for theenunciation of the principle of equitable apportionment, which147 Ibid. p. 323: The Yadav Mohan Committee was appointed by theGovernment of India in 1961 to examine the levy of charges forutilisation of water on a downstream project. The committeerecommended as follows: “when an upstream project is constructedlater than an existing downstream project, the latter shall be liable topay for the benefit obtained from an upstream project irrespective ofthe period that has elapsed after its construction; but when thedownstream project is constructed after the upstream project, thedownstream project need pay for the benefits received only if it isconceived within 20 years of completion of the upper project. In eithercase the charge will be borne only if it is clearly established that thedownstream project has been benefited by the changes in flows orotherwise by the construction or operation of the upstream project. Thelower project will bear the cost to the extent that the actual additionalbenefits are made available to it <strong>and</strong> as <strong>and</strong> when these benefitsaccrue”.148 Ibid. p. 324.149 Ibid.
230 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 231is considered the foundation of the principle of equitableutilisation. Furthermore, being an indispensable part ofequitable utilisation, the issues of sharing the costs <strong>and</strong> benefitsin a shared river, lake or stream, has been dealt with in severalresolutions of conflicts between states. 150Nepal <strong>and</strong> India have agreed in principle to share the cost inproportion to the benefits in the Mahakali River Treaty, 1996.Article 3 (3) states:“The cost of the project shall be borne by theParties in proportion to the benefits accruing tothem. Both the Parties shall jointly endeavour tomobilize the finance required for theimplementation of the Project.” 151This arrangement entails the acceptance of the principle thatmust be applied in future co-operation in the area of waterresources development between two states. Besides this, twoprojects, namely the G<strong>and</strong>ak <strong>and</strong> the Kosi projects wereimplemented by India at her own cost. These projects do notprovide examples of downstream benefits. However, they areinstances of providing some irrigation <strong>and</strong> hydroelectricbenefits for Nepal as a matter of Nepal’s entitlement to suchshared resources. 152150 G. William Sherk, Dividing the Waters: The Resolution of InterstateWater Conflicts in the United States, the Hague: Kluwer <strong>Law</strong>, 2000, p.60.151 37 ILM (1997), p. 700.152 Article 5 of the G<strong>and</strong>ak project states “(iii): the Government of India agrees toprovide locking arrangements for facility of riverine traffic across the barragefree from payment of any tolls whatever, provided that this traffic will beregulated by the project staff in accordance with the rules mutually agreedupon between His Majesty’s Government <strong>and</strong> the Government of India.Similarly Article 7 provides irrigation facilities to Nepal at their cost. The Kosiproject agreement Article 4 provides that Nepal would be entitled to 50% ofelectricity generated from the project <strong>and</strong> that a huge irrigation network wouldbe provided at India’s cost, <strong>and</strong> that some irrigation benefits would also beprovided. These benefits would also be provided as a share of Nepal’sownership in the resources.”Nonetheless, putting the theory into practice is a verycomplicated task, as experience shows, which suggests thatwithout co-operation between the riparian countries concerned,the task is not feasible. The real issue in the development ofNepalese water resources is the sharing of costs <strong>and</strong> benefitswith her lower riparian states. Evidently, the sharing <strong>and</strong>allocation of benefits from Nepalese water resources is not onlybilateral in nature: it has crossed over into the sphere ofregional management. The fact is that Bangladesh would, likeIndia, benefit from water works in Nepal. From experience inthe international arena, downstream benefits could becategorised as follows:Power BenefitsThese should be evaluated by comparison with otheralternatives available for generating power. This obviously setsthe maximum price that Nepal might seek for the cost ofgeneration <strong>and</strong> transmission to the Indian border, i.e. theaverage of the two ‘costs’, <strong>and</strong> if it goes on to other countriesadjoining India, some of the costs for such facilities could bepaid by Nepal to India. It is understood that Nepal hassuggested to India that her current thermal replacement cost,plus the Karnali generation cost, divided by two, would lead toa fair price. That could provide a basis for negotiation, but itshould not be forgotten that there could be a cut-off price whichIndia would not be willing to exceed, as she would then find itprudent <strong>and</strong> economic to develop her own hydroelectric,thermal or nuclear options. 153 The Columbia River Treaty hasprovided a method for calculating flood benefit, <strong>and</strong> alsoregulated flow in the downstream state for extra generation ofpower. 154 Likewise, the Ycetra <strong>and</strong> Itaypu Project in the BorderRiver Panarma, the Columbia River experience, <strong>and</strong> the Laos-153 Supra note 22, pp. 344-345.154 R. W. Johnson, “The Columbia Basins” in A.H. Garretson, et.al (eds),The <strong>Law</strong> of <strong>International</strong> Drainage Basins, New York: Oceana Pub.,1967, pp. 167-241.
232 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 233Thail<strong>and</strong> experience on the Mekong basin have furnished goodexamples of the sharing of border resources. Severalhydroelectric projects in Canada which sell power to the USAprovide examples of methods of the sale of power; this isgenerally on the basis of 80% of alternative generation cost, orsometimes its cost of generation <strong>and</strong> sale of power shared bytwo. 155 However, India persistently advocates the plus priceprinciple based on the price of generation plus a certainpercentage as profit. 156Irrigation BenefitsAn augmented flow of water could provide extended irrigation<strong>and</strong> cropping downstream, <strong>and</strong> the potential for increasingproductivity to feed 240 million people of a growing populationin North India, <strong>and</strong> 10 million in Bangladesh. 157 It is arguedfrom technical experience that the life of a dam or reservoir isnormally 50 years <strong>and</strong> the benefits should be taken within thisperiod. It appears (in Indo-Nepal water diplomacy), that thisissue remains much more complicated than expected. Nepalasserts that the waters augmented in a reservoir or dam can beused in times of scarcity during the dry season, increasing cropyields <strong>and</strong> even permitting the growing of different types ofmore beneficial crops. Hence, those benefits should becalculated <strong>and</strong> duly paid to Nepal. The other benefit is thecontrol of silt <strong>and</strong> sedimentation, which significantly reduces oreven prevents flood devastation <strong>and</strong> other damage; this toomust be shared. In this sphere, international experience couldbe shared <strong>and</strong> meaningful co-operation from India is to beexpected, to enable a breakthrough. 158155 Supra note 12, p. 339.156 Supra note 48, pp. 53-65.157 Supra note 25, p. 225.158 Supra note 22, pp. 344 346.Flood Control BenefitsThese could be calculated on the basis of the value of people<strong>and</strong> property in the lower reaches of the catchment area savedfrom damage. There are numerous reports prepared by the GOI<strong>and</strong> international organisations which suggest that the annualdamages from the recurrent floods from Nepalese rivers couldform a basis for negotiation. Nonetheless, immense devastationfrom Nepalese rivers flowing to India can be prevented, <strong>and</strong>India should not be exempted from the obligation to pay forthis. Billions of dollars could be saved by flood modernisationprogrammes alone. Take, for example in Bihar State, the KosiRiver flood in 1987: out of 39 districts, 33 were severelyflooded, <strong>and</strong> an estimated Rs. 1200 crore worth of property wasdamaged; such huge potential benefits should be shared on anequal basis. 159Navigational BenefitsMuch emphasis has been given to the basic need for Nepal’sexistence, <strong>and</strong> this remains a crucial element of Indo-Nepalrelations. If this issue were appreciated by India, Nepal couldenjoy navigational facilities via rivers down to the sea. This is aproblem for Nepal that should be sorted out, <strong>and</strong> we shouldnote here that its resolution is pivotal in the solving of the widerproblems of Indo-Nepal water sharing <strong>and</strong> allocation.Navigation on the G<strong>and</strong>ak <strong>and</strong> Kosi, via the Mahan<strong>and</strong>a <strong>and</strong> theKoroyota <strong>and</strong> thus into the lower Ganga-Brahmputra system,has been proposed by Bangladesh. If the G<strong>and</strong>ak-Kosi-Mahan<strong>and</strong>a schemes were to be consented to by India, or workswere carried out pursuant to the Indo-Nepal G<strong>and</strong>ak agreementof 1959, which provides for a lock in the G<strong>and</strong>ak barrage, or ifother potential for navigation at the Kosi or Karnali rivers wereexpedited by India as a gesture of goodwill, a big impedimentfor Nepal would finally be removed. 160 Furthermore, one way159 Supra note 17, p. 116.160 Supra note 22, p. 347; see supra note 12, p. 177; also see supra note20, pp. 208-209.
234 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 235to create a good environment for progress might be through theuse of these vast water resources for mutual or regionaladvantage.In the case of India herself, she has declared NationalNavigational Route No 1 to be from Allahabad to Kolkotta; ifproper arrangements could be made up to Nepal, she alsowould benefit from these services. There are similar problemsin relations between India <strong>and</strong> Bangladesh. India haspersistently resisted a former proposal for Ganga flowaugmentation <strong>and</strong> related reservoir construction in Nepal,asserting that the Ganga is an Indian river not an internationalriver, contrary to the precepts of IWL, particularly in view ofthe judgment rendered by the PCIJ in the River Oder case. 161While India rejected Bangladesh’s proposal of augmentation ofdry season flow in the Ganges, Bangladesh similarly refused toaccept the Brahmaputra-Ganga link canal proposal. 162It is technically viable for boats to travel from the Hooghly (inIndia) on the Ganges (which emerges in Bangladesh), viaFarakka <strong>and</strong> Kanpur in India to the following points in Nepal:Bhardaha on the river Kosi, Narayanghat on the G<strong>and</strong>ak, <strong>and</strong>Chisapani on the Karnali; however, the economic <strong>and</strong> technicalfeasibility, <strong>and</strong> other implications, need to be studied further. 163Furthermore, Water Resources Ministers of Nepal <strong>and</strong> Indiaconstituted a joint study team to investigate the possibilities ofnavigation on the Kosi, Karnali <strong>and</strong> G<strong>and</strong>ak rivers, in 1997. Itis understood that the studies have not been not completed sofar, 164 but it is expected that once the technical feasibility hasbeen endorsed, both states can expect to execute projects fornavigation. The experience gained by Austria <strong>and</strong> Paraguay in161 PCIJ Reports (1937) pp. 221-222.162 Supra note 12, pp. 203-210.163 Supra note 20, pp. 208-209.164 Annual Report of Water <strong>and</strong> Energy Commission Secretariat 1999, pp.13-14.the area of inl<strong>and</strong> waterways <strong>and</strong> access to <strong>and</strong> from the sea canbe of significance in the Nepalese context. 1654.12 Regional Co-operationThere are several views on how to maximize benefits fromthese huge resources. There are many possible scenarios fortwo riparian country involvements, e.g., Indo-Nepal cooperation.There is also trilaterisation of the issues that includeNepal, India <strong>and</strong> Bangladesh; even inviting Bhutan in, asconceived in the SAARC Quadrangle concept; <strong>and</strong> thepossibility of adding China to this group. Finally, there is scopefor the internationalisation of the issue by involving multilateralorganisations, e.g. the World Bank, GEF, UNDP, UN or indeedany influential <strong>and</strong> resourceful western government; it isnoteworthy that the UK <strong>and</strong> the USA have already shown aninterest. 166 These institutions are capable of making abreakthrough in issues of this magnitude, in terms ofeconomics, technology <strong>and</strong> politics; 167 the only aim should beto achieve broader co-operation between all riparian states <strong>and</strong>to gain maximum benefits from these resources. The motivesbehind such external involvement should be considered to bepositive, regarding it not as external interference, but rather asexternal co-operation. The need for it is crystal clear. Thegovernments of this region have been negotiating waterresources development for the last forty years, <strong>and</strong> so far suchbilateral endeavours have yielded no tangible result nor does165 A. B. Thapa, “L<strong>and</strong>locked Austria’s Lesson for Nepal” in 22 Spotlight,Sept. 27-Oct.3, (2002), pp. 1-3.166 M.R. Josse, “The Case For New Thinking” (1994) in 4 Water Nepal, p.260: US President Jimmy Carter <strong>and</strong> British Prime Minister JamesCallaghan made separate statements in January 1978 offering their“countries technical <strong>and</strong> financial support to any regional waterdevelopment project that India, Nepal <strong>and</strong> Bangladesh may put up”;this was not to India’s liking.167 Ibid.
236 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 237any miraculous breakthrough seem likely in the foreseeablefuture. If any achievements are to be made, co-operation on aregional level is the first condition; but far from this happening,nothing has been done nor is anything expected, except forsome bilateral treaties, <strong>and</strong> this inaction remains the subject ofsharp criticism. 168 However, the World Bank has made anapproach with a view to involvement in the resolution of theGanges disputes; it was reported that Bangladesh welcomed itbut that India refused it, asserting that it was a bilateral issue. 169India has persistently maintained that the Ganga 170 is an Indianriver, disregarding Nepal’s legitimate dem<strong>and</strong> for navigationalrights over river access to the sea. Bangladesh’s legitimatedem<strong>and</strong> for the sharing of Ganges waters in an equitable <strong>and</strong>reasonable manner, <strong>and</strong> augmentation of lean season flow, hasalso been denied. It was once dem<strong>and</strong>ed that the Ganga bedeclared "an international river of south Asia" <strong>and</strong> Nepalconsidered a co-riparian partner along with India <strong>and</strong>Bangladesh, for the purpose of sharing her waters <strong>and</strong> benefits.This specific proposal was made by Shrestha, an expert onNepalese foreign policy, who has pointed out that it cost NepalRs 66 million to transport 100,000 tonnes of freight fromKolkotta to Kathm<strong>and</strong>u against just Rs 6.7 million if the goodswere moved by inl<strong>and</strong> waterways. He concluded that a168 The Kosi, the G<strong>and</strong>ak, <strong>and</strong> Tanakpur are highly criticised projects inNepal, whereas the long awaited Mahakali Integrated Treaty has alsonot been implemented so far. In the Indo-Bangladesh sphere, thesuspicion, <strong>and</strong> distrust are visible, as evidenced by the lack of properimplementation of bilateral instruments.169 Supra note 45 (conflicts) pp 148-151: the Bank’s President, RobertMcNamara, has visited both India <strong>and</strong> Bangladesh <strong>and</strong> proposedmediation, but this was refused by India.170 J. G. Lammers, Pollution of <strong>International</strong> <strong>Watercourses</strong>, the Hague:Martinus Nijhoff, 1984, pp. 313-317, supra note 22, p. 347; see supranote 31, p. 122.navigational outlet to the sea is Nepal’s birthright. 171 Thesignificance of enabling navigation by international waterwaysin Nepal is evident from these facts. There are two otheralternatives for Nepal in terms of routes to access the sea: theKosi-G<strong>and</strong>ak link canal to Mahan<strong>and</strong>a-Koroyoka, Bangladesh;<strong>and</strong> a 16 km long tunnel link between the Jhapa district of theeastern part of Nepal, passing through India at a depth of 3000metres, <strong>and</strong> coming out at the western border of Bangladesh.Both of these alternatives require multilateral consent <strong>and</strong> cooperation.If a spirit of co-operation is established, technical<strong>and</strong> financial assistance is easy to obtain; examples include theEisenhower tunnel in the US, <strong>and</strong> tunnels below the sea inJapan <strong>and</strong> Hong Kong. 172 Several tunnels have already beenconstructed in Switzerl<strong>and</strong> which proves this technology.Bangladesh, from the time of its emergence in 1971, haspersistently dem<strong>and</strong>ed Nepalese involvement in theaugmentation of the dry season flow of the Ganges; it is evidentthat without Nepal's involvement in building huge reservoirs inher own territory, this is not feasible <strong>and</strong> India, for her part, hasrepudiated the idea. On the contrary, India dem<strong>and</strong>ed theconstruction of a Brahmputra-Ganges link canal, 324 km long,one third within Bangladesh's territory <strong>and</strong> joining the Gangesabove Farakka, although this was outrightly rejected byBangladesh. In order to increase the Ganges flow, the divertingof the Brahmaputra through the Arun valley in Nepal is alsorecommended; if this were implemented, the chronic problems171 Supra note 20, p. 209; A. B. Thapa, “Kosi Navigational Canal” in 8Water <strong>and</strong> Energy Commission Secretariat Bulletin, (1999),Kathm<strong>and</strong>u, pp. 5-7: the experience of the US tells us that shallowdraft inl<strong>and</strong> water transportation can be about 5 times cheaper thanrailway, 21 times cheaper than road transportation <strong>and</strong> 63 timescheaper than air transportation; also see H. Shrestha, “Water Resourcesin Nepal-China Relation” The Telegraph, 15 January (2003),Kathm<strong>and</strong>u.172 Supra note 21, p. 134.
238 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 239between India <strong>and</strong> Bangladesh would definitely be sortedout. 173 But broader co-operation is still the key.Flood modernisation is not possible without Nepal's cooperation.India wants this modernisation, <strong>and</strong> some work onearly forecasting <strong>and</strong> warning arrangements has already beendone bilaterally. If arrangements between the three nationswere made, benefits for all of them could be greatly increased.Flood control, navigation, augmentation of dry season flow,<strong>and</strong> the generation of more hydro power from augmented waterare obvious benefits to all countries of south Asia. Moreover,navigation services <strong>and</strong> business trade links can be establishedthrough India, while coal <strong>and</strong> gas could be imported fromBangladesh; these are the potential benefits of a multilateralarrangement. 174Nevertheless, there are general guidelines for examples of cooperation,<strong>and</strong> the sharing <strong>and</strong> allocation of the benefits from anIWC; by following these practices <strong>and</strong> learning from theseexperiences, states of this region can accrue maximumbenefits. 175 Every aspect is closely linked to equity, which takeseveryone’s interests into consideration. The new potentialafforded by the involvement of a third party to enhance <strong>and</strong>facilitate regional or bilateral co-operation is one result ofrecently emerging creative thinking. It is recognised that India’spredominant role in the region, in terms of her size, economic,<strong>and</strong> military power, technological status <strong>and</strong> political stability,has made her smaller <strong>and</strong> weaker neighbours feel vulnerable173 H. M. Shrestha <strong>and</strong> L. M. Singh, “The Ganges-Brahmputra System: ANepalese Perspective in the Context of Regional Cooperation” in A. K.Biswas & T. Hashimoto (eds), Asian <strong>International</strong> Waters FromGanges- Brahmputra to Mekong, Oxford: Oxford University, 1996, p.81.174 Supra note 8, p. 361.175 Supra note 22, pp. 326-328; also see J.S. Mehata, "Opportunity Costsof Delay" in D.J. Eaton (ed), The Ganges-Brahmaputra Basin: WaterResources Co-operation between Nepal, India <strong>and</strong> Bangladesh,Austin: the University of Texas, 1992, p. 12.<strong>and</strong> suspicious. In turn, India is also afraid of these neighboursganging up against her, or taking other hostile attitudes. Inthese circumstances, it is recommended that third partyinvolvement could help end their suspicion <strong>and</strong> distrust, <strong>and</strong>open the windows of opportunity for fostering bilateral <strong>and</strong>regional co-operation. The World Bank involvement in theIndus impasse resolved issues of the similar magnitude betweentwo rival states. However, the problems within the provinces ofPunjab <strong>and</strong> Sind in Pakistan remain unsettled; both states arealleging stealing <strong>and</strong> wastage of their share of Indus waters, 176<strong>and</strong> severe disputes between the Indian states of Karnataka <strong>and</strong>Tamil Nadu remain unsettled despite the rulings of the CauveryRiver Authority, <strong>and</strong> even a judgement from the IndianSupreme Court. 177In order to enhance this idea <strong>and</strong> implement regional cooperation,several initiatives have been taken both in unofficial<strong>and</strong> official spheres; for example, under the auspices of theUnited States Agency for <strong>International</strong> Development (USAID),the US government is implementing a project called the SouthAsia Regional Initiative (SARI-within SAARC area). Theformation of the South Asia Growth Quadrangle (SAGQ-Nepal, Bhutan, India <strong>and</strong> Bangladesh) with a view to promotingsub regional co-operation in the fields of energy <strong>and</strong> trade(among others) is also considered to be a watershed.Furthermore, regular meetings of experts are taking place, <strong>and</strong> acommon electricity grid for these nations is expected verysoon. 178 Besides that, the Asian Development Bank (ADB) hasgiven the green light for providing financial assistance todevelop a series of three Arun hydropower projects, of 1050MW total capacity, in Nepal, enhancing regional co-operation.It has also initiated another project named Regional Technical176 Supra note 55, pp. 1-3.177 Staff, “Karnataka ignored the Supreme Court Order.” The Times ofIndia, 5 October 2002.178 Staff, “Arun Project with Indian involvement.” The Kathm<strong>and</strong>u Post10 January 2002.
240 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 241Assistance (RETA), which being implemented in order toenable the SAGQ nations to share <strong>and</strong> trade off the availableenergy benefits among themselves. 179In a recent development, India is now undertaking a studyinvestigating linking 37 rivers in a region extending from theHimalayas to the southern peninsula of India <strong>and</strong> bringingwater from where there is a surplus to areas of water deficit byconstructing a network of dams <strong>and</strong> reservoirs <strong>and</strong> a network ofcanals. In order to implement this ambitious project, riparianco-operation from Bhutan, Bangladesh <strong>and</strong> Nepal is essential.Unfortunately India seems determined to implement this projectunilaterally <strong>and</strong> complete the vast amount of work involved by2016, starting in 2006 (she expects to complete the chains ofstudies before 2006). 180 After successful negotiation withriparian states, which would be hard, but will yield a definiteoutcome, the grievances <strong>and</strong> bitterness of the past would beremoved, <strong>and</strong> everyone’s interests would be taken intoconsideration. However, this project will only happen given aspirit of regional co-operation.4.13 Problems <strong>and</strong> Prospects of Water ResourcesDevelopmentThe pace of globalisation <strong>and</strong> interdependence has created anopportunity for states to integrate <strong>and</strong> work closely with eachother in order to obtain maximum advantage. As a result of theend of the Cold War, states are focused on business <strong>and</strong>179 Staff, “Regional energy grid “The Kathm<strong>and</strong>u Post, 26 December2001.180 S. Aiyer, “Changing the Course” in XXVII India Today, January 20(2003), pp. 28-32; also see R. R. Iyer, “Making of a SubcontinentFiasco” in Himal South Asian , pp. 1-8; also H. Thakkar, “Flood ofnonsense: How to Manufacture Consensus for River-Linking” HimalSouth Asian, August (2003), pp. 1-5. Also see “Bangladesh Concernedover India’s Proposed River-Linking Project” inwww.internationalwaterlaw.orgeconomic transactions <strong>and</strong> the creation of economic or tradeblocs. Such characteristics have become a modernphenomenon: yesterday's enemy states are the reliable friendsof today. 181 Within south Asia, China <strong>and</strong> India were mutuallyhostile states <strong>and</strong> have been to war with each other; however,this has not hindered China from trading uranium with theDurgapur Nuclear Plants in India in the interests of business. 182Moreover, both nations have recently agreed to enhancebilateral trade, during the visit of the Indian Prime Minister toChina. 183 If even a situation as sensitive as this cannotundermine trade <strong>and</strong> business, nothing is beyond reach,including the harnessing of Himalayan water resources for theircommon benefit: every obstacle to this can be removed. Equitycan help in this regard.As to the arguments made in connection with nonimplementation<strong>and</strong> outdated instruments (such as the 1950treaty between Nepal <strong>and</strong> India), an Indian writer, Datta-Ray,has advised his government from a new perspective, somethingof which the government of Nepal is aware:“access to or from a l<strong>and</strong>-locked country is nolonger a favour. It knows, too, that colonial styletreaties cannot forever inhibit a sovereign nation’sforeign policy options or choice of arms supplier.Since there is nothing India can do about theselegal entitlements, it might do so with good grace181 P. Muchlinski, Multinational Enterprises <strong>and</strong> the <strong>Law</strong>, London:Blackwell Pub., 1997, p. 243; also note Expansion of EEC membershiptowards Eastern Europe, creation of NAFTA, ASEAN, SAARC,SADC <strong>and</strong> so on. The exp<strong>and</strong>ing foreign direct investment (FDI) inChina leads to China’s development <strong>and</strong> her growing position in theinternational manufacturing market, <strong>and</strong> her close trade relations withEurope <strong>and</strong> the USA.182 Staff, “Nuclear pay-off: China to supply enriched uranium to India”,Far Eastern Economic Review, 19 January, (1995), p. 22.183 Staff, “Nathu-La Pass is to be open for trade after the war of 1962.”The Kathm<strong>and</strong>u Post 2 August, 2003.
242 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 243so that at least friendship <strong>and</strong> influence survive.Ultimately, these will remain our best weapons inthe Himalayan kingdom. We cannot afford toblunt them through the antics of busybodieswhose phoney idealism or cynical calculationthreatens to spoil the climate for areconciliation." 184Hence, as a regional power, India should not continue to expectreciprocity in every agreement (as, for example, in theprovision of the Peace <strong>and</strong> Friendship Treaty 1950), which herweak neighbour cannot sustain. If this arrangement were madeapplicable in Nepal, <strong>and</strong> if 3% of Indians were allowed to doso, then the population with Indian origin in Nepal would bethe majority. But if the same percentage of Nepalese were toassimilate into India's one billion population, it would not makeany difference to them, because 600,000 people (3% of 20million) would not make a noticeable impact on one billion.Since the right of access to <strong>and</strong> from the sea is already settledas a customary rule of international law, this right should beprovided unhindered <strong>and</strong> without dem<strong>and</strong>s for concessionsfrom Nepal. A huge country with large resources such as Indiashould not ask for complete reciprocity from a weak <strong>and</strong>vulnerable neighbour such as Nepal, but rather, shouldcooperate wholeheartedly. In other words, while India itself adeveloping country it should nonetheless cooperate with itseven less-developed neighbour.India, since she is a regional power <strong>and</strong> has a strategic position(in particular because every drop of water from Tibet, whetherit passes through Bhutan <strong>and</strong> India or through Nepal <strong>and</strong> India,drains into the ocean via Bangladesh), has a greaterresponsibility to create an environment for broader regional cooperation,as a result of which the whole region would be184 S.K. Datta-Ray, "Living with Nepal: Must Busybodies Queer thePitch?" in the Statesman weekly, 17 India, February (1990), p. 11.converted into a developed <strong>and</strong> prosperous part of the world.Simultaneously, the other nations also need to move forward,resolving each <strong>and</strong> every issue in the changing context, in orderto meet the wider objectives of such co-operation. If thesearrangements could be made, the resources, technology <strong>and</strong>skill of the world would undoubtedly become available to thesegovernments. 185The facts suggest that in terms of water per unit of l<strong>and</strong>, theGanges-Brahmaputra-Meghana basin is second only to theAmazon. Unique stores of flora <strong>and</strong> fauna, <strong>and</strong> endangeredspecies are found in the only Sundarbans (the largest mangroveforest in the world). The attainment of India’s aspiration tobecome a member of the Security Council of the UN alsohinges on how much she can reconcile every state’s interest in abalanced way. Third party involvement was recommended inIWC finance, technology <strong>and</strong> manpower transfer to developingcountries, as in the case of the Indus Waters Treaty 1960. 186India must accept this reality now <strong>and</strong> forget the intransigentpattern of bilateralism.4.14 Conditions for Funding Imposed by theWorld Bank <strong>and</strong> the Other DonorsThe implementation of water projects is a costly business,involving huge amounts of money with a long gestation period.The WB has been financing transboundary water projects since1949 (El Salvador’s RioLempa Hydroelectric Project), thenagain in Rhodesia in 1956, where there was no riparian dispute.On the other h<strong>and</strong>, the Bank refused to finance the BhakraNangal Project in India in 1949, the Lower Sind Barrage in185 Supra note 34, p. 130.186 A. K. Biswas, “Indus Water Treaty: The Negotiation Process” (1992)in 17 WI, p. 209.
244 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 245Pakistan in 1950, the Aswan Dam in Egypt in 1955, theRoseries Project in Sudan in 1987, or the Three Gorges projectin China. All of these refusals were linked with adverse effects<strong>and</strong> riparian objections. 187 From its experience the Bank firstdrafted its operational policy memor<strong>and</strong>um in 1956 for its ownstaff to use; it was revised in 1964 <strong>and</strong> 1985. In 1993 the Bankadopted an Operational Manual <strong>and</strong> Operational PoliciesO.P.750, “Project on <strong>International</strong> Waterways” <strong>and</strong> bankprocedure “Project on <strong>International</strong> Waterways”. Thesedocuments were revised in July, 2001. All of these documentsare based on the principles of ‘no harm’ rules <strong>and</strong> the reasongiven was that for this, the principles of ‘equitable utilisation’contain abstract ideas, vagueness <strong>and</strong> a lack of clarity. 188 In asimilar vein, a document posted on the internet by the Bankseeks to justify its current policy. 189 These rules are against thecore principle of IWL, equitable utilisation, <strong>and</strong> it should beamended to reconcile to this principle, because internationalinstitutions can no longer operate against the rules of IWL. 190 Itis illegimate not only from the legal point of view but also fromthe political point of view.187 R. Krishna, “The Evolution <strong>and</strong> Context of the Bank Policy forProjects on <strong>International</strong> Waterways” in <strong>International</strong> <strong>Watercourses</strong>:Enhancing Co-operation <strong>and</strong> Managing Conflicts, Washington DC:World Bank Technical paper 414, Salman et. el (eds), 1998 p 31; alsosee A. Nollkaemper, “The Contribution of the <strong>International</strong> <strong>Law</strong>Commission to <strong>International</strong> Water <strong>Law</strong>; Does it Reverse the Flightfrom Substance?” (1996) in XXVII NYBIL, p. 57.188 Ibid. Also see “D. Goldberg, “World Bank Policy on <strong>International</strong>Waterways in the Context of Emerging <strong>International</strong> <strong>Law</strong> <strong>and</strong> theWork of the <strong>International</strong> <strong>Law</strong> Commission” in The PeacefulManagement of Transboundary Resources, Dordrecht: Graham &Trotman/ Martinus Nijhoff, 1995, pp. 153-165.189 World Bank Group, <strong>International</strong> Waterways,www4.worldbank.org/legal/legen/legen_iw.html190 S. P. Subedi, “Resolution of <strong>International</strong> Water Disputes: Challengesfor the 21st Century” in PCIA (ed), Resolution of <strong>International</strong> WaterDisputes, the Hague: Kluwer <strong>Law</strong>, 2003, pp. 33-47.Before 1980 little attention was given to the environment <strong>and</strong>sustainable development; as a result of this, the WB <strong>and</strong> othermultilateral funding agencies had received pointed criticism. 191Consequently the WB has changed its policy to takeenvironmental issues into consideration, <strong>and</strong> several new ruleshave been enacted. These measures have been adopted byregional development banks, UN agencies <strong>and</strong> bilateral donor,particularly the G7 countries. 192 Furthermore, in order topreserve <strong>and</strong> protect several aspects of the environment,numerous funds have been created since 1990, such as theWorld Heritage Fund, Wetl<strong>and</strong>s Funds, the Montreal ProtocolMultilateral Fund, the Global Environment Facility. 193 Theseinstruments set out conditions to be complied with in order toqualify for a loan or assistance. Consistent with theseinstitutional regulations, a state which is looking for a loan fordeveloping a water project requires riparian consent in order toproceed; in the case of IWC, riparian states are required toexchange information in regards to the particular project.Unless <strong>and</strong> until this has occurred, the Bank would not besatisfied that other riparian countries had given consent for theexecution of the project, <strong>and</strong> that the project does not cause any191 P. S<strong>and</strong>s, The Principle of <strong>International</strong> Environmental <strong>Law</strong>, NewYork: Manchester University, 1995, p. 731. The construction of thePolonoreste dam in Brazil resulted in significant environmentaldamage at both national <strong>and</strong> regional levels. Also see I. F. I. Shihata,The World Bank in a Changing World: Selected Essays, Dordrecht:Martinus Nijhoff Pub., 1991, pp.135-180192 For the Kuwait Fund for Arab Economic Development seewww.kuwait-fund.org/frames.htm <strong>and</strong> for the Saudi fund see thespeech delivered by M. AL-Shawi, Director of the fund atwww1.worldbank.org/harmonization/romehlf.IPlans/SaudiFund.statement.pdf.193 Supra note 192, pp. 730-736.
246 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 247appreciable harm; without this assurance being given, fundingcannot be made available. 194Under such an arrangement, the poorer state cannot developany water projects in her watercourses whilst a wealthy statecan develop any project of her own. The reason for thissituation is that the wealthy country can undertake a waterproject in an IWC, ignoring other riparian interests <strong>and</strong> onlytaking into consideration her own maximum benefit; this in fact194 The World Bank Operational Manual: Operational Policies; Project on<strong>International</strong> Waterways. The WB annex 2.A.OP. 7.50 October 1994,pp. 193-200. (OP 7.50 <strong>and</strong> BP 7.50 have been amended in 2001. Alsosee www4.worldbank.org/legal/legen/legen_iw.html).“Agreements/ Arrangements3. Projects on international waterways may affect relations betweenthe Bank <strong>and</strong> its borrowers <strong>and</strong> between states (whether membersof the Bank or not). The Bank recognizes as that the co-operation<strong>and</strong> goodwill of riparians is essential for the efficient utilisation<strong>and</strong> protection of the waterway. ...In cases where differencesremain unresolved between the state proposing the project(beneficiary state) <strong>and</strong> other riparians, prior to financing theproject the Bank normally urges the beneficiary state to offer tonegotiate in good faith with the other riparians to reachappropriate agreement or arrangements.”4. “NotificationThe bank ensures that the international aspects of project on aninternational waterways are dealt with at the earliest possibleopportunity. If such a project is proposed, the Bank requires thebeneficiary state, if it has not already done so, formally to notifythe other riparians of the proposed project <strong>and</strong> its project details(see B.P 7.50, para. 3). If the prospective borrower indicates tothe bank that it does not wish to give notification, normally theBank itself does so. If the borrower also objects to the Bank’sdoing so, the Bank discontinues processing of the project. Theexecutive directors concerned are informed of thesedevelopments <strong>and</strong> any further steps taken.”6. “Following notification, if the other riparians raise objections tothe proposed project, the Bank in appropriate case may appointone or more independent experts to examine the issue inaccordance with B P 7.50, paras. 8-12. Should the Bank decide toproceed with the project despite the objections of the otherriparians, the Bank informs them of its decision.” p. 194.frequently happens. 195 The argument is that although IWL isuniversal, its application varies. That is to say, if you are acountry with resources, you can develop a project as you wish,even to the detriment of others <strong>and</strong> no one can stop you; but ifyou have no resources you have to borrow the money, <strong>and</strong> onlyif the riparian states concerned are in favour can the project bedeveloped. The wealthy nations have not adhered to the law,whereas the developing nations can do nothing except agreewith all the preconditions of the donor, which constitutes aninequitable arrangement in this area. If equality, fairness <strong>and</strong>justice are to prevail, then this impractical <strong>and</strong> unfair systemshould be reassessed, <strong>and</strong> a fair <strong>and</strong> equitable arrangementshould be arrived at.In other words the WB, by giving precedence to the ‘no harm’principle over more fundamental <strong>and</strong> overarching principles –particularly that of reasonable <strong>and</strong> equitable utilisation – isignoring the main thrust of IWL. 196 In fact, from Article 7, it is195 In the Nile basin, downstream Egypt had utilised all the benefits, <strong>and</strong>vetoed the other upstream nations, particularly Ethiopia, from utilisingthe Blue Nile’s water. Whereas in the Euphrates <strong>and</strong> Tigris Basin,Upstream Turkey is in an advantageous position, ignoring Iraq’slegitimate <strong>and</strong> historic right over it. She has utilised <strong>and</strong> diverted waterfor her own interests in 1991 during the Gulf War, <strong>and</strong> diversion of allwaters of the Euphrates to fill the Ataturk reservoir was proposed. T.Hoffer, "<strong>International</strong> Inl<strong>and</strong> Waters" (1994), in 4 Waters Nepal, p.304, states that India diverted the Ganges waters at the Farakka withoutformally informing Pakistan (later Bangladesh); on the contrary, theobjections raised in this connection were not heard by the former, <strong>and</strong>even when the case was brought to the UNGA in 1976 by the latter, notangible result for reparation to the former was undertaken.In 1948 India temporarily interrupted the Indus river waters toPakistan, advocating Harmon's doctrine; as for the USA, she divertedthe Chicago river’s waters ignoring Canadian interests.196 Commentary, II (part two)YBILC (1994), p. 103: “in certaincircumstances “equitable <strong>and</strong> reasonable utilization” of an internationalwatercourse may still involve significant harm to another watercourseState. Generally, in such instances, the principle of equitable <strong>and</strong>reasonable utilisation remains the guiding criterion in balancing theinterests at stake.”
248 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 249clear that not all harm is prohibited by law, <strong>and</strong> the abovementioned notification is not a legal requirement in every case.The existing WB policy departs from that of the UNCIW, <strong>and</strong>as a result favours bigger <strong>and</strong> more powerful lower riparian tothe detriment of smaller <strong>and</strong> weaker upper riparian states. TheWB does not have the authority to change or undermine thebalance reached in the UNCIW by introducing its owncontroversial conditions on financing projects on internationalwaters <strong>and</strong> the WB also does not have the authority to definerights, duties <strong>and</strong> obligations of upper <strong>and</strong> lower ripariancountries in IWC’s. 197Special clauses favourable to the less developed states havebeen written into the instruments of numerous institutions, suchas GATT, the WTO, the UNCTAD, <strong>and</strong> the LOSC Convention.Moreover, the third United Nations Conference on the LeastDeveloped Countries held in Brussels, 14-20 May, 2001,adopted a programme of action for the assistance of leastdeveloped countries. 198 Such favourable rules are absolutelyessential to a vulnerable state. 199197 Supra note 191, pp. 40-43.198 Special facilities <strong>and</strong> concessions in the international system such astrade, investment <strong>and</strong> favour have been recommended. See “ThirdUnited Nations Conference on the Least Developed Countries”Brussels, 14-20 May, 2001, pp. 4-62.199 J. R. Crook & S. C. McCaffrey, “The United Nations Starts Work on aWatercourse Convention” (1997) in 91 AJIL, pp. 374-377: Article 125 ofthe <strong>Law</strong> of the Sea provides the right of access to <strong>and</strong> from the sea, whichis also regarded as a customary rule of international law <strong>and</strong> gives specialconsideration to l<strong>and</strong>-locked <strong>and</strong> geographically h<strong>and</strong>icapped nations;similar arrangements could be made for such nations whilst applying <strong>and</strong>interpreting the provisions of Article 5 of the UNCIW. Also see supra note74, pp. 187-196. The WTO <strong>and</strong> Debt relief movement of the BrettonWoods Institutions, <strong>and</strong> the Millennium Development Goal set by the UNfor development for poor countries <strong>and</strong> the UNCTAD also undertookspecial clauses favouring the support of such nations in their manydocuments, <strong>and</strong> all these matters are guided by the concept of equity. Thus,the international community needs to adopt a new plan <strong>and</strong> policy in orderto underst<strong>and</strong> <strong>and</strong> address the pressing needs of weak, vulnerable <strong>and</strong>geographically disadvantaged nations.Nepal has continually come off badly in bilateral arrangementwith India. After the conclusion of several feasibility studies<strong>and</strong> the expenditure of vast amounts of time <strong>and</strong> money, theSikta, Babai <strong>and</strong> Rapti irrigation projects, the MulghatMultipurpose project <strong>and</strong> the Kanaki Multipurpose project wereall cancelled due to Indian objections. 200 Recently, the WB haslent US$ 80 million for a power development fund to Nepal;this was in fact announced after the cancellation of the Arun IIProject (1995). It has asked riparian consent from China, India<strong>and</strong> Bangladesh, a move that has been severely criticised inNepal by water experts, saying that it will establish a newunjust precedent, <strong>and</strong> a discriminatory attitude towards Nepal;for these reasons some of them have recommended that Nepal’srelationship with the Bank should to be reviewed. 201 Moreover,S. N. Paudel went on to say that the Bank did not giveinformation to or obtain consent from Nepal while it provided aUS$ 1 billion loan to the Indian state of Uttar Pradesh todevelop an irrigation project. 202 At the same time it is askingriparian consent before lending money to the PowerDevelopment Fund (PDF) in Nepal, which is obviously a caseof discriminatory behaviour on the part of the Bank.The Global Environment Facility (GEF) was established <strong>and</strong>subsequently restructured to carry out sustainable developmentactivities in the areas of global warming (50% of its fund), Bio-Diversity (30%) <strong>and</strong> to protecting <strong>International</strong> Waterways(20%). However, there are similar preconditions as well.Besides, every nation <strong>and</strong> institution has adopted similarrules. 203 Thus, it is argued that the consideration of the unfair<strong>and</strong> impractical circumstances prevailing upon vulnerable200 Supra note 22, p. 341.201 Staff, “the World Bank lent money against its own policy”, A highlyplaced authority in the Ministry of Water Resources also noted thatsuch loan was provided without giving notice to Nepal. TheKathm<strong>and</strong>u Post, August 7 & October 3, 2002.202 Staff, “Nepali Experts comes heavy to the World Bank”, The RisingNepal 7 August, 2002.203 www.gefweb.org/operational_policies/operational_programs/OP_8_english.pdf.
250 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 251nations should be dealt with urgently according to theprinciples of equality enshrined in the Charter of the UnitedNations. The only solution is to insist that consent must alwaysbe required, <strong>and</strong> that no project may be allowed without it; if acountry has economic strength, <strong>and</strong> goes ahead with thedevelopment of any project for which it does not have consent,this must be stopped by UN Security Council intervention,through its power to maintain international peace <strong>and</strong> security.Wouters argues that the revised protocol of SADC in 2002, <strong>and</strong>the Implementation Committee established under theConvention on Long-range Transboundary Air Pollution by theUNECE, set a precedent (established a system) for assistingstates party to a treaty to achieve the goals therein, which theinternational community should follow. 204 Only then wouldequity prevail in every circumstance, across all nations.However, it seems that the Bank has learned by experience, <strong>and</strong>in 1993 it adopted a new policy initiative by establishing anappeal mechanism <strong>and</strong> an inspection panel. This procedureallows citizens who may be adversely affected by Bank fundedprojects to file claims regarding violation of its policies,procedures <strong>and</strong> loan agreements, if the project severely affectsthe environmental or socio-economic situation, such as flora<strong>and</strong> fauna, or the resettlement <strong>and</strong> rehabilitation of indigenouspeople. It has also promoted more flexible approaches towardsinformation disclosure by the Bank. 205204 P. Wouters, “Universal <strong>and</strong> Regional Approaches to Resolving<strong>International</strong> Water Disputes: What Lessons Learned from StatePractice” in PCIA (ed), Resolution of <strong>International</strong> Water Disputes, theHague: Kluwer <strong>Law</strong>, 2003, pp. 111-154. Whilst most watercourseagreements in the past did not include compliance reviews <strong>and</strong> supportsystems, recent treaties appear to be introducing these mechanisms,which should ensure implementation, <strong>and</strong> give added value to disputeavoidance efforts.205 World Commission on Dams (WCD), Dams <strong>and</strong> Development: A NewFramework for Decision Making, London: Earthscan, WCD Report,November 2000, p. 19.The first test case under the above provision was the Arun IIProject 1995, in Nepal, that culminated in cancellation in thelast stage of finalisation; <strong>and</strong> this was regarded as an enormoussetback <strong>and</strong> insult to Nepal. After the conclusion of dozens ofstudies, involving the investment of millions of dollars <strong>and</strong>taking up years of time, as the project was reaching the stage ofconcluding a final agreement, <strong>and</strong> while the government ofNepal was waiting for the Bank’s final invitation for thesigning of this agreement, the President of the Bank informedthe Nepalese Prime Minister, M. M. Adhikari, by letter, that theBank had cancelled the project unilaterally. This was the resultof severe criticism from an INGO (INHURED <strong>International</strong>),about the potential adverse effect of the project on theenvironment, constituting a breach of the Bank’s own policy onenvironment, resettlement <strong>and</strong> indigenous peoples. The Bankthan constituted an inspection panel of three experts, whovisited the sites <strong>and</strong> submitted a report, in which breaches of itspolicies <strong>and</strong> an adverse affect on the environment were found.As a result of that, the Bank cancelled its involvement in theproject. 206 With the creation of a new mechanism, theInspection Panel, although generally speaking, the WB’s newenvironmental orientation is commendable, Nepal did suffereconomically from this Bank policy initiative. Particularlysince there was no alternative project ready for implementation;for this reason Nepal experienced electricity load shedding for206 Report of the Inspection Panel submitted to the Bank, News release no.96/S008 <strong>and</strong> see also a booklet named “The World Bank & Nepal’sArun III Hydro Project: A Case of Anti-Social Development: UrgentAction Appeal” prepared <strong>and</strong> compiled by G. Siwakoti Chintan <strong>and</strong> A.Ma’anit, INHURED <strong>International</strong> Pub., June (1995), Kathm<strong>and</strong>u,Nepal. This pamphlet described every detail of the project, from itsmany stages of numerous studies to its cancellation, with muchexplanation of the potential effect on the environment, <strong>and</strong> resettlementof indigenous peoples, etc. (copies on file with author).
252 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 253several years, <strong>and</strong> her development was undermined. 207 TheBank has also been blamed for dictating the adoption ofeconomic <strong>and</strong> other policies, thus exploiting developing states<strong>and</strong> retarding their development. As a result, it is argued thatdrawing loans from the WB amounts to surrender of economicsovereignty. 208 However, the latter topic is not an area coveredby this book.4.15 ConclusionsThe issue of water resources development from the st<strong>and</strong>pointof bilateral <strong>and</strong> regional co-operation has been dealt with, inwhich it has been seen that national effort alone cannot yieldholistic results. Co-operation is not only necessary from thepoint of view of money <strong>and</strong> technological capability; it is alsoneeded because of the requirements of a watercourse itself. Forexample, in the Nepalese context, barrage, diversion <strong>and</strong>reservoir sites are available only in Nepal, <strong>and</strong> from such workshydropower units can be established in Nepal <strong>and</strong> India;regulated flow control to mitigate flood damage, water forsupply in time of scarcity, <strong>and</strong> navigation facilities could alsoall be developed. From these works, the needs of states couldbe met <strong>and</strong> optimum benefits accrued for all. In the wet seasonthere is too much water, causing havoc, but there is not a singledrop of water in the dry season, which in turn causesdevastation, hunger <strong>and</strong> famine. This observation leads to theconclusion that the characteristics of developing states are207 The World Bank withdrew funding for the Sardar Sarover project inIndia, <strong>and</strong> a project from Somalia, as a result of Kenya’s objections; italso refused to finance the Three Gorges project, in China, the SouthAntolia Project in Turkey, <strong>and</strong> the Aswan Dam in Egypt. The reasonswere riparian objections <strong>and</strong> the environmental disasters likely toensure from the proposed projects.208 S. R. Chowdhury, “Intergenerational Equity: Substratum of the Rightto Development” in S. R. Chowdhury, Erik M.G. Denters & PaulJ.M.de Waart (eds), The Right to Development in <strong>International</strong> <strong>Law</strong>,Dordrecht: Martinus Nijhoof Pub., 1992, pp. 350-359.obviously found in the SAARC region, namely the scarcity ofwater <strong>and</strong> associated issues: water conflicts remain largelyconfined to developing states. 209It appears that without settling major existing politicalproblems in the bilateral sphere, water resources co-operationcannot make the progress that might be expected. Thus, majorchanges are needed in governments’ outlook regarding how todevelop relations with neighbouring countries, how to utilisethese immense water resources for the common benefit, <strong>and</strong>how to face the challenges arising from these water problems,for which purpose a summit of the leaders of this region hasbeen suggested. 210 Indeed, the key to the resolution of allnational water resource problems is bilateral <strong>and</strong> regional cooperation.If upstream work provides any benefit to adownstream state, such benefit could be shared in proportion tothe cost, otherwise it would constitute a windfall, a benefitacquired without any corresponding effort <strong>and</strong> investment. InIWL, such a windfall would be a case of unjust-enrichment,<strong>and</strong> as a result unreasonable <strong>and</strong> inequitable. 211 According tothe norm of equity which takes into account socio-economic,<strong>and</strong> geographical aspects <strong>and</strong> vulnerability, Nepal is weakerthan India socio-economically, which has led to persistentproblems in Indo-Nepal relations. Thus, according to theprinciple of equitable utilisation enshrined in Articles 5 <strong>and</strong> 6of the UN Convention of 1997, India should give a highpriority to Nepal’s development, with a magnanimous attitude.Such policies would be immensely helpful in resolving the209 R. Clarke, Water: the <strong>International</strong> Crisis, London: Eartscan Pub.,1991, pp. 91-92.210 Supra note 34, p. 130.211 Supra note 136: An upstream state may be reluctant, in the first place,to go ahead with its projects unless it can be assured of receivingcompensation for the uncaptured benefits it would send downstream;see also the Factory of Charzow case in PCIJ Reports, (1928), p. 47.
254 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 255outst<strong>and</strong>ing problems existing between them, including theissue of augmenting dry season flow in the Ganga by divertingthe Brahamaputra through the Arun valley via Tibetan territory,which can be achieved with Nepal’s co-operation. 212A suitable model, particularly in the Indo-Nepalese sphere, isthe Columbia River Treaty arrangement between the USA <strong>and</strong>Canada, which is suggested as the ideal point of reference.Those benefits were shared, <strong>and</strong> the cost of the reservoir <strong>and</strong>dam construction, along with the submergence, displacement<strong>and</strong> rehabilitation cost, was paid by the United States. 213 It isargued that such co-operation can prevent confrontation, <strong>and</strong>that the best way of resolving international water disputes is bynegotiation, <strong>and</strong> concluding agreements; even submitting adispute in a court or tribunal is not proven to be the best way. 214However, numerous instances have illustrated how theinvolvement of heads of state <strong>and</strong> governments has enabled theavoidance of conflicts <strong>and</strong> facilitated agreement in manycomplex <strong>and</strong> chronic issues between a weaker <strong>and</strong> a morepowerful state. President Echeverria of Mexico <strong>and</strong> PresidentNixon of the USA resolved the salinity problem on theColorado River, which was seen as most delicate problembetween the two countries, <strong>and</strong> it was politically difficult forthe USA to construct such a huge project at her own cost. 215212 Supra note 174. See H. L. Shrestha, “SAARC, China <strong>and</strong> Pan-AsianUnity” in U. Gautam (ed), South Asia <strong>and</strong> China: Towards Inter-Regional Cooperation, Kathm<strong>and</strong>u: China Study Centre, (2003), p. 59.213 L. Teclaff, “Harmonizing Water Use <strong>and</strong> Development WithEnvironmental Protection” in A. Utton & L. Teclaff (eds), Water in theDeveloping World: The Management of a Critical Resources,Colorado: Westview Press, 1978, pp. 104-105.214 B. R. Chauhan, Settlement of <strong>International</strong> Water <strong>Law</strong> Disputes in<strong>International</strong> Drainage Basins, Berlin: Eric Schmidt Verlag, 1981, p.463.215 Supra note 210, p. 160.The current Indian Prime Minister, A. B. Bajpayee, is nowdirectly involved in ending the bitter relations of the pastbetween his country <strong>and</strong> Pakistan, replacing them with a goodneighbourly relationship. A similar, dynamic approach needs tobe adopted in the case of Nepal.According to the current energy trends, India has enough fossilfuel reserves for forty years, Bangladesh for thirty years <strong>and</strong>Pakistan for about twenty years. After these periods haveelapsed, each country will be compelled to turn to waterresources. 216 The co-operation between Bhutan <strong>and</strong> India showsthat both states are accruing tremendous benefits; the sameapproach is proving successful in the Mekong Basin, in whichThail<strong>and</strong> guaranteed a loan on behalf of Laos from the worldcapital market, <strong>and</strong> provided some amount in advance for thepurchase of the hydropower which is being developed. Laos iscommissioning these projects purely for export purposes, forwhich a regional grid has been already constructed to deliverthe hydropower to Thail<strong>and</strong>. This regional grid was constructedby the Mekong Commission, with the money being provided bythe WB <strong>and</strong> the UNDP. 217 There are other similar models: suchas Itaipu (Paraguay <strong>and</strong> Brazil) <strong>and</strong> Yacerata (Paraguay <strong>and</strong>Argentina). In both examples, the money was borrowed fromthe world market (the WB <strong>and</strong> the Latin American Bank), forwhich Brazil <strong>and</strong> Argentina have provided a sovereign guarantyfor Paraguay. Moreover, each project started with a capitalinvestment of US$ 100 million, for which each country lentParaguay its share of the initial capital of US$ 50 million under216 R. D. Joshi, "Nepali Hydropower <strong>and</strong> Regional Energy Needs” (1994)in 4 Water Nepal, p. 156.217 P. Chomchai, “Management of Tranboundary Water Resources: ACase Study of the Mekong” in M. I. (ed), The United Nations at Work,Westport, CT: Praeger, 1998, pp. 254-255.
256 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Prospects <strong>and</strong> Problems of Nepalese Water Resources / 257the concessional terms. 218 Any of the above models are suitablefor south Asia <strong>and</strong> can be followed. However, the problem doesnot lie in the area of knowledge, technology or even finance;the real impediment is the lack of political will of the leaders ofthe region. If this can be resolved according to the norms ofequity, the Himalayan waters will be at their disposal, <strong>and</strong> thiscould obviate the misery of poverty.Next chapter is related with India's River-Linking Project,which analysed the legal issues involve in the project, riparianconsent <strong>and</strong> the advantage from the project not only for Indiabut for her neighbours as well. It also demonstrate thecomplexity in the project <strong>and</strong> the links this project from theview of regional cooperation.•218 H. Dhungel, “Risks <strong>and</strong> Rewards of Mega Projects: The Political-Economy of Paraguayan Hydropower” (1999), in 7 Water Nepal,Nepal, p. 25-26. see www.solar.copper.ufrj.bu/itaipu.html.
Legality River Linking Project / 257 258 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South AsiaChapter- FiveLegality River Linking Project5.1 IntroductionIndia <strong>and</strong> her neighbours have been unprecedently witnessingrecurring phenomenon of flood, drought <strong>and</strong> famine over theyears. This has been blamed for unsciencetific use of resources,forgetting the rule of hydrology, overuse, <strong>and</strong> unsustainable use<strong>and</strong> burgeoning population in comparison with the availabilityof fresh waters. The population <strong>and</strong> the availability of water donot match in India. With 4% water resources <strong>and</strong> 15% worldpopulation, which is rising <strong>and</strong> likely to touch almost in 25% in2050, the situation will obviously worsen. In India per capitaavailability of water was 6,008 cubic meters in 1947 <strong>and</strong> todayit is 1,700 cubic meters <strong>and</strong> by the year 2050, it will be 1,140cubic meters. This is because of excess water availability in theBrahumputra basin is as high as 13,000 CM while suchavailability in Pennar area is just 300 CM. 1 The paradox offlood in Assam <strong>and</strong> Bihar <strong>and</strong> at the same time misery causedby unprecedented long drought is another story of devastationof large section of people <strong>and</strong> property. However, R. R. Iyerwho denied recognising the paradox of floods <strong>and</strong> droughtrather considers these are merely facts of geography that governour lives. The occurrence of floods in one area, <strong>and</strong> the scarcityof water in arid or drought- prone areas, are two entirelyseparate questions <strong>and</strong> need separate resolution. 21 Suresh Prabhu, "Garl<strong>and</strong> of Hope: River-linking as a Solution to WaterCrisis" August 14, (2004), Times of India2 R. R. Iyer, "Rising Rivers, Arid L<strong>and</strong>s: Interlinking will not Solve theProblem" July 20, (2004) The Times of India.5.2 Magnitude of the ProblemThe recurring droughts <strong>and</strong> floods have been the major cause ofhuman misery, poverty <strong>and</strong> backwardness of entire south Asia.The water resources of South Asia have not been fully utilizedfor the benefits of the people regardless of the acute need of theabundant waters for the development <strong>and</strong> livelihood of theregion’s people. The irony is that both natural calamities arisingout of an excess of water as well as its scarcity are taking placeat the same time in different places of the same states of India<strong>and</strong> some parts of other nations as well. Sometimes, it is hard tobelieve how flood <strong>and</strong> drought occur simultaneously <strong>and</strong> leadto destructive surpluses <strong>and</strong> also situations of acute water stresswithin <strong>and</strong> across states of the same region. The lack ofscientific water management <strong>and</strong> utilization in a holistic <strong>and</strong>integrated manner has been blamed for this state of affairs thatneed not necessarily be ab<strong>and</strong>oned to the vagaries of nature.The other factor that has been blamed for this state of affairs isthe phenomenon of climate change, <strong>and</strong> its impacts onprecipitation <strong>and</strong> nature. However, even though the evidencesput forward in support of climate change may warrant furtherresearch for full confirmation, it is widely believed that itsimplications for the erratic nature of hydro-meteorologicalextremes experienced recently cannot be brushed aside as merespeculation. Apart from this, the consequences of human nonactionsuch as mismanagement, non-cooperation amongst states<strong>and</strong> lack of strong political to resolve these issues are alsobelieved to be the contributing factors. This Chapter criticallydeals with the issues <strong>and</strong> implications of India’s plan <strong>and</strong>demonstrates what the problems are <strong>and</strong> where the solutions liefrom a legal viewpoint.It is not just the predicament of a particular year but one thathas been replete year after year with a loss of properties worthbillions <strong>and</strong> a tragic toll of thous<strong>and</strong>s of precious lives.Politicians tend to voice radical slogans to end this humanmisery when there is flood <strong>and</strong> drought, particularly during
Legality River Linking Project / 259 260 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiaelection time. Once the elections are over, <strong>and</strong> the leaders <strong>and</strong>parties get elected, they tend to forget people’s miseries <strong>and</strong> goabout business as usual for personal or partisan gains. The fewworks that get done to ameliorate the situation are far fromadequate to cope with this enormous task.3 The littlecompensation or relief provided in the aftermath of thecalamities is always insufficient. The compulsions of the rulingelite in not being able to resolve these formidable challengesneed to be understood before arriving at a substantialconclusion <strong>and</strong> blaming someone without sufficientunderst<strong>and</strong>ing. The other point of significance is that the lack ofcooperation between states, either members of a federation orsovereign nations, has become the cause of suffering for all thepeople of the SAARC Quadrangle. 4The basic point from the view of hydrology <strong>and</strong> internationallaw is that a watercourse should be taken as a single entity,from its origins in the high Himalayas of Tibet to the point ofits drainage into the Ocean. Moreover, it is a rule of nature <strong>and</strong>the watercourse itself. Therefore, a nation or a state could notclaim such watercourse as its national wealth alone but as apartner or a member of the basin. Thus, any development,allocation <strong>and</strong> sharing from such a shared watercourse shouldbe undertaken in such a way that every state’s share will not beinfringed upon, nor any harm <strong>and</strong> injury caused to it from suchuse <strong>and</strong> everyone should be benefited equitably. The<strong>International</strong> Court of Justice in its judgment of 1937 in theRiver Oder case resolved these issues forever, <strong>and</strong> since then,this concept has received universal recognition <strong>and</strong> is regardedas a rule of customary international law. 5 Against thiscontextual setting, Bangladesh could not claim the3 D. Gyawali, Water in Nepal, Kathm<strong>and</strong>u: Himal Books, 2001, pp. 87-135.4 B. G. Verghese, Waters of Hope, Oxford & IBH Pub., New Delhi,1990, p. 374.5 Denmark, Germany, France, Great Britain, Sweeten, Czechoslovakia v.Pol<strong>and</strong>, PCIJ Report 1937. pp. 221-222.Brahmaputra or India the Ganges, or Nepal the Kosi or Bhutanthe Sunkos, as a solely national river <strong>and</strong> do whatever it wishedto fulfill the requirement within one’s territory only. This basicconcept <strong>and</strong> framework has been largely ignored by the nations,which should be seen as the crux of the problem in the sharing<strong>and</strong> allocation of shared watercourses among the nations <strong>and</strong>developing projects unilaterally against the core theme ofinternational law. As a major partner of these watercourses, ifwe study the law <strong>and</strong> tradition within India in its interstatewater conflicts, such concepts <strong>and</strong> views have beenunanimously accepted <strong>and</strong> widely practiced. For instance,Godawari River Water dispute, Cauvery River Water dispute<strong>and</strong> other disputes are the living testimonials of this area. Onecould question how India could behave or expect to acceptconditions of allocation <strong>and</strong> sharing of waters which are againstthe norms that it has already been practicing, whether in itsdispute with Pakistan pertaining to the Indus River Treaty,inter-state disputes or the accepted norms in relation with thethen east Pakistan pertaining to the Karmaphuli river- along theAsam-Meghalaya border. 6Much has transpired since then <strong>and</strong> so has the politicalenvironment of south Asia. Moreover, many things havechanged since the Koshi <strong>and</strong> G<strong>and</strong>ak river treaties with Nepalin the 1960s, the 1975 treaty on the commission of the Farakkabarrage, the 1977 Ganges treaty <strong>and</strong> so forth. There isdemocracy with democratic institutions in the SAARCQuadrangle, which has altered the structure of governance <strong>and</strong>the power base of the governments as well. In this context, it isnot only the governments that should be heard but also civilsocieties, NGOs, INGOs <strong>and</strong> a host of stakeholders, whoseconcerns must also be accommodated. That is to say, amonopolistic <strong>and</strong> hegemonistic approach is no more palatableor tolerated so that democratic norms should somehow befollowed. Such changes in mindsets can be witnessed6 T. <strong>Upreti</strong>, "Inundation problem in Indo-Nepal Relations" April 29(2004), The Kathm<strong>and</strong>u Post.
Legality River Linking Project / 261 262 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiaeverywhere in the world <strong>and</strong> south Asia cannot remainunaffected from this trend. Transparency in projects with dueconsideration of the socioeconomic, seismic, hydrological,climatic, environmental, human rights <strong>and</strong> other relevant issuesare key element for the successful implementation of any watersharing <strong>and</strong> allocation treaty. These issues must be integrated inall international, regional <strong>and</strong> municipal projects. Moreover, theapplication of <strong>International</strong> Water <strong>Law</strong> <strong>and</strong> the norms that haveevolved over time to the present with a cooperative attitudebetween <strong>and</strong> among riparian states leading to a reasonable,sustainable <strong>and</strong> equitable utilization of the resources of sharedwatercourses is an inevitable element for any significantconsensus to materialize. 7 Furthermore, the existing needs,future water requirement, the alternatives available to fulfill thediverse dem<strong>and</strong>s, <strong>and</strong> other issues of similar nature must beevaluated in the context of the prevailing economic base inorder to arrive at a sound conclusion. Nevertheless, these arethe very complex issues that require meticulous analyses <strong>and</strong>special consideration. The key to any amicable resolution formutual benefits remains unrestricted political will <strong>and</strong>wholehearted cooperation propelled by a positive forwardmoving mindset thereby reversing the parochial approach of thepast.While considerable parts of the country have been deluged byrivers in spate, it is common tradition for people in the otherparts afflicted by drought at the same time to worship <strong>and</strong> prayfor rains in south Asia. For example, this monsoon season only,floods seriously affected 33 of the 39 districts of Bihar withenormous loss of lives <strong>and</strong> property. The proposal of buildingthe Kosi high dam has been in the air since the last 60 years <strong>and</strong>has been repeated at the highest political levels wheneverfloods strike havoc in Bihar. 8 Prime Minister M. M Singh ofIndia has been quoted as referring to it again as a joint team oftechnical experts of Nepal <strong>and</strong> India are preparing to conductfield studies planned to be completed within three years.However, from the national point of view, sufficient discussion<strong>and</strong> deliberations have not been held on how to protect nationalinterests of both nations. The primary purpose of the proposedproject, it seems, is to relieve the people of Bihar from thescourge of recurrent floods of the Kosi River. The expected lifeof the Kosi barrage at Bhimnagar is said to be almostexhausted. However, it is imperative that lessons must belearned from the past treaties <strong>and</strong> their implementation in orderthat Nepal get a fair <strong>and</strong> equitable deal from this undertaking.It appears that India is expected to reverse its past policy <strong>and</strong>work unprecedently as an equal partner for the commonbenefits of both nations <strong>and</strong> Nepal should get the unhinderedright of access to <strong>and</strong> from the sea from the proposed Kosinavigational canal. Moreover, Nepal's upstream water rights<strong>and</strong> the consequent provisions of the proposed Sunkosidiversion project <strong>and</strong> other diversion as <strong>and</strong> when requiredmust also be simultaneously recognized as Nepal's entitlementpursuant to the provisions of international law <strong>and</strong> practice.From the Nepalese side, over-politicization of the issues,harbouring the small brother syndrome, <strong>and</strong> lip service to Indiaby the politicians <strong>and</strong> political parties to stay in power must notbe allowed in any way to subdue the meticulous exercise <strong>and</strong>due diligence that needs to be performed in optimizing to thebest the benefits to be gained from the project for the nation.This is invariably the urgent <strong>and</strong> by far the most pressing needof the hour. If we underst<strong>and</strong> this sensitivity <strong>and</strong> workaccordingly, both nations will be sufficiently benefited therebymitigating to a great extent the chronic diseases of flood,drought, famine <strong>and</strong> underdevelopment.7 F. Marty, "The Pancheswar Multipurpose Project on the MahakaliRiver (India-Nepal), P. Lang (ed), Managing <strong>International</strong> Rivers:Problems, Politics <strong>and</strong> Institutions, Swiss Federal Institute ofTechnology, Zurich, 2001, pp. 160- 203.8 Supra note 3.
Legality River Linking Project / 263 264 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia5.3 Legal issues Involve in the River LinkingProjectFresh water resources have remained the life-blood for nations,communities <strong>and</strong> individuals. Without fresh water, naturecannot sustain itself <strong>and</strong> life, as we know it, cannot beimagined. In this sense, water as the universal solvent <strong>and</strong>sustenance of the very fabric of life has always remained aninevitable substance for the survival of the people of the globeas well as their socio-economic development. Water sources inmany parts of the world have been stressed to the point ofscarcity. Even in the so called water abundant areas like SouthAsia, its uneven distribution over time <strong>and</strong> space combinedwith extreme weather events renders many areas exposed torecurrent floods <strong>and</strong> cycles of drought. Countries like India,Bangladesh, <strong>and</strong> even Nepal have been badly affected by thisannual phenomenon with a consequent loss of <strong>and</strong> heavydamage to property <strong>and</strong> infrastructures including human lives<strong>and</strong> livelihoods. 9 On the positive side, the underpinnings of thequest for a secure livelihood <strong>and</strong> economic well being of thepoverty ridden masses of the region also lie in the judiciousharnessing <strong>and</strong> utilisation of the available water resources. Forthis, conveying water from water surplus areas to water scarceareas at the right time <strong>and</strong> place is a concept cherished by manywell meaning planners <strong>and</strong> engineers.In this context, the Government of India has beencontemplating an ambitious plan to translate this concept of theRiver linking Project (RLP) into ground action. The idea is totransfer the waters from the areas of surplus traversed by theHimalayan Rivers in the north to the areas of deficit in thepeninsular south by linking 37 rivers. 10 The main area fromwhere the waters are to be diverted is the Ganga-Brahmaputra-9 Supra note 3, pp. 371-373.10 T. <strong>Upreti</strong>, "India's River-linking Project <strong>and</strong> Nepal's Concern" (23/4/2004), The Kathm<strong>and</strong>u Post.Barak basin, which accounts for 60 per cent of the surfacewater resources of the country <strong>and</strong> is also rich in ground water.However, the rivers that comprise this mega-basin areinternational watercourses <strong>and</strong> naturally, international politicsas well as international law are bound to be explicitly involvedin this proposed undertaking.In the latest development pertaining to the concept, thePresident of the Republic of India had proclaimed hisgovernment’s policy initiative on 14 August 2002, proposing anetworking of rivers for eliminating the scourges of the cycle ofdrought <strong>and</strong> flood <strong>and</strong> promoting the economic advancement ofIndia. The proposal was first conceived by Sir Arthur Cotton<strong>and</strong> later put forward by K. L Rao <strong>and</strong> Captain Dastur atdifferent times. In 1982, the National Water DevelopmentAgency was set up to study the feasibility of this concept. It hassubmitted a series of 30 links <strong>and</strong> claimed to have reportedlycompleted feasibility studies on eight links while other studiesare reported to be continuing with the target of completingthem very soon. Further studies on the project are beingconducted by a high level commission chaired by SureshPrabhu, former water resources minister, government of India.The watercourses that flow through the territories of severalcountries are common resources of all <strong>and</strong> should be sharedequitably. In other words, every interest should be heeded <strong>and</strong>benefits shared in such a manner that reconciles each divergentinterest to the satisfaction of each concerned country. A reviewof the problems <strong>and</strong> conflict of interests persisting in south Asiasuggests that the problem is enormous <strong>and</strong> complex on accountof the fact that the prevailing law <strong>and</strong> the practice in the area isnot quite as clear as mathematics <strong>and</strong> the interpretation of therules could be different in different situations. For example, theissue of sharing of the waters of the Brahmaputra could bedifferent from that of the Ganges. Articles 5-10 of the 1997 UNConvention on Non-Navigational Uses of <strong>International</strong><strong>Watercourses</strong> provide sufficient guidance on how to share <strong>and</strong>
Legality River Linking Project / 265 266 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiause such resources, but these rules could be applicabledifferently in different situations. 11 The main theme of the lawis that international watercourses should be shared in areasonable, sustainable <strong>and</strong> equitable manner <strong>and</strong> Article 6provides seventeen considerations to be applied for sharingsuch resources in such circumstances. 12 Furthermore, equalweights have been given to all elements, which means that nosingle consideration outweighs the others. However, Article 10provides that the vital human needs, supposedly drinking use,will get the top priority over other uses. Consideration of theprocedural underpinnings requires a co-riparian state to givenotice <strong>and</strong> information together with the copies of such plans<strong>and</strong> studies contemplated over international watercourses inorder to obtain the consent of the neighbours that would beaffected by such an undertaking. If such consent is notforthcoming <strong>and</strong> objections are raised by riparian states,negotiation for achieving consent would be required. Thisprocess itself is very complex <strong>and</strong> could take years to completethe exercise.In the contextual situation of the Brahmaputra or the Gangesriver, if the drinking water needs of Bangladesh were to beimpeded by any irrigation <strong>and</strong> other uses in Indian territory, theformer use must of necessity get top priority <strong>and</strong> the latter usescannot be justified as reasonable <strong>and</strong> equitable. In anotherinstance, if the RLP conceived by India could hamper theexisting irrigation, drinking water, navigational <strong>and</strong> other usesof Bangladesh, such work would be considered inequitable <strong>and</strong>unreasonable. Similar provisions would be applicable to each ofthe riparian states of south Asia from the proposed RLP. That isto say, the RLP should not inflict any harm or injury to otherriparian states such as Bhutan, Nepal <strong>and</strong> Bangladesh. It isobvious that the anticipated repercussions of the project wouldgo contrary to this principle. In other words, there would11 36 ILM (1997), pp. 700-720.12 Ibid.naturally arise hindrances, injury or harm in one way or other tothe upstream <strong>and</strong> downstream riparian states.For instance, the implementation of the RLP would necessitatethe construction of several high dams <strong>and</strong> structures in Nepal,Bhutan, <strong>and</strong> India, which could be harmful for the environmentincluding aquatic life, not to mention the highly sensitiveattendant problems of the resettlement <strong>and</strong> rehabilitation ofmillions of people. Furthermore, such structures woulddecimate huge tracts of forests with all their biodiversity,national parks <strong>and</strong> sanctuaries, religious sites, <strong>and</strong> adverselyaffect the livelihoods of ethnic people. According to SureshPrabhu, past Indian record on rehabilitation is deplorable. 13 Thecases of other south Asian countries have worsening record.The drastic alteration in the existing hydrology <strong>and</strong> climaticconditions could engender an environmental disaster. These aresome of the anticipated inevitable consequences of theproposed project. How India's neighbours would be benefitedor compensated for such inevitabilities, or what would be thestatus of the existing treaty regime <strong>and</strong> how they would bereplaced with a new treaty regime are very staggering <strong>and</strong>intricate issues. It would be a very tricky, complex <strong>and</strong>protracted process to negotiate <strong>and</strong> finalise a treaty in thisconnection. In a milieu of democratic dispensation wherevehement arguments for <strong>and</strong> against mammoth water resourceprojects have a right to be heeded, all stakeholders- affectedstates, people, civil societies, NGOs, experts, political parties<strong>and</strong> diverse interest groups- must be provided the opportunityto voice their concerns. Hitherto, such a process has beentaking place in India <strong>and</strong>, in a few instances, in Bangladesh. Itis understood that Nepal <strong>and</strong> Bhutan have not even bothered toinitiate such a discussion yet at any appreciable level.It is germane to shed some light on the outcome of suchexercises held in India in this highly charged context. It is13 Supra note 1.
Legality River Linking Project / 267 268 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiaunderstood that the states of Kerala, Bihar, West Bengal,Assam, Punjab, Chatisgarh <strong>and</strong> Goa have heavily criticised theconcept whilst Gujrat, Karnataka, Andhra Pradesh, Orissa <strong>and</strong>Maharastra have shown only conditional consent. In essence,the recipients of water are in favour <strong>and</strong> the donors are deadagainst the proposed undertaking. 14 Apart from this, almost allof the environmentalists, human right activists, experts <strong>and</strong>former bureaucrats are not only against the concept but alsorebutting that it is infeasible, environmentally damaging <strong>and</strong>asserting that it would create more problems than offersolutions. 15 Even if the Union Government succeeded insatisfying the divergent interests of these states, it would be adaunting uphill task to obtain riparian consents from India’sneighbours.Overall, Bangladesh is dead against the project <strong>and</strong> comparesthe concept to a macabre intrigue to render its territory into awastel<strong>and</strong>. Hence, it would be a question of life <strong>and</strong> death forits existence. 16 Moreover, Bangladesh has not only h<strong>and</strong>ed overits protest to India but also strongly opposed it at the highestpolitical level. It has criticised that the concept is politicallyunsound, technically infeasible <strong>and</strong> very wrong from theviewpoint of <strong>International</strong> Water <strong>Law</strong> <strong>and</strong> practice. This topichas brought about tectonic upheavals of opinion in these twonations; however, ironically enough, Nepal’s official st<strong>and</strong> onthe issue appears to be blissfully oblivious of all thisdevelopment. In fact, like the other neighbours, it could posebefore her momentous questions relating to her survival <strong>and</strong>further development. If she were prudent enough to take up thismatter seriously <strong>and</strong> strive to protect her national interests, herfuture would not be jeopardised. Otherwise, she would againfail forever without a chance of improving or amending thesituation. Clearly, she would be a loser forever. The strange <strong>and</strong>perplexing matter is that Nepal Government; political parties,NGOs <strong>and</strong> civil society are very reticent on such a seriousmatter of stupendous ramifications for this nation, which couldpose a very grave future threat for her. Proper studies, debates<strong>and</strong> deliberations to cross check <strong>and</strong> explore the threats as wellas the opportunities confronting her bolstered by the formationof a national consensus for ensuring the national interest arematters of prime urgency <strong>and</strong> the pressing need of the hour. 17The reality is that water in south Asia is in surplus in someplaces <strong>and</strong> scarce in others. During the dry season, water isscarce almost everywhere <strong>and</strong>, in the monsoon season a surfeitof it creates the havoc of floods. Thus, the management of thiswater for the beneficial use of all poses a formidable challenge<strong>and</strong> the complicated issues of sharing the benefits ofinternational watercourses need to be sorted out keeping allinterests in due focus <strong>and</strong> consideration. No doubt, there isasymmetry in terms of the l<strong>and</strong>mass, economic prowess <strong>and</strong>water requirement <strong>and</strong> compulsions of hydrology <strong>and</strong>availability of alternative sources of water amongst thecountries of the region. 18 Moreover, the history of the pastcooperation in this area has not been satisfactory <strong>and</strong> repletewith bitter experiences, suspicion <strong>and</strong> examples of inequitablesharing.The proposed RLP, in all likelihood, is bound to severely affectthe interests of all riparian nations. Even the past treaties havenot been implemented in good faith <strong>and</strong> the problems thatemerged from their implementation have not been yet14 U. Shankari (ed), Interlinking Rivers: Contradictions &Confrontations, A Report on electronic debate, New Delhi: Centre forthe Study of the Developing Societies, 2004, pp. 24-37.15 R. R. Iyer, "Making of a Subcontinent Fiasco" Himal South Asian,August (2003), pp.1-8.16 www.internationalwaterlaw.org17 T. <strong>Upreti</strong>, Dimension of India's River-Linking Project" (14 & 15,2004), The Katm<strong>and</strong>u Post.18 S. Aiyer, "Changing the Course" XXVII India Today, (20-1-2003), pp.28-32.
Legality River Linking Project / 269 270 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiaresolved. 19 Moreover, the RLP is not targeting a single basinonly, but also directly envisages to impact upon the totality ofthe resources south of the Himalayan water towers. C<strong>and</strong>idlyspeaking, this project is explicitly linked with the life <strong>and</strong> deathof the people of this region. The law could be used only asguidance. Everything depends on how liberal, cooperative <strong>and</strong>friendly are these nations in order to underst<strong>and</strong> others’sensitivities <strong>and</strong> the realities <strong>and</strong> compulsions of theirneighbours. In India itself, apart from Tamil Nadu <strong>and</strong>Haryana, which are water scarce states, other states appear tobe strongly critical <strong>and</strong> opposed to this project. Their argumentis based on what they would get in exchange of their water interms of royalty <strong>and</strong> export revenues from the beneficiaries.Otherwise, why should they provide their life-blood to others?On the other h<strong>and</strong>, each state first wants to provide sufficientwater to its own deficit or water stressed areas. Moreover, theenvironmentalists, human rights activists, civil societies,experts <strong>and</strong> concerned people have exhibited strong criticisms<strong>and</strong> concerns over the consequences of the implementation ofsuch a project. They opine that linking of rivers is a disastrousidea from the environmental point of view. The inter-linking oftoxic rivers with non-toxic ones will have a devastating impacton all forms of life, let alone humans. 20In this context, one will have to deal with some very gravequestions concerned with south Asia's interests for the presentas well as future generations. How can we sell <strong>and</strong> buy ourwater for the best price? How can we fix royalty <strong>and</strong> exportduties on it? How can we achieve a better settlement on our19 Hydro electricity under the Kosi project was not commissioned,irrigation benefits were not materialized <strong>and</strong> compensation were notpaid to the project affected people under the Kosi Agreement <strong>and</strong> inG<strong>and</strong>ak project lock for navigational services was not provided. Underthe Sharing of the Ganges Treaty between India <strong>and</strong> Bangladesh, theassured minimum flow was not provided in 1997 dry season.20 H. Thakkar, "Flood of Nonsense: How to Manufacture Consensus forRiver-Linking" Himal South Asian, August (2003), pp. 1-5.hydropower import/export? How can we secure the right tounfettered access to <strong>and</strong> from the sea from the proposed riverlinking project <strong>and</strong> how can we amend <strong>and</strong> improve upon theunequal treaties of the past? However, the other issues ofoutst<strong>and</strong>ing chronic problems out side this area should alsoimprove in order to strike this deal. These are the burningquestions that need to be resolved in the complex negotiationsthat we shall be bound to enter into regarding the proposedgr<strong>and</strong>iose project. Therefore, there are numerous threats as wellas opportunities for us. It could even furnish the bestopportunity to establish new relations based on equity <strong>and</strong>equitability that could reverse or recompense for the unequaltreaties of the past. In a nutshell, for this ambitious project tobecome a success, it is imperative that whole heartedbilateral/regional cooperation <strong>and</strong> an equitable sharing of thebenefits of these resources should be ensured thereby dispellingthe miasma of past bitterness, cheating <strong>and</strong> exploitation,whether perceived or real, for the common future of the peopleof south Asia. Unless this happens, the project will merelyremain in the dream of Indian politicians <strong>and</strong> their acolytes. 215.4 Concern of NeighboursUnlike upstream neighbours Nepal <strong>and</strong> Bhutan, Bangladeshhas not been keep quite <strong>and</strong> become a mere spectator of thepropose RLP, in her view, is the question of life <strong>and</strong> death toher existence. Comparing with the Farrakka barrage built byIndia in the cost of Bangladesh, she has maintained that thecoercive diplomacy of India has created obstacles in thedevelopment of her neighbours, such diplomacy cannot bringany lasting benefits to her or her neighbours <strong>and</strong> in order toresolve the problems subsisting in the region, basin-widedevelopment in regional perspective is essential. 22 That is to21 Supra note 17.22 A. A. tutu, "The Farakka Barrage: A Diary of India's CoerciveDiplomacy in Practice" 1 Prasix Journal, (2003), pp. 36-40.
Legality River Linking Project / 271 272 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiasay, consent <strong>and</strong> cooperation from the view of regionalcooperation is requires. The historical conflicts on the sharingof Ganges river water, which was thought to be resolved afterthe treaty of 1996, could not even been complied due to theextraordinary reduction of the predicted flow <strong>and</strong> the treatymechanism was unable to fulfil India's obligation on thatminimum flow guaranty clause of the said treaty. Worse still,India has diverted the waters of Teesta unilaterally withoutgiving attention on Bangladesh legitimate share, has beenadded the fuel on already complex <strong>and</strong> conflicting relationsbetween two neighbours. From the point of Bangladesh, theyhave been restricted from their legitimate entitlement in theGanges <strong>and</strong> as a result, Bangladesh's one third of fertileterritory have been converted into a desert l<strong>and</strong>. Moreover, Shehas been maintaining that India's paln to divert waters ofBrahumputra, from which her almost all territory will beconverted into desert as a result her existence would bejeopardised. In a nutshell, Bangladesh has considered that theproject could be threat to her very right to exist as a nation. Ifone consider the magnitude of this question, it is very unlikelythat India could make her agree to commission this project untilshe rectified the past grievances <strong>and</strong> accommodate her everyinterests. 23 On the other h<strong>and</strong>, it seems that without thisundertaking, India's problem of relieving from poverty <strong>and</strong>socio-economic development is not possible, which means sheis determined to implement this project. In this potentialeventuality, one can assume that cooperation from regionalperspective is the need of hour in which every nation can get itsfair share, divergent views should change into convergence. Inorder to create this environment may take long time along withthe completion of such huge, complex areas of studies,verification <strong>and</strong> crosscheck into them by the experts ofinternational repute could consume substantial period of time.23 M. Asfuddowalah, "Sharing Transboundary Rivers: The GangesTragedy" M. I. Glassner(ed), The United Nations at Work, WestportCT: Praeger, 1998, pp. 212-218.The success of Indus River Waters Treaty 1960 <strong>and</strong> itseffective implementation even in two wars time has beenregarded as a catalytic. 24 However, there are also disputesrecently emerging <strong>and</strong> it is interesting matter how India <strong>and</strong>Pakistan strive to resolve the issues. Pakistan has beenobjecting the construction of Bahlihar hydroelectric projectmaintaining that it is against the provision of the said treatywhilst India is ascertaining it does not hamper existing uses orreduce the volume of the waters. Other objections of Pakistanare with India's plan to divert Chenab river water in HimanchalPradesh at Basholi-Pathankot dam project, the Wullar barrageproject on Jhelum, the Dul-Hasti hydroelectric project atChenab <strong>and</strong> the Sawlko dam at the same river. It is interestingfact that the Legislature of Jammu <strong>and</strong> Kashmir has asked thecentre to repudiate the Indus treaty <strong>and</strong> give her free h<strong>and</strong> todevelop project in this state. However, this proposal wasrefused by the central Government. It is understood that theJoint River commission under the treaty, which did not cease tosuccessfully working in the time of wars 25 <strong>and</strong> bothgovernments are working expeditiously to resolve thesedisputes. It is obvious that India appears to be seriouslyworking to find out resolution with any water disputes withPakistan <strong>and</strong> reverse the position whilst dealing withBangladesh <strong>and</strong> Nepal. That is to say, undermine the legitimatedem<strong>and</strong> of these neighbours. This has been proved in severalprojects implementation <strong>and</strong> water conflicts with these nations.How this is happening could be topic of separate politicalresearch.24 G. T. Keith Pitman, "The Role of the World Bank in EnhancingCooperation <strong>and</strong> Resolving Conflict on <strong>International</strong> <strong>Watercourses</strong>: thecase of Indus basin" G. H Blake, W. J. Hildeslay, M. A. Pratt, RebeccaJ. Ridley & C.H. Schofield (eds) The Peaceful Management ofTransboundary Resources, Graham &Troatmat/Martinus Nijhoof,1995, pp 155-165.25 Salman M. A. Salman, "Good Offices <strong>and</strong> Mediation <strong>and</strong> <strong>International</strong>Water Disputes" Permanent Court of Arbitration, The Hague: Kluwer<strong>Law</strong>, 2003, Resolution of <strong>International</strong> Water Disputes, pp 182-185.
Legality River Linking Project / 273 274 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South AsiaFrom the perspective of getting consent or making agreementwith Nepal <strong>and</strong> Bhutan, India appears to have thought an easyjob. So far there are not official st<strong>and</strong>s or reactions from theofficial source from these two nations. 26 However, consideringthe past bitterness, suspicion <strong>and</strong> history of cooperation, itseems that these nations could not give up their fair share orsacrifice interests on that project. Apart from them, severalhuge structures/ dams/barrages are needs to be constructed inthe territory of these nations. Eventually, huge tract of territorywould be submerge, huge people should be resettled <strong>and</strong>rehabilitated, lot of forest, fauna will be disappear, a lot of sitefor hydropower will be diminished <strong>and</strong> many injury <strong>and</strong> harmwill have to be tolerated. In return, how they be benefited <strong>and</strong>how the past bitterness is to be converted into fair benefit arethe thorny questions need to be answered. In a nutshell, it is avery complex issue that needs long exercises from the part ofIndia itself. Time has changed <strong>and</strong> so the people. In order to getthis thing done not only governments but also the civilsocieties, stake holders <strong>and</strong> people should convince that theyhave got a fair share for the contribution they have been makingfor the benefit provided to India.Robert McNamara, then President of the World Bank hasproposed to Bangladesh, (which has welcome the idea), <strong>and</strong>India to mediate dispute <strong>and</strong> involve in striking a treaty in theGanges River between the riparian states, as in the IndusTreaty. 27 However, India has been alleged to refuse theproposal <strong>and</strong> insisted to resolve every issue in bilateral spheres.Now, India has been reversing its earlier st<strong>and</strong> <strong>and</strong> probably26 Spokesmen of Ministry of Nepalese Water Resources <strong>and</strong> ForeignAffairs quoted as saying that Nepal has no knowledge of India's Riverproject, (29-7-2003) the Kathm<strong>and</strong>u Post27 S. M. A. Salman & K. Uprety, Conflict <strong>and</strong> Cooperation on SouthAsia's <strong>International</strong> Rivers: A Legal Perspective, the Hague: Kluwer<strong>Law</strong>, 2003, p. 198.asking for consent with her neighbours for the RLP, muchwider issue than a watercourse. Things are changing rapidly. <strong>Its</strong>eems that India have to accept its past mistake to stick inbilateralism <strong>and</strong> time is approaching to agree on thelongst<strong>and</strong>ing dem<strong>and</strong> of her neighbours for regionalcooperation based on regional benefits. As things st<strong>and</strong>,international water law has been rapidly developing <strong>and</strong> there isa wide body of law, which provides guidance how to resolvesuch issues in reasonable, sustainable <strong>and</strong> equitable manner.Moreover, such law encourage for wider cooperation betweenriparian states.5.5 Diversions Around the GlobeThere are several diversions around the globe, for exampleTennessee Valley Authority in which seven states have beenequitably benefited in the US, as a result of this diversioneconomy <strong>and</strong> water needs of these federal members havesatisfied <strong>and</strong> this diversion has been taken as a success story inthe world. Three Georges dam <strong>and</strong> diversion of mighty Yellowriver in China, one of the biggest multipurpose project, haspredicted to contribute the elimination of flood, drought, <strong>and</strong>scarcity of hydropower in China. The GAP, Southeast Antoliaproject in Turkey, which has been implementing stage with thecost of $32 billion. The project involved with 495 separateprojects includes 32 dams on the Tigris <strong>and</strong> Euphrates rivers,19 hydroelectric projects <strong>and</strong> more than 1000 Kilometres ofirrigational canal which provide waters to over 8.5 millionhectares of l<strong>and</strong>. 28 The huge diversion of the Syr Darya Riverin the central Asia state of former Soviet Union prevent thewater reaching to the Aral sea, has contributed to meet watersdem<strong>and</strong> in these states at the same time caused tremendous28 Aron Suffer, Rivers of the Fire: The Conflicts over Water in the MiddleEast, New York: Rewman & Littlefield Pub, 1999, pp. 82-93.
Legality River Linking Project / 275 276 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asiaenvironmental disaster. 29 However, the harm/injury caused bythese diversion are erroneous regardless the fact that hugeefforts have been undertaken to reduce <strong>and</strong> mitigate suchharms. But the harms were overweighed by benefits except inthe case of Aral Sea. Those who favour the RLP are insistingthat such diversion have been contributing the socio-economicdevelopment of nations why not in India? 30 However, diversion<strong>and</strong> construction of dams are not encouraged at all but the basicprinciple of them is that minimum harm/injury is to be accepted<strong>and</strong> such harm must be overweighed by the benefits. 31Furthermore, there is an increasing trend in the west in whichinstead of construction of new dam they are destroyingnumerous dams to reverse the environmental <strong>and</strong> other harmscaused by these dams.5.6 ConclusionsIf the Indian political leadership really wish to fulfil the waterdem<strong>and</strong> <strong>and</strong> get rid from the recurring phenomenon of floods,drought <strong>and</strong> famine then she need to change her past attitude,negotiate in such a way that every interests are heeds <strong>and</strong> createa win-win situation to all riparian neighbours. The benefitsshould allocate fairly so that every dem<strong>and</strong> of her neighbourscould be meet as her own requirement, Bangladesh should getaugmented water in dry season, hydroelectricity should reach tothem in a fair price, floods should be checked <strong>and</strong> otherbenefits should divide. Similarly upper riparian Nepal <strong>and</strong>Bhutan should be treated as similar manner. Until now, neitherIndia has not provided noticed pertaining its intention <strong>and</strong> plan29 S. McCaffrey, "Waters Disputes Defined: Characteristics <strong>and</strong> Trendsfor Resolving Them" Resolution of <strong>International</strong> Water Disputes, theHague: PCA, Kluwer <strong>Law</strong>, 2003, pp. 71-72.30 Supra note 1.31 WCD, Dams <strong>and</strong> Development: A Framework for Decision Making,London: Earthescan, pp 8-10.about the project nor sought any consent or provided copy ofsuch studies. The claim made by Suresh Prabhu that he hasconsulted with the Nepalese side is a false matter neither Nepalhas given positive signal about the project nor got any studies,intent or sought consent.. 32 Such matter only helps to createnegative environment. If all neighbours get their fair share <strong>and</strong>benefits equitably nothing is impossible in this context but it isIndia turn to change her unprecedently <strong>and</strong> heed the legitimatedem<strong>and</strong> of her neighbours. From the part of her riparianneighbour, they also need to over politicise the matter, mustunderst<strong>and</strong> the reality, <strong>and</strong> must be prepared for broaderregional cooperation for the elimination of chronic poverty. Inorder to get this objective creation of a regional level waterinstitution to facilitate <strong>and</strong> avert further suspicion <strong>and</strong> prejudiceto each other is essential. If one see the example of Nile BasinInitiative (NBI), which is working to end the past negativeenvironment <strong>and</strong> work for the mutual benefits of ten ripariannations at the financial assistance of the UNDP, the WorldBank <strong>and</strong> Canadian <strong>International</strong> Development Agency, couldbe catalyst for the beneficial use of south Asian waterresources. 33 However, numerous instances have illustrated howthe involvement of heads of state <strong>and</strong> governments has enabledthe avoidance of conflicts <strong>and</strong> facilitated agreement in manycomplex <strong>and</strong> chronic issues between a weaker <strong>and</strong> a morepowerful state. President Echeverria of Mexico <strong>and</strong> PresidentNixon of the USA resolved the salinity problem on theColorado River, which was seen as most delicate problembetween the two countries, <strong>and</strong> it was politically difficult for32 News appeared in the 2/3/2003, in Hindustan Express saying the abovecannot be proved because the spokesmen of Ministry of WaterResources <strong>and</strong> Foreign affairs refused the claim, see the Katm<strong>and</strong>uPost 29/7/2003.33 J. Brunnee & S. J. Toope, “The Changing Nile Basin Regime: Does<strong>Law</strong> Matter ?” (2002) in 42 HILJ, pp. 105-159.
the USA to construct such a huge project at her own cost. 34 Theformer Indian Prime Minister, A. B. Bajpayee, had beendirectly involved in ending the bitter relations of the pastbetween his country <strong>and</strong> Pakistan, replacing them with a goodneighbourly relationship. A similar, dynamic approach needs tobe adopted in the case of the members of SAARC Quadranglenations. That is the way out for the success of RLP. Otherwise,Mark Twain's quotation "Whisky's for drinkin <strong>and</strong> water's forfightin over" will be applied in South Asia. 35Legality River Linking Project / 277 278 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia•34 R. Clarke, Water; The <strong>International</strong> Crisis, London: Earthscan, 1991,p. 160.35 www.twainquotes.com/WaterWhisky.html
278 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Conclusions <strong>and</strong> Recummendations / 279Chapter- SixConclusions <strong>and</strong> Recummendations6.1 ConclusionsIn the earlier chapter, an analysis of IWL, <strong>and</strong> its application tothe water resources available in south Asia has been made.Each Chapter analysed the problems associated with realisingthe promising potential of the resources in a coherent manner.The study has indicated the significance of water, themagnitude of the problems, the manner in which they could beresolved, <strong>and</strong> the tremendous gains that would be realised fromthe judicious utilisation of these resources. Of the fourprinciples that have emerged in IWL, i.e. territorial sovereignty,territorial integrity, prior appropriation <strong>and</strong> equitable utilisation,I advocate the wider acceptance of the equitable utilisationprinciple. Equity, which is the central theme of this book, hasthe ability to accommodate every interest <strong>and</strong> create win-winsituations out of complicated conflicts between contestantstates <strong>and</strong> communities.6.2 Summary of FindingsThe first Chapter introduced the aims of this thesis <strong>and</strong> assessedthe significance of the water resources of Nepal <strong>and</strong> theirimmense potential for the prosperity of that country as well asher south Asian neighbours. As a regional power, India has agreat role to play but she must give attention to Nepal’sdevelopment in harmony with the norms of equity envisaged inArticles 5 <strong>and</strong> 6 of UNCIW. The best way to resolve waterconflicts is by negotiation rather than judicial settlement, 1 inline with a liberal approach of equity.1 B. R. Chauhan, Settlement of <strong>International</strong> Water <strong>Law</strong> Disputes in<strong>International</strong> Drainage Basins, Berlin: Eric Schmidt Verlag, 1981, p. 465.The present circumstance of confrontation between Nepal <strong>and</strong>India is not conducive to the enhancement of co-operation forequitable utilisation of water resources. For example, India hasconstructed a network of reservoirs <strong>and</strong> dams along the wholeIndo-Nepal border without giving prior notice to Nepal, therebyinundating huge areas of Nepalese territory. 2 No mitigation,elimination or compensation has been provided for such harm.This is a flagrant breach of IWL. 3 The study suggests that inorder to attain the maximum benefits for all the riparian states,international <strong>and</strong> regional cooperation is the first pre-condition.By doing so, poverty can be reduced, sustainable developmentundertaken; dependence within interdependence can be set out<strong>and</strong> the cloud of distrust can be converted into prosperity. 4Chapter two evaluated <strong>and</strong> demonstrated the long effortsexerted in the development <strong>and</strong> codification of IWL. There areseveral instruments that deserve universal application such asUNCIW. The exact application of those instruments, however,could vary depending upon the specific circumstances. Eachwatercourse has unique circumstances; 5 a resolution suitablefor each set of circumstances is highly desirable. Even thoughthe law is the same, it requires greater flexibility in the use ofdiscretion <strong>and</strong> interpretation for a just <strong>and</strong> fair resolution,depending upon the specific nature of the problem.2 As demonstrated in Chapter Four, India is constructing new reservoirs<strong>and</strong> dams which have submerged a huge amount of territory in Nepal.Neither notification was given, complaints heard nor compensationpaid. Also see staff, “India completed Mahalisagar reservoir project”The Kathm<strong>and</strong>u Post 1 July 2003, staff, “SCIP Failed to resolvedispute”, The Kathm<strong>and</strong>u Post 13 August, 2003; India refused toacknowledge the harm caused by the reservoirs constructed without theconsent of the St<strong>and</strong>ing Committee for Inundation Problem (SCIP).3 Article 5 (Equitable Utilisation) <strong>and</strong> Article 7 (No Harm Rule)UNCIW, 36 ILM (1997), p. 722.4 B. G. Verghese, Waters of Hope, New Delhi: Oxford & IBH Pub.,1990, pp. 385-393.5 H. A. Smith, The Economic Use of <strong>International</strong> Rivers, London: P. S.King & son, 1931, p. 121.
280 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Conclusions <strong>and</strong> Recummendations / 281The law developed so far is based on the principle ofreasonable <strong>and</strong> equitable utilisation. Some argue that it is tooambiguous a principle with major problems in its interpretation<strong>and</strong> application. 6 There are, however, several guidelines inArticle 6 for the proper interpretation <strong>and</strong> implementation ofthe provisions of such laws. The other fact is that the law isonly a tool, the dominant factors are human will <strong>and</strong> desire toconsistently address <strong>and</strong> harmonise the interests of thecontestant states. The UNCIW was adopted as a holistic,framework law in 1997, even though this UN vote was notunanimous. Several states still entertain conflicting views oncertain provisions of this law. For example, it has been arguedthat Article 5 of the UNCIW favours upstream states, whilstArticle 7 favours downstream states. Similarly, which rulesshould prevail in the event of a conflict “equitable or no harmrules” remains a disputed issue. 7 Moreover, even in theapplication of these two rules, due to the ambiguity <strong>and</strong>vagueness surrounding them, there are still conflicting ideas. 8However, the rule of equitable utilisation, which is the core law,contains guidelines <strong>and</strong> the basis for its application, but itrequires ongoing cooperation between states for its effectiveimplementation. 96 L. Caflisch, “Regulation of the Use of <strong>International</strong> <strong>Watercourses</strong>” in S.M. A. Salman & L. B. de Chazournes (eds), <strong>International</strong><strong>Watercourses</strong>: Enhancing Cooperation <strong>and</strong> Managing Conflict,Washington DC: World Bank Technical paper no 14, p. 16; also see C.B. Bourne, “The Primacy of Equitable Utilisation in the 1997Watercourse Convention” (1997) in XXXV CYBIL, pp. 215-231.7 S. C. McCaffrey, The <strong>Law</strong> of <strong>International</strong> <strong>Watercourses</strong>: Non-Navigational Uses, Oxford: Oxford University, 2001, p. 308.8 R. St. McDonald, “Charles B. Bourne: Scholar, Teacher <strong>and</strong> Editor,Innovator in the Development of <strong>International</strong> <strong>Law</strong> of Watercourse”(1996) in XXXIV CYBIL, pp. 53-87.9 J. Brunnee & S. J. Toope, “The Changing Nile Basin Regime: Does<strong>Law</strong> Matter?” (2002) in 43 HILJ, pp 131-151; also see supra note 1, p.467.Chapter three deals with the origin, development <strong>and</strong>application of equity. Furthermore, application of equity in thesharing of natural resources, the practice of the ICJ <strong>and</strong> itspredecessor, <strong>and</strong> other municipal courts <strong>and</strong> tribunals havebeen analysed. The research findings suggest that equity hasbecome the pivotal point for bridging any gaps betweencontestants views or principles. The role of equity has provenits capacity to prevent conflicts in such a way that everyinterest is addressed with a rational resolution of the problemsthat lead to conflict. In order to fill the chasm between poorstates <strong>and</strong> the developed states, to balance <strong>and</strong> preserve theinterests of present <strong>and</strong> future generations, to carry outdevelopment without adversely damaging the environment, <strong>and</strong>to accommodate all interests in a shared resource, equity hasremained a central issue. 10 Equity has given flexibility <strong>and</strong>strength to decision-makers in harmonising the divergentinterests of disputant parties. However, it is only a tool; itsapplication requires the utmost measure of fairness with aprofusion of liberal attitude <strong>and</strong> sound discretion.The political use of equity in human rights, environment <strong>and</strong>sustainable development issues must be differentiated from thelegal use of equity. The legal use of equity in IWL has beendeveloped by the Supreme Court of the United States <strong>and</strong> someother European states in the twentieth century in the resolutionof conflicts involving the allocation <strong>and</strong> sharing of waterbetween federal states <strong>and</strong> provinces. 11 The PCIJ <strong>and</strong> the ICJhave contributed immensely to its application <strong>and</strong> developmentin their decisions for sharing <strong>and</strong> delimiting the ContinentalShelf <strong>and</strong> disputed issues arising over it. The LOSC 1982 <strong>and</strong>the UNCIW have codified equity as a rule of customaryinternational law. Furthermore, resolution of both existing <strong>and</strong>future conflicts are also expected to be resolved by theapplication of equity. In fact, equitable utilisation has become10 D. French, “<strong>International</strong> Environmental <strong>Law</strong> <strong>and</strong> the Achievement ofIntragenerational Equity” (2001) in 31 ELR, pp. 10469-10485.11 Demonstrated in Chapter two.
282 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Conclusions <strong>and</strong> Recummendations / 283the cornerstone of resolution of the issues on shared naturalresources, including shared watercourses. 12 The tremendoussuccess in new technological innovations has the potential tohelp avert conflicts. Examples are, re-use of water, 13 distillationtechnology, <strong>and</strong> technologies to deliver water over greatdistances. Some ambitious propositions that can be cited in thiscontext are: Turkey’s plan to deliver waters to the wholeMiddle East, cloud shedding <strong>and</strong> unnatural precipitationprogrammes as undertaken presently in the US <strong>and</strong> Israel,potential water delivery, <strong>and</strong> use of Antarctica's <strong>and</strong> also thehigh Himalaya's waters. 14Chapter four dealt with the issues of Nepal <strong>and</strong> regional cooperationin south Asia. It assessed the problems <strong>and</strong> prospects,<strong>and</strong> suggested measures to solve problems in such a way thatevery nation can win <strong>and</strong> no one loses. 15 A historicalperspective on bilateral relations, <strong>and</strong> water relations inparticular have been given <strong>and</strong> evaluated in the light of presentchallenges. The potential benefits to Nepal, India, Bangladesh<strong>and</strong> Bhutan in bilateral <strong>and</strong> regional perspectives are verypromising. However, the reality <strong>and</strong> the existing framework ofco-operation is far from satisfactory. 16 There are opportunitiesfor numerous trade-offs amongst these nations, whereby themisery of poverty could be overcome by prosperity within the12 S. C. McCaffrey <strong>and</strong> M. Sinzela, “The United Nations Convention on<strong>International</strong> <strong>Watercourses</strong>” (1998) 92 AJIL, p. 106.13 Singapore is planning to substitute at least 2% of imported water byrecycling waste water by the year 2004,www.internationalwaterlaw.org.14 R. Clarke, Water: The <strong>International</strong> Crisis, London: Earthscan Pub.,1991, p.110.15 B. Subba, Himalayan Waters, Kathm<strong>and</strong>u: Panos South Asia, 2001, p225; also see B. G.Vershese, “Regional Cooperation for Optimal Basin Development” inB. G. Verghese & R. R. Iyer (eds) Harnessing the Eastern HimalayanRivers: Regional Cooperation in South Asia, New Delhi: Konark Pub.,1994, pp. 263-280.16 S. D. Muni, India <strong>and</strong> Nepal: A Changing Relationships, New Delhi:Konark Pub., 1996, pp. 161-176.framework of the concept of, ‘dependence withininterdependence’. 17 Past experiences have been marred byconfrontation rather than improved by meaningful co-operation.Such attitudes, however, appear to be changing, most recentlyin the Nile basin 18 <strong>and</strong> south Asia. 19 It is essential to takeadvantage of such a positive situation. 20 As a result of pastrelations shrouded by the miasma of negative attitudes ofsuspicion, each state is cautious <strong>and</strong> doubtful of the other. 21This research has indicated the implications of co-operation.For its achievement, however, a radical change in working aswell as in thinking is urgently required <strong>and</strong> the leaders of thisregion must undertake radical change with charismaticleadership. 22Chapter five has demonstrated the legal issues involved in theRiver-Linking Project of India, its relevance to get rid ofrecurrence flood, drought <strong>and</strong> famine, potential advantage fromthe project to India <strong>and</strong> her neighbours <strong>and</strong> the role of regionalcooperation. The best way to tackle the poverty in south Asiahas been is depend how states can cooperate with others,underst<strong>and</strong> other sensivity <strong>and</strong> how law help them toimplement this huge project.6.3 Implications of Water ScarcityThe alarming increase of the world’s population poses a threatto the maintenance of the availability <strong>and</strong> distribution of these17 B. C. <strong>Upreti</strong>, Politics of Himalayan River Waters, New Delhi: NiralaPub., 1993, pp. 158-178.18 Supra note 9, p. 159.19 The Power Purchase agreement on west the Seti project <strong>and</strong> the riverLinking Project are evidence of it.20 S. P. Subedi, “The Hydro Politics of South Asia: the Conclusion of theMahakali <strong>and</strong> Ganges River Treaties” (1999) 93 AJIL, p. 962.21 B. Crow, A. Lindquist & D. Wilson, Sharing the Ganges: the Politics<strong>and</strong> Technology of River Development, New Delhi: Sage Pub, 1995, p.222.22 Supra note 4, p. 393.
284 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Conclusions <strong>and</strong> Recummendations / 285precious water resources: withdrawals are expected to rise by31% by 2020 <strong>and</strong> groundwater resources are being replenishedonly at a rate of between 0.1% <strong>and</strong> 0.5%. 23 There arepredictions that the next war will be fought over water, if theinternational community does not work hard in unison bypromptly <strong>and</strong> prudently taking into account the interests of all,equally. 24 Such a gloomy picture presents either a recipe forconflict or an incentive to co-operation.However, the key to regional as well as bilateral cooperationlargely depends on how India, as a regional power willing to bea member of Security Council of the United Nations, 25reconciles its views <strong>and</strong> aspirations in addressing the similarinterests of its neighbours. 26 Moreover, India’s traditional viewof benefiting at another's expense, as alleged, must be changedinto the concept of good neighbourliness, a cooperative attitude,<strong>and</strong> incorporate equitable sharing of shared resources. Thesame attitude must be adopted by Nepal <strong>and</strong> other neighbours.The positive aspects of the past treaties must also be recalled 2723 Staff, “Ecological Decline far worse than official estimates”, TheGuardian 26 August 2002, p. 4, also see United Nations,Comprehensive Assessment of Freshwater Resources of the World,1997, Geneva: UN Pub.24 Supra note 7. A Vice President of the World Bank, Ismail Serageldin,who thought water a catalyst for peace, predicted in 1995 that ‘the warsin the next century will be over water.’25 C. D. Mass, “South Asia: Drawn Between Cooperation <strong>and</strong> Conflict”in E. Gonsalves & N. Jetly (eds), The Dynamics of south Asia:Regional Cooperation <strong>and</strong> SAARC, New Delhi: Sage Pub., 1999, p. 67.25 C. D. Mass, “South Asia: Drawn Between Cooperation <strong>and</strong> Conflict”in E. Gonsalves & N. Jetly (eds), The Dynamics of south Asia:Regional Cooperation <strong>and</strong> SAARC, New Delhi: Sage Pub., 1999, p. 67.26 S. P. Subedi, “Indo-Nepal Relations: The Cause of Conflict <strong>and</strong> TheirResolution” in S. K. Mitra & D. Rothermund (eds), Legitimacy <strong>and</strong>Conflict in South Asia, New Delhi: Manohar, 1997, p. 240.27 A. Mukarij, “Is Destabilization the Name of the Game” in A. Sen (ed)India’s Neighbours: Problems <strong>and</strong> Prospects, New Delhi: Har-An<strong>and</strong>,2001, p. 115.instead of one way criticism <strong>and</strong> over-politicising. 28 Nepal mustconvince <strong>and</strong> persuade its over-bearing neighbour to promote<strong>and</strong> preserve the interests of both countries, <strong>and</strong> India must stopdamming the rivers on the Indo-Nepal border <strong>and</strong> causing theupstream states significant harm. If there is the political willamong the south Asian nations <strong>and</strong> the required co-operationfrom the international community in terms of finance,technology <strong>and</strong> skill, the other modes of co-operation arewithin the reach of south Asia. 29 The Mekong Basin <strong>and</strong>Southern African states have adopted the concept of regionalgrids to trade off hydroelectricity for the investment ofmultilateral agencies. Thail<strong>and</strong> has not only guaranteed thepurchase of Lao’s hydroelectricity but also provided asovereign guarantee to the consortium of international banks<strong>and</strong> other lending agencies to allow the project to proceed. 30There are several models in the bilateral <strong>and</strong> multinationalspheres as indicated in Chapter two, any of which could befollowed.28 D. Gyawali, Water in Nepal, Kathm<strong>and</strong>u: Himal Books, 2001, pp. 53-65: The Nepalese Parliament ratified the Mahakali treaty, however, itthen passed a stricture (by both Houses of Parliament). breaching theTreaty’s provision, <strong>and</strong> sought incorporation of the terms of thestrictures into the Detail Project Report, which obviously preventsprogress in executing the Treaty.29 M. R. Josse, “The Case for New Thinking” (1994) in 4 Water Nepal, p.260: Then British PM James Callaghan <strong>and</strong> then US President JimmyCarter were quoted as saying that their nations were eager to help inutilising Himalayan water resources.30 P. Chomchai, “Management of Transboundary Water Resources: ACase Study of the Mekong” in M. I. Glassner (ed), The United Nationsat Work, Westport, CT: Praeger, 1998, pp. 245-255; also seewww.internationalwaterlaw.org: Laos has signed a deal with aconsortium to build <strong>and</strong> operate the Nan Theun Project (1,070 MWhydroelectric project) in which Thail<strong>and</strong> is the sole buyer. The ADBsaid Laos earned $ 112 million from electricity exports in 2000, onethird of the country’s total exports <strong>and</strong> its biggest export item. Also seeSouth African Power Pool, common electricity for 14 African stateswww.eia.doe.gov/emev/cabs/sadc.html.
286 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Conclusions <strong>and</strong> Recummendations / 2876.4 Changing PerspectivesThere are some more positive indications which suggest thatimproved attitudes are being developed in the area of cooperation.The recently proposed Arun III, Lower Arun <strong>and</strong>Upper Arun projects, altogether 1,050 MW, are beingconsidered for implementation through bilateral arrangement,with the involvement of public power utilities <strong>and</strong> privateinstitutions in India <strong>and</strong> Nepal. The ADB which has beeninvolved as a facilitator, had expressed its preparedness toprovide the necessary amount of loan money, not only to carryout the feasibility studies but also to implement the project. 31Furthermore, the West Seti export purpose hydroelectric project,which is being planned for development by the AustralianSnowy Mountain Electric Company (SMEC), has beenpermitted to have an MOU with Power Trading Corporation(PTC), the Indian Government’s Power Purchasing Company.Successful negotiations to obtain a power purchase agreementhave been recently concluded. It is expected that after itssuccess, a new cooperative dimension in Indo-Nepal waterresources relations will be opened. 32 As expected the SMEC<strong>and</strong> PTC has struck a power purchase agreement at US$ Cents4.865 per unit rate <strong>and</strong> the project is going to be started fromthis year. 33 Similar positive development expected to occurbetween India <strong>and</strong> Bangladesh as well.Apart from this, SAREE, SAGQ, SASEC <strong>and</strong> other institutionsworking for exp<strong>and</strong>ed regional cooperation are emerging. Theallegation that everything hinges on the Indian attitude iscommonly made by all the small <strong>and</strong> vulnerable nations ofsouth Asia. However, in 1996, Nepal <strong>and</strong> Bangladesh managedto conclude separate treaties with India, thereby removing theirlong entertained complaints <strong>and</strong> grievances over the Mahakali<strong>and</strong> the Ganges rivers respectively. 34 In the case of Nepal,however, the positive circumstance created by the Mahakalitreaty is not being reaped because of non-implementation of theproject due to differing views on how to implement the treatyregime. Other nations are ready for utilising this resource, ifIndia were ready to address its neighbour's interests in areasonable <strong>and</strong> equitable manner. 35 It is worth mentioning thatin the 19 th century, strong countries wanted weak neighboursthey could dominate. In the 21 st century, strong countries willbenefit from neighbours who are prosperous <strong>and</strong> democratic.Troubled neighbours export problems whereas healthyneighbours promote the region's vitality, growth <strong>and</strong> peace. 36Additionally, in a U-turn in its policy on water sharing issues,India is contemplating a gr<strong>and</strong>iose project linking 37 rivers,constructing 27 big dams <strong>and</strong> diverting 141,288 million cubicmetres of water through a network of 4,777 km of canals. TheRiver Linking Project will cost Rs. 560,000 crore. In thisproject, it is hoped that the riparian consent <strong>and</strong> co-operation ofNepal, Bhutan <strong>and</strong> Bangladesh will be sought <strong>and</strong> everyinterest heeded so that past bitternesses will be eliminated. 37 Ifthe project were to be executed in this manner, it is likely thatthe mistrust <strong>and</strong> bitterness of the past would be reversed, asevery complaint would be accommodated. The grievancessuffered by the smaller states for so long could be resolved31 Staff, “ADB co-operation on water projects”, The Space Time Daily,18 September, 2002, quoted the country Director of the ADB statingits readiness to provide any type of co-operation to implement theseprojects.32 www.internationalwaterlaw.org ‘SMEC strikes a deal with Indiangovernment’.33 Staff, “SMEC concluded an agreement with Power TradingCorporation of India.” Kantipur (in Nepali)10 December 2003.34 Supra note 20, p. 958, also see, S. M. A. Salman <strong>and</strong> K. Uprety,“Hydro-Politics in South Asia: A Comparative Analysis of theMahakali <strong>and</strong> Ganges Treaties” (1999), 39 NRJ, pp. 333-335.35 Supra note 15, pp. 188-195.36 R. B. Zoellick, “NAFTA: A Successful Model of North SouthRelations” in www. usembassy-mexico.gov/sbfnafta.37 S. Aiyar, “Changing the Course” (2003) in XXVII India Today,January 20, pp. 28-32.
288 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Conclusions <strong>and</strong> Recummendations / 289forever, only if their interests were accommodated in such agr<strong>and</strong>iose enterprise.6.5 Implications <strong>and</strong> Future ResearchIn this section, I will consider the implications of this study forfuture scholarship in two areas, poverty reduction <strong>and</strong> the MDG.Efforts of the international community were initiated in 1972 inStockholm, further strengthened in Rio de Janeiro through theEarth Summit in 1992, <strong>and</strong> WSSD, signifying the importanceof freshwater not as a separate issue but as an integrated part ofthe whole environment, <strong>and</strong> the commitment of the world toit. 38The issue of water is explicitly related to the human rights ofpeople, without which life cannot be imagined. 39 These rightsare safeguarded by the provisions of Article 10 of the 1997UNCIW, stating that priority will be provided for “vital humanneeds.” 40 Moreover, the development of renewable energy forreducing global warming is on the agenda for the internationalcommunity. 41 MDG’s <strong>and</strong> the recent WSSD have set a target ofhalving the number of people presently deprived of potablewater, proper sanitation <strong>and</strong> clean energy from two billion toone billon by the year 2015. In context of the statement that38 D. Harrison, “America bows to summit dem<strong>and</strong> on sanitation for theworld’s poor” The Daily Telegraph, 3 p. 4, September 2002. The UK’sEnvironment Secretary Margaret Beckett is quoted as saying that theWSSD has been largely successful <strong>and</strong> illustrated the significance of‘multilaterism’.39 S. McCaffrey, “A Human Right to Water: Domestic <strong>and</strong> <strong>International</strong>Implications” (1992) 5 GIELR, pp. 1-23.40 UNCIW, 36 ILM (1997), p. 722.41 J. Vidal & P. Brown, “Meeting was sell out” The Guardian, 4September 2002, pp. 1-3, 2002. It is massive blow for the renewableenergy plan. Main achievements were setting the target of halving thenumber without basic sanitation <strong>and</strong> drinking water by 2015, <strong>and</strong> alsohalving the 1.2 billion who live on less than $1 a day.hydropower as a source of clean energy will be encouraged,unfortunately, no timetable is provided. 42 As maintained byGerhard Schroder, the German Chancellor, global warming isno longer a matter for scepticism, it has become a reality. Hefurther argues that there can be no global security without anagenda for global equity <strong>and</strong> that developing countries requirethe co-operation of developed nations to carry out ambitiousenergy projects. 43To eliminate poverty in the least developed <strong>and</strong> geographicallyh<strong>and</strong>icapped nations, the international community shouldchange existing policies <strong>and</strong> programmes so as to providespecial treatment <strong>and</strong> concessions on investment, trade,environmental obligations <strong>and</strong> financial assistance. Poverty hasbeen identified as a cause of civil war <strong>and</strong> terrorism, <strong>and</strong> is ageneral hindrance to world peace <strong>and</strong> prosperity. For example,in Nepal the seven year Maoist insurgency has led to the deathsof over 9,000 people <strong>and</strong> the loss of billions of rupees worth ofproperty. 44 Thabo Mbaki, the South African President, hasrightly suggested at the (WSSD) in Johannesburg) that until thegap between the haves <strong>and</strong> have-nots is filled, the fuelling ofglobal terrorism will continue. 45 World poverty including thatof south Asia must be eradicated by utilising these immensewater resources. In this effort, the rich states must favour theweaker states in order to eradicate the hardship of poverty,pursuant to the notion of equity. In the context of India <strong>and</strong>42 P. Brown & J. Vidal, “Summiteers plant their flags in the foot hills.” p.13, The Guardian, 4 September 2002.43 P. Brown, “The US must play its part” p. 18, The Guardian August 30,2002.44 On human rights implications of Nepal see “Human Rights <strong>and</strong>Security” (14 February 2000) at www.amnesty.org.45 P. Brown & J. Vidal, ‘End seas of poverty’, The Guardian, 27 August2002, p. 3. John Pronk, Envoy of UN Secretary General to the WSSDis quoted as saying that the poverty of developing countries should beaddressed by the help of developed states.
290 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Conclusions <strong>and</strong> Recummendations / 291Nepal, the former, being better off than the latter, should givepriority to the development of it less developed neighbour,Nepal. This is also a finding of this research. A world ordercharacterised by equitable development <strong>and</strong> provision ofservices to the people of developing nations like those enjoyedby the people of the developed nations is indispensable tokeeping the peace, harmony, <strong>and</strong> welfare of this planet. Povertyhas been blamed for the Maoist uprising. Similar problemsexist across other parts of south Asia. Thus, in order toestablish an equitable society in these countries, broadening thescope of the MDG’s, is urgently required. The issue of cleanenergy such as hydro-energy <strong>and</strong> the supply of potable water<strong>and</strong> sanitation service are linked with the freshwater issue.Nepal requires cooperation without conditions (imposed asriparian consent) from western governments <strong>and</strong> multilateralinstitutions. These issues require further research. The otherimpediment for Nepal, regarding the utilisation of its resources,is the lack of its ability to generate power at competitiveprices. 46 The private sector should be encouraged tosupplement the public sector so that cheap energy generation<strong>and</strong> competitive marketing can be undertaken. 47 Enhancedtechnology, competitive energy prices (as required <strong>and</strong> set bythe market) <strong>and</strong> maximisation of efficiency are essential toensure competitiveness. Alternative markets such as China <strong>and</strong>Bangladesh need to be explored so that India is not the solemarket. The provision of modern technology to provide quick<strong>and</strong> dependable energy is related to the water resourcesavailable in south Asia.This study shows that application of the principle of equity <strong>and</strong>the rule of ‘reasonable <strong>and</strong> equitable utilisation’ will helpunravel the intricate <strong>and</strong> complex problems associated with theharnessing <strong>and</strong> sharing of Himalayan waters. As stated inChapter three, the principle of equity has the ability to reconcileinterests of all states by considering socio-economic <strong>and</strong> otherrelevant factors. The norms associated with it will helpmaximise the benefits to all the nations concerned. Such amindset on the part of the regional <strong>and</strong> sub-regional partnerswould ensure justice <strong>and</strong> prosperity for not only Nepal but thewhole of south Asia.•46 Supra note 28, p. 30: Government-developed hydropower in Nepal hascost an average of $ 2800/kw while private generation costs are$ 1000/kw; see S. Rana, “Don’t Blame Private Power Producers” in(2002) September, 111 Nepali Times; also see M. Pradhan & S. B. Pun,“Private Sector Participation in the Power Sector LessonLearnt/Unlearnt so far” 14-20 (2003) February, in 22 Spotlight, p. 5.;also note “Chilime begins production” in The Kathm<strong>and</strong>u Post 26August 2003.47 S. B. Pun, “The Evolving Role of Public <strong>and</strong> Private Institutions in theNepalese Power Sector” in (1999) WECS Annual Report, pp. 38-49.
292 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 293AppendixAppendix- 1The 1954 Agreement on the Kosi Project(as revised in 1966)Amended agreement between His Majesty’s Government ofNepal(hereinafter referred to as ‘HMG’) <strong>and</strong> the Governmentof India (hereinafter referred to as the ‘Union’) concerning theKosi Project.WHEREAS the Union was desirous of constructing a barrage,headworks <strong>and</strong> other appurtenant work about three milesupstream of Hanuman Nagar town on the Kosi River withafflux <strong>and</strong> food banks, <strong>and</strong> canals protective works on l<strong>and</strong>lying within the territories of Nepal for the purpose of floodcontrol, irrigation, generation of hydro-electric power <strong>and</strong>prevention of erosion of Nepal areas on the right side of theriver, upstream of the barrage (hereinafter referred to asthe ;Project;)AND WHEREAS MHG agreed to the construction of the saidbarrage, headworks <strong>and</strong> other connected works by <strong>and</strong> at thecost of the Union, in consideration of the benefits arisingtherefrom <strong>and</strong> a formal document incorporating the terms of theAgreement was brought into existence on the 25 th April , 1954<strong>and</strong> was given effect to;AND WHEREWAS in pursuance of the said Agreementvarious works in respect of the Project have been competed bythe Union while others are in various stages of completion forwhich HMG has agreed to afford necessary facilities;AND WHEREAS HMG has suggested revision of the saidAgreement in order to meet the requirements of the changedcircumstances, <strong>and</strong> the Union, with a view to maintainingfriendship <strong>and</strong> good relation subsisting between Nepal, <strong>and</strong>India, has agreed to the revision of Agreement.NOW,THEREFORE, THE PARTIES AGREE AS FOLLOWS:1. DETAILS OF THEH PROJECT(i) The barrage is located about 3 miles upstream ofHunuman Nagar town.(ii) The general layout of the barrage, the areas withinafflux banks, flood embankments, <strong>and</strong> other protectiveworks, canals, power house <strong>and</strong> the lines ofcommunication are shown in the amended planannexed to this agreement as Amended Annexure A. 1(iii) Any construction <strong>and</strong> other undertaking by the Unionin connection with this Project shall be planned <strong>and</strong>carried out in consultation with HMG.Provided that such works <strong>and</strong> undertakings which,pursuant to any provision of this Agreement requirethe prior approval of HMG shall not be started withoutsuch prior approval;And further provided that in situation described inClause 3(iii) <strong>and</strong> Clause 3 (iv) intimation to HMGshall be sufficient.(iv) For the purpose of Clause 3 <strong>and</strong> 8 of this Agreementthe l<strong>and</strong> under the ponded areas <strong>and</strong> boundaries asindicated by the plan specified in the sub-clause(ii)above, shall be deemed to be submerged.2. INVESTIGATION AND SURVEYS(i) Whenever the Chief Engineer of Kosi Project,Government of Bihar may consider any survey orinvestigation to be required in connection with the saidProject, HMG shall, if <strong>and</strong> in so far as HMG hasapproved such survey or investigation, authorize <strong>and</strong>give necessary facilities to the concerned officers ofthe Union or other persons acting under the general orspecial orders of such officers to enter upon such l<strong>and</strong>as necessary with such men, animals, vehicles,equipment, plant, machinery <strong>and</strong> instruments as1 Not reproduced here.
294 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 295necessary to undertake such surveys <strong>and</strong> investigations.Such surveys <strong>and</strong> investigations may comprise aerial<strong>and</strong> ground surveys, hydraulic, hydrometric,hydrological <strong>and</strong> geological surveys includingconstruction of drill holes for surface <strong>and</strong> sub-surfaceexploration, investigations for communications <strong>and</strong> formaterials of construction; <strong>and</strong> all other surveys <strong>and</strong>investigation necessary for the proper design,construction <strong>and</strong> maintenance of the barrage <strong>and</strong> all itsconnected works mentioned under the Project.However, investigation <strong>and</strong> surveys necessary for thegeneral maintenance <strong>and</strong> operation of the Project,inside the project area, may be done by the Union afterdue intimation to HMG.In this agreement, ‘the project area’ shall mean thearea acquired for the Project.(ii) The provisions of sub-clause (i) of this clause shallalso apply to surveys <strong>and</strong> investigations of storagedams or detention dams on the Kosi, soil conservationmeasures, such as check dams, afforestation, etcrequired for a complete solution of the Kosi problemsin the future.(iii) The surveys <strong>and</strong> investigations referred to in subclause(i)<strong>and</strong> (ii) shall be carried in co-operation witHMG.(iv) All date, maps, specimens, reports <strong>and</strong> other result ofsurveys <strong>and</strong> investigations carried out by or on behalfof the Union in Nepal pursuant to the provisions ofthis clause, shall be made available to HMG freely <strong>and</strong>without delay. In turn, HMG shall, upon request by theUnion, make available to the Union all data, maps,specimens, reports <strong>and</strong> other results of surveys <strong>and</strong>investigation carried out by or on behalf of HMG inNepal in respect of the Kosi River.3. AUTHORITY FOR EXECUTION OF WRKS ANDUSE OF LAND AND OTHER PROPERTY(i) Provided that any major construction work notenvisaged in the emended plan (Amended Annexure-A) referred to in clause I (ii) shall require the priorapproval of HMG, HMG shall authorize the Union toproceed with the execution of the said project as <strong>and</strong>when the project or a part of the project receivessanction of the said Union <strong>and</strong> notice has been givenby the Union to HMG of its intention to commencework on the respective constructions <strong>and</strong> shall permitaccess by the Engineer <strong>and</strong> all other officers, servants,<strong>and</strong> nominees of the Union, with such men, animals,vehicles, plant, machinery, equipment <strong>and</strong> instrumentsas may be necessary for the direction <strong>and</strong> execution ofthe respective constructions, to all such l<strong>and</strong>s <strong>and</strong>places, <strong>and</strong> shall permit the occupation, for suchperiod as may be necessary, of all such l<strong>and</strong>s <strong>and</strong>places as may be required for the proper execution ofthe respective constructions.(ii) the l<strong>and</strong> required for the purposes mentions inClause3(i) above shall be acquired by HMG <strong>and</strong>compensation thereof shall be paid by the Union inaccordance with the provisions of clause 8 hereof.(iii) HMG shall, upon prior notification, authorize officersof the Union to enter on l<strong>and</strong> outside the limits orboundaries of the barrage <strong>and</strong> its connected works incase of any accident happening or being apprehendedto any of the said works <strong>and</strong> to execute all workswhich may be necessary for the purpose of repairing orpreventing such damage. Compensation, in every case,shall be tendered by the Union through HMG to theowners of the said l<strong>and</strong> for all accidents done to thesame in order that compensation may be awarded inaccordance with clause 8 hereof.
296 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 297(iv) HMG will permit the Union to quarry the constructionmaterials required for the project from the variousdeposits at Chatra, Daran Bazar or other place sinNepal.4. USE OF WATER AND POWER(i)HMG shall have very right to withdraw for irrigation<strong>and</strong> for many other purpose in Nepal water from teKosi River <strong>and</strong> from the Sun-Kosi river or within theKosi Basin from any other tributaries of the Kosi Riveras may be required from time to time. The Union shallhave the right to regulate all the balance of supplies inthe Kosi Roiver at the barrage site thus available fromtime to time <strong>and</strong> to generate power in the Easter Canal.(ii) HMG shall be entitled to obtain for use in Nepal anyportion up to 50 per cent of the total hydro-electricpower generate by any Power House situated within a10-mile redius from the barrage site <strong>and</strong> constructedby or on behalf of the Union, as HMG shall from timeto time determine <strong>and</strong> communicate to the Union:Provided that:-HMG shall communicate to the Union any increase ordecrease in the required power supply exceeding 6,800KW at least three months in advance.(iii) If any power to be supplied to Nepal pursuant to theprovisions of this cub-clause is generated in a powerhouse located in Indian territory, the Union shallconstruct the necessary transmission line or lines tosuch points at the Nepal-Indian border as shall bemutually agree upon.(iv) The tariff rates for electricity to be supplied to Nepalpursuant to the provisions of this clause shall be fixedby mutual agreement.5. LEASE OF THE PROJECT AREAS(i) All the l<strong>and</strong>s acquired by HMG under the provision ofclause 3 hereof as of the date of signing of theseamendments shall be leased by HMG to the Union fora period of 199 years from the date of theseamendments at an annual Nominal Rate.(ii) The rent <strong>and</strong> other terms <strong>and</strong> conditions on which l<strong>and</strong>for Western Kosi Canal shall be leased by HMG to theUnion pursuant to this Agreement shall be similar tothose under sub-clause (i).(iii) The rent <strong>and</strong> other terms <strong>and</strong> conditions of any otherl<strong>and</strong> to be leased by HMG to the Union pursuant tothis Agreement shall be fixed by mutual agreement.(iv) At the request of the Union, HMG may grant renewalof the leases referred to in sub-clauses (i), (ii) <strong>and</strong> (iii)on such terms <strong>and</strong> conditions as may mutually agreedupon.(v) The sovereignty rights <strong>and</strong> territorial jurisdiction ofHMG, including the application ad enforcement of thelaw of Nepal on <strong>and</strong> in respect of the leased l<strong>and</strong> shallcontinue unimpaired by such lease.6. ROYALTIES(i) HMG will receive royalty in respect to powergenerated <strong>and</strong> utilized in the Indian Union at rates tobe settled by agreement hereafter:Provided that no royalty will be paid on the power soldto Nepal.(ii) HMG shall be entitled to receive payment of royaltiesfrom the Union in respect of stone, gravel <strong>and</strong> ballastobtained from Nepal territory <strong>and</strong> used in theconstruction <strong>and</strong> future maintenance of the barrage <strong>and</strong>other connected works at rates to be settled byagreement hereafter.(iii) The Union shall be at liberty to use <strong>and</strong> remove clay,s<strong>and</strong> <strong>and</strong> soil without let or hindrance from l<strong>and</strong>sleased by HMG to the Union.
298 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 299(iv) Use of timber from Nepal forest, required for theconstruction, shall be permitted on payment ofcompensation. Provided that no compensation will bepayable to HMG for such quantities of timber as mybe agreed upon by HMG <strong>and</strong> the Union to benecessary for the use in the spurs <strong>and</strong> other rivertraining works required for the prevention of caving<strong>and</strong> erosion of the right bank in Nepal.Provided likewise that no compensation will bepayable to the Union for any timber obtained from theforestl<strong>and</strong>s leased by HMG to the Union.7. CUSTOMS DUTIESHMG shall charge no customs duty or duty of any kind,during the construction <strong>and</strong> subsequent maintenance, onany articles <strong>and</strong> materials required for the purpose of theProject <strong>and</strong> work connected therewith.8. COMPENSATION FOR LAND PROPERTY ANDFOR LAND REVENUE(i) For assessing the compensation to be awarded by theUnion to HMG in cash:-(a) L<strong>and</strong>s required for the execution of various worksas mentioned in clause (ii) <strong>and</strong> clause9(i); <strong>and</strong>(b) Submerged l<strong>and</strong>s will be divided into thefollowing clauses:-1. Cultivated l<strong>and</strong>s.2. Forest l<strong>and</strong>s.3. Village l<strong>and</strong>s <strong>and</strong> houses <strong>and</strong> otherimmovable property st<strong>and</strong>ing on them.4. Waste l<strong>and</strong>.All l<strong>and</strong>s recorded in the register of l<strong>and</strong>s in theterritory of Nepal as actually cultivated shall bedeemed to be cultivated l<strong>and</strong>s for the purpose ofthis clause.(ii) The Union shall pay compensation:-(a) to HMG for the loss of l<strong>and</strong> revenue as at the timeof acquisition in respect of the area required, <strong>and</strong>(b) to whomsoever it my be due for the l<strong>and</strong>s, houses<strong>and</strong> other immovable property acquired for theProject <strong>and</strong> leased to the Union.The assessment of such compensation <strong>and</strong> themanner of payment shall be determined hereaftery mutual agreement between HMG <strong>and</strong> the Union.(iii) All l<strong>and</strong>s required for the purposes of the Project shallbe jointly measured by the duly authorized officers ofHMG <strong>and</strong> the Union respectively.9. COMMUNICATIONS(i) HMG agrees that the Union may construct <strong>and</strong>maintain roads, tramways, railways, ropeways, etc.,required for the Project in Nepal <strong>and</strong> shall provide l<strong>and</strong>for these pruposes on payment of compensation asprovided in clause 8. Provided that the construction ofany roads, tramways, railways, ropeways, etc., outsidethe Project area shall require the prior approval ofHMG.(ii) Any constructions, required in the interest ofconstruction, maintenance <strong>and</strong> proper operation of theProject, regarding the use of the roads, etc., referred toin sub-clause(i) by commercial or private vehicles maybe mutually agreed upon. In case of threatened breachor erosion of the structures on account of the river, theofficers of the Project may restrict public traffic underintimation to HMG.(iii) HMG agrees to permit, on the same terms as for otherusers, the use of all roads, waterways <strong>and</strong> otheravenues of transport <strong>and</strong> communication in Nepal forbona fide purposes of the construction <strong>and</strong>maintenance of the barrage <strong>and</strong> other connected works.
300 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 301(vi) The bridge over Hanuman Nagar barrage shall beopened to public traffic. With prior approval of HMG,the Union shall have right to close the traffic over thebridge temporarily if an in so far as required fortechnical or safety reasons. In such cases, the Unionshall take measures required for the most expeditiousreopening of the bridge.(v) HMG agrees to permit installation of telegraph,telephone <strong>and</strong> radio communications in Nepal for thebona fide purposes of the construction <strong>and</strong>maintenance of the Project.Provided that the Union shall agree to the withdrawalof such facilities, which HMG may in this respect,provided in future.Further provided that the Union shall agree to permitthe use of internal telephone <strong>and</strong> telegraph in theProject area to authorized servants of HMG forbusiness in emergencies provided such use does not inany way interfere with the construction <strong>and</strong> operationfor the Project.10. NAVIGATION RIGHTSAll navigation rights in the Kosi River in Nepal shall restwith HMG. Provision shall be made for suitablearrangements at or around the site of the barrage for free<strong>and</strong> unrestricted navigation in the Kosi River, if technicallyfeasible. However, the use of any watercraft like boat,launces <strong>and</strong> timber raft within two miles of the barrage <strong>and</strong>headworks shall not be allowed on grounds of safety,except by special permits to be issued by the competentauthority of HMG in consultation with the ExecutiveEngineer, Barrage. While issuing the special permits withintwo miles, HMG shall keep in view the safety of theheadworks <strong>and</strong> the permit holders.11. USE OF NEPALI LABOURThe Union shall give preference to Nepali labour,personnel <strong>and</strong> contractors to the extent available <strong>and</strong> in itsopinion suitable for the construction of the Project but shallbe at liberty to import labour of all cases to the extentnecessary.12. CIVIC AMENTIES IN THE PROJET AREASubject to the prior approval of HMG, the Union may, inthe Project area, establish schools, hospitals, water-supplysystems, electric supply systems, drainage <strong>and</strong> other civicamenities for the duration of the construction of the Project.On completion of construction the Project, any suchamenities shall, upon request by HMG, be transferred toHMG, <strong>and</strong> that, in any case, any such amenities shall, uponrequest by HMG, be transferred to HMG, <strong>and</strong> that, in anycase, all function of public administration shall, pursuant tothe provisions of clause5(v) be exercised by HMG.13. ARBITRATION(i) Any dispute or difference arising out of or in any waytouching or concerning the construction, effect ormeaning of this Agreement, or of any matter containedherein or the respective rights <strong>and</strong> liabilities of theparties hereunder, if not settled by discussion shall bedetermined in accordance with the provisions of thisclause.(ii) Any of the parties may by notice in writing inform theother party of its intention to refer to arbitration anysuch dispute or difference mentioned in sub-clause (i);<strong>and</strong> within 90 days of the delivery of such notice, eachof the tw3o parties shall nominate an arbitrator forjointly determining such dispute or differences <strong>and</strong> theaward of the arbitrator for jointly determining suchdispute or difference <strong>and</strong> the award of the arbitratorsshall be binding on the parties.
302 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 303(iii) In case the arbitrators are unable to agree, the partieshereto may consult each other <strong>and</strong> appoint an Umpirewhose award shall be final <strong>and</strong> binding on them.14. ESTABLISHMENT OF INDO-NEPAL KOSIPROJECT COMMISSION(i) For the discussion of problems of common interest inconnection with the Project <strong>and</strong> for the purposes of coordination<strong>and</strong> co-operation between the twoGovernments with regard to any matter covered in thisAgreement, the two Governments shall at an early dateestablish a joint ‘Indo-Nepal Kosi ProjectCommission’. The rules for the composition,jurisdiction, etc., of the said Commission shall bemutually agreed upon.(ii) Until the said Joint Commission shall be constitutedthe ‘Co-ordination Committee’ for the Kosi Projectshall continue function as follows:-(a) The committee shall consist of fourrepresentatives from each country.(b) The Chairman of the committee shall be aMinister of HMG, <strong>and</strong> the Secretary shall be theAdministrator of the Kosi project.(c) The committee shall consider among other suchmatters of common interest concerning the projectas l<strong>and</strong> acquisition by HMG for lease to the Union,rehabilitation of displaced population,maintenance of law <strong>and</strong> order.(iii) As soon as the said Joint Commission shall beconsulted, the Coordination Committee for the KosiProject shall be dissolved.15.(i) This present Agreement shall come into force from thedate of signatures of the authorized representatives ofHMG <strong>and</strong> the Union respectively <strong>and</strong> thereafter, itshall remain valid for a period of 199 years.(ii) This present Agreement shall supersede theAgreement signed between the Government of Nepal<strong>and</strong> Government of India on the 25 th April, 19564 onthe Kosi Project.IN WITNESS WHEREOF the undersigned being dulyauthorized thereto by their respective Government havesigned the present Amended Agreement.Done at Kathm<strong>and</strong>u, in quadruplicate, this day, the 19 th ofDecember, 1966.For the Government of India For His Majesty’sGovernment of NepalSRIMAN NARAYAN Y. P. PantaAmbassador of India in Nepal Secretary, Ministry ofEconomic Planning <strong>and</strong>Finance.•
304 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 305Appendix- 2Agreement between His Majesty’sGovernment of Nepal <strong>and</strong> the Governmentof India on the G<strong>and</strong>ak Irrigation <strong>and</strong>Power ProjectKathm<strong>and</strong>uDecember 4, 1959PEAMBLE:- WHEREAS His Majesty’s Government ofNepal <strong>and</strong> the Government of India consider that it is in thecommon interests of both Nepal <strong>and</strong> India to construct abarrage, canal head regulators <strong>and</strong> other appurtenant worksabout 1,000 feet below the existing Tribeni Canal headregulator <strong>and</strong> of taking out canal systems for purposes ofirrigation <strong>and</strong> development of power for Nepal <strong>and</strong> India(hereinafter referred to as ‘the Project’).AND WHEREAS in view of the common benefits, HisMajesty’s Government have agreed to the construction of thesaid barrage, canal head regulators <strong>and</strong> other connected worksas shown in the Plan annexed 2 to this Agreement to the extentthat they lie within the territory of Nepal, by <strong>and</strong> at the cost ofthe Government of India.NOW THE PARTIES AGREE AS FOLLOWS:-1. INVESTIGATION AND SURVEYSHis Majesty’s Government authorize the Project Officerss<strong>and</strong> other persons acting under the grneral or special ordersof such officers to move in the area indicated in the saidPlan with men, material <strong>and</strong> equipment as may be requiredfor the surveys <strong>and</strong> investigations in connection with theProject, before, during <strong>and</strong> after construction, as may befound necessary from time to time. These surveys include2 Not reproduced here.ground, aerial, hydraulic, hydrometric, hydrological <strong>and</strong>geological surveys; investigations for communication forthe alignment of canals <strong>and</strong> for materials required for theconstruction <strong>and</strong> maintenance of the Project.2. AUTHORITY FOR THE EXECUTION OF WORKSAND THEIR MAINTENANCE(i) His Majesty’s Government authorize the Governmentof Indias to proceed with the execution of the Project<strong>and</strong> for this purpose His Makesty’s Government shallacquire all such l<strong>and</strong>s as the Government of India mayrequire <strong>and</strong> will permit the access to, the movementwithin the residence in the area indicated in the Plan ofofficers <strong>and</strong> field staff with labour force, draught,animals, vehicles, plants, machinery, equipment <strong>and</strong>instruments as may be necessary for the execution ofthe Project <strong>and</strong> for its operation <strong>and</strong> maintenance afterits completion.(ii) In case of any apprehended danger or accident to anyof the structures, the officers of te Government ofIndia will execute all works which may be necessaryfor repairing the existing works or preventing suchaccidents <strong>and</strong>/or danger in the areas indicated in thePlan. If any of such works have to be constructed onl<strong>and</strong>s as may be necessary for the purpose. In all suchcases the Government of India shall pay reasonablecompensation for the l<strong>and</strong>s so acquired as well as fordamage, if any, arising out of the execution of theseworks.(ii) L<strong>and</strong>s requisioned under paragraph (i) shall be held bythe Government of India for the duration of therequisition <strong>and</strong> l<strong>and</strong>s acquired under sub-clause (i) ortransferred under sub-clause (ii) shall vest in theGovernment of India as proprietor <strong>and</strong> subject topayment of l<strong>and</strong> revenue (Malpot) at the rates at whichit is leviable on agricultural l<strong>and</strong>s in theneighbourhood.
306 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 307(iii) L<strong>and</strong>s requisitioned under paragraph (i) shall be heldby the Government of India for the duration of therequisition an l<strong>and</strong>s acquired under sub-clause (i) ortransferred under sub-clause (ii) shall vest in theGovernment of India as proprietor <strong>and</strong> subject topayment of l<strong>and</strong> revenue (Malpot) at the rates at whichit is leviable on agricultural l<strong>and</strong>s in theneighbourhood.(iv) When such l<strong>and</strong> vesting in the Government of India orany part thereof ceases to be required by theGovernment of India for the purposes of the Project,the Government of India will reconvey the same to HisMajesty’s Government free of charge.4. QUARRYINGHis Majesty’s Government shall permit the Government ofIndia on payment of reasonable royalty to quarry materialssuch as block stones, boulders, single <strong>and</strong> s<strong>and</strong> required forthe construction <strong>and</strong> maintenance of the Project from theareas indicated in the said plan.5. COMMUNICATIONS(i) His Majesty’s Government shall allow theGovernment of India to construct <strong>and</strong> maintain suchportion of the main Western Canal which falls in theNepal territory <strong>and</strong> to construct <strong>and</strong> maintaincommunications for the construction <strong>and</strong> maintenanceof the Project. The roads will be essentiallydepartmental roads of the Project <strong>and</strong> their use bycommercial <strong>and</strong> non-commercial vehicles of Nepalwill be regulated as mutually agreed upon between HisMajesty’s Government <strong>and</strong> the Government of India.(ii) The bridge over the G<strong>and</strong>ak Barrage will be open topublic traffic, but the Government of India shall havethe right to close the traffic over the bridge for repair,etc.(iii) The Government of India agree to provide lockingarrangements for facility of riverine traffic across theBarrage free from payment of any tolls whatever,provided that this traffic will be regulated by theProject staff in accordance with the rules mutuallyagreed upon between His Majesty’s Government <strong>and</strong>the Government of India.(iv) The Government of India shall permit the use ofinternal telegraph, telephone; <strong>and</strong> radiocommunications as approximately indicated in thePlan for the bona fide purpose of the construction,maintenance <strong>and</strong> operation of the Project.(v)the Government of India shall permit the use ofinternal telegraph, telephone <strong>and</strong> radiocommunications as indicated in the Plan to theauthorized servants of His Majesty’s Government inemergencies, provided such use does not interfere withte construction, maintenance <strong>and</strong> operation of theProject.6. OWNERSHIP, OPERATION AND MAINTENANCEOF WORKSSubject to the provisions sub-clause (v) of clause 7, allworks connected with the Project in the territory of Nepalwill remain the property of <strong>and</strong> be operated <strong>and</strong> maintainedby the Government of India.7. IRRIGATION FOR NEPAL(i) The Government of Indial shall construct at their owncost the Western Nepal Canal including thedistributary system thereof down to a minimumdischarge of 20 ft3/s for providing flow irrigation inthe gross comm<strong>and</strong>ed area estimated to be about40,000 acres.(ii) The Government of India shall construct the EasternNepal Canal from the tail end of the Don BranchCanal up to river Bagmati including the distributary
308 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 309system down to a minimum discharge of 20 ft3/s attheir own cost for providing flow irrigation in Nepalfor the gross comm<strong>and</strong>ed area estimated to be 103,500acres.(iii) His Majesty’s Government shall be responsible for theconstruction of channels below 20 ft3/s capacity forirrigation in Nepal but the Government of India shallcontribute such sum of money as they may considerreasonable to meet the cost of construction.(iv) The Nepal Eastern Canal <strong>and</strong> the Nepal Western Canalshall be completed, as far as possible, within one yearof the completion of the barrage.(v) The canal systems including the service roads situatedin Nepal territory except the main Western Canal shallbe h<strong>and</strong>ed over to His Majesty’s Government foroperation <strong>and</strong> maintenance at their cost.8. POWER DEVELOPMENT AND RESERVATIONFOR NEAPL(i) The Government of India agree to construct one PowerHouse with an installed capacity of 15,000 KW in theNepal territory on the Main Western Canal.(ii) The government of India also agree to construct atransmission line from the Power House in Nepal tothe Bihar border near Bhaisalotan <strong>and</strong> from Sagauli toRaxaul in Bihar in order to facilitate supply of poweron any point in the Bihar Grid up to <strong>and</strong> includingRaxaul.(iii) The Government of India shall supply power to HisMajesty’s Government at the Power Huse <strong>and</strong>/or atany point in the Grid up to <strong>and</strong> including Raxaul to anaggregate masimum of 10,000 KW up to 60 per centload factor at power factor not below 0.85. Thecharges for supply at the Power House shall be thecost of production ; <strong>and</strong> on any point on the Grid up toRaxaul it shall be the actual cost of production, <strong>and</strong> onany point on the Grid up to Raxaul it shall be the costof production plus the cost of transmission on suchterms <strong>and</strong> conditions as may be mutually agreed upon.(iv) His Majesty’s Government will be responsible for theconstruction at their own cost of the transmission <strong>and</strong>distribution system for supply of power within Nepalfrom the Power House or from any point on the Gridup to <strong>and</strong> including Raxaul.(v) The ownership <strong>and</strong> management of the Power Houseshall be their own cost of the transmission <strong>and</strong>distribution system for supply of power within Nepalfrom the Power House or from any point on the Gridup to <strong>and</strong> including Raxaul.(vi) The ownership of the transmission system constructedby the Government of India at its cost shall remainvested in the Government of India, but, on transfer ofPower House, the Government of India shall continuethe arrangements for transmission of power, if sodesired by His Majesty’s Government shall have rightto purchase the transmission system from the PowerHouse to Bhaisalotan situated in the Nepal territory onpayment of the original cost minus depreciation.(vii) The Government of India shall be free to regulate theflow into or close the Main Western Canal HeadRegulator temporarity, if such works are found to benecessary in the interest of the efficient maintenance<strong>and</strong> operation of the Canal or the Power House,provided that in such situations the Government ofIndia agree to supply te minimum essential powerfrom the Bihar Grid to the extent possible on suchterms <strong>and</strong> conditions as may be mutually agreed upon.9. PROTECTION OF NEPAL’S RIPAIRAN RIGHTSHis Majesty’s Government will continue to have the rightto withdraw for irrigation or any other purpose from theriver or its tributaries in Nepal such supplies of water asmay be required by them from time to time <strong>and</strong> HisMajesty’s Government agree that they shall not exercise
310 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 311this right in such manner as is likely, in the opinion of theparties hereto prejudicially to affect the water requirementsof the Project as set out in the schedule annexed hereto.10. PRO RATE REDUCTION OF SUPPLIES DURINGPERIOD OF SHORTAGEWhenever the supply of water available for irrigation fallsshort of the requirements of the total area under the Projectfro which irrigation has to be provided the shortage shallbe shared on pro rata bais between the Government ofIndia <strong>and</strong> His Majesty’s Government.11. SOVERIGNTY AND JURISDICTIONNothing in this Agreement shall be deemed to derogatefrom the sovereignty <strong>and</strong> territorial jurisdiction of HisMajesty’s Government in respect of l<strong>and</strong>s acquired by HisMajesty’s Government <strong>and</strong> made available to theGovernment of India for investigation, execution <strong>and</strong>maintenance of the Project.12. ARBITRATION(i) Any dispute or difference arising out of or in any waytouching or concerning the construction, effect ormeaning of this Agreement, or of any mater containedherein or the respective rights <strong>and</strong> liabilities of theparties hereunder, if not settled by discussion, shall bedetermined in accordance with provision of this clause.(ii) Any of the parties may be notice in writing inform theother party of its intention to refer to arbitration anysuch disputes or difference mentioned in sub-clause(1) <strong>and</strong> within 90 days of the delivery of such notice,each of the two parties shall nominate an arbitrator forjointly determining such dispute or difference <strong>and</strong> theaward of the arbitrators shall be binding on the parties.(iii) In case the arbitrators are unable to agree, the partieshereto may consult each other appoint an Umpirewhose award shall be final <strong>and</strong> bonding on them.14. This Agreement will come into force with effect from thedate of signatures of the authorized representatives of HisMajesty’s Government <strong>and</strong> the Government of Indiarespectively.IN WITNESS WHEREOF the undersigned being dulyauthorized thereof by their respective Governments have signedthe present AGREEMENT in Nepali, Hindi <strong>and</strong> English induplicate, all three texts being equally authentic, at Kathm<strong>and</strong>uthis 19 th day of Magh Sambat 2016 corresponding to December4, 1959. For purposes of interpretation the English text shall beused.For the Government of India On behalf ofFor <strong>and</strong> on behalf of His Majesty’s GovernmentPresident of India of NepalBHAGWAN SAHAY SUBARNA SHAMSHEREAmbassador of India Deputy Prime Minister•
312 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 313Appendix- 3Treaty between His Majesty’ Government ofNepal <strong>and</strong> the Government of Indiaconcerning the Integrated Mahakali River,including Sarada Barrage, TanakpurBarrage <strong>and</strong> Pancheshwar ProjectHis Majesty’s government of NEPAL, <strong>and</strong> the Government ofINDIA(hereinafter referred to as the ‘Parties’)Referring the determination to promote <strong>and</strong> strengthen theirrelations of friendship <strong>and</strong> close neighbourness for the cooperationin the development of water resources;Recognizing that the Mahakali River is a boundary river onmajor stretches between the two countries;Realizing the desirability to enter into a treaty on the basis ofequal partnership to define their obligations <strong>and</strong> correspondingrights <strong>and</strong> duties thereto in regard to the waters of the MahakaliRiver <strong>and</strong> its utilization;Noting the Exchange of Letters of 1920 through which both theparties had entered into an arrangement for the construction ofSarada Barrage in the Mahakali River, whereby Nepal is toreceive some waters from the said Barrage;Recalling the decision taken in the Joint Commission dated 4-5December, 1991 <strong>and</strong> the Joint Communiqué issued during thevisit of the Prime Minister of India to Nepal on 21 st October,1992 regarding the Tanakpur Barrage which India hasconstructed in a course of the Mahakali River with a part of theeastern afflux bund at Jimuwa <strong>and</strong> the adjoining poundage areaof the said barrage lying in the Nepalese territory;Noting that both the Parties jointly preparing a Detailed ProjectReport of the Pancheshwar Multi purpose Project to bimplemented in the Mahakali River;Now, therefore, the Parties hereto hereby have agreed asfollows:Article 11. Nepal shall have the right to a supply of 28.35m3/s(1000ft3/s of water from the Sarada Barrage in the wetseason (i. e. from 16 th October to 14 th May).2. India shall maintain a flow of not less than 10 m3/s (350ft3/s) downstream of the Sarada Barrage in the MahakaliRiver to maintain <strong>and</strong> preserve the river eco-system.3. In case the Sarada Barage become non-functional due toany cause.(a) Nepal shall have the right to a supply of water asmentioned in Paragraph 1 of this Article, by usingthe head regulator (s) mentioned in Paragraph 2ofArticle 2 herein. Such a supply of water shall be inaddition to the water to be supplied to Nepalpursuant to Paragraph 2 of Article 2.(b) India shall maintain the rive flow pursuant toParagraph 2 of the Article from the tailrace of theTanakpur Power Station downstream of the SaradaBarrage.Article 2In continuation of the decisions taken in the Joint Commissiondates 4-5 December, 1991 <strong>and</strong> a Joint Communiqué issuesduring the visit of the Prime Ministers of India of India toNepal on 21 st October, 1992, both the Parties agree as follows.1. For the construction of the eastern afflux bund of theTanakpure barrage, at Jimuwa <strong>and</strong> tying it up to the highground in the Nepalese territory at EL 250 M, Nepal givesits consent to use a piece of l<strong>and</strong> of about 577 meters inlength (an area of about 2.9 hectares) of the Nepalese
314 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 315territory at the Jimuwa Village in MahendranagarMunicipal area <strong>and</strong> a certain portion of the No-Man’s L<strong>and</strong>on either side of the border. The Nepalese l<strong>and</strong> consented tobe so used <strong>and</strong> the l<strong>and</strong> lying on the west of the saidl<strong>and</strong> )about 9 hectares) up to the Nepal India border whichforms a part for the poundage area, including the naturalresources endowment lying within the area, remains underthe continued sovereignty <strong>and</strong> control of Nepal <strong>and</strong>.2. In lieu of the eastern afflux bund of the Tanakpur Barrrage,at Jimuwa thus constructed, Nepal shall have the right to-(a) a supply of 28.35 m3/s (1000ft3/s) of water in the wetseason(i. e. from 15 th May to 15 th October) <strong>and</strong> 8.50m3/s (300ft3/s) in the dry season (i. e. from 16 thOctober to 14 th May) from the date for the entry intoforce of this Treaty. For this purposes of Article 1herein, India shall construct the head regulator (s) nearthe left undersluice of the Tanakpur Barrage <strong>and</strong> alsothe waterways of the required capacity up to the Nepal-India border. Such head regulator(s) <strong>and</strong> waterwaysshall be operated jointly.(b) a supply of 70 millions kilowatt-hour (units) of energyon a continuous basis annually, free of cost, from thedate of the entry into force of this Treaty. For thispurpose, India shall construct a 132 K v transmissionline up to the Nepal-India border from the TanakpurPower Station (which has, at present, an installedcapacity of 120,000 kilowatt generating 448.4 millionskilowatt-hour of energy annually on 90 percentdependable year flow).3. Following arrangement shall be made at the TanakpurBarrage, at the time of development of any storage project(s) including Pancheshwar Multipurpose Project upstreamof the Tanakpur Barrage.(a) Additional head regulator <strong>and</strong> necessary waterways, asrequired, up to the Nepal-India border shall beconstructed to supply additional water to Nepal. Suchhead regulator <strong>and</strong> waterways shall be operated jointly.(b) Nepal shall have additional energy equal to half of theincremental energy generated from the TanakpurPower Station, on a continuous basis from the date ofaugmentation of the flow of the Mahakali River <strong>and</strong>shall bear half of the additional operation cost <strong>and</strong>, ifrequired, half of the additional capital cost at theTanakpur Power Station for the generation of suchincremental energy.Article 3Pancheshwar Multipurpose Project (hereinafter referred to asthe “Project”) is to be constructed on a stretch of the MahakaliRiver where it forms the boundary between the two countries<strong>and</strong> hence both the parties agree that they have equalentitlement in the utilization of the waters of the MahakaliRiver without prejudice to their respective existingconsumptive uses of the waters of the Mahakali River.Therefore, both Parties agree to implement the Project in theMahakali River is accordance with the Detailed Project Report(DPR) being jointly prepared by them. The Project shall bedesigned <strong>and</strong> implemented on the basis of the followingprinciples:1. The Project shall, as would be agreed between theParties, be designed to produce the maximum total netbenefit. All benefits accruing to both the Parties withthe development of the Project in the forms of power,irrigation, flood control etc., shall be assessed.2. The Project shall be implemented or caused to beimplemented as an integrated project including powerstations shall be operated in an integrated manner <strong>and</strong>the total energy generated shall be shared equallybetween the Parties.3. The cost of the project shall be borne by the Parties inproportion to the benefits accruing to them. Both the
316 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 317Parties shall jointly endeavour to mobilize the financerequired for the implementation of the Project.4. A portion of Nepal’s share of energy shall be sold toIndia. The quantum of such energy <strong>and</strong> its price shall bemutually agreed upon between the Parties.Article 4India shall supply 10 m3/s (350 ft3/s) of water for theirrigation of Dodhara –Ch<strong>and</strong>ani area of Nepalese territory.The technical <strong>and</strong> other details will be mutually worked out.Article 51. Water requirements of Nepal shall be given primeconsideration in the utilization of the waters of theMahakali River.2. Both the Parties shall be entitled to draw their share ofwaters of the Mahakali River from the Tanakpur Barrage<strong>and</strong>/or other mutually agreed points as provided for in thisTreaty <strong>and</strong> any subsequent agreement between the Parties.Article 6Any Project, other than those mentioned herein, to bedeveloped in the Mahakali River, where it is a boundaryriver, shall be designed <strong>and</strong> implemented by an agreementbetween the Parties on the principles established by theTreaty.Article 7In order to maintain the flow <strong>and</strong> level of the waters of theMahakali River, each Party undertakes not to use orobstruct or divert the waters of the Mahakali Riveradversely affecting its natural flow <strong>and</strong> level except by anagreement between the Parties. Provided, however, thisshall not preclude the use of the waters of the MahakaliRiver by the local communities living along both sides ofthe Mahakali River, not exceeding five (5) percent of theaverage annual flow at Pancheshwar.Article 8This Treaty shall not preclude planning, survey,development <strong>and</strong> operation of any work on the tributariesof the Mahakali River, to be carried out independently byeach Party in its own territory without adversely affectingthe provision of Article 7 of this Treaty.Article 91. There shall be a Mahakali River Commission (hereinafterreferred to as the ‘Commission’). The Commission shall beguided by the principles of equality, mutual benefit <strong>and</strong> noharm to either Party.2. The commission shall be composed of equal number ofrepresentatives from both the Parties.3. The function of the Commission shall, inter alia, include thefollowing:(a) To seek information on <strong>and</strong>, if necessary, inspect allstructures included in the Treaty <strong>and</strong> makerecommendations to both the Parties to take stepswhich shall be necessary to implement the provisionsof this Treaty,(b) To make recommendations to both the Parties for theconservation <strong>and</strong> utilization of the Mahakali River asenvisaged <strong>and</strong> provided for in this Treaty,(c) To provide expert evaluation of projects <strong>and</strong>recommendations thereto,(d) To co-ordinate <strong>and</strong> monitor plans of actions arising outof the implementation of this treaty, <strong>and</strong>(e) To examine any differences arising between theParties concerning the interpretation <strong>and</strong> application ofthis Treaty.4. The expense of the Commission shall be borne equally byboth the Parties.5. As soon as the Commission has been constituted pursuantto Paragraph 1<strong>and</strong> 2 of this Article, it shall draft its rules ofprocedure, which shall be submitted to other the Parties fortheir concurrence.
318 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 3196. Both the Parties shall reserve their rights to deal directlywith each other on matters, which may be in thecompetence of the Commission.Article 10Both the Parties may from project specific joint entity/ies forthe development, execution <strong>and</strong> operation of new projectsincluding Pancheshwar Multipurpose Project in the MahakaliRive for their mutual benefit.Article 111. If the Commission fails under Article 9 of this Treaty torecommend its opinion after examining the differences ofthe Parties within thee (3) months of such reference to theCommission then a dispute shall be deemed to have arisenwhich shall then be submitted to arbitration for decision. Indoing so either party shall give three (30 months priornotice other the other Party.2. Arbitration shall be conducted by a tribunal composed ofthree arbitrators. One arbitrator shall be nominated byNepal, one by India, with neither country nominate its ownnational <strong>and</strong> the third arbitrator shall be appointed jointly,who, as a member of the tribunal shall preside over suchtribunal. In the event that the Parties are unable to agreeupon the third arbitrator within ninety (90) days afterreceipt of a proposal, with Party may request the Secretary-General of the Permanent Court of Arbitration at the Hagueto appoint such arbitrator who shall not be a national ofeither country.3. The procedures of the arbitration shall be determined by thearbitration tribunal <strong>and</strong> the decision of a majority of thearbitrators shall be decision of the tribunal. The proceedingsof the tribunal shall be conducted in English <strong>and</strong> thedecision of such a tribunal shall be in writing.4. Provision for the venue of arbitration, the administrativesupport of the arbitration tribunal <strong>and</strong> the remuneration <strong>and</strong>expenses of its arbitrators shall be as agreed in an exchangeof notes between the Parties. Both the Parties may alsoagree by such exchange of notes on alternative proceduresfor settling differences arising under this Treaty.Article 121. Following the conclusion of this Treaty, the earlierunderst<strong>and</strong>ing reached between the Parties concerning theutilization of the waters of the Mahakali River from theSarada Barrrage <strong>and</strong> the Tanakpur Barrage, which has beenincorporated herein, shall be deemed to have been replacedby this Treaty.2. This Treaty shall be subject to ratification <strong>and</strong> shall enterinto force on the date of exchange of instruments ofratification. It shall remains valid for a period of seventyfive(75) years from the date of its entry into force.3. This Treaty shall be reviewed by both the Parties at ten (10)years interval or earlier as required by wither Party <strong>and</strong>make amendments thereof, if necessary.4. Agreement, as required, shall be entered into by the Partiesto give effect to the provisions of this Treaty.IN WITNESS WEHREFO the undersigned being dulyauthorized thereto by their respective governments have theretotheir seals in two originals each in Hindi, Nepali <strong>and</strong> Englishlanguages, all the texts being equally authentic. In case of doubt,the English text shall prevail.Done at New Delhi, India, on the twelfth day of February of theyear one thous<strong>and</strong> nine hundred ninety six.(SHER BAHADUR DEUBA) (P. V. NARSIMGH RAO)PRIME MINISTER OF INDIAPRIME MINISTERSHIS MAJESTY’S GOVERNMENT OF NEPAL•
320 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 321Appendix- 4United Nations Convention on the <strong>Law</strong> ofthe Non-navigational Uses of<strong>International</strong> <strong>Watercourses</strong>, 1997The Parties to the present Convention, Conscious of theimportance of international watercourses <strong>and</strong> the nonnavigationaluses thereof in many regions of the world,Having in mind Article 13, paragraph 1 (a), of the Charter ofthe United Nations, which provides that the General Assemblyshall initiate studies <strong>and</strong> make recommendations for thepurpose of encouraging the progressive development ofinternational law <strong>and</strong> its codification, Considering thatsuccessful codification <strong>and</strong> progressive development of rules ofinternational law regarding non-navigational uses ofinternational watercourses would assist in promoting <strong>and</strong>implementing the purposes <strong>and</strong> principles set forth in Articles 1<strong>and</strong> 2 of the Charter of the United Nations,Taking into account the problems affecting many internationalwatercourses resulting from, among other things, increasingdem<strong>and</strong>s <strong>and</strong> pollution,Expressing the conviction that a framework convention willensure the utilization, development, conservation, management<strong>and</strong> protection of international watercourses <strong>and</strong> the promotionof the optimal <strong>and</strong> sustainable utilization thereof for present<strong>and</strong> future generationsAffirming the importance of international cooperation <strong>and</strong> goodneighbourliness in this field,Aware of the special situation <strong>and</strong> needs of developingcountries,Recalling the principles <strong>and</strong> recommendations adopted by theUnited Nations Conference on Environment <strong>and</strong> Developmentof 1992 in the Rio Declaration <strong>and</strong> Agenda 21,Recalling also the existing bilateral <strong>and</strong> multilateral agreementsregarding the non-navigational uses of internationalwatercourses,Mindful of the valuable contribution of internationalorganizations, both governmental <strong>and</strong> non-governmental, to thecodification <strong>and</strong> progressive development of international lawin this field,Appreciative of the work carried out by the <strong>International</strong> <strong>Law</strong>Commission on the law of the non-navigational uses ofinternationalwatercourses,Bearing in mind United Nations General Assembly resolution49/52 of 9 December 1994,Have agreed as follows:PART- IINTRODUCTIONArticle 1Scope of the Present Convention1. The present Convention applies to uses of internationalwatercourses <strong>and</strong> of their waters for purposes other thannavigation <strong>and</strong> to measures of protection, preservation <strong>and</strong>management related to the uses of those watercourses <strong>and</strong>their waters.2. The uses of international watercourses for navigation is notwithin the scope of the present Convention except insofaras other uses affect navigation or are affected by navigation.Article 2Use of TermsFor the purposes of the present Convention:(a) "Watercourse" means a system of surface waters <strong>and</strong>groundwaters constituting by virtue of their physical
322 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 323relationship a unitary whole <strong>and</strong> normally flowing into acommon terminus;(b) "<strong>International</strong> watercourse" means a watercourse, parts ofwhich are situated in different States;(c) "Watercourse State" means a State Party to the presentConvention in whose territory part of an internationalwatercourse is situated, or a Party that is a regionaleconomic integration organization, in the territory of one ormore of whose Member States part of an internationalwatercourse is situated;(d) "Regional economic integration organization" means anorganization constituted by sovereign States of a givenregion, to which its member States have transferredcompetence in respect of matters governed by thisConvention <strong>and</strong> which has been duly authorized inaccordance with its internal procedures, to sign, ratify,accept, approve or accede to it.Article 3Watercourse Agreements1. In the absence of an agreement to the contrary, nothing inthe present Convention shall affect the rights or obligationsof a watercourse State arising from agreements in force forit on the date on which it became a party to the presentConvention.2. Notwithst<strong>and</strong>ing the provisions of paragraph 1, parties toagreements referred to in paragraph 1 may, wherenecessary, consider harmonizing such agreements with thebasic principles of the present Convention.3. Watercourse States may enter into one or more agreements,hereinafter referred to as "watercourse agreements", whichapply <strong>and</strong> adjust the provisions of the present Conventionto the characteristics <strong>and</strong> uses of a particular internationalwatercourse or part thereof.4. Where a watercourse agreement is concluded between twoor more watercourse States, it shall define the waters towhich it applies. Such an agreement may be entered intowith respect to an entire international watercourse or anypart thereof or a particular project programme or useexcept insofar as the agreement adversely affects, to asignificant extent, the use by one or more otherwatercourse States of the waters of the watercourse,without their express consent.5. Where a watercourse State considers that adjustment <strong>and</strong>application of the provisions of the present Convention isrequired because of the characteristics <strong>and</strong> uses of aparticular international watercourse, watercourse Statesshall consult with a view to negotiating in good faith forthe purpose of concluding a watercourse agreement oragreements.6. Where some but not all watercourse States to a particularinternational watercourse are parties to an agreement,nothing in such agreement shall affect the rights orobligations under the present Convention of watercourseStates that are not parties to such an agreement.Article 4Parties to Watercourse Agreements1. Every watercourse State is entitled to participate in thenegotiation of <strong>and</strong> to become a party to any watercourseagreement that applies to the entire internationalwatercourse, as well as to participate in any relevantconsultations.2. A watercourse State whose use of an internationalwatercourse may be affected to a significant extent by theimplementation of a proposed watercourse agreement thatapplies only to a part of the watercourse or to a particularproject, programme or use is entitled to participate inconsultations on such an agreement <strong>and</strong>, whereappropriate, in the negotiation thereof in good faith with aview to becoming a party thereto, to the extent that its useis thereby affected.
324 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 325PART- IIGENERAL PRINCIPLESArticle 5Equitable <strong>and</strong> Reasonable Utilization <strong>and</strong> Participation1. Watercourse States shall in their respective territoriesutilize an international watercourse in an equitable <strong>and</strong>reasonable manner. In particular, an internationalwatercourse shall be used <strong>and</strong> developed by watercourseStates with a view to attaining optimal <strong>and</strong> sustainableutilization thereof <strong>and</strong> benefits therefrom, taking intoaccount the interests of the watercourse States concerned,consistent with adequate protection of the watercourse.2. Watercourse States shall participate in the use,development <strong>and</strong> protection of an international watercoursein an equitable <strong>and</strong> reasonable manner. Such participationincludes both the right to utilize the watercourse <strong>and</strong> theduty to cooperate in the protection <strong>and</strong> developmentthereof, as provided in the present Convention.Article 6Factors Relevant to Equitable <strong>and</strong> Reasonable Utilization1. Utilization of an international watercourse in an equitable<strong>and</strong> reasonable manner within the meaning of article 5requires taking into account all relevant factors <strong>and</strong>circumstances, including:(a) Geographic, hydrographic, hydrological, climatic,ecological <strong>and</strong> other factors of a natural character;(b) The social <strong>and</strong> economic needs of the watercourseStates concerned;(c) The population dependent on the watercourse in eachwatercourse State;(d) The effects of the use or uses of the watercourses inone watercourse State on other watercourse States;(e) Existing <strong>and</strong> potential uses of the watercourse;(f) Conservation, protection, development <strong>and</strong> economyof use of the water resources of the watercourse <strong>and</strong>the costs of measures taken to that effect;(g) The availability of alternatives, of comparable value,to a particular planned or existing use.2. In the application of article 5 or paragraph 1 of this article,watercourse States concerned shall, when the need arises,enter into consultations in a spirit of cooperation.3. The weight to be given to each factor is to be determinedby its importance in comparison with that of other relevantfactors. In determining what is a reasonable <strong>and</strong> equitableuse, all relevant factors are to be considered together <strong>and</strong> aconclusion reached on the basis of the whole.Article 7Obligation Not to Cause Significant Harm1. Watercourse States shall, in utilizing an internationalwatercourse in their territories, take all appropriatemeasures to prevent the causing of significant harm toother watercourse States.2. Where significant harm nevertheless is caused to anotherwatercourse State, the States whose use causes such harmshall, in the absence of agreement to such use, take allappropriate measures, having due regard for the provisionsof articles 5 <strong>and</strong> 6, in consultation with the affected State,to eliminate or mitigate such harm <strong>and</strong>, where appropriate,to discuss the question of compensation.Article 8General Obligation to Cooperate1. Watercourse States shall cooperate on the basis ofsovereign equality, territorial integrity, mutual benefit <strong>and</strong>good faith in order to attain optimal utilization <strong>and</strong>adequate protection of an international watercourse.
326 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 3272. In determining the manner of such cooperation,watercourse States may consider the establishment of jointmechanisms or commissions, as deemed necessary bythem, to facilitate cooperation on relevant measures <strong>and</strong>procedures in the light of experience gained throughcooperation in existing joint mechanisms <strong>and</strong> commissionsin various regions.Article 9Regular Exchange of Data <strong>and</strong> Information1. Pursuant to article 8, watercourse States shall on a regularbasis exchange readily available data <strong>and</strong> information onthe condition of the watercourse, in particular that of ahydrological, meteorological, hydrogeological <strong>and</strong>ecological nature <strong>and</strong> related to the water quality as well asrelated forecasts.2. If a watercourse State is requested by another watercourseState to provide data or information that is not readilyavailable, it shall employ its best efforts to comply with therequest but may condition its compliance upon payment bythe requesting State of the reasonable costs of collecting<strong>and</strong>, where appropriate, processing such data orinformation.3. Watercourse States shall employ their best efforts to collect<strong>and</strong>, where appropriate, to process data <strong>and</strong> information ina manner which facilitates its utilization by the otherwatercourse States to which it is communicated.Article 10Relationship Between Different Kinds of Uses1. In the absence of agreement or custom to the contrary, nouse of an international watercourse enjoys inherent priorityover other uses.2. In the event of a conflict between uses of an internationalwatercourse, it shall be resolved with reference to articles 5to 7, with special regard being given to the requirements ofvital human needs.PART- IIIPLANNED MEASURESArticle 11Information Concerning Planned MeasuresWatercourse States shall exchange information <strong>and</strong> consulteach other <strong>and</strong>, if necessary, negotiate on the possible effects ofplanned measures on the condition of an internationalwatercourse.Article 12Notification Concerning Planned Measureswith Possible Adverse EffectsBefore a watercourse State implements or permits theimplementation of planned measures which may have asignificant adverse effect upon other watercourse States, it shallprovide those States with timely notification thereof. Suchnotification shall be accompanied by available technical data<strong>and</strong> information, including the results of any environmentalimpact assessment, in order to enable the notified States toevaluate the possible effects of the planned measures.Article 13Period for Reply to NotificationUnless otherwise agreed:(a) A watercourse State providing a notification under article12 shall allow the notified States a period of six monthswithin which to study <strong>and</strong> evaluate the possible effects ofthe planned measures <strong>and</strong> to communicate the findings to it;(b) This period shall, at the request of a notified State forwhich the evaluation of the planned measures poses specialdifficulty, be extended for a period of six months.
328 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 329Article 14Obligations of the Notifying StateDuring the Period for ReplyDuring the period referred to in article 13, the notifying State:(a) Shall cooperate with the notified States by providing them,on request, with any additional data <strong>and</strong> information that isavailable <strong>and</strong> necessary for an accurate evaluation; <strong>and</strong>(b) Shall not implement or permit the implementation of theplanned measures without the consent of the notifiedStates.Article 15Reply to NotificationThe notified States shall communicate their findings to thenotifying State as early as possible within the period applicablepursuant to article 13. If a notified State finds thatimplementation of the planned measures would be inconsistentwith the provisions of articles 5 or 7, it shall attach to itsfinding a documented explanation setting forth the reasons forthe finding.Article 16Absence of Reply to Notification1. If, within the period applicable pursuant to article 13, thenotifying State receives no communication under article15, it may, subject to its obligations under articles 5 <strong>and</strong> 7,proceed with the implementation of the planned measures,in accordance with the notification <strong>and</strong> any other data <strong>and</strong>information provided to the notified States.2. Any claim to compensation by a notified State which hasfailed to reply within the period applicable pursuant toarticle 13 may be offset by the costs incurred by thenotifying State for action undertaken after the expiration ofthe time for a reply which would not have been undertakenif the notified State had objected within that period.Article 17Consultations <strong>and</strong> NegotiationsConcerning Planned Measures1. If a communication is made under article 15 thatimplementation of the planned measures would beinconsistent with the provisions of articles 5 or 7, thenotifying State <strong>and</strong> the State making the communicationshall enter into consultations <strong>and</strong>, if necessary, negotiationswith a view to arriving at an equitable resolution of thesituation.2. The consultations <strong>and</strong> negotiations shall be conducted onthe basis that each State must in good faith pay reasonableregard to the rights <strong>and</strong> legitimate interests of the otherState.3. During the course of the consultations <strong>and</strong> negotiations, thenotifying State shall, if so requested by the notified State atthe time it makes the communication, refrain fromimplementing or permitting the implementation of theplanned measures for a period of six months unlessotherwise agreed.Article 18Procedures in the Absence of Notification1. If a watercourse State has reasonable grounds to believethat another watercourse State is planning measures thatmay have a significant adverse effect upon it, the formerState may request the latter to apply the provisions ofarticle 12. The request shall be accompanied by adocumented explanation setting forth its grounds.2. In the event that the State planning the measuresnevertheless finds that it is not under an obligation toprovide a notification under article 12, it shall so informthe other State, providing a documented explanation setting
330 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 331forth the reasons for such finding. If this finding does notsatisfy the other State, the two States shall, at the request ofthat other State, promptly enter into consultations <strong>and</strong>negotiations in the manner indicated in paragraphs 1 <strong>and</strong> 2of article 17.3. During the course of the consultations <strong>and</strong> negotiations, theState planning the measures shall, if so requested by theother State at the time it requests the initiation ofconsultations <strong>and</strong> negotiations, refrain from implementingor permitting the implementation of those measures for aperiod of six months unless otherwise agreed.Article 19Urgent Implementation of Planned Measures1. In the event that the implementation of planned measures isof the utmost urgency in order to protect public health,public safety or other equally important interests, the Stateplanning the measures may, subject to articles 5 <strong>and</strong> 7,immediately proceed to implementation, notwithst<strong>and</strong>ingthe provisions of article 14 <strong>and</strong> paragraph 3 of article 17.2. In such case, a formal declaration of the urgency of themeasures shall be communicated without delay to the otherwatercourse States referred to in article 12 together withthe relevant data <strong>and</strong> information.3. The State planning the measures shall, at the request of anyof the States referred to in paragraph 2, promptly enter intoconsultations <strong>and</strong> negotiations with it in the mannerindicated in paragraphs 1 <strong>and</strong> 2 of article 17.PART- IVPROTECTION, PRESERVATION AND MANAGEMENTArticle 20Protection <strong>and</strong> Preservation of EcosystemsWatercourse States shall, individually <strong>and</strong>, where appropriate,jointly, protect <strong>and</strong> preserve the ecosystems of internationalwatercourses.Article 21Prevention, Reduction <strong>and</strong> Control of Pollution1. For the purpose of this article, "pollution of aninternational watercourse" means any detrimentalalteration in the composition or quality of the waters of aninternational watercourse which results directly orindirectly from human conduct.2. Watercourse States shall, individually <strong>and</strong>, whereappropriate, jointly, prevent, reduce <strong>and</strong> control thepollution of an international watercourse that may causesignificant harm to other watercourse States or to theirenvironment, including harm to human health or safety, tothe use of the waters for any beneficial purpose or to theliving resources of the watercourse. Watercourse Statesshall take steps to harmonize their policies in thisconnection.3. Watercourse States shall, at the request of any of them,consult with a view to arriving at mutually agreeablemeasures <strong>and</strong> methods to prevent, reduce <strong>and</strong> controlpollution of an international watercourse, such as:(a) Setting joint water quality objectives <strong>and</strong> criteria;(b) Establishing techniques <strong>and</strong> practices to addresspollution from point <strong>and</strong> non-point sources;(c) Establishing lists of substances the introduction ofwhich into the waters of an international watercourseis to be prohibited, limited, investigated or monitored.Article 22Introduction of Alien or New SpeciesWatercourse States shall take all measures necessary to preventthe introduction of species, alien or new, into an internationalwatercourse which may have effects detrimental to theecosystem of the watercourse resulting in significant harm toother watercourse States.
332 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 333Article 23Protection <strong>and</strong> Preservation of the Marine EnvironmentWatercourse States shall, individually <strong>and</strong>, where appropriate,in cooperation with other States, take all measures with respectto an international watercourse that are necessary to protect <strong>and</strong>preserve the marine environment, including estuaries, takinginto account generally accepted international rules <strong>and</strong>st<strong>and</strong>ards.Article 24Management1. Watercourse States shall, at the request of any of them,enter into consultations concerning the management of aninternational watercourse, which may include theestablishment of a joint management mechanism.2. For the purposes of this article, "management" refers, inparticular, to:(a) Planning the sustainable development of aninternational watercourse <strong>and</strong> providing for theimplementation of any plans adopted; <strong>and</strong>(b) Otherwise promoting the rational <strong>and</strong> optimalutilization, protection <strong>and</strong> control of the watercourse.Article 25Regulation1. Watercourse States shall cooperate, where appropriate, torespond to needs or opportunities for regulation of the flowof the waters of an international watercourse.2. Unless otherwise agreed, watercourse States shallparticipate on an equitable basis in the construction <strong>and</strong>maintenance or defrayal of the costs of such regulationworks as they may have agreed to undertake.3. For the purposes of this article, "regulation" means the useof hydraulic works or any other continuing measure toalter, vary or otherwise control the flow of the waters of aninternational watercourse.Article 26Installations1. Watercourse States shall, within their respective territories,employ their best efforts to maintain <strong>and</strong> protectinstallations, facilities <strong>and</strong> other works related to aninternational watercourse.2. Watercourse States shall, at the request of any of themwhich has reasonable grounds to believe that it may suffersignificant adverse effects, enter into consultations withregard to:(a) The safe operation <strong>and</strong> maintenance of installations,facilities or other works related to an internationalwatercourse; <strong>and</strong>(b) The protection of installations, facilities or other worksfrom willful or negligent acts or the forces of nature.PART- VHARMFUL CONDITIONS ANDEMERGENCY SITUATIONSArticle 27Prevention <strong>and</strong> mitigation of harmful conditionsWatercourse States shall, individually <strong>and</strong>, where appropriate,jointly, take all appropriate measures to prevent or mitigateconditions related to an international watercourse that may beharmful to other watercourse States, whether resulting fromnatural causes or human conduct, such as flood or iceconditions, water-borne diseases, siltation, erosion, salt-waterintrusion, drought or desertification.
334 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 335Article 28Emergency situations1. For the purposes of this article, "emergency" means asituation that causes, or poses an imminent threat ofcausing, serious harm to watercourse States or other States<strong>and</strong> that results suddenly from natural causes, such asfloods, the breaking up of ice, l<strong>and</strong>slides or earthquakes, orfrom human conduct, such as industrial accidents.2. A watercourse State shall, without delay <strong>and</strong> by the mostexpeditious means available, notify other potentiallyaffected States <strong>and</strong> competent international organizationsof any emergency originating within its territory.3. A watercourse State within whose territory an emergencyoriginates shall, in cooperation with potentially affectedStates <strong>and</strong>, where appropriate, competent internationalorganizations, immediately take all practicable measuresnecessitated by the circumstances to prevent, mitigate <strong>and</strong>eliminate harmful effects of the emergency.4. When necessary, watercourse States shall jointly developcontingency plans for responding to emergencies, incooperation, where appropriate, with other potentiallyaffected States <strong>and</strong> competent international organizations.PART- VIMISCELLANEOUS PROVISIONSArticle 29<strong>International</strong> watercourses <strong>and</strong> installationsin time of armed conflict<strong>International</strong> watercourses <strong>and</strong> related installations, facilities<strong>and</strong> other works shall enjoy the protection accorded by theprinciples <strong>and</strong> rules of international law applicable ininternational <strong>and</strong> non-international armed conflict <strong>and</strong> shall notbe used in violation of those principles <strong>and</strong> rules.Article 30Indirect ProceduresIn cases where there are serious obstacles to direct contactsbetween watercourse States, the States concerned shall fulfilltheir obligations of cooperation provided for in the presentConvention, including exchange of data <strong>and</strong> information,notification, communication, consultations <strong>and</strong> negotiations,through any indirect procedure accepted by them.Article 31Data <strong>and</strong> Information Vital to National Defence or SecurityNothing in the present Convention obliges a watercourse Stateto provide data or information vital to its national defence orsecurity. Nevertheless, that State shall cooperate in good faithwith the other watercourse States with a view to providing asmuch information as possible under the circumstances.Article 32Non-discriminationUnless the watercourse States concerned have agreed otherwisefor the protection of the interests of persons, natural orjuridical, who have suffered or are under a serious threat ofsuffering significant transboundary harm as a result of activitiesrelated to an international watercourse, a watercourse Stateshall not discriminate on the basis of nationality or residence orplace where the injury occurred, in granting to such persons, inaccordance with its legal system, access to judicial or otherprocedures, or a right to claim compensation or other relief inrespect of significant harm caused by such activities carried onin its territory.
336 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 337Article 33Settlement of disputes1. In the event of a dispute between two or more Partiesconcerning the interpretation or application of the presentConvention, the Parties concerned shall, in the absence ofan applicable agreement between them, seek a settlementof the dispute by peaceful means in accordance with thefollowing provisions.2. If the Parties concerned cannot reach agreement bynegotiation requested by one of them, they may jointlyseek the good offices of, or request mediation orconciliation by, a third party, or make use, as appropriate,of any joint watercourse institutions that may have beenestablished by them or agree to submit the dispute toarbitration or to the <strong>International</strong> Court of Justice.3. Subject to the operation of paragraph 10, if after sixmonths from the time of the request for negotiationsreferred to in paragraph 2, the Parties concerned have notbeen able to settle their dispute through negotiation or anyother means referred to in paragraph 2, the dispute shall besubmitted, at the request of any of the parties to thedispute, to impartial fact-finding in accordance withparagraphs 4 to 9, unless the Parties otherwise agree.4. Fact-finding Commission shall be established, composedof one member nominated by each Party concerned <strong>and</strong> inaddition a member not having the nationality of any of theParties concerned chosen by the nominated members whoshall serve as Chairman.5. If the members nominated by the Parties are unable toagree on a Chairman within three months of the request forthe establishment of the Commission, any Party concernedmay request the Secretary-General of the United Nations toappoint the Chairman who shall not have the nationality ofany of the parties to the dispute or of any riparian State ofthe watercourse concerned. If one of the Parties fails tonominate a member within three months of the initialrequest pursuant to paragraph 3, any other Party concernedmay request the Secretary-General of the United Nations toappoint a person who shall not have the nationality of anyof the parties to the dispute or of any riparian State of thewatercourse concerned. The person so appointed shallconstitute a single-member Commission.6. The Commission shall determine its own procedure.7. The Parties concerned have the obligation to provide theCommission with such information as it may require <strong>and</strong>,on request, to permit the Commission to have access totheir respective territory <strong>and</strong> to inspect any facilities, plant,equipment, construction or natural feature relevant for thepurpose of its inquiry.8. The Commission shall adopt its report by a majority vote,unless it is a single-member Commission, <strong>and</strong> shall submitthat report to the Parties concerned setting forth its findings<strong>and</strong> the reasons therefore <strong>and</strong> such recommendations as itdeems appropriate for an equitable solution of the dispute,which the Parties concerned shall consider in good faith.9. The expenses of the Commission shall be borne equally bythe Parties concerned10. When ratifying, accepting, approving or acceding to thepresent Convention, or at any time thereafter, a Partywhich is not a regional economic integration organizationmay declare in a written instrument submitted to theDepositary that, in respect of any dispute not resolved inaccordance with paragraph 2, it recognizes as compulsoryipso facto <strong>and</strong> without special agreement in relation to anyParty accepting the same obligation:(a) Submission of the dispute to the <strong>International</strong> Court ofJustice; <strong>and</strong>/or(b) Arbitration by an arbitral tribunal established <strong>and</strong>operating, 'unless the parties to the dispute otherwiseagreed, in accordance with the procedure laid down inthe annex to the present Convention.
338 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 339A Party which is a regional economic integration organizationmay make a declaration with like effect in relation to arbitrationin accordance with subparagraph (b).PART- VIIFINAL CLAUSESArticle 34SignatureThe present Convention shall be open for signature by all States<strong>and</strong> by regional economic integration organizations from 21May 1997 until 20 May 2000 at United Nations Headquartersin New York.Article 35Ratification, Acceptance, Approval or Accession1. The present Convention is subject to ratification,acceptance, approval or accession by States <strong>and</strong> byregional economic integration organizations. Theinstruments of ratification, acceptance, approval oraccession shall be deposited with the Secretary-General ofthe United Nations.2. Any regional economic integration organization whichbecomes a Party to this Convention without any of itsmember States being a Party shall be bound by all theobligations under the Convention. In the case of suchorganizations, one or more of whose member States is aParty to this Convention, the organization <strong>and</strong> its memberStates shall decide on their respective responsibilities forthe performance of their obligations under the Convention.In such cases, the organization <strong>and</strong> the member States shallnot be entitled to exercise rights under the Conventionconcurrently.3. In their instruments of ratification, acceptance, approval oraccession, the regional economic integration organizationsshall declare the extent of their competence with respect tothe matters governed by the Convention. Theseorganizations shall also inform the Secretary-General ofthe United Nations of any substantial modification in theextent of their competence.Article 36Entry into Force1. The present Convention shall enter into force on theninetieth day following the date of deposit of the thirtyfifthinstrument of ratification, acceptance, approval oraccession with the Secretary-General of the UnitedNations.2. For each State or regional economic integrationorganization that ratifies, accepts or approves theConvention or accedes thereto after the deposit of thethirty-fifth instrument of ratification, acceptance, approvalor accession, the Convention shall enter into force on theninetieth day after the deposit by such State or regionaleconomic integration organization of its instrument ofratification, acceptance, approval or accession.3. For the purposes of paragraphs 1 <strong>and</strong> 2, any instrumentdeposited by a regional economic integration organizationshall not be counted as additional those deposited by States.Article 37Authentic TextsThe original of the present Convention, of which the Arabic,Chinese, English, French, Russian <strong>and</strong> Spanish texts areequally authentic, shall be deposited with the Secretary-Generalof the United Nations.IN WITNESS WHEREOF the undersigned plenipotentiaries,being duly authorized thereto, have signed this Convention.DONE at New York, this ___________ day of one thous<strong>and</strong>nine hundred <strong>and</strong> ninety-seven.
340 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 341ANNEXARBITRATIONArticle 1Unless the parties to the dispute otherwise agree, the arbitrationpursuant to article 33 of the Convention shall take place inaccordance with articles 2 to 14 of the present annex.Article 2The claimant party shall notify the respondent party that it isreferring a dispute to arbitration pursuant to article 33 of theConvention. The notification shall state the subject matter ofarbitration <strong>and</strong> include, in particular, the articles of theConvention, the interpretation or application of which are atissue. If the parties do not agree on the subject matter of thedispute, the arbitral tribunal shall determine the subject matter.Article 31. In disputes between two parties, the arbitral tribunal shallconsist of three members. Each of the parties to the disputeshall appoint an arbitrator <strong>and</strong> the two arbitrators soappointed shall designate by common agreement the thirdarbitrator, who shall be the Chairman of the tribunal. Thelatter shall not' be a national of one of the parties to thedispute or of any riparian State of the watercourseconcerned, nor have his or her usual place of residence inthe territory of one of these parties or such riparian State,nor have dealt with the case in any other capacity.2. In disputes between more than two parties, parties in thesame interest shall appoint one arbitrator jointly byagreement.3. Any vacancy shall be filled in the manner prescribed forthe initial appointment.Article 41. If the Chairman of the arbitral tribunal has not beendesignated within two months of the appointment of thesecond arbitrator, the President of the <strong>International</strong> Courtof Justice shall, at the request of a party, designate theChairman within a further two-month period.2. If one of the parties to the dispute does not appoint anarbitrator within two months of receipt of the request, theother party may inform the President of the <strong>International</strong>Court of Justice, who shall make the designation within afurther two-month period.Article 5The arbitral tribunal shall render its decisions in accordancewith the provisions of this Convention <strong>and</strong> international law.Article 6Unless the parties to the dispute otherwise agree, the arbitraltribunal shall determine its own rules of procedure.Article 7The arbitral tribunal may, at the request of one of the Parties,recommend essential interim measures of protection.Article 81. The parties to the dispute shall facilitate the work of thearbitral tribunal <strong>and</strong>, in particular, using all means at theirdisposal, shall:(a) Provide it with all relevant documents, information<strong>and</strong> facilities; <strong>and</strong>(b) Enable it', when necessary, to call witnesses or experts<strong>and</strong> receive their evidence.2. The parties <strong>and</strong> the arbitrators are under an obligation toprotect the confidentiality of any information they receivein confidence during the proceedings of the arbitraltribunal.Article 9Unless the arbitral tribunal determines otherwise because of theparticular circumstances of the case, the costs of the tribunal
342 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 343shall be borne by the parties to the dispute in equal shares. Thetribunal shall keep a record of all its costs, <strong>and</strong> shall furnish afinal statement thereof to the parties.Article 10Any Party that has an interest of a legal nature in the subjectmatter of the dispute which may be affected by the decision inthe case, may intervene in the proceedings with the consent ofthe tribunal.Article 11The tribunal may hear <strong>and</strong> determine counterclaims arisingdirectly out of the subject matter of the dispute.the members who have participated <strong>and</strong> the date of thefinal decision. Any member of the tribunal may attach aseparate or dissenting opinion to the final decision.3. The award shall be binding on the parties to the dispute. <strong>Its</strong>hall be without appeal unless the parties to the disputehave agreed in advance to an appellate procedure.4. Any controversy which may arise between the parties tothe dispute as regards the interpretation or manner ofimplementation of the final decision may be submitted byeither party for decision to the arbitral tribunal whichrendered it.•Article 12Decisions both on procedure <strong>and</strong> substance of the arbitraltribunal shall be taken by a majority vote of its members.Article 13If one of the parties to the dispute does not appear before thearbitral tribunal or fails to defend its case, the other party mayrequest the tribunal to continue the proceedings <strong>and</strong> to make itsaward. Absence of a party or a failure of a party to defend itscase shall not constitute a bar to the proceedings. Beforerendering its final decision, the arbitral tribunal must satisfyitself that the claim is well founded in fact <strong>and</strong> law.Article 141. The tribunal shall render its final decision within fivemonths of the date on which it is fully constituted unless itfinds it necessary to extend the time limit for a periodwhich should not exceed five more months.2. The final decision of the arbitral tribunal shall be confinedto the subject matter of the dispute <strong>and</strong> shall state thereasons on which it is based'. It shall contain the names of
344 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 345Appendix- 5The Helsinki Rules on the Uses of theWaters of <strong>International</strong> Rivers 1966CHAPTER- 1GENERALArticle IThe general rules of international law as set forth in thesechapters are applicable to the use of the waters of aninternational drainage basin except as may be providedotherwise by convention, agreement or binding custom amongthe basin States.Article IIAn international drainage basin is a geographical areaextending over two or more States determined by the watershedlimits of the system of waters, including surface <strong>and</strong>underground waters, flowing into a common terminus.Article IIIA "basin State" is a State the territory of which includes aportion of an international drainage basin.CHAPTER- 2EQUITABLE UTILIZATION OF THE WATERS OF ANINTERNATIONAL DRAINAGE BASINArticle IVEach basin State is entitled, within its territory, to a reasonable<strong>and</strong> equitable share in the beneficial uses of the waters of aninternational drainage basin.Article VI. What is a reasonable <strong>and</strong> equitable share within themeaning of article IV to be determined in the light of allthe relevant factors in each particular case.II. Relevant factors which are to be considered include, butare not limited to:1. The geography of the basin, including in particular theextent of the drainage area in the territory of eachbasin State;2. The hydrology of the basin, including in particular thecontribution of water by each basin State;3. The climate affecting the basin;4. The past utilization of the waters of the basin,including in particular existingutilization;5. The economic <strong>and</strong> social needs of each basin State;6. The population dependent on the waters of the basin ineach basin State;7. The comparative costs of alternative means ofsatisfying the economic <strong>and</strong> social needs of each basinState;8. The availability of other resources;9. The avoidance of unnecessary waste in the utilizationof waters of the basin;10. The practicability of compensation to one or more ofthe co-basin States as a means of adjusting conflictsamong uses; <strong>and</strong>11. The degree to which the needs of a basin State may besatisfied, without causing substantial injury to a cobasinState.III. The weight to be given to each factor is to be determinedby its importance in comparison with that of other relevantfactors. In determining what is reasonable <strong>and</strong> equitableshare, all relevant factors are to be considered together <strong>and</strong>a conclusion reached on the basis of the whole.Article VIA use or category of uses is not entitled to any inherentpreference over any other use or category of uses.
346 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 347Article VIIA basin State may not be denied the present reasonable use ofthe waters of an international drainage basin to reserve for a cobasinState a future use of such waters.Article VIII1. An existing reasonable use may continue in operationunless the factors justifying its continuance are outweighedby other factors leading to the conclusion that it bemodified or terminated so as to accommodate a competingincompatible use.2.(a) A use that is in fact operational is deemed to have been anexisting use from the time of the initiation of constructiondirectly related to the use or, where such construction is notrequired, the undertaking of comparable acts of actualimplementation.(b) Such a use continues to be an existing use until such timeas it is discontinued with the intention that it be ab<strong>and</strong>oned.3. A use will not be deemed an existing use if at the time ofbecoming operational it is incompatible with an alreadyexisting reasonable use.CHAPTER- 3POLLUTIONArticle IXAs used in this chapter, the term "water pollution" refers to anydetrimental change resulting from human conduct in the naturalcomposition, content, or quality of the waters of aninternational drainage basin.Article X1. Consistent with the principle of equitable utilization of thewaters of an international drainage basin, a State:(a) Must prevent any new form of water pollution or anyincrease in the degree of existing water pollution in aninternational drainage basin which would causesubstantial injury in the territory of a co-basin State;(b) Should take all reasonable measures to abate existingwater pollution in an international drainage basin tosuch an extent that no substantial damage is caused inthe territory of a co-basin State.2. The rule stated in paragraph 1 of this article applies towater pollution originating:(a) Within a territory of the State, or(b) Outside the territory of the State, if it is caused by theState's conduct.Article XI1. In the case of a violation of the rule stated in paragraph 1(a) of article X of this chapter, the State responsible shallbe required to cease the wrongful conduct <strong>and</strong> compensatethe injured co-basin State for the injury that has beencaused to it.2. In a case falling under the rule stated in paragraph 1 (b) ofarticle X, if a State fails to take reasonable measures, itshall be required promptly to enter into negotiations withthe injured State with a view towards reaching a settlementequitable under the circumstances.CHAPTER- 4NAVIGATION (Articles XII-XX)CHAPTER- 5TIMBER FLOATING (ArticlesXXI-XXV)CHAPTER- 6PROCEDURES FOR THE PREVENTION ANDSETTLEMENT OF DISPUTESArticle XXVIThis chapter relates to procedures for the prevention <strong>and</strong>settlement of international disputes as to the legal rights or
348 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 349other interests of basin States <strong>and</strong> of other States in the watersof an international drainage basin.Article XXVIIConsistently with the Charter of the United Nations, States areunder an obligation to settle international disputes as to theirlegal rights or other interests by peaceful means in such amanner that international peace <strong>and</strong> security <strong>and</strong> justice are notendangered.It is recommended that States resort progressively to the meansof prevention <strong>and</strong> settlement of disputes stipulated in articlesXXIX to XXXIV of this chapter.Article XXVIII1. States are under a primary obligation to resort to means ofprevention <strong>and</strong> settlement of disputes stipulated in theapplicable treaties binding upon them.2. States are limited to the means of prevention <strong>and</strong>settlement of disputes stipulated in treaties binding uponthem only to the extent provided by the applicable treaties.Article XXIX1. With a view to preventing disputes from arising betweenbasin States as to their legal rights or other interest, it isrecommended that each basin State furnish relevant <strong>and</strong>reasonably available information to the other basin Statesconcerning the waters of a drainage basin within itsterritory <strong>and</strong> its use of, <strong>and</strong> activities with respect to, suchwaters.2. A State, regardless of its location in a drainage basin,should in particular furnish to any other basin State, theinterests of which may be substantially affected, notice ofany proposed construction or installation which would alterthe regime of the basin in a way which might give rise to adispute as defined in article XXVI. The notice shouldinclude such essential facts as will permit the recipient tomake an assessment of the probable effect of the proposedalteration.3. A State providing the notice referred to in paragraph 2 ofthis article should afford the recipient a reasonable periodof time to make an assessment of the probable effect of theproposed construction or installation <strong>and</strong> to submit itsviews thereon to the State furnishing the notice.4. If a State has failed to give the notice referred to inparagraph 2 of this article, the alteration by the State in theregime of the drainage basin shall not be given the weightnormally accorded to temporal priority in use in the eventof a determination of what is a reasonable <strong>and</strong> equitableshare of the waters of the basin.Article XXXIn case of a dispute between States as to their legal rights orother interests, as defined in article XXVI, they should seek asolution by negotiation..Article XXXI1. If a question or dispute arises which relates to the presentor future utilization of the waters of an internationaldrainage basin, it is recommended that the basin Statesrefer the question or dispute to a joint agency <strong>and</strong> that theyrequest the agency to survey the international drainagebasin <strong>and</strong> to formulate plans or recommendations for thefullest <strong>and</strong> most efficient use thereof in the interests of allsuch States.2. It is recommended that the joint agency be instructed tosubmit reports on all matters within its competence to theappropriate authorities of the member States concerned.3. It is recommended that the member States of the jointagency in appropriate cases invite non-basin States whichby treaty enjoy a right in the use of the waters of aninternational drainage basin to associate themselves withthe work of the joint agency or that they be permitted toappear before the agency.
350 / <strong>International</strong> <strong>Watercourses</strong> <strong>Law</strong> <strong>and</strong> <strong>Its</strong> <strong>Application</strong> in South Asia Appendix / 351Article XXXIIIf a question or a dispute is one which is considered by theStates concerned to be incapable of resolution in the manner setforth in article XXXI, it is recommended that they seek thegood offices, or jointly request the mediation of a third State, ofa qualified international organization or of a qualified person.Article XXXIII1. If the States concerned have not been able to resolve theirdispute through negotiation or have been unable to agreeon the measures described in articles XXXI <strong>and</strong> XXXII, itis recommended that they form a commission of inquiry oran ad hoc conciliation commission, which shall endeavorto find a solution, likely to be accepted by the Statesconcerned, of any dispute as to their legal rights.2. It is recommended that the conciliation commission beconstituted in the manner set forth in the annex.Article XXXVIRecourse to arbitration implies the undertaking by the Statesconcerned to consider the award to be given as final <strong>and</strong> tosubmit in good faith to its execution.Article XXXVIIThe means of settlement referred to in the preceding articles ofthis chapter are without prejudice to the utilization of means ofsettlement recommended to, or required of, members ofregional arrangements or agencies <strong>and</strong> of other internationalorganizations.•Article XXXIVIt is recommended that the States concerned agree to submittheir legal disputes to an ad hoc arbitral tribunal, to apermanent arbitral tribunal or to the <strong>International</strong> Court ofJustice if:(a) A commission has not been formed as provided inarticle XXXIII, or(b) The commission has not been able to find a solution tobe recommended, or(c) A solution recommendedhas not been accepted by theStates concerned, <strong>and</strong>(d) An agreement has not been otherwise arrived at.Article XXXVIt is recommended that in the event of arbitration the Statesconcerned have recourse to the Model Rules on ArbitralProcedure prepared by the <strong>International</strong> <strong>Law</strong> Commission ofthe United Nations at its tenth session b/in 1958.
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