World Bank Neutral Expert supports India’s stand on IWT

Context: A World Bank appointed Neutral Expert (NE) has declared that he is competent to address the dispute regarding the Indus Water Treaty. He has backed New Delhi’s position on the framework to resolve certain disputes between India and Pakistan on Kishenganga and Ratle hydroelectric projects.

Indus Water Treaty (IWT), 1960

• Indus Waters Treaty is a water-sharing agreement signed in 1960 between India and Pakistan, brokered by the World Bank. 
• The treaty fixed and delimited the rights and obligations of both countries concerning the use of the waters of the Indus River system.
• Sharing of water as per IWT:
  • Eastern rivers: Ravi, Beas, and Sutlej were allocated to India for unrestricted use.
  • Western rivers: Indus, Jhelum, and Chenab were allocated largely to Pakistan. India is permitted certain agricultural uses and can build 'run of the river' hydropower projects with limited storage.

Dispute Resolution Mechanism in IWT

• Permanent Indus Commission (PIC): Commissioners are appointed by both countries for cooperation and information exchange regarding their use of the rivers.
• The treaty provides a 3-tier dispute resolution mechanism:
  • PIC is the first stage.
  • A neutral expert is the second stage.
  • The Court of Arbitration is the third stage.
• IWT does not have a unilateral exit provision: The treaty is supposed to remain in force unless both countries ratify another mutually agreed pact.
• Issues: There have been differences between India and Pakistan over:
  • the design of hydroelectric projects (Kishenganga and Ratle) and 
  • the treaty’s dispute resolution mechanism.

Points of Difference: Difference lines in sequential mechanism interpretation:

India’s stand	Pakistan’s stand
- India’s stand is that the dispute resolution must go step-by-step— Permanent Indus Commission → Neutral Expert → Court of Arbitration. - India opposes simultaneous resolution through Neutral Expert and Court of Arbitration (CoA) proceedings. - India has ceased participation in Permanent Indus Commission meetings since May 2022.	- Pakistan has moved directly to the Court of Arbitration (CoA) bypassing the Neutral Expert without India’s concurrence. - It continues with both mechanisms, citing treaty provisions.

Working of Neutral Expert (NE)

• Neutral Expert: NE will hear both parties and decide if hydroelectric designs conform to the Indus Water Treaty.
  • NE proceeding does not invalidate the Court of Arbitration proceedings but operates within a technical scope.
• Court of Arbitration: It has been convened by Pakistan; India however has boycotted its proceedings as they are premature.

Issues involved in Indus Water Treaty

• Dissatisfaction over water apportionment: Long lasting dissatisfaction in India because 80% of the water is allocated to Pakistan.
• Sub-optimal data sharing: Diplomatic tensions lead to suboptimal data sharing, and the quality of shared data is often questionable. There is no mechanism for the research community to access this data.
• Ambiguous and room for Conflict:
  • The technical nature of the treaty and the fact that the western rivers flow through the conflicted region of Jammu and Kashmir pave the way for conflict. 
  • Perceived impacts of infrastructure development on downstream flows, and Pakistan’s concerns as a lower riparian state.
• Lack of Mutual Trust: A recent case in point is Pakistan’s accusation of water terrorism against India for the Shahpurkandi barrage project. 
• Limited role of Guarantor:
  • In disputes involving Krishanganga and Ratle Hydroelectric Projects, the World Bank had to appoint the Neutral Expert and chairman of the CoA, simultaneously. This concurrent appointment poses practical and legal risks. 
  • Moreover, the World Bank lacks the power to decide which one should take precedence.
• Climate Change:
  • In 2015, the Indus basin was ranked by NASA as the world’s second most over-stressed aquifer.  
  • An estimated 31% of the net basin flow originates from climate-impacted glaciers and snow melts, making mean annual flows more volatile and seasonal.
• Lack of adequate environmental safeguards in the treaty to protect the environment.

Way Forward

• Renegotiating the treaty: India has proposed revising the IWT, it however needs Pakistan’s formal engagement to move forward.
• Addressing procedural differences:
  • The World Bank could play a more proactive role in bridging differences between the two countries. 
  • Establish clarity on the sequential use of dispute resolution mechanisms.
  • Expedite the Neutral Expert's decisions on hydroelectric project designs to build confidence.
• Resuming dialogue: Restart PIC meetings to foster bilateral discussions on treaty concerns.
• Promoting open data policy encouraging open data policies to international supervisory bodies and other stakeholders to promote transparency and applied scientific research.
• Adopting Ecological perspective: 
  • It is essential to view the Indus River system as a cohesive geographical unit, benefiting all stakeholders.
  •  An ecological perspective should be integrated into the governance framework of IWT, including the institutionalisation of Environmental Flows (EF).
• Ratification of the UN Water Convention to ensure the sustainable use of transboundary water resources by facilitating cooperation.
  • International customary law, such as the 2004 Berlin Rules on Water Resources, also emphasises sustainability and ecological flows. 
  • The 2013 Permanent Court of Arbitration's verdict on India's Kishanganga project underscores the obligation to release EFs in transboundary basins, setting a precedent for similar cases.
• Both countries should undertake joint research on the rivers to study the impact of climate change for future cooperation, as underlined in Article VII of the IWT.

Additionally, a nuanced understanding of climate change and population pressures on the Indus basin's hydrology is needed. This includes developing a robust mechanism for real-time data-sharing between India and Pakistan, supervised by the World Bank, to ensure accountability and enhance policy-making. 

Conclusion: Recognising climate change as a shared vulnerability and focusing on holistic basin management will strengthen the IWT, improving India-Pakistan relations and serving as a model for global transboundary climate cooperation.