World Bank "Pauses" Arbitration on Indus Waters Treaty, Urges India-Pakistan to Talk

NEW DELHI: The World Bank has announced a “pause” in arbitration between India and Pakistan on the construction of matters arising out of the Indus Waters Treaty, calling on both countries to "to consider alternative ways to resolve their disagreements".

It has urged them to sort out their differences and problems by January 2017.The World Bank made it clear that it was pausing the processes initiated by both the countries for arbitration in the interests of the Treaty, to ensure that it was safeguarded.

In its first response, in an answer to a question, the Ministry of External Affairs seemed to suggest that the World Bank announcement was a follow up to objections that it had raised on the same issue last month.

The MEA spokesperson said, "The government had pointed out on 10 November 2016 the legal untenability of the World Bank launching two simultaneous processes for appointment of a Neutral Expert - requested by India - and establishment of a Court of Arbitration - requested by Pakistan- to adjudicate technical differences between India and a Pakistan on Kishenganga and Ralte projects. By temporarily halting both the processes now, the Bank has confirmed that pursuing the two concurrent processes can render the Treaty unworkable over time.”

He further said, “India remains fully conscious of her international obligations and is ready to engage in further consultations on the matter of resolving current differences regarding these two projects."

The water sharing agreement had run into trouble as tensions escalated between the two countries, and after the Uri terror attack, reports suggesting that the sharing of water could be impacted were circulated creating some concern in Islamabad as it is the lower riparian. The concern turned into panic after Prime Minister Narendra Modi called a meeting to review the Treaty where he said that “blood and water cannot flow together.” And let it be known that India was quite prepared to revoke the Treaty.

This has been a view supported by what passes as the establishment in Delhi, under successive governments, with senior bureaucrats in particular supporting a review of the Treaty “to teach Pakistan a lesson.”

After PM Modi’s statement Pakistan almost immediately approached the World Bank that is the appointed adjudicator for bilateral problems between the two countries on the Treaty. Pakistan asked for a Chairman for a Court of Arbitration to be appointed. India followed with the demand for the appointment of a Neutral Expert.

Recognising the tensions that continue unabated between New Delhi and Islamabad, the World Bank explained the pause with, "both processes initiated by the respective countries were advancing at the same time, creating a risk of contradictory outcomes that could potentially endanger the Treaty."

World Bank President Jim Yong Kim said Pakistan and India should look to resolve the conflict mutually and within the bounds of the IWT. India is constructing two hydropower projects on the rivers at Ratle and Kishanganga. Pakistan has objected to both saying this will affect the flow of the Chenab and Neelum rivers.

"This is an opportunity for the two countries to begin to resolve the issue in an amicable manner and in line with the spirit of the treaty rather than pursuing concurrent processes that could make the treaty unworkable over time," Jim Yong Kim said.

"I would hope that the two countries will come to an agreement by the end of January [2017],” he added.

"Pausing the process for now, the Bank would hold off from appointing the Chairman for the Court of Arbitration or the Neutral Expert – appointments that had been expected on December 12 as earlier communicated by the Bank," the WB statement further said.

The WB has sent letters to the finance ministers of Pakistan and India to apprise them of the decision taken to "safeguard the Treaty".

According to the Pakistan media, their Water and Power Ministry has asked Pakistan’s Commissioner for Indus Waters to take up the construction of the two dams with India. MEA has also stated now that it is open to consultations.