The Neutral Expert (NE), appointed by the World Bank, decided he is "competent" to resolve differences between India and Pakistan over hydroelectric projects on the Indus Treaty rivers.
India welcomed the decision, but it does not resolve India’s demand for renegotiating the IWT, which has been an ongoing issue since January 2023.
India wants to renegotiate the IWT and has sent four formal requests to Pakistan since January 2023, but Pakistan has not responded.
India also decided to suspend meetings of the Permanent Indus Commission (PIC) until the treaty is renegotiated.
Dispute Resolution Mechanism: According to India, the IWT’s dispute resolution process requires disputes to first be resolved by the PIC, then by the Neutral Expert, and lastly by a Court of Arbitration.
India insists each step must be fully exhausted before moving on.
Pakistan has disagreed with India’s interpretation, moving forward with the dispute resolution without India's agreement.
This has led to parallel processes involving both the Neutral Expert and the Court of Arbitration.
The NE will decide if the design parameters of India’s Kishenganga and Ratle hydroelectric projects comply with the IWT.
However, the NE’s decision does not invalidate the Court of Arbitration process that India has refused to participate in.
Indus Water Treaty
India and Pakistan signed the IWT in September, 1960 after nine years of negotiations, with the World Bank being a signatory to the pact.
The treaty sets out a mechanism for cooperation and information exchange between the two sides on the use of the water of the Indus River and its five tributaries Sutlej, Beas, Ravi, Jhelum, and Chenab.
It allocated the three western rivers—Indus, Chenab and Jhelum—to Pakistan for unrestricted use, barring certain non-consumptive, agricultural and domestic uses by India
And the three Eastern rivers—Ravi, Beas and Sutlej—were allocated to India for unrestricted usage.
This means that 80% of the share of water went to Pakistan, while leaving the rest 20% of water for use by India.
It also required both the countries to establish a Permanent Indus Commission (PIC) constituted by permanent commissioners on both sides.
Commissioners of both countries are mandated to meet every year, and sometimes have met multiple times in a year, to discuss and resolve differences on the sharing of river water and construction of hydel projects.
The IWT provides a three-step dispute resolution mechanism under Article IX of the Indus Waters Treaty, under which :
“questions” on both sides can be resolved at the Permanent Commission, or can also be taken up at the inter-government level
In case of unresolved questions or “differences” between the countries on water-sharing, such as technical differences, either side can approach the World Bank to appoint a Neutral Expert (NE) to come to a decision.
And eventually, if either party is not satisfied with the NE’s decision or in case of “disputes” in the interpretation and extent of the treaty, matters can be referred to a Court of Arbitration.
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