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222 / International Watercourses Law and Its Application in South Asia Prospects and 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’ and ‘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 and serious questions were asked about the future ofIndo-Nepal relations. This was only settled after the conclusionand ratification of the Integrated Mahakali Treaty in 1996. The120 MW hydroelectric project lies below the proposedPancheshwar dam site and a little above the old Sarada barrageat Banbasa. A short 577 M long afflux bund (embankment orcauseway in India and Pakistan) (occupying some 2.9 ha ofland) 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 and remains underNepalese sovereignty. 132 However, as no amendments orcorrections were made to address Nepalese concerns andinterests, no further co-operation was possible; this was a caseof a dichotomy of perceptions between two states. After a longdispute and general outcry in Nepal, several negotiations were131 S. C. McCaffrey, The Law of International Watercourses, Oxford:Oxford University, 2001, p. 348; also see D. Gyawali and O. Schwank,"Interstate Sharing of Waters Rights: An Alps-HimalayanComparison" (1994) in 4 Water Nepal, p. 234.132 Supra note 44.held and finally an agreement was concluded, with theMakhakali treaty of 1996.As a result of the conclusion of a new treaty and 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 land in Nepal; an annual supply of 70 million KWhoursunits of energy ‘free of charge’ 133 was provided and 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 understand that waterresources are both a symbol of national identity and pride, anda 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 and inpractice, such benefits must be shared equally and equitably.Professors Bourne, McCaffrey and 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. Upreti, "A Perspective on Downstream Benefits" in the KathmanduPost, June 24, (2000), p. 10.
224 / International Watercourses Law and Its Application in South Asia Prospects and Problems of Nepalese Water Resources / 225law. Under the concept of equitable utilization,watercourse states are entitled to a reasonable andequitable 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 and storage of flood and snow fed waters of theColumbia River in Canadian territory made it possible toaugment and 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, and 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,and forests, flora and 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 International Rivers, comment on “APosition Paper on The Rights, Duties and Obligations of Upper andLower 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, and 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 andirrigation and were each shared equally. However, it tookalmost twenty years to convince the United States about thesebenefits and conclude this treaty. 137Bourne, McCaffrey and 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, and 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), TheLaw of International 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 and 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 theNetherlands 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 Netherlands apart from thetreaty”); v) the Lesotho Highlands 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 Czechoslovakiaand Hungary (which was the subject of the Gavcikovo-Nagymaros case)provides for a dam and hydro plant to be located in Czechoslovakia (nowSlovakia) with Hungary to receive power and flood control benefits.
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International WatercoursesLaw and I
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PrefaceIn this book, the author has
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International Treaties and other Do
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ADBAJILAus.JILAYBLADPILALCCASEANAGO
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GlossaryMap of the Ganges BasinThe
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Chapter- ThreeEquitable Utilisation
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Introduction / 1 2 / International
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