33.2.1 Dispute resolution scenario
Upstream state A is currently operating an opencast coal mine on mountain plateau situated beside an international watercourse. Downstream state B has recently experienced increased downstream sediment and acid mine drainage issues that arise from mining activities during periods of flooding. State A has significant potential to generate hydropower from the rainfall in the surrounding catchment of the coal mine and in the process utilise and clean the slightly contaminated water.
Downstream state B is eager to avoid future contam-ination and also to develop its agricultural potential, which requires irrigation and a reliable flow regime. State B has also recently had an election and is opting to move away from Nuclear power as its domestic energy supply. States A and B conclude Treaty X on the joint utilisation of their border River Y. Treaty X provides for the Parties to construct a joint barrage system which will involve two dams, one in upstream state A (Dam I) and one further downstream in the territory of state B (Dam II).
The Treaty provides that Dam I is located on a tributary of River X in state A. It will collect water from the majority of the catchment, and then divert and transfer the water via a canal to Dam II, which is located on River X just inside the border of state A. This will alter the flow regime of River X into state B. Under the Treaty, state A will produce power to sell at a very reduced rate to state B. State B will finance the construction of Dam II and will also receive flood control, navigation benefits and be able to irrigate with a more reliable flow regime. Both states are contracting parties to the 1997 UN Watercourses Convention which has recently come into force and it is agreed that the dispute resolution clause under Treaty X is drafted as follows:
Paragraph XX: ‘In the event of a dispute between parties concerning the interpretation or application of the present Treaty X, the parties concerned shall, in the absence of an applicable agreement between them, seek a settlement of the dispute by peaceful means in accordance with the provisions of Article 33 of the 1997 UN Watercourses Convention’.
During the construction of Dam I, state B has concerns that the filtration and cleaning systems will be insufficient to protect its citizens against contamination. It enters into a dispute with state A over the dam design. What dispute settlement process is to be followed by the parties to resolve the dispute?
In accordance with Article 33(2) of the UN Watercourses Convention (the adopted dispute settlement procedures of Treaty X), the states must first attempt to resolve the dispute by negotiation which can take different forms, including (but not limited to) bilateral talks or diplomatic correspondence. Diplomatic negotiations are sometimes preceded by the meetings of experts and thus a Water Management Working Group of Experts is informally established between states A and B to discuss the issues and put forward suggestions for improved pollution management – the results of which are submitted to a diplomatic conference where parties who are under an international legal obligation to conduct negotiations in good faith and in a manner that the negotiations are meaningful, which will not be the case when either of them insists upon its own position without contemplating modification of it. The results of this negotiation are successful and the parties record the terms of settlement – in a Memorandum of Understanding on future pollution management procedures.
State B reviews the designs and schedules of flow release for Dam II and concludes that the times at which maximum flows will be released and the rate of flow does match the demand times for water in state B, and also the dramatic increase in flow rate during peak generation periods will cause environmental consequences for aquatic life which have only recently been discovered. State B refuses to pay for the construction of Dam II and State A decides to proceed unilaterally with Dam I and abandon Dam II. State B enters into a dispute with State A. What dispute settlement process is to be followed by the parties to resolve the dispute?
As before, the parties attempt to resolve their dispute this time by negotiation which fails. Mediation involves more active third party participation in the negotiations. State A suggests engaging a mediator in accordance with Article 33(2) of the UN Watercourses Convention. State B agrees and the mediator conducts the negotiations between contending parties on the basis of proposals made by the mediator aimed at a mutually acceptable compromise solution. The mediator attempts to clarify issues and drafts a solution of provisional arrangements to minimise contentious issues. Neither party is satisfied with this solution and both reject it. Both parties then agree to submit the dispute to Arbitration in accordance with the procedure under Article 33(10)(b) and Annex Articles 1-14 of the Convention. The outcome of this decision will binding in accordance with Annex Article 14(3).
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