03 February 2005	Thursday	23 Zilhaj 1425

WASHINGTON, Feb 2: The World Bank does not need the "consent" of either India or Pakistan to appoint a neutral expert to help resolve the dispute over the Baglihar dam, says a senior bank official.

The bank only needs to consult both the parties and after the lapse of "a reasonable period of time," it can appoint a neutral expert even if both the parties disagree, Dale Lautenbach, communications manager of the World Bank for South Asia, told Dawn.

This clearly contradicts a claim reported in the Indian media, and attributed to Indian officials, that the bank needs New Delhi's consent to appoint a neutral expert.

After the failure of the final round of bilateral talks in New Delhi on Jan 7, Pakistan asked the World Bank to appoint a neutral observer to resolve its differences with New Delhi over a dam India is building on the Chenab river at Baglihar in occupied Kashmir.

Islamabad believes the 450 MW Baglihar project will divert up to 7,000 cubic feet per second of water a day destined for Pakistan. According to the Indus Water Treaty India and Pakistan signed on Sept 19, 1960, New Delhi is allowed to build a reservoir on the Chenab only if it does not interrupt the flow of water.

But a senior Indian official recently told journalists in New Delhi "the dam does not violate the treaty and India is unlikely to stop construction of the dam". Pakistan disagrees.

Explaining the bank's position on this issue, Ms Lautenbach said under the treaty the bank has an obligation to appoint a neutral expert after consultation and after a reasonable period of time for that consultation."

Asked if the bank requires India's consent, as media reports have quoted Indian officials as saying, she said, "consent is not required, just consultation." he said under the treaty, which the bank brokered, there's "no absolute timeframe for appointing a neutral expert but it will be a reasonable period."

Asked if this "reasonable period" could extend to years, Ms Lautenbach said: "Obviously, if you have a difference between two parties, you want to sort it out, you don't want to drag it forever."

Ms Lautenbach also explained that a bank lawyer, Salman Salman, never said that Pakistan's reference for arbitration could end up opening a Pandora's box with the dispute being drawn out for years.

The quote taken from a World Bank website and predicting a "prolonged" and "complicated" legal battle over the Baglihar project was played up by the Indian media to suggest that Pakistan would not gain anything by taking the dispute to the World Bank. But Ms Lautenbach said the quote was used out of context because Mr Salman was not talking about the Baglihar dam issue. It was an academic discussion, more than a year ago, on whether the Indus Water Treaty could be reopened for negotiations.

Mr Salman said the treaty itself allows the parties to modify it or even terminate it. "But reopening such a comprehensive and complex treaty for negotiations and to seek to modify or terminate would be opening the Pandora's box so the parties are better off staying with this treaty," Ms Lautenbach quoted Mr Salman as saying.

"It was a hypothetical discussion, and has no bearing on what is happening now," she added. Ms Lautenbach recalled that in a detailed response to Pakistan's request for appointing a neutral expert, the bank had said that the treaty allows it to appoint a neutral expert but only after India and Pakistan have exhausted all available means for resolving the dispute bilaterally.

She explained that under the treaty, the first step is to resolve any "question" between the parties through the Permanent Indus Commission itself. If the "question" is not resolved there, it becomes a "difference" and is referred to a neutral expert, to be appointed by the two countries, or by a third party agreed upon by the two countries.

In the absence of such an agreement, the appointment of the neutral expert would be made by the World Bank, in consultation with the two countries. This consultation would seek as far as possible to reach consensus within a reasonable time, in the absence of which the World Bank has an obligation under the treaty to appoint a neutral expert.

On Jan 29, Pakistan provided a set of documents to the World Bank to support its claim that it has already exhausted all possible means for settling the dispute bilaterally with India.

The bank says the documents need to indicate that all the necessary prior actions have been taken by the parties, so that the bank may satisfy itself that it is in strict compliance with the treaty when it takes the appropriate next step

The neutral expert will regard the complaint as a "difference" and not a dispute. If the "difference" does not fall within the mandate of the neutral expert, or if the neutral expert rules that the "difference" should be treated as a "dispute", then a court of arbitration would be established.