WATER GLOBAL PRACTICE Promoting Development MARCH 2018 in Shared River Basins Christina Leb Tools for Enhancing Transboundary Basin Management Taylor Henshaw Nausheen Iqbal and Irene Rehberger Bescos About the Water Global Practice Launched in 2014, the Word Bank Group’s Water Global Practice brings together financing, knowledge, and implementation in one platform. By combining the Bank’s global knowledge with country investments, this model generates more firepower for transformational solutions to help countries grow sustainably. Please visit us at www.worldbank.org/water or follow us on Twitter @WorldBankWater. Promoting Development in Shared River Basins Tools for Enhancing Transboundary Basin Management Christina Leb, Taylor Henshaw, Nausheen Iqbal, and Irene Rehberger Bescos © 2018 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org This work is a product of the staff of the World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. Because the World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for non-commercial purposes as long as full attribution to this work is given. Please cite the work as follows: Leb, Christina, Taylor Henshaw, Nausheen Iqbal, and Irene Rehberger Bescos. 2018. “Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management.” Washington, DC, World Bank. Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org. Cover photo: Mekong River Basin. © Rusm/iStock. Cover design: Jean Franz, Franz and Company, Inc. Contents Preface ix Acknowledgments xiii Abbreviations xv Part I  Summary Report 1 Chapter 1  The Case for Coordinated Basin Development 3 Introduction 3 1.1 Benefits of Coordination 5 1.2 Water Stress Projections in Transboundary River Basins 7 1.3 Enabling Conditions for Cooperation 10 Notes 14 Chapter 2  Framework and Tools for Engagement 15 2.1 The Three-Stage Process of Coordinated Basin Development 15 2.2 Tools for Coordinated Basin Management 17 2.3 Dimensions of Coordinated Basin Management 21 Chapter 3  Application of the Framework and Lessons Learned 27 3.1 Identification of Opportunities and Risks 28 3.2 Design of Intervention 34 3.3 Implementation and Compliance 35 3.4 Adjustment Loop 36 Part II  Toolbox 39 Chapter 4  Country Tools 49 4.1 Identification of Opportunities and Risks Tools 49 4.2 Design of Intervention Tools 58 4.3 Implementation and Compliance Tools 65 4.4 Coordination Frameworks 83 Notes 102 Chapter 5  Third-Party Engagement Tools 103 5.1 Identification of Opportunities and Risks Tools 103 5.2 Design of Intervention Tools 113 5.3 Implementation and Compliance Tools 118 5.4 Coordination Frameworks 125 Notes 128 References 129 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management iii Boxes 2.1. Third-Party Guarantee: Lom Pangar/Nachtigal Dams 18 2.2. Dimensions of Coordinated Management 25 4.1. Visual Atlas of Cooperation on the Amu Darya 50 4.2. State of the Nile Basin Report 51 4.3. OKACOM Water Audit Project 51 4.4. Transboundary Diagnostic Analysis of the Kura-Araks 52 4.5. Economic Valuation of the Okavango Basin 52 4.6. Vulnerability Mapping of the Limpopo 53 4.7. Rhine Preliminary Flood Risk Assessment 53 4.8. Kura-Araks Stakeholder Analysis 54 4.9. Nexus Assessment in the Sava Basin 55 4.10. Quantifying the Benefits of Nile Cooperation 55 4.11. Multisector Investment Opportunity Analysis of the Zambezi Basin 56 4.12. Lesotho Highlands Water Project Feasibility Assessment 56 4.13. Mekong Strategic Environmental Assessment 57 4.14. Mekong River Commission Strategic Plan 2016–20 57 4.15. Okavango Strategic Action Program 58 4.16. NBI Climate Change Strategy 59 4.17. Itaipu Equal Cost Sharing 59 4.18. Joint Investments in the Senegal Basin 60 4.19. Itaipu Repayments 61 4.20. Bhutan–India Hydropower Generation Financing 62 4.21. The Canadian Entitlement (CE) under the Columbia River Treaty (CRT) 62 4.22. Chu-Talas Storage Infrastructure O&M Payments 63 4.23. Royalty Payments under the Lesotho Highlands Water Project 64 4.24. Standards for Comparability/Interoperability 65 4.25. Procedures for Data Exchange in the Zambezi 67 4.26. Mekong River Commission Data/Information Disclosure Guidelines 67 4.27. The DanubeGIS 68 4.28. International Boundary and Water Commission Technical Bulletins 68 4.29. Niger Basin Authority Water Bulletins 69 4.30. LHDA, NBI, OMVS, and Itaipu Annual and Sustainability Reports 69 4.31. Kunene River Awareness Kit 70 4.32. The Danube Box 70 4.33. Indicators 71 4.34. World Water Assessment Program’s Sex Disaggregated Indicators 72 4.35. Danube TransNational Monitoring Network (TNMN) 72 4.36. Effects of Measures on Flood Risk Assessment 73 4.37. European Flood Awareness System and Columbia Basin Forecasting 73 4.38. Nile Basin Decision Support System 75 iv Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 4.39. The Decision Tree 75 4.40. Farakka Barrage 76 4.41. Permanent Indus Commission 76 4.42. Owen Falls Resident Egyptian Engineer 77 4.43. Itaipu Control Room Team 77 4.44. Niger Basin Authority and AGRHYMET 78 4.45. Monitoring through the International Commission for the Protection of the Rhine 79 4.46. Compensation Mechanisms in the Iberian Basins 79 4.47. Flow Release Determinations in the Columbia 81 4.48. Orange-Senqu River Commission Roadmap towards Stakeholder Participation 82 4.49. Gender Policy and Strategy of the Mekong River Commission 82 4.50. Farakka Agreement Extreme Event Provisions 83 4.51. Nukus Declaration 84 4.52. Brahmaputra Flood Control/Data Sharing Memoranda of Understanding 85 4.53. Indus Waters Treaty 86 4.54. Columbia River Treaty 86 4.55. Bhutan/India Power Purchase Agreements 87 4.56. Minutes of the International Boundary and Water Commission—Mexico/USA 88 4.57. Periodic Review of the Mahakali and Farakka Agreements 89 4.58. Columbia Conference Calls 89 4.59. Lake Victoria Basin Commission 90 4.60. NBI 91 4.61. Lake Chad Basin Commission 92 4.62. International Boundary and Water Commission 92 4.63. LHWP Joint Technical Committee 93 4.64. Niger Basin Authority 94 4.65. Chu-Talas Commission 95 4.66. Equal Contribution Cost Sharing in OKACOM 96 4.67. Economic Capacity Cost Sharing in the International Commission for the Protection of the Danube River 96 4.68. Indicator-Based Contributions to the Mekong River Commission 98 4.69. CICOS Community Integration Tax 99 4.70. Financing Kariba Dam Rehabilitation 99 4.71. Kosi River Treaty Renegotiation 100 4.72. Columbia Permanent Engineering Board 101 4.73. Joint Committee Review under the Farakka Treaty 101 4.74. Permanent Indus Commission Procedures for Dispute Settlement 101 4.75. Arbitral Procedures for the Lesotho Highlands Water Project 102 5.1. International Union for the Conservation of Nature Building River Dialogue and Governance Program 105 5.2. World Bank Open Knowledge Repository 105 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management v 5.3. Joint Rivers Commission, Bangladesh Capacity Strengthening Program 106 5.4. Capacity Building for Cooperation on Dam Safety for the Kyrgyz Republic and Kazakhstan 106 5.5. Global Environment Facility Twinning Program  107 5.6. South Asia Water Initiative Study Tour to the Yellow River 107 5.7. Seed Financing for Permanent Okavango River Basin Commission 108 5.8. Nile Cooperation for Results Project 109 5.9. Multidonor Trust Funded Programs for Transboundary Waters 110 5.10. Nile Basin Trust Fund 111 5.11. Indus Basin Development Fund 111 5.12. The Petersberg Process 112 5.13. International Bank for Reconstruction and Development and International Development Association Financing Terms 114 5.14. World Bank Guarantee Mechanisms 115 5.15. Financing the Nam Theun 2 Project 116 5.16. OP 7.50 Projects on International Waterways 117 5.17. Equipment Provision to Georgia 119 5.18. Guarantee Arrangement for Lom Pangar/Nachtigal Dams 120 5.19. World Bank Safeguard Reforms 121 5.20. World Bank Procurement Reform 121 5.21. Mediation and Conciliation under the Organisation pour la Mise en Valeur du fleuve Sénégal 122 5.22. The Baglihar Difference 123 5.23. Arbitral Appointment in the Sava Basin 123 5.24. Gabčikovo-Nagymaros Case before the International Court of Justice 124 5.25. World Bank Co-Signatory to the Indus Waters Treaty 125 5.26. Panel of Experts to Negotiate a Framework Treaty for the Nile 126 5.27. Third-Party Assistance to Establish the Chu-Talas Commission 126 5.28. Global Environment Facility and World Bank Support to the Mekong River Commission 127 Figures P.1. Three-Stage Process of Coordinated Basin Development x ­1.1. Cooperation Potential 10 1.2. ­ Influence of Perceptions 11 1.3. ­ Turning Costs/Risks of Harm into Benefits 12 ­1.4. Cooperation Continuum 13 2.1. Three-Stage Process of Coordinated Basin Development 16 2.2. Dimensions and Spectra of Coordinated Basin Management 25 4.1. Three-Stage Process of Coordinated Basin Development 40 vi Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management Maps 1.1. ­ Water Stress: Maximum Risk Category of Environmental, Human, and Agricultural Stress, by Basin 8 ­ 1.2. Human Water Stress for the Senegal River Basin and Basin Country Units 8 1.3. ­ Change in Relative Risk in 2030 (Water Environmental Stress Indicator) 9 Tables 2.1. Identification of Opportunities and Risks 20 2.2. Design of Intervention 22 2.3. Implementation and Compliance 23 3.1. Identification of Opportunities and Risks 29 3.2. Design of Intervention 30 3.3. Implementation and Compliance 31 4.1. Macro Table 41 B4.18.1. OMVS Cost/Benefit Repartition Key 60 B4.67.1. ICPDR Member Contribution Categories 97 B4.68.1. MRC Indicator-Based Cost Contributions: Country Data/Measurements 98 B4.68.2. MRC Indicator-Based Cost Contributions: Weighted Indicators and Corresponding Percentage of Annual Increase in Contributions 98 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management vii Okavango River Basin. © Nicola Margaret/iStock. Preface The United Nations Sustainable Development Goals neighboring countries. With a growing number of (SDGs), adopted in September 2015, outline the new basins in which water use and demand permanently or global development agenda. Goal Number 6, which temporarily exceeds the amount of renewable water seeks to ensure availability and sustainable manage- ­ limate change, Target available, and uncertainty from c ment of water for all, recognizes the important trans- 6.5 becomes increasingly relevant to development boundary dimension of meeting the world’s future interventions (“hard” and “soft” solutions) designed water demands. Target 6.5 calls on the world commu- to secure availability of supplies and create resilience. nity to implement integrated water resources manage- Infrastructure investments, such as storage reservoirs ment at all levels, “including through transboundary (“hard” solution), are among the measures that can cooperation as appropriate,” recognizing the greater increase available supplies locally or at the basin-scale benefits that can be achieved in transboundary basins by tapping into previously inaccessible resources. For through coordinated versus unilateral action. example, floodwaters can be captured to increase dry season flows. Coordination of flow regulation (“soft” The world’s 286 transboundary river basins support solution) can be used to ensure that growing water the socioeconomic well-being of more than 40 percent demands can be met both within and between coun- of its population, as well as the ecosystems on which tries sharing transboundary basins. they depend (UNEP-DHI and UNEP 2016). Many of the  countries that share these basins are developing This report aims to contribute to relevant knowledge or  emerging economies that are actively looking for achieving Target 6.5. It guides the reader through to further develop and utilize their water resources— the process of identifying appropriate tools to achieve yet their desire to do so may negatively impact sustainable and mutually beneficial water resource Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management ix management in transboundary river basins. It aims to This report then identifies a series of tools that can be assist countries and development partners, such as the used to (a) realize and/or increase mutual benefits for World Bank, in their efforts to develop more water riparian countries; (b) mitigate transboundary harm; secure economies and societies through harnessing the and (c) promote cross-border coordination in order to shared freshwater resources of transboundary basins. reduce the risk of tensions and conflict that may occur due to the development of transboundary water The report presents the process of choosing the appro- resources. It distinguishes between tools that are avail- priate tools for individual basins and development able to countries directly (i.e., that do not require challenges along a three-stage process of coordinated involvement of third parties) and complementary tools basin development. As shown in figure P.1, the three that are typically provided by development partners or stages of process are (1) identification of opportunities other third parties. and risks of basin development; (2) design of interven- tions; and (3) implementation and  compliance with Some of the tools have been tested over the years and agreed actions. Along the process, coordination frame- employed successfully by countries and development works, such as joint basin management institutions, partners in coordinated basin development. Other provide platforms for countries to interact and identify tools are new, and have been developed by refining new opportunities to deepen coordinated develop- existing tools to respond to country demands. For ment in specific sectors or to expand cooperation to example, new payment guarantee mechanisms have other sectors and beyond the basin. been developed that could be used to guarantee FIGURE P.1. Three-Stage Process of Coordinated Basin Development 1. Identification of opportunities and risks Adjustment Loop 2. Design of intervention 3. Implementation and compliance Coordination framework x Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management compliance with storage reservoir release schedules International Experience” (part III of the overall for downstream hydropower production or irrigation study, Altingoz et al. 2018). benefits in transboundary river basins. Part II: Toolbox This report does not make direct recommendations and is not intended to be presciptive about which tools Part II identifies a wide range of tools that countries to use. Rather it presents the wide array of tools avail- and development partners can employ to increase the able and guides practitioners and decision makers in effectiveness of working in transboundary basins. The the process of making their choice. Toolbox accounts for the complex interdependencies that exist between riparian states; for the fact that The results of the analysis are presented in three parts. riparian coordination may equally be required in This report includes parts I and II. Part III is documented basins that do not currently or do not yet face physical in a companion report, “Promoting Development in water scarcity or water quality challenges; and that Shared River Basins: Case Studies from International interventions need to be adjusted to the specific basin Experience” (Altingoz et al. 2018). conditions. Although the focus of this report is on transboundary river basins, most tools can equally be Part I: Summary Report applied for shared groundwater resources and other Part I lays out the case for engaging in coordinated common-pool resources. basin development, both for countries as well as for development partners. It guides through the three- Part III: Case Studies stage process of coordinated basin development and guides in the choice of the appropriate Country Part III (Altingoz et al. 2018) presents six case studies and/or Third-Party tools. The report then summa- of  international experience on coordinated basin rizes the lessons learned from the application of the management in transboundary river basins: Kura- ­ framework and the tools presented in part II based Araks, Columbia, Chu and Talas, Vuoksi, Douro, and the on case studies from international experience on Rhône. The case studies focus on specific operations coordinated basin management in transboundary within these basins. Each case study is preceded by a ­ resented in more detail in river basins, which are p summary that explains the application of the three- in the companion report, “Promoting Development stage process of coordinated basin development frame- in  Shared Rivers Basins: Case Studies from work and tools described in part I and part II. Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management xi Acknowledgments This report was prepared by a team led by Christina The team thanks the many colleagues who pro- Leb and Taylor Henshaw, including Nausheen Iqbal, vided  support throughout the preparation of the Irene Rehberger Bescos, Scott Moore, Claudia Sadoff, study through generously sharing their expertise, in and Sanjay Pahuja. particular, Jennifer Sara, Pilar Maisterra, Anthony Molle, Nathalie Munzberg, William Young, Eileen Case study reports that informed the analysis were Burke, Marcus Wishart, and Anders Jagerskog, who authored by Mehmet Altingoz, Suren Gevinian, Melissa reviewed the report at various stages and McCracken, and Aaron T. Wolf (Kura-Araks Basin); Glen provided valuable comments and contributions along ­ Hearns (Columbia Basin); Vadim Ni (Chu and Talas the way. Basins); Antti Belinskij, Marko Keskinen, and Niko Soininen (Vuoksi Basin); Afonso do Ó (Douro Basin); This work was made possible by the financial contribu- and Christian Brethaut (Rhône Basin). The water scar- tion of the World Bank’s Water Partnership Program city analysis, which provided the basis for section 1.2 (WPP)—a multidonor trust fund that promotes water “Water Stress Projections in Transboundary River security for inclusive green growth. Basins,” was authored by Paul Glennie, with support from Maija Bertule and Peter Koefoed Bjørnsen. Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management xiii Abbreviations AGRHYMET Agrometeorology, Hydrology, Meteorology Regional Center ANDE Administración Nacional de Electricidad AOP assured operating plan AU African Union AWF African Water Facility BCH British Columbia Hydro and Power Authority BCU basin country unit BP Bank policy BPA Bonneville Power Administration BRIDGE Building River Dialogue and Governance (IUCN) CADC Commission for the Application and Development of the Convention CAEWDP Central Asia Energy and Water Development Program CAP-NET Capacity Development in Sustainable Water Management (UNDP) CE Canadian Entitlement CEMAC Economic Community of Central African States CICOS International Commission of Congo, Oubangui and Sangha River Basins CIT community integration tax CIWA Cooperation for International Waters in Africa CRB Columbia River Basin CRT Columbia River Treaty DMU decision making under uncertainty DOP detailed operating plan DSS decision support system EAC East African Community EFAS European Flood Awareness System ENCOM Eastern Nile Council of Ministers ENTRO Eastern Nile Technical Regional Office Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management xv ESCP environmental and social commitment plan ESCWAE Economic and Social Commission for Western Asia ESF environmental and social framework ESHS environmental, social, health, and safety ESS environmental and social standards EU European Union FAO Food and Agricultural Organization FCOP flood control operating plan GDP gross domestic product GEF Global Environment Facility GIS geographic information system GWh gigawatt hours IBRD International Bank for Reconstruction and Development IBWC International Boundary Water Commission ICJ International Court of Justice ICPDR International Commission for the Protection of the Danube River ICPR International Commission for the Protection of the Rhine ICREB International Columbia River Engineering Board IDA International Development Association IFC International Finance Corporation IFI international finance institution IGAD Intergovernmental Authority on Development IJC International Joint Commission IUCN International Union for the Conservation of Nature IW:LEARN International Waters Learning and Exchange Network (GEF) IWRM integrated water resources management IWT Indus Waters Treaty JTC joint technical committee kWh kilowatt hours xvi Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management LHDA Lesotho Hydropower Development Authority LHSE Lao Holding State Enterprise LHWC Lesotho Highlands Water Commission LHWP Lesotho Highlands Water Project LIBOR London Interbank Offered Rate LVBC Lake Victoria Basin Commission M meters MAF million acre feet MDTF multidonor trust fund MIGA Multilateral Investment Guarantee Agency MoU memorandum of understanding MRC Mekong River Commission MSIOA Multisector Investment Opportunity Analysis MW megawatt NAP National Action Program NBA Niger Basin Authority NBI Nile Basin Initiative NBTF Nile Basin Trust Fund NCORE Nile Cooperation for Results Project NE neutral expert NELSAP Nile Equatorial Lakes Subsidiary Action Program NMHS National Metoerological and Hydrological Services of Georgia NT2 Nam Theun 2 Project NTPC Nam Theun 2 Power Company O&M operation and maintenance OKACOM Permanent Okavango River Basin Commission OKR Open Knowledge Repository OMVS Organisation pour la Mise en Valeur du fleuve Sénégal OP operational policy (World Bank) Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management xvii ORASECOM Orange-Senqu River Commission OSCE Organization for Security and Cooperation in Europe OVTS Orange-Vaal Transfer Scheme PEB permanent engineering board PPA power purchase agreement PWC permanent water commission RAK river awareness kit RBO river basin organization ROR run-of-river RSA Republic of South Africa SADC Southern African Development Community SAP Strategic Action Program SAWI South Asia Water Initiative SDG Sustainable Development Goal SEA Strategic Environmental Assessment SEE Southeastern Europe SEEA System of Environmental-Economic Accounting for Water SIG Services Industriels de Genève SOGED Société de Gestion et D’Exploitation du Barrage de Diama SOGEM Société de Gestion du Barrage de Manantali SOMELEC La Société Mauritanienne d’Electricité SPEG Société de Production d’Electricite a Partir du Gaz SPV special purpose vehicle TA technical assistance TCTA Trans-Caledon Tunnel Authority TDA Transboundary Diagnostic Analysis TNMN TransNational Monitoring Network TWAP Transboundary Waters Assessment Program (GEF-UNEP) xviii Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management TWO transboundary water opportunity analysis UAHP Upper Arun Hydropower Project UNDP United Nations Development Program UNECE United Nations Economic Commission for Europe UNEP United Nations Environment Program UNEP-DHI United Nations Environment Program and DHI Group Partnership—Centre on Water and Environment UNESCAP United Nations Economic and Social Commission for Asia and the Pacific USACE US Army Corps of Engineers USAID United States Agency for International Development WMO World Meteorological Organization WUP Water Utilization Program WWAP World Water Assessment Program ZAMCOM Zambezi Watercourse Commission ZRA Zambezi River Authority Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management xix Water infrastructure. © drnadig/iStock. Part I Summary Report Columbia River Basin. © 4nadia/iStock. Chapter 1 The Case for Coordinated Basin Development Introduction ­ lanet. More 40  percent of the total land area of the p than ­ 2.8 billion people inhabit these basins, represent- Given global trends on population growth, economic ing more than 40 percent of the world’s population development, and urbanization, the pressure on the (UNEP-DHI and UNEP 2016). This proportion is even world’s freshwater resources is r ­ .6 billion ­ ising. About 1 higher when transboundary aquifers and lake basins people live in countries with physical water scarcity, considered. Countries are relying more and are also ­ and this number may double over the next two decades more on transboundary water resources to meet their 2016). Estimates suggest that within the (World Bank ­ growing water demands; yet actions to this end may next three decades, the global food system will require impacts. have cross-border ­ between 40 and 50 percent more water, municipal and industrial water demand will increase by 50–70 per- Transboundary freshwater systems create inevitable cent, and the energy sector will see water demand linkages and interdependencies between c ­ountries. ­ 016). Ecosystems increase by 85 percent (World Bank 2 The use of shared water resources by one country will, that are already suffering significantly from human in most cases, impact other countries sharing the water exploitation will likely receive even less water in system. At the same time, coordination among same ­ today. the future than they do ­ countries in the development of transboundary basins About 60 percent of the world’s freshwater flows occur can yield greater benefits than would be available to in transboundary river basins that cover more than individual countries pursuing unilateral development. Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 3 Coordinated development therefore holds a signifi- development; (2) the design of interventions; and cant potential to address the continued rise in water (3)  the implementation and compliance with agreed ­demand. ­actions. The new global development agenda recognizes the This report distinguishes between tools that are avail- benefits of coordinated development of water able directly to countries and tools that are offered by resources flowing in transboundary ­ basins. In 2015, third parties, including those offered by the World the United Nations SDGs were approved as part of the partners. These tools can Bank and other development ­ agenda to end poverty, protect the planet, and ensure assist in the optimization of basin development and prosperity for ­ all. As one of the seventeen goals, SDG 6 the achievement of mutual benefits and sustainable focuses on ensuring access to water and sanitation and use, while preventing or mitigating transboundary on achieving sustainable management of ­ water. Its harm that may occur to basins or to the populations 6.5 calls for integrated water resources manage- Target ­ them. dependent on ­ ment at all levels, “including through transboundary The report then summarizes the lessons learned from appropriate.” cooperation as ­ the application of the framework and tools presented based on a number of case studies from international The objective of this report is to assist with the imple- experience on coordinated basin management in mentation of this new development ­agenda. It summa- transboundary river ­ basins. rizes the wide array of tools available to countries for the design of their cooperation on transboundary borders. Many river basins connect countries across ­ basins. Many of the countries that are actively looking ­ They originate in one and receive further flow contri- to further develop and utilize transboundary water butions through rainfall and tributaries in other terri- economies. resources are developing or emerging ­ tories they cross along the way to a sea or inland d ­ elta. Accordingly, development partners, such as the World These transboundary rivers establish hydrological Bank, other international financial institutions (IFIs), countries. The use of the interdependencies between ­ and bilateral donors, may increasingly find themselves shared waters in one country may affect water avail- confronted by requests for assistance to facilitate coor- ability for use in another country—seasonally ( ­e.g., in ­ ystems. It dinated development of shared freshwater s case of flow changes through storage or other flow is critical that these actors understand the challenges (e.g., in management infrastructure), quantitatively ­ of working in transboundary basins, and that they ­ e.g., in case of case of consumptive use), qualitatively ( have the tools at their disposal to facilitate transbound- pollution), and over time (downstream development ary cooperation to achieve mutual development bene- upstream). or water resources may foreclose future use ­ fits and manage associated r ­ isks. This report is These cross-border impacts invariably affect relations therefore written for both countries and development among the countries sharing and depending on the partners, as well as other interested practitioners and resources. They may catalyze cooperation same water ­ ­stakeholders. where cooperation is perceived as mutually b ­ eneficial. After presenting the case for coordinated basin devel- Navigation for river transport and trade, for example, opment, this report guides through the process of is one of the oldest and most established forms of choosing the appropriate tools for individual basins rivers. Other issues cooperation along transboundary ­ and development challenges along a three-stage pro- related to country cooperation include information cess of coordinated basin development, comprising exchange for flood forecasting and early warning sys- (1) the identification opportunities and risks of basin tems to prevent flood damage; coordination on 4 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management upstream storage and flow releases to smoothen sea- 1.1 Benefits of Coordination sonal hydrologic extremes and ensure water availabil- Over the course of history, countries have jointly, or in ity also in dry seasons; as well as flood risk and water a coordinated manner, developed shared river basins quality management, including through wetland res- with expectations to unlock benefits that cannot toration and green ­ infrastructure. be  achieved through unilateral development. ­ At the same time, cross-border impacts can cause ten- Coordination can take many forms: it can range from sions among co-riparian countries—tensions that can simple consultation on development plans, to infor- spill over into country relationships concerning other mation sharing, to joint infrastructure investments, to sectors or that may be compounded by tensions unre- comprehensive basin management focusing on water lated to water that might already exist between non–water-related sectors, such as in the and even ­ ­ countries. Experience shows that water-related ten- La  Plata Basin and the Amazon Basin, where the sions are more common in basins where water quan- watersheds also serve as geographic space to organize tity is of concern to riparian ­ countries. Cooperation or broadly. economic integration more ­ coordinated development may not easily occur where An example of a basin where countries have achieved solutions to overcome water scarcity and quantity significant mutual economic benefits through coopera- obvious. And it may be further ham- issues are not ­ tion is the Columbia Basin in North America (Altingoz pered by decision makers’ perceptions of political or al. 2018). In the 1940s, Canada and the United States et ­ other non–water-related risks to ­ cooperation. of America set up a joint technical committee, the However, the case of the Senegal River Basin, for International Columbia River Engineering Board, to instance, illustrates that water availability concerns study the development potential of their shared ­ basin. cooperation. are not necessarily a stumbling block for ­ The results of the Board’s analysis concluded that Faced with the experience of devastating droughts, the through developing reservoirs in the upper basin and riparian countries have set up a durable, basin-wide coordinating cascade operation with already existing cooperation framework over the past decades that dams downstream, significant flood control and power delivers multiple benefits, including beyond the water ­ chieved. The cooperative generation benefits could be a sector. This and other basin experiences highlight that ­ regime set up by the two countries, based on the 1961 countries usually cooperate when the benefits of coop- Columbia River Treaty (CRT), resulted in significant eration outweigh the perceived ­ costs. ­ enefits. In terms of prevented flood dam- economic b The following sections present a summary analysis of age, it is estimated that the flow regulation p ­ rovided by benefits that can be obtained from cooperation; and new upstream dams during 1972, 1974, 1996, and 1997 the global water trends and risks, which indicate that prevented damage of US$260 million, US$306 million, coordinated basin development will likely become US$227 million, and US$379 million, respectively ­ ome. A depiction more important in the decades to c ­ 013). Average annual (US  Army Corps of Engineers 2 of the conditions that create an enabling environment flood damage prevented in the United States that for cooperation and coordinated basin develop- can  be attributed to the Treaty is estimated at ment concludes this section of part I. The subsequent million. Flood risk control has also allowed US$75  ­ section then describes the three-stage process frame- additional investments in irrigation and port facilities work that can guide countries and development basin. In terms of electricity benefits, in the lower ­ partners in the choice of appropriate tools for identifi- the  so-called Canadian Entitlement (CE) benefits cation, design, and implementation of coordinated the  province of British Columbia, Canada, where the basin ­management. Dams are located, with electricity valued at about Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 5 US$120 million to $300 million annually since 1998/1999 and dam operations among the countries sharing the (Province of British Columbia ­ 2016). Zambezi Basin found that exchange of information can ­ S$15.7 million of monetary benefits in result in up to U In the La Plata Basin, cooperation on hydropower addition to ecologic benefits for the Zambezi Delta generation development on the shared river stretches (Giuliani and Casteletti ­ 2013). of the Paraná River have equally generated significant benefits from electricity p ­ roduction. The Itaipu Dam, The economic rate of return for hydrometeorology jointly developed by Brazil and Paraguay and man- systems for the countries in Central Asia, which aged by an entity co-owned by their respective power share the Aral Sea Basin, has been estimated as high as companies, Eletrobrás and the Administración 36 percent, partially due to reducing costs of extreme Nacional de Electricidad (Ande), provides almost events, which cost the countries up to 1 percent of gross 75  percent of  the electricity consumed in Paraguay 2008). As the man- domestic product (GDP) (World Bank ­ and about 15 percent of electricity consumption in agement of water for agriculture in the lower parts of ­ Brazil. Because Paraguay only uses about 5–10 percent the basin depend on the hydrology and reservoir man- of the electricity produced at Itaipu, its sells the agement upstream, these investments coupled with remainder of its share to Brazil and receives an annual information exchange can assist with optimization of compensation payment of about US$360 million from agriculture. In Central flow regulation for irrigated ­ Brazil for the use of Paraguay’s share of the hydraulic Asia, as in other basins around the world, investments al. ­ resource (Kramer et  ­ 2012). The development of in hydrometeorology systems combined with infor- the hydropower potential that the country shares on mation exchange will improve climate risk manage- its border rivers with Brazil and Argentina (with ment and help countries in their efforts to enhance which it has developed the Yacyretá Dam) has pro- resilience to climate change through ­ adaptation. vided Paraguay with significant export revenues and linkages to the markets of its larger ­ neighbors. Further to improved water management, informa- tion sharing can improve trust through increased Beyond the investment in and coordination of large transparency, and build institutional c apacity. ­ infrastructure, important gains can already be achieved Coordination mechanisms that monitor basin condi- from far less cost-intensive ­ measures. The  introduc- tions, such as river basin organizations or permanent tion of regulations on pollution prevention and water technical committees, can play an important role in quality standards (“soft” solutions) coupled with constantly assessing the effectiveness of coordinated investments in sewage treatment plants and wetland basin management and compliance of countries with restoration can restore availability of freshwater for commitments. And, more importantly, they agreed ­ use. These measures have been successfully human ­ provide useful platforms for countries to interact and employed in the 1980s and 1990s in Europe to restore identify new opportunities to deepen cooperation the multiple benefits that the waters of transboundary and to expand it to new sectors, including beyond provide. Similarly, damages caused by rivers can ­ the ­basin. severe weather events, floods, dam failures or glacial lake outburst can be significantly reduced through the The preceding examples highlight that, further to mea- establishment of reliable flood forecasting and early sures that can be carried out by countries unilaterally warning systems, as well as through regular exchange (e.g., water use efficiency increases and quality man- ­ countries. of data and information between riparian ­ agement measures), additional benefits can be An assessment comparing a noncooperative scenario achieved through coordinated management in trans- with a coordinated scenario for information exchange boundary river b ­asins. Opportunities for countries 6 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management participating in coordinated basin management ­ tress. The baseline locates the hotspot basins in water s include better water quality, energy power trade bene- Central Asia and South Asia, in the Middle East, in fits resulting from better utilization of upstream water Northern and Southern Africa, and between the United storage and hydropower developments, reduction in 1.1). Five basins in Central States and Mexico (map ­ flood risks through flow management, information Asia—the Harirud, Helmand, Kowl E Namaksar, forecasting. sharing and coordinated hydrological ­ Murgab, and Tarim—and the Rio Grande in North Overall, cooperation and coordination can lead to bet- indicators. America have very high risk for all three ­ ter utilization of water ­ systems. Afghanistan is part of all five identified river basins in Central Asia, the Islamic Republic of Iran is part of Coordinated basin management becomes more basins. three, and Turkmenistan is part of two ­ important in basins where water resources are not available in abundance, and in situations of seasonal or An analysis of differences between basin country ­ carcity. In these cases, transboundary absolute water s units (BCUs)3 demonstrates that the core challenges impacts caused by developments in one country are in managing water within transboundary basins are usually more immediately felt elsewhere; for instance, country-to-country differences in water dependency rivers with low flow volumes lack the capacity to dilute ­ xposure. Across all three indicators, basins and risk e pollution, and additional consumptive uses upstream that may have had a “very low” or “low” risk at the may deprive downstream users of water resources that basin level contain BCUs that have high or very high sustain their ­ livelihoods. risk. For example, the Senegal River Basin shows a ­ “low” maximum relative risk category across all The next section summarizes the risks to transboundary three indicators (map 1.2, panel a). Similarly, the basins posed by global trends of increasing water low. However, human water stress indicator is very ­ demand caused by population growth and economic this indication masks the differences among BCUs development and the shifts in precipitation patterns due within the basin: Guinea and Mali are at very low change. The assessment is based on the Global to climate ­ risk, whereas Mauritania is at very high risk (map ­1.2, Environment Facility Transboundary Waters Assessment panel b). Program’s (TWAP) Transboundary River Basins: Status and Trends ­ analysis (UNEP-DHI and UNEP 2016).1 In the future, significant changes to river flows are expected due to a combination of climate change 1.2 Water Stress Projections in (both less and more water), dam management, and Transboundary River Basins consumption. More rainfall is projected in the water ­ Sahel region of West Africa, and some BCUs are pro- Water stress is increasing in a number of the 286 jected to have lower human water stress due to cli- ­ world. Using transboundary river basins around the ­ availability. Drier conditions mate-driven increases in ­ environmental water stress, human water stress, and are expected in basins and BCUs in South Africa, agricultural water stress indicators2 under a “business- Eastern Europe, and the southern European countries as-usual” scenario, significant changes to river flows (Spain and Portugal), and relative risk is projected to predicted. These changes are due to a combination are ­ increase in these ­ areas. In the Ganges-Brahmaputra- of climate change effects (both less and more water), Meghna Basin, projected increases in water availabil- infrastructure investments to regulate flows, and ity are cancelled out by significant increases in consumption. human water ­ population growth and water ­demand. Environmental At the basin level, a fairly high degree of correlation water stress, which is assessed based on the human exists between environment, human, and agricultural induced monthly variations to the natural flow regime Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 7 MAP ­1.1. Water Stress: Maximum Risk Category of Environmental, Human, and Agricultural Stress, by Basin IBRD 43508 | MARCH 2018 Relative risk category Very low Low Moderate High Very high No data Source: “Global Environment Facility Transboundary Waters Assessment Program 2015. http://twap-rivers.org.” Note: GAUL = Global Administrative Unit Layers. MAP ­1.2. Human Water Stress for the Senegal River Basin and Basin Country Units a. Senegal River Basin b. Basin country units NOUAKCHOTT NOUAKCHOTT ATLANTIC ATLANTIC OCEAN OCEAN MAURITANIA MAURITANIA Se Se ne ne l l ga ga SENEGAL SENEGAL DAKAR Riv DAKAR Riv e e r r THE GAMBIA THE GAMBIA MAL MALI MALI BANJUL BANJUL BAMAKO BAMAKO GUINEA- GUINEA- BISSAU BISSAU BISSAU BISSAU GUINEA GUINEA IBRD 43509 | MARCH 2018 Relative risk category Very low Low Moderate High Very high 8 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management MAP ­1.3. Change in Relative Risk in 2030 (Water Environmental Stress Indicator) IBRD 43510 | MARCH 2018 Relative risk category Very low Low Moderate High Very high No data Source: Global Environment Facility Transboundary Waters Assessment Program 2015. http://twap-rivers.org. considering water withdrawals and dam manage- These need to be considered in the use of tools to ment, is expected to increase significantly in basins address transboundary ­impact. One of the key factors and BCUs in Northern and Southern Africa, as well as is water quality; available water must be of adequate in Northwestern America, Northern and Eastern quality for the intended ­use. Overlaying water quality Europe, and the Russian Federation by 2030 (map ­1.3). risks on top of water quantity risks would likely result Agricultural water stress can be expected to increase in even more extreme scenarios than the ones previ- roughly in line with environmental water stress, as ously ­ described. As with other risk factors, there are correlated. the two indicators are reasonably highly ­ challenge. Based technical solutions to address the ­ Irrigation is expected to increase water demand both on experience in various basins, water quality can due to growing food demands and increased evapo- generally be cooperatively managed and improved transpiration (water use by plants) in many regions of with greater impact and ease than physical water the world, though this may be offset to some extent by ­scarcity. potential improvements in irrigation water use The Transboundary River Basins: Status and Trends ­efficiency. analysis illustrates that many of the world’s trans- In addition to the water quantity perspective, several boundary basins are at risk due to a complex blend of other factors affect water stress and the way water stresses, including human, environmental, and agri- resources are managed in transboundary river ­basins. cultural water s ­ tress. A number of the transboundary Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 9 basins at risk are shared by fragile or conflict-affected potential role of  third parties in facilitating coordi- countries, elevating the water scarcity challenges nated basin ­ development. not only to a development risk but also to a security ­ risk. In “closing” transboundary basins, where water 1.3 Enabling Conditions for Cooperation demand exceeds supply seasonally, the introduction Based on experience, countries do not cooperate in the of new uses or the change in existing uses by one management of transboundary waters because they basin country is likely to have impacts on other basin are compelled by an ethic of ­cooperation. They cooper- countries. Investments that cause consumptive use ­ ate when the net benefits of cooperation are perceived or changes in seasonal flow patterns will likely to be greater than the net benefits of noncooperation impact existing uses elsewhere, potentially depriv- and when the distribution of these net benefits is per- ing others of the benefits they derive from the shared ceived to be fair (figure ­ 1.1). The benefits and costs resource. In cases of unilateral development, with- ­ ­ considered in this calculation are not only of financial out coordination or consultation with co-riparian or economic nature, they may also involve consider- countries, this can lead to significant negative or ations such as national security or stability of a govern- unintended consequences, and in the worst-case ment, or others, such as social and environmental conflict. scenario may become a cause of ­ ­ well-being. For in-country operations with trans- The existence of multiple hotspot basins now and boundary impact, cooperation may happen when the  projected increase in numbers in the future sug- mutual benefits outweigh the costs of cooperation and gest an  urgent need for countries and development the benefits that can be achieved for the country in institutions 4 to identify adequate interventions to whose territory the operation is located are greater address impending water stress as well as the adequate unilaterally. Cross-country projects than when acting ­ tools that can facilitate coordination on basin manage- involving the territory of two or more countries gener- ment to achieve mutual benefits and mitigate the risk ally take place only in the presence of a joint under- of ­ harm. The following section discusses the condi- standing between those who agree that the benefits tions that enable cooperation, and refers to the costs. outweigh the ­ FIGURE ­1.1. Cooperation Potential In-country development project/program Cross-country development project/program Unilateral action Cooperation Cooperation Mutual benefits outweigh costs Benefits Mutual benefits Cooperation likely Cost of cooperation 10 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 1.3.1 Perceived Risks and Opportunities benefits and costs as well as a consideration of risks In addition to cost–benefit calculations, countries also and opportunities; the higher the benefits and oppor- consider exposure to ­ risks. Countries may therefore dis- tunities relative to costs and risks, the greater the count benefits based on perceived risks of engagement likelihood of sustained cooperation (Subramanian, in cooperative ­ solutions. When faced with opportunities ­ 012). Figure 1 Brown, and Wolf 2 ­ .2 illustrates how per- for cooperation that would bring benefits to their coun- ceptions of political risks and opportunities might try, policy makers decide whether or not to c ­ ooperate. influence country decisions over cooperation, and Individual decision makers in riparian countries operate how risk reduction and opportunity enhancement within the political context of their countries and con- ­ ime. Countries might change those perceptions over t sider external and internal drivers of decision making. considering cooperation assess their positions on the Decisions are informed by the perceived risks of engage- x-axis in terms of net benefits (benefits less costs) and ment; that is, the perception that an act of cooperation on the y-axis in terms of net opportunities (opportu- will expose the country to harm will jeopardize some- risks). Benefits and costs are economic, nities less ­ thing of value to the country, or will threaten the politi- political. These whereas opportunities and risks are ­ cal future of individual p ­ olicy ­ makers. “positions” in the framework may determine the like- lihood of cooperation in that given situation, as Policy makers will need to see positive political gains described in the text in each ­ quadrant. The northeast cooperation. Perceived political opportunity for from ­ quadrant depicts the balance of costs/benefits and a given country can be defined as the perception that cooperation. risks/opportunities most conducive to ­ an act of cooperation will enhance the country’s well-­ Reducing risks and seizing opportunities, reducing being, will augment something of value to the coun- economic costs and increasing economic benefits will try, or will improve the political future of individual move countries from their initial positions into the ­ 012). policy makers (Subramanian, Brown, and Wolf 2 northeast ­quadrant. Positive gains, both economic and political, must be evident. In the mid-1980s, when the riparians of the ­ Danube River came together, they faced not only the FIGURE ­1.2. Influence of Perceptions possibility of improved water quality monitoring (and subsequent improvement), but also the oppor- Opportunity tunity for the Western and Eastern European coun- Opportunity Countries may enhancement tries to intensify communication, at least at the consider a deal, technical ­ level. Likewise, the cooperative stance of but likely Countries request most likely to Aral Sea riparians in the early 1990s has been make a deal more benefits attributed to their decision to seize the political opportunities for investments in environmental Cost Benefit remediation (Subramanian, Brown, and Wolf ­ 2012). Risk reduction Unbiased third parties can facilitate between-coun- Countries may Countries try exchanges, interpret each country’s interests, consider a deal, may pursue but need to help clarify mutually beneficial cooperation opportu- unilateral address risk and development nities, and extend assurances regarding the flow of opportunity cooperation ­benefits. Risk For each country, the possibilities of cooperation and the discussion of benefits can trigger an analysis of 2012. Source: Subramanian, Brown, and Wolf ­ Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 11 The level and type of risks will likely vary depending ­ ction. It is that can be achieved through unilateral a on both the scope of the agreement and the hydropo- therefore important that riparian countries care- litical context of the basin in q ­ uestion. Perceived risks fully analyze the benefit and cost potential and appear to lie at the core of decisions by countries identify adequate tools that can facilitate benefit to  cooperate or not on issues of shared waters optimization. On the Douro River, where Portugal ­ 2012). Risk mitigation (Subramanian, Brown, and Wolf ­ and Spain both engage in hydroelectricity produc- tools can be adopted unilaterally by a country imple- tion, the two countries agreed to a compensation menting an operation without coordination with other mechanism as a means to ensure compliance with riparian countries; for instance, through enforcement agreed limitations on withdrawals and flow diver- ­ revention. However, of legislation requiring pollution p sions (Altingoz et ­ 2018). al. ­ whereas an in-country project involves the risk of sig- Identifying the right level of effort and investment in nificant transboundary harm, other affected riparian international cooperation is a key to capturing real countries may demand some sort of guarantee from gains without incurring excessive c ­ osts. If a country the implementing country that these risks are cannot find a way to compensate for or control risks, it ­mitigated. For instance, affected countries may ask for may choose not to enter into a cooperative a ­ greement. a guarantee that any harm that occurs will at least be Instead, it may either maintain the status quo or pur- repaired or compensated for; or they may ask for the sue its own interests to the extent possible without an establishment of a mechanism that would, for exam- ­agreement. However, if the risk is reduced or removed, ple, guarantee compliance with arrangements requir- increase. Third par- the potential for cooperation may ­ ing that large storage and flow regulation infrastructure ties can assist both by identifying tools to manage benefit. Thus, depending on is operated also to their ­ risks and by providing t ­ hem. Among others, they can the tools that are employed, the potential costs and provide technical assistance and independent data risks of harm may be turned into transboundary bene- during the identification process; they can provide a fits (figure ­1.3). space for discussions as conveners and facilitators Tools that promote compliance or that can effec- during the identification and design process; and they tively hedge risks may help tip the balance toward can provide guarantee mechanisms, such as indepen- cooperation among riparian countries on operations dent monitoring or financial guarantees to promote impact. This may be the case with transboundary ­ ­compliance. where the mutual benefits that can be achieved through cooperation are greater than the benefits 1.3.2 Identifying Effective Cooperation There are no blueprints for cooperation on trans- boundary waters ­ projects. In reality, innumerable FIGURE ­1.3. Turning Costs/Risks of Harm into Benefits practical avenues of cooperation exist that coun- tries can undertake to their mutual advantage, each Application of risk mitigation/compliance tool with different potential benefits and different asso- ciated ­ costs. Each basin is unique; each case is different. Different modes of cooperation should be ­ Costs/risk Mutual of harm Costs/ bene ts considered in response to different ­ c ircumstances. Bene ts risk of harm The most appropriate mode of cooperation will depend on many factors, including hydrological 12 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management FIGURE ­1.4. Cooperation Continuum • Communication and • Implement national investments that capture • Joint project design notification cooperative gains • Joint ownership • Information sharing • Adapt national plans to mitigate regional costs • Joint institutions • Regional asessments • Adapt national plans to capture regional gains • Joint investments Dispute Cooperation continuum Integration Unilateral action Coordination Cooperation Joint action 2005. Source: Adapted from Sadoff and Grey ­ characteristics, the economics of cooperative are appropriate for different activities at different investments, the number of interested or affected times. Countries may adapt their activities to increase ­ riparian countries, the  costs of engaging and any or decrease the intensity of their cooperation in potential ­risks. These together determine the poten- response to new opportunities or developments within tial benefits and costs to be balanced in choosing a or outside the cooperative p ­ rocess. Finally, the contin- cooperative strategy (Grey et ­ 2016). al. ­ uum is also ­ iterative. There are repeated, discrete opportunities for cooperation, and the success of ear- In some basins, information sharing and basin-wide lier cooperation, particularly in terms of realized bene- strategic assessments may be enough to promote bet- fits, will likely promote increasing ­ cooperation. In this management. In others, joint ter, more cooperative ­ iterative context, the riparian countries are aware that actions might be needed on environmental flow regu- noncooperative actions may impact and possibly lation, water storage, and drought and flood mitigation diminish future cooperation (Grey et ­ 2016). al. ­ in order to yield significant net ­ benefits. A cooperation 1.4) can be conceived, from unilat- continuum (figure ­ The next section describes the ways in which countries eral action (independent, nontransparent national go through the process of identifying, designing, and planning and management), to coordination (sharing implementing coordinated basin management and information regarding national planning and manage- process. individual interventions that are part of the ­ ment), to collaboration (adaptation of national plans Structured around the three-stage process framework, for mutual benefits), to joint action (joint planning, it describes the various phases of the coordination pro- investment). management, or ­ cess, the tools that can be used during each stage, and It is important to note that this continuum is nondirec- the dimensions to consider for the choice of tools as tional, because more cooperation is not necessarily ­ ools. These con- well as for the content design of the t ­ better. It portrays increasing levels of cooperative siderations help identify the adequate level of effort effort, but it does not suggest that this is a goal in all and investment required to address the individual basins. The continuum is dynamic, as various points ­ stake. basin development issue(s) at ­ Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 13 3. A basin country unit is the portion of a country within a particular Notes basin. ­ river ­ 1. See ­http://www.geftwap.org/water-systems/river-basins. 4. Development partners, such as the World Bank, other IFIs and bilateral 2. Environmental Water Stress is based on the human induced monthly donors, will increasingly find themselves in situations where invest- variations to the natural flow regime considering water withdrawals ment support in one country (including for projects outside the water management. Human Water Stress is based on the maxi- and dam ­ ­ ountries. This leaves them with sector) risks to negatively impact other c mum risk of two subindicators: availability per person (m3/person/ the decision to either step away from the investment avoiding responsi- year), and water withdrawals as proportion of availability, that is, bility for potential harm or to engage proactively in efforts to design relative water use: mean annual withdrawal divided by the available projects that not only mitigate the risk of harm, but seek to be mutually (percent). Agricultural Water Stress is based on the rela- water supply ­ ­ ountries. It is beneficial to achieve acceptance of a project by affected c tive water consumption by crops under irrigation compared to water therefore critical that they have the tools at their disposal to facilitate ­availability. ­ enefits. transboundary cooperation and the sharing of both risks and b 14 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management Itaipu Dam on the Paraná River. © Chandra Dhas/iStock. Chapter 2 Framework and Tools for Engagement Each basin context is unique; therefore, the process by they can employ throughout the process of coordi- which riparian countries initiate and structure basin nated basin management. coordination will display different characteristics in each and every case. Countries may determine that reg- 2.1 The Three-Stage Process of Coordinated Basin Development ular information exchange on their respective uses of a river basin is sufficient to ensure effective coordination The process of coordinated basin development can be and sustainable resource use. Countries planning to structured along three stages: (1) identification of use the hydropower potential of river stretches along a development opportunities and risks; (2) design of a shared border face the option of ceding the rights to specific intervention or a broader plan for basin man- develop the river stretch to one country and providing agement; and (3) the implementation of the project or access and use of their territory as needed, or they may process (figure 2.1). The three-stage process frame- decide on a joint investment. Although the specific work can be applied to both project-based interven- actions in each of these processes will be different, in tions and programmatic basin approaches. It does not each of the cases the stages of the coordination process make much difference whether one country or multi- will broadly be the same: identification, design, and ple countries are contemplating a specific project, such implementation. The subsequent sections provide a as the establishment of a flood forecasting and early conceptual framework that can guide countries, and warning system, or whether they are considering their development partners, through the choice of tools broader multisector basin development. The process Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 15 FIGURE 2.1. Three-Stage Process of Coordinated Basin Development 1. Identification of opportunities and risks Adjustment Loop 2. Design of intervention 3. Implementation and compliance Coordination framework for participating countries will broadly be the same different, or less or more consumptive sectors. Changes and follow these three stages. in hydrological patterns may require adaptation. Over the past decades, cooperation that set out with a strong Each of the three stages can benefit from structured focus on water quality management turned to other coordination frameworks that provide the “rules of the issues as riparian countries on the Danube and Rhine game” for cooperation. At the identification stage, Rivers moved on to coordinate wetland restoration these can be global or regional agreements that outline efforts to adapt to the increase in the number and principles for cooperation (e.g., multilateral environ- severity of flood events which challenge the highly mental agreements, global or regional water conven- regulated river beds. tions) or these may be existing organizations (e.g., the East African Community provided the institutional Moreover, as coordination between two or more coun- umbrella for the establishment of the Lake Victoria tries on transboundary water resources is complex, the Basin Commission). At the subsequent stages, coun- perfect is the enemy of the good. Trying to establish tries can decide on and design an adequate framework the perfect cooperation modalities that consider all based on the characteristics of the given situation. eventualities and potential risks from the outset may lead to a situation where coordinated development As outlined above, coordination processes are nonlin- never takes off. It can be beneficial for countries to ear, iterative, and dynamic. Countries learn over time start at a low level of cooperation along the continuum what works best in any given situation, or underlying (figure 1.4) or to start with “imperfect” cooperation conditions may change prompting the need for adjust- and then improve on it over time. Spain and Portugal ment. Basins may be faced with new challenges and have revised the international agreements based on demands, such as a change in the composition of water which they coordinate flow management in their uses and users in the basin, shifting water use to 16 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management shared river basins twice, in the 1960s and in 1998, to phase in tables 2.1, 2.2, and 2.3. This is done because a adjust for changing circumstances and enhance com- number of the tools are appropriate for both pliance rules (Altingoz et al. 2018). Similarly, prompted project-based as well as wider basin-level engage- by environmental concerns, France and Switzerland ments, and in order not to introduce too many layers have reviewed and improved the sediment flushing into the tables. However, distinctions are made modalities at Verbois Dam in the Rhône Basin (Altingoz between those tools that are available to countries et al. 2018). The Adjustment Loop in the above frame- directly and those that are typically provided by devel- work (figure 2.1) reflects this iterative character of opment partners or other third parties. It is acknowl- coordination processes and accounts for the adjust- edged that some overlap exists in these two tool ments to cooperation that have taken place in many categories. They are presented separately to show what transboundary basins over time. can be done by countries directly and in which ways they can engage third parties in support of their efforts. The process steps of the three-stage process ­framework are explained in more detail in the following sections. The tools referred to here as “Country Tools” are those The next subsection describes how this framework can that are directly available to countries without requir- guide countries in the choice of tools that can be applied ing participation of third parties. The Country Tools in each of these stages. This is followed by an explana- presented in tables 2.1, 2.2, and 2.3 and in more detail tion of five dimensions that should be considered when in part II: Toolbox are based on the large body of inter- deciding on the tools used and their content. national experience of effective coordination in trans- boundary basins. These tools have been used directly between and by countries to manage transboundary 2.2 Tools for Coordinated Basin water resources in a coordinated manner in order to Management achieve mutual benefits and/or to mitigate risks of Just as each transboundary river basin has unique harm. These are tools that can be used for basin diag- characteristics, each situation that is being pursued nostics and the identification of opportunities, infor- by countries in their efforts to develop transboundary mation exchange, basin planning, joint investments, water resources will be different. Whether countries and basin development as well as to promote compli- engage in project-based engagements or wider basin ance with agreements and dispute settlement. management approaches, they will find themselves in As has been mentioned above, third parties can play an the same three stages of coordination during the pro- effective role in supporting riparian countries in basin cess. Nevertheless, some of the tools employed for coordination processes. They can offer tools and ser- these two distinct approaches will be different. For vices to client countries and may be engaged in multi- example, strategic environmental assessments are ple ways. They can help with meeting financing gaps generally used for basin planning approaches, and the provision of technical assistance as well as whereas the assessment of transboundary impact advisory services during the identification, design, and through detailed environmental and social impact implementation stages; they can join the process as assessments typically takes place for project-based facilitators or countries may request support from interventions. Similarly, detailed design studies are third parties for the promotion of compliance with typically used for the latter rather than for basin-level between-country agreements. The involvement of engagements. third parties, in particular those that have a “weight of For this overview, the tools both for a basin approach presence,” can encourage compliance and provide and individual projects are presented together for each impartiality in monitoring implementation. Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 17 The “Third-Party Tools” presented here are those typi- As indicated in the following tables, a number of these cally provided by bilateral and multilateral donor agen- tools can be applied for multiple stages. This is partic- cies, international finance institutions (IFIs), and the ularly the case for coordination frameworks. For private sector as well as civil society organizations. The instance, a joint technical committee can be convened majority of them have been tested successfully over to identify opportunities or to design interventions, or many years. Some of them are new and have been for the management of activities. International treaties developed by refining existing tools to respond to can be used for all three stages: (1) an existing interna- country demands, in particular those related to pro- tional treaty, or basin organization that has been set up moting compliance. For example, the World Bank can based on an international treaty, can provide a joint now finance a payment guarantee for a nonloan service platform for the identification of new development related to government payment obligations in favor of opportunities; (2) countries can commit to jointly foreign public entities or a foreign government (see designing a project through an international treaty; “Third-Party Guarantee: Lom Pangar/Nachtigal Dams” and (3) a treaty can be negotiated during the design box 2.1). Such a guarantee could, for instance, be used stage in order to set up a legal framework for imple- to guarantee compliance with storage reservoir release mentation that outlines the agreed rules of implemen- schedules for downstream hydropower production or tation, mechanisms to enhance compliance, and irrigation benefits, provided any such noncompliance procedures for dispute settlement in case disputes can be monetized and results in a payment obligation occur during implementation. For example, the 1927 for the relevant foreign public entity or a foreign Protocol on the Beneficial Uses of Boundary Waters government. concerning the use of boundary waters of the Araks and Arpaçay/Akhuryan Rivers between Turkey and The following presents the process of choosing appro- Armenia and the Joint Boundary Water Commission, priate tools in each of the three stages of the coordi- which was established based on the Protocol, provided nated basin management framework and lists the the coordination framework which allowed the two Country Tools and Third-Party Tools available under riparian countries (then the Soviet Union and Turkey) each stage. The tool numbers (T1, T2, etc.) correspond to identify the irrigation benefits a dam on their shared to the tool numbering in part II: Toolbox. BOX 2.1. Third-Party Guarantee: Lom Pangar/Nachtigal Dams Lom Pangar Dam reservoir will unlock the energy production potential of a downstream run-of-river (ROR) hydropower cascade in the Sanaga River Basin in Cameroon. The dam will store water during the wet periods for release during dry seasons. New ROR structures, including Nachtigal Dam, are planned to satisfy demand from the industrial sector, to supply the national grid and to contribute to basin management. Lom Pangar is co-financed by the World Bank, European Investment Bank and African Development Bank through concessional lending. The project is expected to yield downstream ROR power generation projects (including at Nachtigal), which can be supported by guarantee instruments to help Cameroon mobilize private financing and hedge certain risks (offtaker credit risk and country/political risk). The presence of the World Bank through these guaranteed arrangements generally also helps promote compliance with operating agreements. 18 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management river would provide. Subsequently, they signed two already interact typically provide an enabling environ- additional bilateral agreements, in 1964 and 1973, to ment to initiate upstream assessments. For instance, a construct the Arpaçay Dam and reservoir. number of studies on basin diagnostics and sub-basin or basin-wide development opportunity analysis have 2.2.1 Identification of Opportunities and Risks been carried out by the Nile riparian countries within the context of the Nile Basin Initiative (NBI) and the The identification of individual water-related develop- technical offices engaged on the Eastern Nile and the ment projects in transboundary basins should begin Nile Equatorial Lakes, respectively. with a good understanding of the basin conditions, as well as of the needs and interests of riparian countries. Table 2.1 summarizes the various tools that are avail- The basin situation or context needs to be analyzed to able to countries and that are offered by third parties identify opportunities as well as the potential costs to structure the process of identifying basin develop- and risks of cooperation. This can be done through ment opportunities and risks, as well as individual transboundary diagnostic assessments or multisec- projects. toral investment opportunity analyses. In light of increasing water stress, early engagement in coordi- 2.2.2 Design of Intervention nated basin planning is important in order to deter- Once mutually beneficial projects (or programmatic mine a basin’s development potential before it becomes engagements) have been identified, the countries a closing basin. This upstream planning is important to move to designing the intervention and determining identify cooperation options before they become more the scope and objectives of cooperation, if and as difficult to implement due to increasing competition appropriate. The optimal type of cooperation will vary among users over the same resources. in each case. It is important for countries to identify There are multiple tools that can be employed by coun- the most effective level of engagement that helps them tries to gain a comprehensive understanding of oppor- achieve their agreed objectives. Benefit sharing mech- tunities and potential risks. Strategic basin assessments anisms that include redistribution of benefits and costs can be employed to determine the development or compensation may be needed to ensure mutual opportunities, as well as their benefits and costs, for gains. The investment or cooperative engagement will the basin countries and to the basin. These assess- be defined based on these parameters. Countries need ments can be carried out unilaterally with publicly to decide on the financing modalities and design of the available data on the overall basin conditions even intervention, including assessment of any associated beyond a country’s border. Yet in order to appreciate environmental and social impacts. In the case of joint the complete context of a basin, more detailed data investments, countries may consider setting up joint may be needed. Status assessments that are carried out expert groups or other mechanisms to carry out the jointly among interested countries will be more useful. design work. The joint creation of an agreed knowledge base on a At this stage, countries should also start defining basin or sub-basin area that will be affected by an any  coordination frameworks that may be needed engagement can, at the same time, build trust and con- for  implementation. Such frameworks would, for fidence between the participating countries. It facili- instance, define the rules of engagement and/or pro- tates transparency and trust, and can pave the way for vide for a semipermanent or permanent structure that future cooperation. give continuity and stability to the relationship. Coordination frameworks, such as framework treaties Frameworks may provide prescriptive parameters for or existing organizations within which basin countries resource development and management and/or may Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 19 TABLE 2.1. Identification of Opportunities and Risks Country tools Third-Party tools Identification of opportunities and risks tools Diagnostic tools Neutral knowledge provision (T1) Basin inventory (T70) Data and information provision (T2) Basin water audit (T71) Experts to conduct assessments and studies (T3) Transboundary Diagnostic Analysis (T72) Just in time notes, analysis, and advice (T4) Economic valuation of basin resources Capacity building (T5) Vulnerability mapping and risk assessment (T73) Tailored workshops and training programs (T6) Stakeholder analysis (T74) Twinning (T7) Nexus assessments (T75) Study tours (T8) Benefit assessments Financing cooperation (T9) Multisector investment opportunity analyses (T76) Seed financing for joint management mechanisms (T10) Project feasibility studies (T77) Recipient-executed grants (T11) Strategic-level environmental/social impact assessments (T78) Multidonor trust fund programs Basin planning Facilitation/dialogue processes (T12) Multisector development plans (T79) Convener (T13) Climate change adaptation plans (T80) Broker (T81) Weight of presence Coordination framework Intention and commitment tools (T42) Declarations (T43) Memoranda of understanding or minutes of ministerial meetings (T44) International treaties Joint management mechanisms (T50) Advisory functions (T53) Inclusiveness functions (T54) Ad hoc mechanisms (T55) Joint technical committees (T58) Basin coordinating committees or councils (T59) River basin organizations, authorities or commissions define the rights and obligations of water users. Several agreed-upon procedures to resolve it. The issue of other aspects need to be considered: any need for compliance is central to the design and conclusion of mechanisms that promote compliance, the level of international agreements. The establishment of mech- flexibility needed to adapt to changes in hydrological anisms to achieve enough mutual benefits so that the or underlying conditions in the future, and the defini- costs of noncompliance are too high to make defection tion of dispute settlement procedures ahead of time, so worthwhile is one of the keys to lasting cooperation that if and when a conflict occurs, there are predefined, and the effectiveness of international agreements. 20 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management The level of formality and binding nature of these Implementation may be supported through joint mech- agreements usually depends on the level of detail and anisms that manage data exchange, oversee operations, how much binding effect countries want to give to their and/or monitor compliance with agreements. Dispute commitment. For example, if the objective is merely to settlement tools can be used to determine noncompli- generally coordinate on basin development, a declara- ance and to agree on solutions for how to restore tion or statement of principles adopted by heads of compliance or find an agreed alternative to the imple- ­ state or government or other senior decision makers mentation of earlier agreements. For example, in the may suffice. If the intervention is a joint hydropower case of the Kura-Araks Basin, the Permanent Water investment, or another complex project, a series of Commission, which manages the joint utilization and more detailed legal agreements may be required. These operations of Arpaçay Dam, is the first instance to would likely include co-financing agreements, estab- address differences over compliance. Only if it cannot lishment of a joint management mechanism, and any resolve a conflict are the governments notified. A large offtake or purchase agreements, including with private number of transboundary water agreements contain sector parties. dispute settlement provisions (Altingoz et al. 2018). These provisions usually involve a multistep approach, More and closer cooperation is not necessarily always which typically starts with negotiations and may end, as better; the coordination framework needs to be a final step, with dispute resolution by the binding deci- adapted to the nature of the planned intervention. sion of a third party, such as an independent/impartial The  establishment of permanent institutions with expert, court, or tribunal. broad mandates, including advisory, policy develop- ment, implementation and monitoring, as well Table 2.3 presents the various dispute settlement tools, as  ­ dispute settlement functions, is not always as well as a variety of other tools available to be used ­ necessary. Depending on the characteristics of the during the implementation stage. project, effective coordination may already be achievable through a simple information-gathering 2.3 Dimensions of Coordinated Basin and exchange mechanism. It always depends on the Management plans for and the style of coordinated basin develop- When deciding on the appropriate tools to be used ment and individual interventions that the involved for each stage in the process, countries need to con- parties have in mind. Country and Third-Party tools sider a series of dimensions that will inform the that can be employed in the design stage are pre- choice and content of the tools ultimately used. Each sented in table 2.2. transboundary river basin context displays unique characteristics in terms of hydrology, geography, cli- 2.1.3 Implementation and Compliance mate, socioeconomic indicators, population, culture, At the implementation stage, regular information history, and politics. All these characteristics must be exchange on the status of the intervention and, if taken into account when selecting tools to identify applicable, its operations are the main concerns. and realize mutual benefits and/or mitigate harm. At Information tools for management can be used to the same time, the transboundary impacts—the ben- effectively monitor implementation. The information efit and harm potentials of each intervention—­display obtained may also reveal necessary adjustments to the different characteristics. For example, the risk of existing engagement and/or new opportunities for transboundary harm may affect only one other ripar- development that can be taken up by the countries in ian country in a multicountry basin or a planned proj- an “Adjustment Loop” (figure 2.1). ect may bring benefits to all riparian countries. In the Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 21 TABLE 2.2. Design of Intervention Country tools Third-Party tools Design of intervention tools Joint investments Neutral knowledge provision (T14) Equal cost sharing (T70) Data and information provision (T15) Benefit key for cost contribution to common works (T71) Experts to conduct assessments and studies (T16) Repayable loans (T72) Just in time notes, analysis and advice (T17) Direct payments (T82) Oversight experts (T18) Compensation for O&M or construction of regulating infrastructure Project finance (T19) Royalty payments (T83) Grants Design studies (T84) Loans and credits (T11) Project-level environmental/social impact assessments (T85) Project finance guarantees (T86) Public-private partnerships Facilitation/dialogue processes (T79) Convener (T80) Broker (T81) Weight of presence (T87) Project finance safeguards Coordination framework Intention and commitment tools Engagement framework preparation and implementation (T42) Declarations (T98) Co-signatory of an agreement (T43) Memoranda of understanding or minutes of ministerial meetings (T99) Assistance for drafting legal instruments (T44) International treaties (T100) Assistance for building institutions (T45) Agreements of private law character (T101) Assistance for preparing rules and procedures (T46) Amendments and supplementary agreements Implementation and adjustment tools (T12) Multisector development plans (T39) Single sector operational/implementation plans (T40) Stakeholder participation and inclusion tools (T66) Negotiations Joint management mechanisms (T50) Advisory functions (T53) Inclusiveness functions (T54) Ad hoc mechanisms (T55) Joint technical committees (T58) Basin coordinating committees or councils Financing of joint management mechanisms (T61) Principle of equality allocations (T62) Indicator allocations (T63) Community integration tax (T64) Polluter fees (T65) Benefit-based user fees 22 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management TABLE 2.3. Implementation and Compliance Country tools Third-Party tools Implementation and compliance tools Information tools for management Neutral knowledge provision (T20) Standards for comparability and interoperability (T82) Oversight experts (T21) Procedures for data sharing and exchange Capacity building (T22) Guidelines on data and information disclosure (T73) Tailored workshops and training programs (T23) Geographic information systems (T74) Twinning (T24) Hydrological bulletins (T75) Study tours (T25) Annual and sustainability reports (T88) Equipment, software and technology provision (T26) Awareness raising materials Promoting compliance (T27) Indicators (T89) Implementation trust funds (T28) Joint monitoring systems (T90) Payment and loan guarantees (T29) Impact evaluation (T91) Financing agreements (T30) Forecasting and early warning systems (T92) Procurement standards (T31) Decision support systems Dispute settlement tools (T32) Decision making under uncertainty (T93) Mediation Monitoring and promoting compliance (T94) Conciliation (T33) Site visits (T95) Appointment of a neutral expert or expert commission (T34) Individual experts (T96) Reference to an arbitration tribunal (T35) Technical operators (T97) Independent court (T36) Technical entities Facilitation/dialogue processes Enforcing compliance (T79) Convener (T37) Compensation for noncompliance (T80) Broker (T38) Suspension of decision making and participation rights Payment for benefits/compensation for costs (T17) Direct payments (T18) Compensation for O&M or construction of regulating ­infrastructure (T19) Royalty payments Implementation and adjustment tools (T12) Multisector development plans (T13) Climate change adaptation plans (T39) Single sector operational/implementation plans (T40) Stakeholder participation and inclusion tools (T41) Provisions for extreme events and uncertainty table continues next page Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 23 TABLE 2.3. continued Country tools Third-Party tools Coordination framework Intention and commitment tools (T43) Memoranda of understanding or minutes of ministerial meetings (T44) International treaties (T45) Agreements of private law character Dispute settlement (T66) Negotiations (T67) Filing a complaint (T68) Complaint review (T69) Arbitration tribunals Joint management mechanisms (T46) Amendments and supplementary agreements (T47) Minutes of joint management mechanisms or decision of parties to an agreement (T48) Periodic reviews (T49) Conference calls (T51) Executive functions (T52) Regulatory functions (T56) Single-issue entities (T57) Special purpose vehicles (T59) River basin organizations, authorities, or commissions (T60) Entities with “beyond-the-basin” mandates Note: O&M = operations and maintenance. latter case, the planning country could try to seek located along each spectrum (see figure 2.2). It financial contributions from others for the realiza- is  important to keep in mind that there are grey tion of the project. zones and intermediary levels that sit between the levels presented for each dimension. four ­ Five dimensions should be considered when defin- ing the characteristics and content of the tools cho- The dimensions on geographic scope, sectoral man- sen for a respective intervention: (1) geographic date, and the level of integration can guide in the deci- scope; (2) sectoral mandate; (3) level of integration; sion on the scope of the engagement and thus on the (4) likelihood of compliance; and (5) capacity to content design of the tools that are being used. The implement. Each dimension represents a spectrum dimensions relating to the likelihood of compliance of characteristics ranging from minimum to maxi- and capacity to implement can guide in the choice of mum scope. For graphical presentation purposes, corresponding tools: in case countries are in doubt of these characteristics are depicted as four levels compliance or there are high risks involved, countries 24 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management FIGURE 2.2. Dimensions and Spectra of Coordinated may want to employ independent monitoring or guar- Basin Management antees to mitigate for the risk of noncompliance; and in case of strong capacity to implement, technical 1. Geographic scope assistance from third parties may not be needed. Unilateral Bilateral Pluri-lateral Multi-lateral The five dimensions can also guide adjustments in 2. Sectoral mandate coordination (see “Adjustment Loop” in figure 2.1). One sector Two sectors Multiple sectors Beyond basin Regular revision of these dimensions throughout the three stages of coordination will help with adaptation 3. Level of integration to changing circumstances or inform about changes None Communication Coordination Collaboration that may be necessary because of new information. 4. Compliance For example, project-related environmental impact assessments may reveal that a planned project may Unlikely Somewhat unlikely Somewhat likely Likely require coordination with additional, not yet consid- 5. Capacity to implement ered, countries that will be affected by the interven- tion. Or countries engaged in coordinated development Weak Average Good Strong on parts of a transboundary river basin may realize BOX 2.2. Dimensions of Coordinated Management (1) Geographic Scope The geographic scope dimension considers the number of countries, and, as applicable, also the social stakeholders that are involved in coordination and should be reached out to. For example, this would depend on how many countries are potentially affected by a project or are interested in cooperating. The levels range from unilateral to multilateral. A unilateral option means investment by one country without the involvement of any other country or interested third party. The spectrum continues up to plurilateral and multilateral engagements. The former means involvement of three or more parties, including basin- wide arrangements; the latter concerns involvement of third parties and countries beyond the basin. (2) Sectoral Mandate The sectoral dimension considers the areas countries and other interested parties seek to address with the engagement. It is generally determined by what is practical and needed for the effective management and implementation of the respective development intervention. At the minimum, operations are envisioned to cover one sector; for example, flood prevention. Moving along the spectrum of options, interventions could include multiple sectors involving two or more aspects of integrated basin management, such as navigation, irrigation, and electricity trade, as well as mandates that go “beyond the basin,” such as regional economic integration or contribution to data sharing at the global level. box continues next page Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 25 BOX 2.2. continued (3) Level of Integration The level of integration considers the depth of engagement the concerned countries wish to achieve. It broadly corresponds to the stages of the Cooperation Continuum (figure 1.4). It will determine the type of joint arrangement or mechanism to set up between two or more countries (and/or third parties). Communication means a simple exchange of information, either through one-sided notification by the country planning the operation or by two-way consultations or information exchange. The next level— coordination—means that plans regarding the intervention are adjusted and coordinated based on agreement. Collaboration can take multiple forms, such as the establishment of a joint institution for basin planning or of a special purpose vehicle for joint investment. (4) Compliance The compliance dimension considers situations in which specific actions have to be taken in order to provide benefits to others or to mitigate the risk of harm. The levels indicated on the spectrum are based on the likelihood-of-compliance perception of the involved countries and thus indicate their interest in the adoption and in the required strength of a compliance tool. (5) Capacity to Implement An important consideration for countries engaged in coordination is their own and their collaborating partners’ capacity to implement. Some tools are designed to strengthen or complement existing capacity. The use of other tools will depend on the absorptive capacity or capacity to implement. that coordination needs to be extended to additional Using the three-stage process framework described parties because either their engagement is affected by above and illustrated in figure 2.1, the next chapter activities by other riparian countries or because this presents how riparian countries in six different basins opens opportunities for more beneficial deals and have effectively applied specific tools and in which trade-offs. way the five dimensions are reflected in the process. 26 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management Lake Saimaa, Vuoksi Basin. © cesa53rone/iStock. Chapter 3 Application of the Framework and Lessons Learned Countries have successfully engaged in coordinated application of the framework and the riparian coordina- basin management in a large number of the 286 tion processes. The six case studies have been selected transboundary basins of the world. The experiences to present a variety of different interventions, water that come from these examples of cooperation on quality control, flow regulation for agricultural uses, transboundary water resources development high- flood risk, cascade management, and hydropower gen- light the uniqueness of each and every case—not eration. They include basins with mature basin coordi- one compares to the other. At the same time, they nation processes that have been in place for decades follow similar patterns: opportunity identification, and illustrate the iterative character of cooperation; design, and implementation, with dispute settle- they also include basins with relatively young cross-bor- ment and adjustments along the way of the process der coordination processes that highlight the challenges as needed. and sometimes elusiveness of early stage cooperation processes, such as in the case of water quality manage- The following sections summarize how this three-stage ment in the Kura-Araks. Each of the case studies high- process (figure 2.1) has played out in the case of the six lights how the involved countries have used different case studies that have been analyzed as part of the over- tools along the three-stage process of coordinated basin all study, and which lessons can be derived from the Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 27 develpment to address specific challenges in order to concern in the basin. Water pollution is mostly realize mutually beneficial solutions (see tables 3.1, 3.2, attributed to land-based sources, such as agriculture, and 3.3 at the end of this chapter). industry, and mining, as well as the lack of operational and adequate treatment plants. The countries referred 3.1 Identification of Opportunities and Risks to third parties to assist with the water quality issues in the basin. Between 2011 and 2013, the three countries The Columbia Basin and the Kura-Araks Basin case participated in a Transboundary Diagnostic Analysis studies illustrate how the riparian countries have (TDA) (T3) in the context of the United States Agency made use of very different tools to identify the devel- for International Development-Global Environment opment potential of and risks to their shared basins. Facility (UNDP-GEF) project on Reducing Transboundary In the Columbia Basin, which covers 668,000 km2 in Degradation in the Kura-Araks Basin. The TDA is a tool the Pacific Northwest of North America, Canada and developed by the GEF, involving joint fact-finding and the United States used an existing coordination objective (nonnegotiated) assessments showing the rel- framework, the International Joint Commission (IJC) ative importance of causes and impacts of transbound- established based on the 1909 Boundary Waters ary water problems. The TDA identified four main Treaty, to identify the development potential of the transboundary issues in the Kura-Araks Basin: variation basin. In 1944, the two governments asked the IJC to and reduction of hydrological flow; deterioration of investigate and recommend a development plan for water quality; ecosystem degradation; and increased the Columbia Basin. The IJC then created a joint tech- flooding and bank erosion. Information presented in the nical commission (T55), the International Columbia TDA was obtained from publicly accessible data sources River Engineering Board (ICREB), to analyze the use (publications, statistical services), as well as from of the Columbia River Basin waters with respect to national experts in the project countries. The assess- domestic water supply, navigation, efficient power ment provided the basis for the subsequent Kura-Araks production, flood control, reclamation, conservation Basin Strategic Action Program (T12), which includes of fish and wildlife, and other benefits. The joint specific actions that can be adopted nationally, within a investigations (T8 and T9), conducted between 1944 harmonized multinational context, to address the prior- and 1959, showed that developing reservoirs in the ity transboundary problems identified in the TDA. Parts upper part of the Columbia Basin and coordinating of this program are currently being implemented by their operations with those of existing infrastructure Georgia and Azerbaijan. in the United States had the potential to create signif- icant benefits for flood control and power generation for both countries. The assessment ultimately led to 3.1.1 Lessons Learned the Columbia River Treaty (CRT), an international The lessons for the identification of development agreement (T44), in which the countries agreed to opportunities from these two and other case studies coordinated basin management for hydroelectricity include the following: generation and flood control. • The development of an agreed hierarchy of inter- The country-to-country process used by Canada and ests is important. In the case of the Columbia, flood the United States differs significantly from the process control or “vital needs” take precedence over power and tools that were used in the Kura-Araks Basin to generation and then other interests. identify opportunities for water quality management among Armenia, Georgia, and Azerbaijan, three of the • Information and data exchange can be a catalyst for five countries sharing the basin. Water quality is a key confidence building. 28 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management Identification of Opportunities and Risks Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management TABLE 3.1. Kura-Araks (1) Kura-Araks (2) Columbia Chu and Talas Vuoksi Douro Rhône International Treaties Transboundary Diagnostic Joint Technical International Treaty International Treaty International Treaty International Treaty (T44): Countries signed Analysis (TDA) (T3): Committees (T55): (T44): The agree- (T44): The two (T44): The 1927, 1964 (T44): National the 1927 protocol on Completed as part of the In 1944 Canada and ment between the countries signed an and 1968 agreements policies that are the beneficial uses of United States Agency for the US set up the Government of the agreement, the 1964 between the two ripar- in line with the boundary waters com- International Development- International Columbia Kazakhstan and the Frontier Watercourses ians were focused on convention on the mitting to equally share Global Environment Facility River Engineering Board Government of the Agreement, which hydropower generation protection and use the boundary waters. (UNDP-GEF) Reducing (ICREB) to analyse use of Kyrgyz Republic on includes all frontier and flow regulation. of transbound- Basin Coordinating transboundary degradation the waters with respect the use of water man- waters shared between Currently, the 1998 ary watercourses Committees or Councils in the Kura-Araks River Basin. to domestic water sup- agement facilities of Finland and Russia, Albufeira Convention and international (T58): Joint Boundary The TDA process included ply, navigation, efficient intergovernmental and provides the main establishes an annual lakes, the Aarhus Water Commission estab- stakeholder consultations and power, flood control, status on the Rivers substantive and pro- flow regime for all Convention and the lished based on the 1927 identified deterioration of reclamation, conserva- Chu and Talas, signed cedural principles for major rivers, as well Espoo Convention, protocol with advisory, water quality as one of four tion of fish and wildlife, in 2000, governs the transboundary water as priorities among govern the manage- executive and regula- main transboundary issues in and other benefits. joint management and cooperation. economic activities, ment of the Rhône, tory powers to manage the basin. Benefit Assessments maintenance of the River Basin set-up of information as these treaties the use of the waters Experts to Conduct (T8) and Multisector water facilities in these Organizations, exchange channels, have been ratified (T50–T52) as well as to Assessments and Studies Investment Opportunity basins. Authorities or water transfers, and by Switzerland and settle disputes through (T71): Water quality assess- Analyses (T9): Joint River Basin Commissions (T59): sustainable use of France. negotiations (T66). ments were carried out investigations, con- Organizations, Based on the 1964 water. River Basin through Third-Party assis- ducted between 1944 Authorities or agreement, the coun- River Basin Organizations, tance from UNECE, USAID, and 1959 showed that Commissions (T59): tries established Organizations, Authorities or NATO, EU and Organization developing reservoirs In 2005, the bilateral the Joint Finnish- Authorities or Commissions (T59): for Security and Cooperation in the upper part of the Commission on the Russian Watercourses Commissions (T59): The International in Europe (OSCE). Columbia River Basin and Chu and Talas Rivers Commission with adviso- The Commission for Commission for the Multisector Development coordinating their opera- was established by ry, executive and regu- the Application and Protection of Lake Plans (T12): UNDP and GEF tions with those of exist- Kazakhstan and Kyrgyz latory powers (T50–T52) Development of the Geneva is an inter- provided technical assis- ing infrastructure in the Republic to implement to manage the use of Convention (CADC) is governmental body, tance in creating a Strategic USA had the potential to the objectives of the the waters as well as to the primary arrange- which monitors the Action Program that aimed create significant bene- 2000 agreement; it has settle disputes through ment for implementing lake’s water quality, to facilitate a coordinated fits for flood control and advisory, executive and Negotiations (T66). the convention. coordinates water approach to transbound- power generation for regulatory powers to policies between the ary river management and both countries. manage the water facili- Swiss and French and address the key issues iden- ties (T50–T52) informs the resident tified by the updated TDA. population. 29 TABLE 3.2. Design of Intervention 30 Kura-Araks (1) Kura-Araks (2) Columbia Chu and Talas Vuoksi Douro Rhône Memorandum of Multisector Development Compensation Single Sector Operational International Treaties International Treaties Negotiations (T66): Understanding (MoU) Plans (T12): As the coun- for Operation and Plans (T39): The countries (44): The 1989 (T44): Under Article 2 Between France (T43): MoU and protocols tries signed the European Maintenance (O&M) agree annually on the types Vuoksi Agreement of the 1927 Agreement, and Switzerland to agreed between 1962 Neighborhood Policy or Construction and volumes of repair and governs the manage- which specifically targets define the design and 1964 for the estab- Action Plan, they are of Regulating maintenance work to be ment of the release the Douro, about 50 process for the lishment of a joint dam under the obligation to Infrastructure (T18): done on the water facili- of water from Lake percent of hydropower flughins procedure. on the Arpaçay/Akhuryan cooperate regionally. The initial 30-year pay- ties covered by the 2000 Saimaa to the Vuoksi generation capacity is Environmental River. Assistance for Building ment of the Canadian Agreement. to prevent damages allocated to each coun- Impact Assessment International Treaties Institutions (T100) and Entitlement was used Declarations (T42) or caused by high and try. In addition, the 1964 (T11) and Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management (T44): Bilateral agree- Preparing Rules and to partially finance the Minutes of Ministerial low water flows on agreement introduced Stakeholder ments signed in 1964 Procedures (T101): The construction of the Meetings (T43): The water both sides of the strict limitations on Consultations (T40): and 1973 to construct the EU assists all three coun- Canadian Dams. sharing rules on the Chu border. In addition, withdrawals and flow Based on the Espoo dam and reservoir and tries in designing national International Treaties and Talas Rivers were the 1972 Hydropower diversions in both the Convention to iden- commit to equally share water policies. (T44): The Columbia established under the Agreement specifies Douro and its main trib- tify an adequate the water. River Treaty (CRT) 1983 Rules by the Soviet the daily regulation utaries. flushing method. Memorandum of optimizes flood control Union’s All-Union Ministry of the Vuoksi in a Public-Private Joint Technical Understanding (T43) International Treaty and power generation of Melioration and Water manner that is sat- Partnerships (P3) (T86): Committee (T55): An ad between Azerbaijan and (T44): It was decid- in both countries, after Economy. The sharing of isfactory to all the Concession contracts hoc joint technical com- Georgia stipulates that ed to activate the allowing for consump- O&M costs is based on power stations. between the riparians mittee established based to protect and use the Espoo Convention on the 1964 Protocol on transboundary waters, the tive uses, including irri- the 1998 Protocol signed and electric companies to frame the pro- the Joint Construction states should establish gation. Flexibility within by the national water entail a financial com- cess of intervention of the Arpaçay/Akhuryan groups to exchange moni- the agreement accom- authorities of the two pensation from the com- design for sediment Dam, managed the toring information. modates other interests, countries. pany to the public water flushing. building of the dam. It such as fisheries and International Treaties domain, rely on the International Treaties was also put in charge recreation. (T44): The 2000 existing juridical frame- (T44): Bilateral agree- of preparing the annual Amendments and Agreement governs the work (both national and ments are in place operation schedule of the Supplementary joint management and international), and are between Azerbaijan and dam and overseeing its Agreements (T46): To maintenance of the water grounded on the histor- Georgia, and Armenia implementation. fill and operate addi- facilities on Chu and Talas ical flow record across and Georgia, that govern tional storage built in Rivers. the whole river basin. water quality issues. the Canadian Dams, an additional agreement, the 1984 Non-Treaty Storage Agreement, was required. TABLE 3.3. Implementation and Compliance Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management Kura-Araks (1) Kura-Araks (2) Columbia Chu and Talas Vuoksi Douro Rhône Single Sector Operational Convener (T79) and Single Sector Procedures for Data Operational or Operational or Procedures for Data or Implementation Plans Broker (T80): A number Operational or Sharing and Exchange Implementation Plans Implementation Plans Sharing and Exchange (T39): The commission of Third-Party projects Implementation Plans (T21): The working (T39): According to (T39) and Technical (T21) enable the hydro- makes a monthly manage- have aimed to increase (T39): The assured group on economics, the Vuoksi Discharge Operators (T35): The power operators to opti- ment plan that includes transboundary coop- operating plan (AOP) is monitoring and data Rule, a water release two hydropower con- mize electricity produc- decisions on the opera- eration through data drawn up every year and exchange is in charge of program must be dis- cessionaires ensure the tion to satisfy base-load tion of the dam and its exchanges and informa- is used to calculate the the information support cussed and approved operational and daily and peak demands. facilities, a water usage tion sharing. Canadian Entitlement of the activities of the by the Finnish-Russian management of the International Treaty schedule, cleanliness of Multisector to downstream power commission, as well Commission. dams and reservoirs, (T44): The Mésures d’ex- the dam reservoir and fish Development Plans benefits. engaging the public, and Conference Calls ensure the permanent ecution clarify how the production in the dam (T12): Armenia, Conference Calls (T49): preparing publications (T49): Officers and monitoring of stream convention related to lake. Azerbaijan, and Georgia In the operation of the and booklets about the technical experts flows and discharges, the Emosson Dam will be Periodic Review (T48): are committed to CRT, weekly alterations commission’s work. are in direct con- and communicate the implemented. It defines Today, both the Armenian developing integrated to the flow regime are Multisector tact by phone, with information accord- how the waters from the and Turkish sides have river basin management determined by the enti- Development Plans the Finnish regional ing to procedure to Arve River are returned technical sub-committees plans and bringing ties through a weekly (T12): The working authority having a the respective water to France. Agreements that periodically gauge their national water “conference call” to group on legal and Russian-speaking authorities. between the Canton of the other country’s water policies in line with the respond to unforeseen institutional issues has expert at its disposal Procedures for Data Geneva and Services usage. EU Water Framework developments. prepared the Integrated to smoothen the lan- Sharing and Exchange Industriels de Genève Site Visits (T33): A joint Directive, which could Forecasting and Early Water Resources guage barriers. (T21): The two ripari- (SIG) delegates the oper- inspection commission provide a basis for Warning Systems (T30): Management (IWRM) Forecasting and Early ans gather data from ation of lake levels and inspects the dam every future cooperation. A hydro-meteorological plans for the Chu and Warning Systems their respective river flow regime downstream three to five years. monitoring system is in Talas Basins. (T30): According to basin organizations, of Lake Geneva to SIG. place. Provisions for Extreme the Vuoksi Discharge from the hydropower Negotiations (T66): The Events and Uncertainty Rule included in the concessionary com- commission is charged Direct Payments (T17): (T41): Under the 2000 Vuoksi Agreement, the panies that operate with negotiating dis- Based on the CRT, Agreement, the Parties process of adjusting the reservoirs and putes that arise between Canada obtains half of must notify each other the natural flow rate dams, and from other the two countries. If the additional power in the event of an acci- to increase or reduce stakeholders whenever the Permanent Water benefits derived in dent on the facilities the flow must be relevant. Commission (PWC) cannot the USA through the resolve the conflict, the coordinated operations caused by extreme based on forecast pre- governments are notified. of Canadian Dams weather events or dictions carried out by (Canadian Entitlement). technical malfunction in Finland. their operations. 31 table continues next page 32 TABLE 3.3. continued Kura-Araks (1) Kura-Araks (2) Columbia Chu and Talas Vuoksi Douro Rhône International Treaties Compensation for Periodic Reviews (T48): Direct Payments (T17): Annual and Agreements of Private (T44): Bilateral agree- Harm (T37): During One of the regular Based on the 1972 Sustainability Reports Law Character (T45): ment from 1973 specifies the construction of the agenda items of the agreement, Russia (T25): CADC dele- Private law agreements the rules for dam and lake Canadian Dams, any Commission sessions must on a permanent gations exchange implemented by the management. breach by Canada to is the review of poten- basis compensate informal monitoring electricity companies aim River Basin Organizations, commence full opera- tial amendments to Finland the losses reports on a trimestral to optimize hydropower Authorities or Commission tion at specified dates the 2000 Agreement of 19.900 MWh per basis, building up for production in accordance (T59): Joint entity, the would have resulted in a and the Statute of the year caused by the annual reports that are with electricity consump- PWC, established based forfeiture in its Canadian Commission. Svetogorsk station by approved in plenary tion peaks while allowing Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management on the 1973 agreement, to Entitlement. supplying free elec- sessions. the use of the Rhône for manage the rivers as well tricity to the Finnish other purposes such as as dam operations. hydropower company. cooling of nuclear power plants downstream. Dispute Settlement Procedures (T66–69): Are included in the con- vention relating to the Emosson Dam. Executive Functions Complaint Review Compensation for Compensation for Provisions for Implementation Plan (T51): PWC established a (T68): The CRT estab- O&M or Construction Harm (T37): According Extreme Events and (T39): Determined the sub-commission to carry lished the Permanent of Regulating to the 1964 and 1989 Uncertainty (T41): coordination of water out its decisions. Engineering Board (PEB) Infrastructure (T18): agreements, the Party In emergency situa- releases from the differ- Technical Entities (T36): to provide an inde- The O&M costs for the that permits measures tions such as flood ent reservoirs operated A joint inspection com- pendent review of CRT facilities specified in the that cause loss or risk, direct telephone by the French and Swiss mission carries out regular implementation. 2000 agreement would damage in the territory communications are hydropower operators Site Visits (T33) and Appointment of an be shared on a pro rata of the other is liable used between the for the Verbois Dam. sub-committees exist on Expert Commission basis in accordance for reparations to the operational commands both sides to gauge the (T95): If the PEB is with the water volume other Party. Finland of the two hydropower water usage of the other not able to resolve received by each party. has compensated companies to inform party. differences the issue Russia in the range of on river flows and dam can be referred to the less than one million discharges. International Joint euros for hydropower Commission (IJC) that losses due to excep- governs transboundary tional overflows. water issues between the USA and Canada. table continues next page Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management TABLE 3.3. continued Kura-Araks (1) Kura-Araks (2) Columbia Chu and Talas Vuoksi Douro Rhône Reference to an Executive Functions Executive Functions Amendments and Ad Hoc Mechanisms Arbitration Tribunal (T51): The secretariat (T51) and Technical Supplementary (T54), including a Joint (T96): If the IJC does is responsible for the Entities (T37): The Agreements (T46): Technical Committee no render a decision, or implementation of the Finnish-Russian The convention was (T55): Using these tools, within an agreed upon decisions of the com- Commission estab- revised in 2008 as the countries agreed on time, either country may mission and the heads lished working groups per Article 31, and a a revised sediment flush- submit the dispute to of the Secretariat in on IWRM, water quali- trimester and weekly ing methodology for arbitration. Kazakhstan and the ty, border control, and flow regime was added future application. Kyrgyz Republic ensure fisheries, which are to the annual flows the day-to-day opera- the functional insti- previously established. tions of the Commission. tutions that prepare Agreements of Private Technical Entities (T36): Commission protocols. Law Character (T45): The secretariat has The 1927 and 1964 established working agreements largely groups to deal with delegate hydropower issues such as infra- production and flow structure safety, legal management to hydro- and institutional issues, power companies. water resources alloca- Also, the private sector tion, monitoring, data representatives from exchange and others. hydropower companies that operate the dams have consultative sta- tus at CADC meetings. 33 • Negotiating using facts and clearly defined numeri- commission (T59) established based on the early 1964 cal values is important. Frontier Watercourses Agreement (T44). The Discharge Rule is a complex set of parameters deter- • Establishing new collaborative frameworks between mining operational rules (T39) for lake level regulation co-riparian countries who find themselves in uneasy and hydropower production along the Vuoksi. Under relationships is extremely difficult. Third parties can the rule, water shall be released from the lake in such have an important role as facilitators. a manner that the water level of the lake and the flow • Coordinated management often requires contri- into the Vuoksi River remain as far as possible within butions and commitments among different gover- normal limits. Finland reports the adjustments made nance levels. to the natural flow of the Vuoksi and any damages or benefits resulting from these adjustments to the joint • Coordinated management can take several decades commission. Finland also provides a final balance to build. sheet of the damage or benefit, which is used as the basis for the consideration of possible compensations 3.2 Design of Intervention (T17) it pays to Russia for Russia’s loss of hydropower production. An analysis of the design processes for flow regula- tion in the Vuoksi Basin and the Chu and Talas Basins In the case of the Chu and Talas Basins, the hydro- shows that the design stage can take more than a power and irrigation systems once managed by the decade, depending on information requirements Soviet Union became a two-country affair. With the and the scope of the intervention. The two case dissolution of the Soviet Union, the Talas and Chu studies describe the different design processes for Rivers became transboundary waters between coordination frameworks: one carried out directly Kazakhstan and the Kyrgyz Republic. Within the between countries, one done with the involvement basins, all regulation facilities (dams, reservoirs, of third parties. canals) are in the mountains upstream of the Kyrgyz Republic, whereas the irrigation areas are predomi- In the case of the Vuoksi the countries carefully stud- nantly downstream in the valleys and steppes in both ied the characteristics of the flow regime of the river the Kyrgyz Republic and Kazakhstan. Kazakhstan over multiple years to consider ways in which the dif- depends on the operation and proper maintenance of ferent interests of the involved parties could be met: this infrastructure, which had been largely paid for by flood risk management, protection of biodiversity, and the Kyrgyz Republic. Fairness and equity concerns drought management around Lake Saimaa to protect served as the basis for the two countries to establish a biodiversity, industries, and communities on the one legal framework for the joint operation of water man- hand, and hydropower generation on the other. The agement infrastructure in the Basins in 2000 (T44). Vuoksi is a 150-km long transboundary river flowing The countries agreed that the operation and mainte- from Finland to Russian Federation. It originates in nance (O&M) costs for the facilities specified in the Lake Saimaa, flows 13 km within Finland, and empties agreement would be shared on a pro rata basis in into Lake Ladoga in Russia. One of the most significant accordance with the water volume received by each results of the cooperation between Finland and Russia party (T18). (USSR) has been negotiations (T66) which led to the design and agreement of the Discharge Rule of Lake For the establishment of their joint management Saimaa and Vuoksi (1989) (T44). The negotiation pro- mechanism, called for in the agreement, the countries cess took place within the framework of a joint asked the international community for assistance. 34 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management The United Nations Economic Commission for 3.3 Implementation and Compliance Europe (UNECE) and the United Nations Economic The Columbia Basin and the Douro Basin case studies and Social Commission for Asia and the Pacific highlight the importance of establishing durable coor- (UNESCAP), in cooperation with the Organization for dination frameworks and compensation mechanisms Security and Cooperation in Europe (OSCE), joined to promote compliance. The riparian countries in both forces with the governments of Sweden, Estonia, and basins coordinate flow management along their shared the United Kingdom, which provided financial assis- rivers for hydropower production and other uses. tance, to support the Kyrgyz Republic and Coordinated basin management is characterized by Kazakhstan’s request by: facilitating the drafting of treaty-based cooperation that delegates implementa- the documents that would define the commission’s tion to a large part to public/private companies. status, functions, responsibilities and rights; and developing procedures and basic documents for In the case of the Columbia River, the two riparian co-funding of the repair, maintenance, and operation countries established a joint technical committee of multipurpose water facilities on both rivers gov- (T55), the Permanent Engineering Board (PEB), to pro- erned the agreement (T99–101). The commission vide an independent review of the implementation of includes a permanent secretariat as well as experts the CRT (T44). The PEB collects statistics, ensures that and working groups. It enables joint and transparent the objectives of the CRT are met, and reports to the decision making on water allocation and mainte- Canadian and United States federal governments nance costs by the two countries, as well as relevant annually (T48). It consists of two persons from Canada information sharing, efficient implementation of (one federal and one provincial) and two from the joint projects, and prevention and rapid settlement United States. The PEB is not an arbitration board but of differences (T59). can “find fact” with operations, meaning that it can determine a view on how operations are being con- 3.2.1 Lessons Learned ducted; that “fact” may be accepted in any further tri- bunal or ruling. Moreover, the PEB can assist in The lessons about intervention design from these two resolving any contentious issues through dialogue and and other case studies include the following: facilitation (T68). The PEB does not decide or make • Focus on broader benefit sharing and minimiz- rules, but the governments generally respect its rec- ing joint harm, and clearly defined compensation ommendations. The PEB created the PEB Engineering mechanisms. Committee to assess technical elements of CRT opera- tions (T55). In terms of operations and flow regulation, • Preempt potential conflict. When creating a detailed the CRT is implemented by the so-called “Entities,” agreement, consider all possible scenarios and their which are the British Columbia Hydro and Power solutions in advance. Authority (BCH) in Canada, and both the Bonneville • Development partners are often called on to pro- Power Administration (BPA) and the Northwest vide assistance to establish frameworks and for Division of the US Army Corps of Engineers (USACE) in the drafting of documents to define institution the United States. status, functions, responsibilities and rights, and Cooperation between Spain and Portugal on their procedures; providing intermediation to reach shared rivers is regulated by a series of international consensus; providing information to stakeholders; treaties (T44). The 1927, 1964, and 1968 water agree- and promoting broad public participation. ments established a principle of allocating about Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 35 50 percent of hydropower generation potential to • Where international legal agreements exist, infor- each country by earmarking particular sub-stretches mal arrangements still play a key role in implement- and height differences for hydropower use. The 1927 ing effective cooperation mechanisms between and 1964 Agreements largely delegate hydropower parties. At the core of good cooperation are good production and flow management to the previously personal relationships and mutual respect. public (and progressively privatized) electricity com- • For cooperation to occur, either explicitly or panies, EDP and IBERDROLA (T45). The two hydro- implicitly, there needs to be adequate communi- power concessionaires (T35) ensure the operational cation between the parties. The lack of communi- and daily management of the dams and reservoirs as cation inhibits cooperation potential between the well as the permanent monitoring of stream flows and riparians and may compound preexisting tense discharges, and communicate the information relationships. according to procedure to the respective water authorities (T39). For monitoring and disaster pre- • Develop mechanisms for all parties to have as much vention purposes, semiautomatic communications internal flexibility in operating their portions of the are used by both EDP and IBERDROLA companies to cooperative system. inform the respective national water authorities on river flows and dam discharges (as required by the • An appropriate balance of incentives and penalties should be drawn up to help compliance and facili- concession contracts) (T41). The 1964 Agreement was tate investment. the first that established a compensation mechanism as a means to ensure compliance with agreed limita- • Creation of an independent overview body can help tions on withdrawals and flow diversions in both the ensure compliance with agreed terms and resolve Douro and its main tributaries (T37). Building on this any misunderstandings. earlier agreement, the 1998 Albufeira Convention opens a door also for economic compensation in the • Trusted and easily accessible information is import- ant for sustaining cooperation. event that private or public rights are affected as a consequence of noncompliance with the Convention. • Private investment and commercial enterprises can Only on one occasion did Portugal claim economic strengthen focus on efficiency in operations and compensations for the damages incurred by alleged can bring new elements for innovation and creative noncompliance with the agreed flow regimes in the development solutions. Douro River in 2005. The compensation was quanti- fied on the basis of the hydro-energy production 3.4 Adjustment Loop losses downstream. The preceding summaries of some of the key fea- tures of the case studies demonstrate that countries 3.3.1 Lessons Learned do adjust their cooperative engagements over time The lessons for the implementation and compliance as needed. In the case of the Vuoksi, the riparian stage from these two and other case studies include countries improved on the regulations governing the following: flow regulation over time. This is manifested by sub- • Cooperation can take place effectively in the context sequent agreements concluded between the ripar- of formal frameworks that ensure both clarity and ian states, which build on earlier agreements continuity. (T44; T46). 36 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management The same is true for the basins shared by Spain and complaints. French and Swiss authorities launched a Portugal and for the Columbia Basin. Building on the joint technical committee to consider different scenar- 1927 framework agreement on the management of ios and methodologies for the flushing procedure shared river basins on the Iberian Peninsula, the subse- (T55). In addition, stakeholder consultations took quent treaties became more specific and introduced place (T40). After the testing of revised flushing compensation mechanisms to promote compliance modalities in 2012, additional consultations and dis- with the agreed rules of coordinated basin manage- cussions were held to revise the method. Finally, a ment. Since the CRT was established in 1964, various new mixed methodology combining upstream dredg- agreements have been adopted by Canada and the ing and soft flushing and coordination of water releases United States to deal with issues as they arise. In addi- from the different reservoirs operated by the French tion, these agreements provide for built-in adjustment and Swiss hydropower operators for the Verbois Dam mechanisms to respond to natural fluctuations in flow (T39) was successfully executed in May 2016. patterns. In the operation of the CRT, weekly alter- ations to the flow regime are determined by the enti- ties through a weekly, Thursday-morning “conference 3.4.1 Lessons Learned call” to be able to respond to unforeseen develop- The lessons about the importance of adjustments if ments. Monthly alterations to address seasonal and when needed from these two and other case stud- changes in flow, snow pack, and flood forecasting are ies include the following: conducted through storage regulation, which is deter- • Incorporating adaptability into decision-making mined by the dam operators as part of the operating and operational frameworks is critical for effec- procedures under the CRT (T46 and T49). tiveness in addressing changing situations and In the Rhône Basin, France and Switzerland have circumstances. reviewed and adjusted the sediment flushing modali- • Even long-established processes can be adjusted ties at Verbois Dam after complaints about harmful when external conditions change or when new environmental impact of the earlier procedure. information about negative impacts of these long-­ Upstream from the dam, Lake Geneva and the slowing established processes becomes known. down of water flows contribute to the deposit of sedi- ment carried by the Rhône River. Just after Geneva, • Cooperation is iterative. As countries engage over the junction with the Arve River brings additional time, they adjust their coordinated basin manage- ­sediment loads. These materials get trapped at Verbois. ment approaches to new circumstances or to enhance A moratorium on flushing was adopted in 2003 after efficiency and effectiveness of implementation. Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 37 Hydropower generators. © leezsnow/iStock. Part II Toolbox Note on Part II made the best attempt to present an as-complete list as possible; it should not be considered exhaustive. At ­ Part II presents the wide array of tools available to coun- the same time, there is overlap between tools used in tries and development partners to identify, design, and the various stages of the basin development process implement coordinated basin development opportuni- (figure 4.1), as a number of tools are applicable to ties (table 4.1: Macro Table). Countries and development multiple stages. The overlap is intentional and cross-­ ­ partners have successfully employed some of these references are clearly indicated, where applicable. tools; others are new tools that are in the testing stage; and others are ideas of tools that can be employed. Part II distinguishes between tools that are available to countries directly, meaning they can be employed by Given the large variety of tools and their constant countries directly without the assistance of third par- development and improvement as countries engage in ties; and those tools that are offered by third parties, coordinated development in many basins around the such as technical assistance, financing, guarantees, world, the list may not have captured all available and process facilitation. tools and their individual variations. The authors FIGURE 4.1. Three-Stage Process of Coordinated Basin Development 1. Identification of opportunities and risks Adjustment Loop 2. Design of intervention 3. Implementation and compliance Coordination framework 40 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management TABLE 4.1. Macro Table Country tools Third-Party tools 1. Identification of opportunities and risks tools 1.1. Diagnostic tools 1.1. Neutral knowledge provision (T1) Basin inventory (T70) Data and information provision (T2) Basin water audit (T71) Experts to conduct assessments and studies (T3) Transboundary diagnostic analysis (T72) Just in time notes, analysis, and advice (T4) Economic valuation of basin resources 1.2. Capacity building (T5) Vulnerability mapping and risk assessment (T73) Tailored workshops and training programs (T6) Stakeholder analysis (T74) Twinning (T7) Nexus assessments (T75) Study tours (T8) Benefit assessments 1.3. Financing cooperation (T9) Multisector investment opportunity analyses (T76) Seed financing for joint management mechanisms (T10) Project feasibility studies (T77) Recipient executed grants (T11) Strategic-level environmental/social impact (T78) Multidonor trust fund programs ­assessments 1.4. Facilitation/Dialogue Processes 1.2. Basin planning (T79) Convener (T12) Multisector development plans (T80) Broker (T13) Climate change adaptation plans (T81) Weight of presence 2. Design of intervention tools 2.1. Joint investments 2.1. Neutral knowledge provision (T14) Equal cost sharing (T70) Data and information provision (T15) Benefit key for cost contribution to common works (T71) Experts to conduct assessments and studies (T16) Repayable loans (T72) Just in time notes, analysis, and advice (T17) Direct payments (T82) Oversight experts (T18) Compensation for O&M or construction of regulating 2.2. Project finance infrastructure (T83) Grants (T19) Royalty payments (T84) Loans and credits 2.2. Design studies (T85) Project finance guarantees (T11) Project-level environmental/social impact assessments (T86) Public–private partnerships 2.3. Facilitation/dialogue processes (T79) Convener (T80) Broker (T81) Weight of presence (T87) Project finance safeguards 3. Implementation and compliance tools 3.1. Information tools for management 3.1. Neutral knowledge provision (T20) Standards for comparability and interoperability (T82) Oversight experts (T21) Procedures for data sharing and exchange table continues next page Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 41 TABLE 4.1. continued Country tools Third-Party tools (T22) Guidelines on data and information disclosure 3.2. Capacity building (T23) Geographic information systems (T73) Tailored workshops and training programs (T24) Hydrological bulletins (T74) Twinning (T25) Annual and sustainability reports (T75) Study tours (T26) Awareness raising materials (T88) Equipment, software, and technology provision (T27) Indicators 3.3. Promoting compliance (T28) Joint monitoring systems (T89) Implementation trust funds (T29) Impact evaluation (T90) Payment and loan guarantees (T30) Forecasting and early warning systems (T91) Financing agreements (T31) Decision support systems (T92) Procurement standards (T32) Decision making under uncertainty 3.4. Dispute settlement tools 3.2. Monitoring and promoting compliance (T93) Mediation (T33) Site visits (T94) Conciliation (T34) Individual experts (T95) Appointment of a neutral expert or expert commission (T35) Technical operators (T96) Reference to an arbitration tribunal (T36) Technical entities (T97) Independent court 3.3. Enforcing compliance 3.5. Facilitation/dialogue processes (T37) Compensation for noncompliance (T79) Convener (T38) Suspension of decision making and participation rights (T80) Broker 3.4. Payment for benefits/compensation for costs (T17) Direct payments (T18) Compensation for O&M or construction of regulating infrastructure (T19) Royalty payments 3.5. Implementation and adjustment tools (T12) Multisector development plans (T13) Climate change adaptation plans (T39) Single sector operational/implementation plans (T40) Stakeholder participation and inclusion tools (T41) Provisions for extreme events and uncertainty 4. Coordination framework 4.1. Intention and commitment tools 4.1. Engagement framework preparation and implementation (T42) Declarations (T98) Co-signatory of an agreement (T43) Memoranda of understanding or minutes of ministe- (T99) Assistance for drafting legal instruments rial meetings (T100) Assistance for building institutions (T44) International treaties (T101) Assistance for preparing rules and procedures (T45) Agreements of private law character (T46) Amendments and supplementary agreements table continues next page 42 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management TABLE 4.1. continued Country tools Third-Party tools 4.2. Implementation and adjustment tools (T12) Multisector development plans (T13) Climate change adaptation plans (T39) Single sector operational/implementation plans (T40) Stakeholder participation and inclusion tools (T41) Provisions for extreme events and uncertainty (T46) Amendments and supplementary agreements (T47) Minutes of joint management mechanisms or decision of parties to an agreement (T48) Periodic reviews (T49) Conference calls 4.3. Joint management mechanisms (T50) Advisory functions (T51) Executive functions (T52) Regulatory functions (T53) Inclusiveness functions (T54) Ad hoc mechanisms (T55) Joint technical committees (T56) Single-issue entities (T57) Special purpose vehicles (T58) Basin coordinating committees or councils (T59) River basin organizations, authorities, or commissions (T60) Entities with “beyond-the-basin” mandates 4.4. Financing of joint management mechanisms (T61) Principle of equality allocations (T62) Indicator allocations (T63) Community integration tax (T64) Polluter fees (T65) Benefit-based user fees 4.5. Dispute settlement (T66) Negotiations (T67) Filing a complaint (T68) Complaint review (T69) Arbitration tribunals Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 43 List of Tools (T1) Basin Inventory (T26) Awareness Raising Materials (T2) Basin Water Audit (T27) Indicators (T3) Transboundary Diagnostic Analysis (T28) Joint Monitoring Systems (T4) Economic Valuation of Basin Resources (T29) Impact Evaluation (T5) Vulnerability Mapping and Risk Assessment (T30) Forecasting and Early Warning Systems (T6) Stakeholder Analysis (T31) Decision Support Systems (T7) Nexus Assessments (T32) Decision Making under Uncertainty (T8) Benefit Assessments (T33) Site Visits (T9) Multisector Investment Opportunity Analyses (T34) Individual Experts (T10) Project Feasibility Studies (T35) Technical Operators (T11) Strategic/Project-Level Environmental/Social (T36) Technical Entities Impact Assessments (T37) Compensation for Noncompliance (T12) Multisector Development Plans (T38) Suspension of Decision Making and (T13) Climate Change Adaptation Plans Participation Rights (T14) Equal Cost Sharing (T39) Single Sector Operational/Implementation Plans (T15) Benefit Key for Cost Contribution to Common Works (T40) Stakeholder Participation and Inclusion Tools (T16) Repayable Loans (T41) Provisions for Extreme Events and Uncertainty (T17) Direct Payments (T42) Declarations (T18) Compensation for O&M or Construction of (T43) Memoranda of Understanding or Minutes of Regulating Infrastructure Ministerial Meetings (T19) Royalty Payments (T44) International Treaties (T20) Standards for Comparability and (T45) Agreements of Private Law Character Interoperability (T46) Amendments and Supplementary Agreements (T21) Procedures for Data Sharing and Exchange (T47) Minutes of Joint Management Mechanisms or (T22) Guidelines on Data and Information Disclosure Decision of Parties to an Agreement (T23) Geographic Information Systems (T48) Periodic Reviews (T24) Hydrological Bulletins (T49) Conference Calls (T25) Annual and Sustainability Reports (T50) Advisory Functions 44 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management (T51) Executive Functions (T77) Recipient Executed Grants (T52) Regulatory Functions (T78) Multidonor Trust Fund Programs (T53) Inclusiveness Functions (T79) Convener (T54) Ad hoc Mechanisms (T80) Broker (T55) Joint Technical Committees (T81) Weight of Presence (T56) Single-Issue Entities (T82) Oversight Experts (T57) Special Purpose Vehicles (T83) Grants (T58) Basin Coordinating Committees or Councils (T84) Loans and Credits (T59) River Basin Organizations, Authorities or (T85) Project Finance Guarantees Commissions (T86) Public–Private Partnerships (T60) Entities with “Beyond-the-Basin” Mandates (T87) Project Finance Safeguards (T61) Principle of Equality Allocations (T88) Equipment, Software and Technology (T62) Indicator Allocations Provision (T63) Community Integration Tax (T89) Implementation Trust Funds (T64) Polluter Fees (T90) Payment and Loan Guarantees (T65) Benefit-Based User Fees (T91) Financing Agreements (T66) Negotiations (T92) Procurement Standards (T67) Filing a Complaint (T93) Mediation (T68) Complaint Review (T94) Conciliation (T69) Arbitration Tribunals (T95) Appointment of a Neutral Expert or Expert (T70) Data and Information Provision Commission (T71) Experts to Conduct Assessments and Studies (T96) Reference to an Arbitration Tribunal (T72) Just in Time Notes, Analysis, and Advice (T97) Independent Court (T73) Tailored Workshops and Training Programs (T98) Co-Signatory of an Agreement (T74) Twinning (T99) Assistance for Drafting Legal Instruments (T75) Study Tours (T100) Assistance for Building Institutions (T76) Seed Financing for Joint Management (T101) Assistance for Preparing Rules and Mechanisms Procedures Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 45 List of Boxes (Box 4.1) Visual Atlas of Cooperation on the (Box 4.21) The Canadian Entitlement under the Amu Darya Columbia River Treaty (Box 4.2) State of the Nile Basin Report (Box 4.22) Chu-Talas Storage Infrastructure O&M Payments (Box 4.3) OKACOM Water Audit Project (Box 4.23) Royalty Payments under the Lesotho (Box 4.4) Transboundary Diagnostic Analysis of Highlands Water Project the Kura-Araks (Box 4.24) Standards for Comparability/ (Box 4.5) Economic Valuation of the Okavango Interoperability (Box 4.6) Vulnerability Mapping of the Limpopo (Box 4.25) Procedures for Data Exchange in the Zambezi (Box 4.7) Rhine Preliminary Flood Risk Assessment (Box 4.26) Mekong River Commission Data/ Information Disclosure Guidelines (Box 4.8) Kura-Araks Stakeholder Analysis (Box 4.27) The DanubeGIS (Box 4.9) Nexus Assessment in the Sava Basin (Box 4.28) International Boundary and Water (Box 4.10) Quantifying the Benefits of Nile Commission Technical Bulletins Cooperation (Box 4.29) Niger Basin Authority Water Bulletins (Box 4.11) Multisector Investment Opportunity Analysis of the Zambezi Basin (Box 4.30) Annual and Sustainability Reports (Box 4.12) Lesotho Highlands Water Project (Box 4.31) Kunene River Awareness Kit Feasibility Assessment (Box 4.32) The Danube Box (Box 4.13) Mekong Strategic Environmental (Box 4.33) Indicators Assessment (Box 4.34) World Water Assessment Program Sex (Box 4.14) Mekong River Commission Strategic Plan Disaggregated Indicators 2016–2020 (Box 4.35) Danube TransNational Monitoring (Box 4.15) Okavango Strategic Action Program Network (Box 4.16) Nile Basin Initiative Climate Change (Box 4.36) Effects of Measures on Flood Risk Strategy Assessment (Box 4.17) Itaipu Equal Cost Sharing (Box 4.37) European Flood Awareness System and Columbia Basin Forecasting (Box 4.18) Joint Investments in the Senegal Basin (Box 4.38) Nile Basin Decision Support System (Box 4.19) Itaipu Repayments (Box 4.39) The Decision Tree (Box 4.20) Bhutan-India Hydropower Generation Financing (Box 4.40) Farakka Barrage 46 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management (Box 4.41) Permanent Indus Commission (Box 4.61) Lake Chad Basin Commission (Box 4.42) Owen Falls Resident Egyptian Engineer (Box 4.62) International Boundary and Water Commission (Box 4.43) Itaipu Control Room Team (Box 4.63) LHWP Joint Technical Committee (Box 4.44) Niger Basin Authority and AGRHYMET (Box 4.64) Niger Basin Authority (Box 4.45) Monitoring through the International Commission for the Protection of the (Box 4.65) Chu-Talas Commission Rhine (Box 4.66) Equal Contribution Cost Sharing in (Box 4.46) Compensation Mechanisms in the Iberian OKACOM Basins (Box 4.67) Economic Capacity Cost Sharing in the International Commission for the (Box 4.47) Flow Release Determinations in the Protection of the Danube River Columbia (Box 4.68) Indicator-Based Contributions to the (Box 4.48) Orange-Senqu River Commission Mekong River Commission Roadmap towards Stakeholder Participation (Box 4.69) CICOS Community Integration Tax (Box 4.49) Gender Policy and Strategy of the (Box 4.70) Financing Kariba Dam Rehabilitation Mekong River Commission (Box 4.71) Kosi River Treaty Renegotiation (Box 4.50) Farakka Agreement Extreme Event (Box 4.72) Columbia Permanent Engineering Board Provisions (Box 4.73) Joint Committee Review under the (Box 4.51) Nukus Declaration Farakka Treaty (Box 4.52) Brahmaputra Flood Control/Data Sharing (Box 4.74) Permanent Indus Commission Memoranda of Understanding Procedures for Dispute Settlement (Box 4.53) Indus Waters Treaty (Box 4.75) Arbitral Procedures for the Lesotho (Box 4.54) Columbia River Treaty Highlands Water Project (Box 4.55) Bhutan/India Power Purchase (Box 5.1) International Union for the Conservation Agreements of Nature Building River Dialogue and Governance Program (Box 4.56) Minutes of the International Boundary (Box 5.2) World Bank Open Knowledge Repository and Water Commission—Mexico/USA (Box 5.3) Joint Rivers Commission, Bangladesh (Box 4.57) Periodic Review of the Mahakali and Capacity Strengthening Program Farakka Agreements (Box 5.4) Capacity Building for Cooperation on (Box 4.58) Columbia Conference Calls Dam Safety (Box 4.59) Lake Victoria Basin Commission (Box 5.5) Global Environment Facility Twinning (Box 4.60) Nile Basin Initiative Program Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 47 (Box 5.6) South Asia Water Initiative Study Tour to (Box 5.18) Guarantee Arrangement for LOM Pangar/ the Yellow River Nachtigal Dams (Box 5.7) Seed Financing for OKACOM (Box 5.19) World Bank Safeguard Reforms (Box 5.8) Nile Cooperation for Results Project (Box 5.20) World Bank Procurement Reform (Box 5.9) Multidonor Trust Funded Programs for (Box 5.21) Mediation and Conciliation under the Transboundary Waters Organisation pour la Mise en Valeur du fleuve Sénégal (Box 5.10) Nile Basin Trust Fund (Box 5.22) The Baglihar Difference (Box 5.11) Indus Basin Development Fund (Box 5.23) Arbitral Appointment in the Sava Basin (Box 5.12) The Petersberg Process (Box 5.24) Gabčikovo-Nagymaros Case before the (Box 5.13) International Bank for Reconstruction International Court of Justice and Development and International (Box 5.25) World Bank Co-Signatory to the Indus Development Association Financing Waters Treaty Terms (Box 5.26) Panel of Experts to Negotiate Framework (Box 5.14) World Bank Guarantee Mechanisms Treaty for the Nile (Box 5.15) Financing the Nam Theun 2 Project (Box 5.27) Third-Party Assistance to Establish the (Box 5.16) OP 7.50 Projects on International Chu-Talas Commission Waterways (Box 5.28) GEF and World Bank Support to the (Box 5.17) Equipment Provision to Georgia Mekong River Commission 48 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management Mohale Dam, Lesotho. © mtcurado/iStock. Chapter 4 Country Tools This section presents tools that can be employed • Implementation and Compliance Tools directly by and between riparian countries. These tools are based on the large body of inter- • Coordination Frameworks national experience of countries in identifying, 4.1 Identification of Opportunities and developing, and implementing operations with Risks Tools transboundary impacts. These tools have been successfully employed directly between and by Accurate data and information on water and countries to manage transboundary water related natural resources is essential for informed resources jointly or in a coordinated manner in decision making and policy formulation at order to achieve mutual benefits and/or mitigate the local, national, and transboundary levels. The harm. They promote information exchange, pre- tools presented in this category promote the dictability, and transparency, as well as the avail- availability of data and information for decision ability of financing for planned operations and making and the identification of development compliance with agreed arrangements. The tools opportunities. The regular exchange of data and are grouped into the following four categories: information between riparian countries facilitates the establishment of a common knowledge base • Identification of Opportunities and Risks Tools on shared water resources and basin planning. In • Design of Intervention Tools addition, it can create confidence and trust among Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 49 the countries participating in the information exchange. conditions of and future risks to the environment in Several information tools exist to assist with ensur- which an operation would be placed in. These assess- ing  availability of accurate data and information to ments can be carried out at the national level with pub- help  basin-countries make better informed decisions. licly available data on the basin conditions beyond These  tools are grouped under two subcategories: a  country’s border. However, in order to be able to (a) Diagnostic Tools and (b) Basin Planning. appreciate the complete context of the environment in which transboundary impact may occur, it is advisable 4.1.1 Diagnostic Tools to undertake status assessments jointly with poten- Diagnostic tools aim to provide information on the tially affected countries. The joint creation of an agreed operating environment and a baseline for future basin knowledge base on a basin or the transboundary area planning and development. (a) Status assessment tools that would be affected by an operation can also build analyze the risks to and vulnerabilities of the basin and trust and confidence between the engaged parties, provide an overview of basin users and concerned which can pave the way for future cooperation. Tools stakeholders. (b) Opportunity assessments analyze the that have been employed successfully by countries opportunities for development, potential benefits, as include the following: well as the possible costs and the risk of harm of the planned operations. • Basin Inventory (T1) to identify information that is available and data gaps to be filled. (e.g., Visual Atlas 4.1.1.1 Status Assessments of Cooperation between Afghanistan and Tajikistan There are multiple tools that can be employed by coun- concerning the resources of the Amu Darya Basin— tries to gain a comprehensive understanding of the box 4.1; and State of the Nile Basin Report—box 4.2). BOX 4.1. Visual Atlas of Cooperation on the Amu Darya In 2012, in a bilateral meeting between Afghanistan and Tajikistan to discuss common priorities for the management of their shared area of the Amu Darya Basin, participants identified a lack of available information on hydrology and the environment as an impediment to effectively address the region’s hydrological and environmental issues. The countries agreed to develop a document, with contributions from each one of them, that provides an accessible, substantive background of the basin with the goal of supplementing available information and informing local policy makers, experts, donors, and the international community on the basin’s common needs and priorities. The Visual Atlas of Cooperation of the Amu Darya consists of 100 photographs and 50 maps and graphics based on official sources and original research. The Atlas is designed to present information at the river basin level, as opposed to the national level, and portrays challenges from the regional rather than the country perspective. The Atlas was produced with the assistance of Zoi Environment Network, an international nonprofit organization, in association with United Nations Economic Commission for Europe (UNECE) and with funding from the Russian Federation. See Visial Atlas of Cooperation of the Amu Darya at: https://issuu.com/zoienvironment/docs/ atlas-20march2013-pressquality-web-. 50 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 4.2. State of the Nile Basin Report The Nile Basin Initiative (NBI; an intergovernmental partnership of the Nile riparian countries) produces a report, State of the Nile Basin, every three years, targeted at policy makers in the Nile Basin countries, that follows the Driving-Force-Pressure-State-Impact-Response (DPSIR) causal framework for analyzing the health of the basin. According to this framework, there is a chain of causal links starting with “driving forces” (sector) through “pressures” (emissions, waste) to “states” (physical, chemical, biological) and “impacts” on ecosystems, human health, and functions, eventually leading to political “responses” (prioritization, target setting). Written by a team of NBI staff and based on information in the public domain, the first chapters present the current state of water and environmental resources in the basin, describe the causal driving forces and pressures, and enumerate the impacts of the pressures. The remaining chapters take a closer look at the important driving forces in the basin, such as demography, and issues surrounding agriculture, hydropower, inland transportation, and climate change. See State of the Nile Basin report at: http://nileis.nilebasin.org/content/state-river-nile-basin-report. BOX 4.3. OKACOM Water Audit Project The Permanent Okavango River Basin Commission’s (OKACOM) Cubango-Okavango River Basin Water Audit Project assessed the current status of water resources in the basin at various scales, as well as demand and supply trends; analyzed patterns of water-related entitlements of social groups; and assessed the functionality of water-related policies and institutions at different administrative levels. It also provided decision makers with a comprehensive set of policy options to increase capacity to cope with the growing pressures on water resources in the basin. Multidisciplinary teams of experts were appointed by OKACOM and FAO to carry out national-level studies (in consultation with the riparian countries’ “Project Support Groups”), which fed into basin-level thematic studies and ultimately the synthesis audit report. The studies were carried out between November 2010 and December 2012. See OKACOM Water Audit Project Synthesis Report at: http://www.fao.org/3/a-i3743e.pdf. • Basin Water Audit (T2) to assess the current status (nonnegotiated) assessment showing the relative and future trends in both water supply and demand importance of causes and impacts of transboundary (e.g., Permanent Okavango River Basin Commission’s water problems (e.g., Transboundary Diagnostic [OKACOM] Water Audit Project—box 4.3). Analysis [TDA] of the Kura-Araks Basin—box 4.4). • Transboundary Diagnostic Analysis (T3) is a tool, • Economic Valuation of Basin Resources (T4) to help developed by the Global Environment Facility bridge the gap between science and policy making by (GEF), involving joint fact-finding and objective communicating the importance of ecosystems in terms Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 51 BOX 4.4. Transboundary Diagnostic Analysis of the Kura-Araks Between 2011 and 2013, Armenia, Azerbaijan, and Georgia participated in a Transboundary Diagnostic Analysis (TDA)—a component of the UNDP-GEF Reducing Transboundary Degradation in the Kura-Araks Basin Project. The TDA identified four main transboundary issues: variation and reduction of hydrological flow; deterioration of water quality; ecosystem degradation; and increased flooding and bank erosion. Information presented in the TDA was obtained from publicly accessible sources (publications, statistical services, as well as from national experts in the project countries). The TDA provides the basis for the Kura-Araks Basin Strategic Action Program (SAP), which will embody specific actions that can be adopted nationally, within a harmonized multinational context, to address the major priority transboundary problems identified in the TDA. See Kura-Araks TDA report at: http://www.kura-aras.org/Updated_TDA.html. BOX 4.5. Economic Valuation of the Okavango Basin The economic valuation study in the Okavango Basin values direct and indirect contributions of basin resources (including ecosystem services) to the national economies in Angola, Botswana, Namibia, and South Africa; analyzes macroeconomic benefits of three specified water development scenarios and corresponding costs of possible losses in ecosystem services; and provides a sectoral analysis (tourism, agriculture, forestry, and ecosystem services) focusing on feasible development pathways corresponding to the specified water resources development scenarios. See Economic Value of the Okavango Delta report at: http://www.the-eis.com/data/literature/Okavango%20 Delta%20Valuation%20Study.pdf. of their economic worth to a variety of sectors (e.g., • Stakeholder Analysis (T6) to identify stakeholders Economic Valuation of the Okavango Basin—box 4.5). affected by a development intervention, who should be consulted, as well as the relative influence of • Vulnerability Mapping and Risk Assessment (T5) is stakeholders on the planned project (e.g., Kura-Araks generally done through modeling that combines Stakeholder Analysis—box 4.8). variables of exposure and sensitivity to impacts caused by hydrological variability, weather extremes, and climate change in order to identify hotspots and 4.1.1.2 Opportunity Assessments areas at risk for emergency response and risk miti- Opportunity assessments are employed to determine gation planning (e.g., Vulnerability Mapping of the the development opportunities, as well as their benefits Limpopo—box 4.6; Rhine Preliminary Flood Risk and costs, for the basin countries and to the basin. Assessment—box 4.7). These assessments are often based on diagnostic or 52 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 4.6. Vulnerability Mapping of the Limpopo The process of vulnerability mapping in the Limpopo Basin (Botswana, Mozambique, South Africa, and Zimbabwe) made use of a range of indicators, including biophysical, biological, and socioeconomic factors, and combines them with different weightings into one index. The indicators vary spatially, meaning that the final vulnerability index can be displayed as a map. Combined with a model of adaptive capacity, the maps provide insights into which adaptive responses are likely to have the highest impacts on livelihoods and the environment. Combined layers of exposure (such as exposure to cyclones and floods), sensitivity (such as crowding on agricultural land and water stress), and adaptive capacity (such as governance and economic wealth) present a composite picture of risk and vulnerability for the basin. Eight highly vulnerable areas were identified as resilience action areas across the basin. See Risk, Vulnerability & Resilience in the Limpopo River Basin report at: https://www.climatelinks.org/sites/ default/files/asset/document/Risk,%20Vulnerability%20and%20Resilience%20in%20the%20 Limpopo%20River%20Basin%20-%20A%20Synthesis_0.pdf. BOX 4.7. Rhine Preliminary Flood Risk Assessment A preliminary assessment of flood risk was conducted in the Rhine Basin, where each Member State of the International Commission for the Protection of the Rhine (ICPR) was required to make a preliminary flood risk assessment for each river basin or sub-basin on their territory and to determine those areas in its territory presenting a potentially significant flood risk. The assessment included a delimitation of the catchments and sub-basins in the Rhine Basin, a description of flood events in the past, the probability of future floods, as well as an estimation of the potential negative consequences taking into account long- term development, such as effects of climate change on flood occurrence. For areas with a potentially significant flood risk, the Member States drafted flood hazard maps and risk maps (delivered to the ICPR Secretariat), which served as a basis to determine basin priorities for flood management. Member States are required to update the risk assessments every six years and submit the updated assessments to the ICPR Secretariat. The maps are aggregated into an online portal—the Rhine Atlas. See Rhine Atlas at: http://geoportal.bafg.de/mapapps/resources/apps/ICPR_EN/index.html?lang=en. status assessments. The opportunity assessments use project level, there are a variety of tools that can be best-available knowledge to inform investment deci- used, including: sions by one or multiple countries. Depending on the geographic and sectoral scope under consideration, • Nexus Assessments (T7) to identify intersectoral syn- whether they are carried out at the basin, country, or ergies and determine measures that could alleviate Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 53 BOX 4.8. Kura-Araks Stakeholder Analysis The Kura-Araks Stakeholder Analysis involved both quantitative and qualitative surveys of stakeholders in the region. These complementary analyses provided insights into the concerns, priorities, and perceptions of stakeholder groups, and identified where tensions could emerge as a result of different expectations and priorities for water use within the basin. A team comprising a stakeholder analyst and local experts familiar with the riparian communities and with the local languages led the qualitative survey. About 150 people were consulted in this process, including farmers, homemakers, municipal and state officials, school teachers, public healthcare providers, municipal water management officials, and others. The quantitative survey was conducted among 36 stakeholder groups, translated into local languages and administered by local and national-level stakeholder consultants throughout the basin. In total, 512 surveys were collected and statistically analyzed for trends among and between groups. Areas of notably high and low priority concern or high levels of variation within groups were detailed and analyzed for the potential causality and significance of these trends. Issues that showed potential for conflict between groups were highlighted. This stakeholder analysis was utilized as part of the Kura-Araks TDA. See Kura-Araks TDA report at: http://www.kura-aras.org/Updated_TDA.html. tensions related to the multiple demands from ripar- strategies, plans, and programs at the strategic ian countries on shared resources, by increasing level (e.g., Mekong Strategic Environmental Impact efficiency, identifying possible tradeoffs and build- Assessment—box 4.13). ing  synergies (e.g., Nexus Assessment in the Sava Basin—box 4.9). 4.1.2 Basin Planning In light of increasing water stress, early engagement in • Benefit Assessments (T8) and Multisector Investment coordinated basin planning is important in order to Opportunity Analyses (MSIOA) (T9) assess water determine a basin’s development potential before it resources development options and benefits of coop- becomes a closing basin. This upstream planning is eration among riparian countries (e.g., Quantifying important to identify cooperation options before they the Benefits of Nile Cooperation—box 4.10; MSIOA of become more difficult to implement due to increasing the Zambezi Basin—box 4.11). competition among users of the same resources. • Project Feasibility Studies (T10) determine if a project Countries often jointly develop integrated basin is technically feasible, cost-effective and economi- development plans to plan for new uses and/or coor- cally viable (e.g., Lesotho Highlands Water Project dinate existing uses on a transboundary watercourse. Feasibility—box 4.12). Such plans are usually prepared following comple- • Strategic Environmental and Social Impact tion of necessary diagnostic assessments/studies Assessments (T11) determine the potential environ- (such as a TDA); they usually set out the goals, objec- mental and social impact of policies, legislation, tives, and programs for managing water resources for 54 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 4.9. Nexus Assessment in the Sava Basin Assessments of the water-food-energy-ecosystem nexus have been carried out in select transboundary river basins under the United Nations Economic Commission for Europe (UNECE) Water Convention. The participatory nexus assessment process in the Sava Basin involved an intersectoral workshop for identification of the main intersectoral issues and possible solutions, detailed by a subsequent analysis, and followed by consultations of the various sectoral authorities in each country. The assessment report describes the characteristics of the water, food and land, as well as energy and ecosystem services in the basin. The assessment shows multiple linkages in the basin between the different basin resources and presents a broad range of beneficial response actions to strengthen transboundary cooperation on the integrated management of the different basin resources. According to the UNECE, the assessment exercise is contributing to further integration of water policy in the basin with other sector policies, and is furthering dialogue among key sectoral stakeholders to broaden stakeholder involvement in the International Sava River Basin Commission. See Reconciling Resource Uses in Transboundary Basins: Assessment of the Water-Food-Energy-Ecosystems Nexus in the Sava River Basin report at: http://www.unece.org/index.php?id=45241. BOX 4.10. Quantifying the Benefits of Nile Cooperation The Nile Basin Initiative (NBI)-facilitated quantification of benefits analysis includes evidence of benefits of potential future cooperation in various sectors for the Nile Basin (agriculture, electricity, flood control, navigation, water security, peace, and stability) and subregions, compiled from other studies, reports, and ongoing NBI work. The analysis aims to reflect on clear, communicable case studies and scenarios that show benefits, including more effective quantification of these benefits as well as the costs of noncooperation in understandable terms. The analysis sets out a series of recommendations of new approaches and methods for quantifying the benefits of cooperation and the costs of noncooperation. The Transboundary Water Opportunity (TWO) Analysis, a flexible tool to support decision making at the basin level, was utilized. The TWO Analysis allows for the identification of assets (basin services) and potential uses of assets (benefits). Each combination of a service and a potential use is then evaluated according to the economic, social, and political costs and benefits so that different portfolios of development options can be compared. Ultimately, a combined matrix with all the potential assets and potential socioeconomic activities is compiled to easily compare and screen development options and decide on the preferred portfolio of options. See Quantifying the Benefits of Transboundary Water Cooperation in the Nile Basin report at: http://nileis. nilebasin.org/system/files/Quantifying%20the%20Benefits%20of%20Cooperation.pdf. See Two Analysis report at: http://internationalwatercooperation.org/wp-content/uploads/2015/02​ /­Report23_TWO_Analysis.pdf. Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 55 BOX 4.11. Multisector Investment Opportunity Analysis of the Zambezi Basin The overall objective of the Zambezi River Multisector Investment Opportunity Analysis (MSIOA) is to illustrate the benefits of cooperation among the riparian countries in the Zambezi Basin through a multisectoral economic evaluation of water resources development, management options, and scenarios— from both national and basin-wide perspectives. The analytical framework was designed in consultation with the eight riparian countries (Angola, Botswana, Malawi, Mozambique, Namibia, Tanzania, Zambia, and Zimbabwe), Southern African Development Community Water Division (SADC-WD), and development partners in line with the Zambezi Action Plan Project 6, Phase II. A scenario analysis was carried out with the primary objective of determining and maximizing economic benefits while meeting water supply and environmental sustainability requirements. The scenarios are tested using a coupled hydroeconomic modeling system. The purpose of the modeling effort was to provide insight into the range of gains that would be expected from various infrastructure investments along the axes of full hydropower and irrigation development (while continuing to satisfy requirements for water supply and environmental sustainability). The five development scenarios that the report assessed were: (a) coordinated operation of existing hydropower facilities, either basin-wide or in clusters; (b) development of the hydropower sector as envisioned in plans for the Southern African Power Pool; (c) development of the irrigation sector through unilateral or cooperative implementation of projects identified by the riparian countries; (d) flood management, particularly in the Lower Zambezi and the Zambezi Delta; and (e) effects of other projects using the waters of the Zambezi River. See Zambezi River Basin MSIOA report (World Bank 2010) at: https://openknowledge.worldbank.org​ /­handle/10986/2959. BOX 4.12. Lesotho Highlands Water Project Feasibility Assessment In 1978, the governments of Lesotho and South Africa appointed a joint technical team, under the direction of a joint technical committee (JTC), to investigate the possibility of a water transfer project between the two countries. The first feasibility study suggested a project to transfer 35 m3/s, with four dams, 100 km of transfer tunnels, and a hydropower component. Agreement was reached to study the project in more detail, with the cost of the study to be borne by both governments. In 1979, the JTC produced a report on the strength of which it was decided to proceed to a final feasibility study, where each country was to contribute half the cost of the study. The second feasibility study, completed in 1986, concluded that the project was feasible and recommended that the amount of water to be transferred be doubled to 70 m3/s. In 2005, a Phase Two feasibility study was undertaken in two stages aimed at identifying further development options and investigating the preferred option in detail. This resulted in the recommendation of the Polihali Dam and transfer tunnel for implementation. See Lesotho Highlands Water Project portal at: http://www.lhwp.org.ls/. 56 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 4.13. Mekong Strategic Environmental Assessment To understand the long-term implications of the mainstream dam proposals in the Mekong Basin and to provide better understanding of the cumulative risks and opportunities to the Mekong River Commission (MRC) Member Countries, a Strategic Environmental Assessment (SEA) was conducted over a 14-month period (2009–10). The SEA addressed the broader issues within the mainstream development proposals. It also provided recommendations on how the proposed projects should be best pursued by Member Countries in relation to regional distribution of costs and benefits with respect to economic development, social equity and environmental protection among affected stakeholders. The SEA examined four strategic options that range from a 10-year deferral for mainstream hydropower development to pursuing a market-driven development. While conducting the SEA, the SEA consultant team engaged with government agencies, civil society, private sector developers, and development partners over its four phases: scoping; baseline assessment; opportunities and risks assessment; and avoidance, enhancement, and mitigation assessment. Each phase included the preparation and circulation of a set of reports as the basis for consultation and feedback. See SEA of Hydropower on the Mekong Mainstream report at: http://icem.com.au/portfolio-items​/­strategic- environmental-assessment-of-hydropower-on-the​-mekong-mainstream/. BOX 4.14. Mekong River Commission Strategic Plan 2016–20 The Mekong River Commission (MRC) Strategic Plan 2016–20 set outs how the MRC will implement the updated IWRM-based Mekong Basin Development Strategy at the regional level and the institutional reform measures directed by the MRC Council in the Roadmap for Decentralization. It guides the actions of the MRC Secretariat in supporting MRC member countries to promote and coordinate sustainable development of the Mekong River Basin over the next five years. It also addresses the collaborative arrangements between the MRC, the implementing agencies in its member countries, dialogue partners (China and Myanmar), development partners, and wider stakeholder groups. This Plan presents a unified corporate plan for the organization, replacing the need for a multitude of MRC program documents, inception reports, project implementation plans, and the like. The Strategic Plan will be operationalized through five Annual Work Plans. See MRC Strategic Plan 2016–20 at: http://www.mrcmekong.org/assets/Publications/strategies-workprog​ /­MRC-Stratigic-Plan-2016-2020.pdf. a specific period. Examples of basin development outline implementation steps for multiple parties, plans include: such as River Basin Management Plans or Strategic Action Programs (e.g., Mekong River Commission • Multisector Development Plans (T12) usually cover a [MRC] Strategic Plan 2016–20—box 4.14; Okavango wide geographic scope (basin or sub-basin level) and Strategic Action Program—box 4.15). Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 57 BOX 4.15. Okavango Strategic Action Program The Okavango Basin SAP is a mid-term planning document designed for voluntary adherence by the Cubango-Okavango Basin States. The initial Transboundary Diagnostic Analysis identified four main areas of concern: variation and reduction of hydrological flow; changes in sediment dynamics; changes in water quality; and changes in the abundance and distribution of biota. In response to these challenges the Cubango-Okavango Basin States agreed on a set of six Integrated Management Objectives that guide implementation of the SAP: (a) the sustainable management of the basin is based on a shared basin-wide vision and jointly agreed decision framework; (b) decisions are based on solid scientific analysis of available data and information and improved basin knowledge through research programs designed to answer management questions; (c) focused environmental and socioeconomic monitoring programs to support management decisions and track long-term trends are established and strengthened, and the results are used in adaptive management strategies; (d) integrated planning criteria and objectives for sustainable development of water resources of the basin are agreed and established; (e) the livelihoods of the basin’s people are improved; and (f) technical capacity in the basin and involvement of stakeholders in SAP and National Action Plan (NAP) implementation is improved. The SAP includes necessary baseline and additional actions to address the priority transboundary issues and to provide an essential monitoring and evaluation tool for implementation. Implementation of the SAP is the responsibility of the Basin States independently as components of their respective NAPs, and collectively as part of OKACOM. The SAP was developed over three years through a consultative process with a wide range of stakeholders from government departments, academic and scientific institutions, civil society, the private sector, and community representatives. See OKACOM SAP report at: http://www.okacom.org/okacoms-work/strategic-action-program. See Angola, Botswana and Namibia NAPs at: http://www.okacom.org/okacoms-work​ /­national-action-plans-naps. • Climate Change Adaptation Plans (T13) recognize appropriate. The optimal type of cooperation will vary the need to build flexibility into management for each hydrologic and investment opportunity. It is plans and to strengthen resilience against uncer- important for countries to identify the most effective tain, yet expected, climate change impacts (e.g., level of engagement that helps them achieve their NBI Climate Change Strategy—box 4.16). agreed objectives. 4.2.1 Joint Investments 4.2 Design of Intervention Tools Joint investments are usually payments for the genera- Once mutually beneficial projects (or programmatic tion of mutual benefits. These may cover the costs engagements) have been identified, the countries of  construction, operation, and maintenance of move to designing the intervention and determining infrastructure. ­ The proportion of the benefits the scope and objectives of cooperation, if and as received usually determines the amount of payment. 58 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 4.16. NBI Climate Change Strategy The NBI Climate Change Strategy was developed as stipulated in the Nile Basin Sustainability Framework under its Key Strategic Direction 4: “Climate Change Adaptation & Mitigation.” The Climate Change Strategy forms an integral part of the landscape of NBI policies, strategies, and guidelines and complements national efforts of NBI member countries. The overall goal of the strategy is to enhance basin-wide resilience and climate compatible water resources management and development. Eight outputs are articulated in order to achieve this goal: (a) develop a Regional Knowledge Hub to share data, roster of experts, development of methodological and analytical tools, and improved predictions on impacts; (b) conduct basin-level analysis through synthesis of national climate risk, impact, and vulnerability assessments to inform joint transboundary climate response actions; (c) develop mechanisms to disseminate information consistently to target audiences; (d) facilitate cross-sectoral, multistakeholder dialogues on climate risks, impacts, and responses; (e) form strategic partnerships between NBI and relevant regional climate initiatives and research institutes; (f) implement a multilateral working group for adaptation planning and management; (g) identify and implement low carbon solutions and climate proof all major investment projects in the basin; and (h) establish a transboundary climate finance mechanism and create a best-practice manual on climate finance. The strategy envisions a five-year horizon for the implementation plan that will be created by the NBI by building on the goal, objectives, outcomes, and outputs outlined in the strategy. See NBI Climate Change Strategy at: http://nileis.nilebasin.org/system/files/23.10.13%20climate%20 change%20strategy.pdf. Joint investments are usually combined with the BOX 4.17. Itaipu Equal Cost Sharing establishment of joint management mechanisms (see “Coordination Frameworks”). Examples of joint The two national electric companies, investment tools include the following: Administración Nacional de Electricidad • Equal Cost Sharing (T14) is typical for hydropower (ANDE) of Paraguay and Electrobras of investments on contiguous river stretches where Brazil, each agreed to contribute half of the the border runs through the river or is not deter- initial US$100 million capital stock of Itaipu mined, and hydropower generation potential Binacional. See box 4.19. used thus cannot easily be identified as originat- ing from the territory of one or the other riparin country (e.g., Itaipu Binacional—box 4.17). ­ hydropower, and navigation benefits. Associated • Benefit Key for Cost Contribution to Common Works rights and obligations, including O&M payment (T15) is a tool unique to cooperation in the Senegal obligations, are based on equality of rights and equi- Basin, where member countries co-own various table sharing of the benefits from these common infrastructure assets that generate irrigation, works (see box 4.18). Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 59 BOX 4.18. Joint Investments in the Senegal Basin The Organisation de mise en valeur du Fleuve Sénégal (OMVS) member states enjoy shared ownership of their common works in the Senegal River Basin, including dams, power stations, high-voltage lines, and navigation facilities. Rights and obligations are based on equality of rights and equitable sharing of the benefits from joint works. Joint works are managed through specially established agencies, including Société de Gestion du Barrage de Manantali (SOGEM) and Société de Gestion et D’Exploitation du Barrage de Diama (SOGED), which are accountable to the OMVS. SOGEM has the exclusive right of production, transport and sale of the electricity produced by the Manantali Dam and related infrastructure. The principles and mechanisms of tariffs and commercialization of energy and services provided by SOGEM have to be agreed among the Member States of OMVS, SOGEM, and the national energy agencies. SOGED has the exclusive right to sell water withdrawal rights for all uses other than electricity production and to provide services in connection to the works that are assigned to its control by intermediary. The principles and mechanisms of tariffs and commercialization of water and services carried out by SOGED have to be agreed on by the Member States of OMVS. Member States contribute to investment, O&M costs proportionally based on the benefits they draw from the infrastructure. The cost/benefit repartition “key” as follows (table B4.18.1) can be and is renegotiated when circumstances change. TABLE B4.18.1. OMVS Cost/Benefit Repartition Key Contribution to cost of Benefit shares (%) Country Basin share (%) the reservoirs (%) A.2 Hydropower A.3 Irrigation Navigation Mali 54 35 52–55 11 80 Mauritania 26 23 15 31 12 Senegal 10 42 33–30 58 8 See Benefit Sharing in International Rivers: Findings from the Senegal River Basin, the Columbia River Basin, and the Lesotho Highlands Water Project report at: http://documents.worldbank.org/curated/en/159191468193140438/Benefit​ -​sharing-in-international-rivers-findings-from-the​-Senegal-river-basin-the-Columbia-river-basin-and-the-Lesotho​ -highlands-­water-project. • Repayable Loans (T16) have been used by relatively • Direct Payments (T17) for benefits received indepen- economically more powerful riparian countries to dent of compensation for costs (e.g., The “Canadian help finance infrastructure that generates mutual Entitlement” established by the Columbia River benefits in or together with relatively poorer riparian Treaty [CRT]—box 4.21). countries. These loans can be linked to repayments • Compensation for O&M or Construction of Regulating through, for example, sale of hydroelectricity gen- Infrastructure (T18) is a direct payment for benefits erated at favorable terms or with first-buyer rights received that is calculated based on the costs incurred to the country that provided the loan (e.g., Itaipu by the other country in the generation of the bene- Repayments—box 4.19; Bhutan-India Hydropower fits or otherwise (e.g., O&M payments for regulating Generation Financing—box 4.20). infrastructure in the Chu-Talas Basins—box 4.22). 60 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 4.19. Itaipu Repayments The two national electric companies, Administración Nacional de Electricidad (ANDE) of Paraguay and Electrobras of Brazil, each agreed to contribute half of the initial US$100 million capital stock of Itaipu Binacional. Brazil provided Paraguay’s half, US$50 million, in a loan arrangement with terms of a 6 percent interest rate, repayable by Paraguay over 50 years. The 1973 Itaipu Treaty confirmed the exclusive right of each country to purchase unused electricity from each other; neither is allowed to sell the energy to a third party. (Each country was required to specify what proportion of its share its domestic market would require over a period of 20 years.) Whereas Paraguay uses about 5–10 percent of the electricity from Itaipu, Brazil consumes around 90–95 percent. Paraguay has been selling its unused share of the generated electricity to Brazil for a fixed price to Eletrobras. Brazil pays Paraguay an annual lump sum in compensation for the use of Paraguay’s share of the generated power. The selling price was fixed by Itaipu Binacional on the basis of an agreed upon formula combining production costs; partial appropriation of the capital stock, finance charges, and other costs for the loans raised by Itaipu Binacional; royalties for the two countries for the use of the electricity; and administrative costs. According to the original Treaty, no changes in the financial arrangements would be permitted until 2023. Paraguay was concerned about the low payment it was receiving from Brazil’s electric company, Electrobras, for unconsumed energy. Electrobras received energy at cost from Paraguay, rather than market price (the price was fixed on the basis of an agreed upon formula) and then sold it with high profit margins in Brazil. The Treaty was renegotiated in 2008/2009, when, under a new president, Paraguay proposed a series of measures to make the sales and compensation agreement more equitable. The agreed terms were: (a) Brazil would pay Paraguay US$360 million annually for imported Itaipu electricity, up from about US$120 million; (b) Brazil would “consider” the possibility of selling electricity to third countries, together with Paraguay, after 2023; (c) Brazil would allow Paraguay “gradual direct sale of energy to the Brazilian market”; (d) Brazil would finance a nonreimbursable loan to enable Itaipu Binacional to construct a 350 km, 500 kV transmission line costing US$450 million to take power to Asunción; (e) Paraguay and Brazil would govern Itaipu Binacional together (under a co-administration agreement); and (f) the Paraguayan Comptroller General would audit all Itaipu debt and financial reports would be made more transparent. See Lessons from Paraguay’s 14,000 MW Itaipu Project vis-à-vis Nepal’s 6,720 MW Pancheshwar Project article at: https://www.nepjol.info/index.php/HN/article/view/7098. See Assessment of RBO-Level Mechanisms for Sustainable Hydropower Development and Management report at: https://www.giz.de/fachexpertise/downloads/giz2012-en-mrc-assessment-rbo-level​-mechansims​ -hydopower-development.pdf. Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 61 BOX 4.20. Bhutan–India Hydropower Generation Financing In 1974, following a series of feasibility studies, Bhutan and India signed an agreement for the implementation of the Chukha Hydel project. Constructed and commissioned by the established Chukha Hydel Project Authority, the project was fully funded by India, in a 60 percent grant and 40 percent loan arrangement, with an interest rate of 5 percent payable over 15 years, in equated installments. After four years of infrastructure development, including roads and residences, the main civil works of the project started in 1979. Chukha became fully operational in 1988 and now falls under the auspices of Druk Green Power Corporation. India absorbed the construction risk and market risk by agreeing to provide the required capital and construct the project in a turnkey arrangement. India off-takes the excess supply of electricity from Chukha over the Bhutanese domestic consumption at a mutually agreed upon price, subject to periodic revisions for inflation and cost escalation. Chukha’s power generation had been meeting Bhutan’s electricity requirements and the surplus was exported to India. In the initial years of operation, about 90 percent of power was exported. By 2006, with increased domestic demand, annual export had decreased to about 80 percent. Power is exported to India through the Power Trading Corporation of India Limited. In Bhutan, the Chukha Hydel Project Authority sells power to the Bhutan Power Corporation, which in turn distributes it to domestic consumers. As of 2008, Bhutan had received well over US$600 million in cumulative revenue from the project. By 2007, India had recovered its capital investment, along with its opportunity cost, through the receipt of loan payments and the share of hydroelectricity rent generated at the project because of lower import prices. Taking into account the economic costs and economic benefits, Bhutan and India end up sharing the net economic gains in a proportion of 48:52. See Risk Sharing in Hydropower Development: Case Study of the Chukha Hydel Project in Bhutan article at: http://wp.iwaponline.com/content/15/S1/109. BOX 4.21. The Canadian Entitlement (CE) under the Columbia River Treaty (CRT) The CRT has provided substantial flood control and power generation benefits to both countries. One main component of the CRT called for Canada to develop reservoirs in the higher reaches of the Columbia River Basin (CRB) sufficient to provide 15.5 million acre-feet (Maf) of water storage. According to the agreement, Canada built three dams in its territory: Duncan, Arrow/Keenleyside, and Mica. The United States and Canada share equally in the computed power benefits that occur in the United States as a consequence of upstream regulation from Canada’s CRT projects. The downstream benefits are calculated based on the assured operating plan (AOP) for Canadian facilities five years in advance of each operating year. Increased power benefits are calculated based on “projected” optimal operation, not actual operation. This means that, while the United States may operate its facilities for nonpower uses, the CE for downstream power benefits remains unaffected. box continues next page 62 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 4.21. continued The CE, received in the form of financial payments and/or energy, is valued between US$120 million to US$300 million annually depending on power market prices—about 4000 GWh per annum. The increased power benefits associated with Canadian storage are “First Added,” meaning that the benefit of Canadian storage is recognized in the benefit computations before recognizing storage built in the United States after the CRT was signed (including Libby Dam). The First Added status helps maintain the financial value of Canadian storage under the CRT. Canada sold the first 30 years of the CE to a consortium of utilities in the United States for US$254 million and used the money to finance the construction of the three CRT dams. In addition, Canada received a “one time” payment of US$64.4 million at the outset in exchange for the annual operation of 8.45 MAF of storage for flood control until 2024. See Columbia Basin Case Study in Altingoz et al. 2018. BOX 4.22. Chu-Talas Storage Infrastructure O&M Payments Once the Chu and Talas Basins became transboundary post-1991, the Kyrgyz Republic was tasked with paying the costs for maintenance and operation of the water reservoirs on its territory, which significantly contributed to Kazakh irrigation areas. In the 2000 Agreement on the Use of Water Management Facilities of Intergovernmental Status on the Rivers Chu and Talas the two countries agreed that the O&M costs for the facilities specified in the Agreement would be shared on a pro rata basis in accordance with the water volume received by each party. The parties assume an individual share in compensation of O&M costs on water distribution facilities of interstate use and other coordinated activities proportionally to received water amount. To ensure safe and reliable operation of water distribution facilities of interstate use, the parties agreed to establish a permanent commission to arrange the working regimes and the range of necessary expenses for O&M. The O&M costs of water infrastructure are covered from the state budgets of the two countries proportionally to water volumes supplied to each of them. The share of funding of the Parties is determined according to the Methodology for Determination of Shared Co-financing of Adjacent Countries for the Operation of Water Management Facilities of Interstate Use in the Basins of Chu and Talas Rivers. The methodology is based on calculations taking into account available fixed assets (assets, book value, norms, and required expenses for O&M and rehabilitation works), composition of operational staff, required salary fund and overhead costs, as well as operational costs needed for energy and materials. Calculation of costs for maintenance of the facilities is made annually and is approved at the sessions of the Commission. See Chu and Talas Basins Case Study in Altingoz et al. 2018. Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 63 • Royalty Payments (T19) for the right to continued Assessment (ESIA), which should include the use of an asset for services provided (e.g., Royalty assessment of potential transboundary impact. The payments for water transfer under the Lesotho development of such a study, even if done unilater- Highlands Water Project [LHWP]—box 4.23). ally, can be used for communication between co-­ riparian countries. In case there is a risk of 4.2.2 Design Studies transboundary impact, communication between *Cross-referenced with (T11). countries can lead to adjustments in project design of planned operations to take interests of affected Countries can decide to contract and super- stakeholders into account. vise  project and program design studies jointly. Each project design study needs to be accompanied • Project-level Environmental and Social Impact by a project level Environmental and Social Impact Assessments (T11) determine the potential BOX 4.23. Royalty Payments under the Lesotho Highlands Water Project The Lesotho Highlands Water Project (LHWP) is a multiphase hydropower scheme between Lesotho and Republic of South Africa (RSA) to: (a) transfer water from the catchments of the Senqu and Orange Rivers in Lesotho to meet the growing demand for water in the major industrial and population centers in RSA; (b) generate hydropower for Lesotho; (c) provide the opportunity to undertake ancillary developments such as the provision of water for irrigation and potable water supply; and (d) promote the general development of the remote and underdeveloped mountain regions of Lesotho, while ensuring that comprehensive measures are taken to counteract any adverse effects the project might have on the local population and their environment. Under the LHWP Treaty, RSA is responsible for all costs of the LHWP related to the transfer of water (including construction, O&M, and social and environmental mitigation measures) regardless of the project’s performance; RSA is responsible for all costs of the LHWP related to the transfer of water; and Lesotho is responsible for hydropower costs and/or ancillary development. As soon as the first water would be delivered, the Treaty provides that “[RSA] undertakes to share with Lesotho, by way of royalty payments, on the basis of 56 percent on the part of Lesotho and 44 percent on the part of South Africa, the net benefit.” The net benefit is computed as the difference between the present value of the LHWP and a similar alternative project—the Orange-Vaal Transfer Scheme (OVTS), a project to pump water from the lower Orange River inside RSA. The royalty payments paid by RSA to Lesotho have a fixed and variable component. The fixed component is calculated on the benefits gained from the investment difference between the LHWP and OVTS. It is payable monthly by RSA to Lesotho up to 2045 (a 50-year period from the beginning of payments). The calculation of the variable component is based on the difference in electricity costs attributable to the O&M of the LHWP and OVTS. The variable component is converted into unit rates and the amount paid per month depends on the quantity of water delivered during that month. Variable royalties will be paid by RSA to Lesotho in perpetuity as long as water is delivered. See Lesotho Highlands Water Project portal at: http://www.lhwp.org.ls/. 64 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management environmental and social impact of an individual 4.3.1.1 Standards and Procedures for project, including transboundary impact. Information Exchange Standards and procedures for information exchange 4.3 Implementation and Compliance Tools ensure comparability of information and regularity of exchange. Ideally, the standards and procedures would 4.3.1 Information Tools for Management determine the time intervals and quality and content Data and information sharing tools aim to ensure that of information and data to be shared, as well as iden- knowledge on the status of and changes in the basin tify the entity or individual responsible for the infor- continues to be available after initial diagnostic assess- mation exchange. A higher level of detail tends to ments. Regularity of information exchange and com- provide greater reliability of data exchange. The avail- parability of data is important to inform future able tools include: planning and management so that adjustments can be made as needed. This category of tools also considers • Standards for Comparability and Interoperability the importance of information sharing and awareness (T20) provide for agreed terminology and stan- raising among local stakeholders, both with respect to dards for data collection and processing (e.g., the status of the basin and to the activities of water System of Environmental-Economic Accounting management institutions. This supports confidence for Water, the Glossary of Shared Water Resources building and establishment of an enabling environ- [English–Arabic], and the International Glossary of ment for operations. Hydrology—box 4.24). BOX 4.24. Standards for Comparability/Interoperability System of Environmental-Economic Accounting for Water (SEEA) The SEEA 2012-Central Framework is a framework that contains internationally agreed standard concepts to produce internationally comparable statistics to monitor interactions between the economy and the environment, and the stocks and changes in stocks of environmental assets. Using a wide range of information, the SEEA Central Framework enables source data to be compared and contrasted and allows for the development of aggregates, indicators and trends across a broad spectrum of environmental and economic issues. The Central Framework covers measurement in three main areas: (a) the physical flows of materials and energy within the economy and between the economy and the environment; (b) the stocks of environmental assets and changes in these stocks; and (c) economic activity and transactions related to the environment. Measurement in these areas is translated into a series of accounts and tables. The concepts and definitions that constitute the SEEA Central Framework are designed to be applicable across all countries, regardless of their level of economic and statistical development, their economic structure, or the composition of their environment. See SEEA at: https://seea.un.org/. box continues next page Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 65 BOX 4.24. continued Glossary of Shared Water Resources (English–Arabic) Water resource specialists from Economic and Social Commission for Western Asia (ESCWA) member countries, who must negotiate agreements with non–Arabic-speaking countries, need Arabic language translations and explanations of such terminology. The Glossary of Shared Water Resources is a 2012 glossary prepared by the UN ESCWA is designed to create an English–Arabic common terminology to harmonize understanding of the technical, socioeconomic, environmental, institutional, and legal issues pertaining to joint management of shared water resources. See Glossary of Shared Water Resources at: http://www.zaragoza.es/contenidos/medioambiente/onu/943-eng-ara.pdf. International Glossary of Hydrology The World Meteorological Organization and UNESCO prepares the International Glossary of Hydrology. The international glossary facilitates comparability and communication on international research related to hydrology. A shared terminology is essential for joint action at the international level. A third edition was prepared in 2012, which builds on the pioneering efforts of the WMO Working Group on Terminology established in 1961, which evolved into the joint WMO/UNESCO Panel on Terminology in 1967 (first edition in 1974, second edition in 1992). See International Glossary of Hydrology at: http://unesdoc.unesco.org/images/0022/002218/221862M.pdf. • Procedures for Data Sharing and Exchange (T21) spec- operations, data sharing among stakeholders may ify the type of data and information to be shared, as result in an increase in flow of information also back well as source, frequency, format, standards, qual- to joint institutions (e.g., MRC Data/Information ity assurance, and the method of transfer; roles and Disclosure Guidelines—box 4.26). responsibilities of involved institutions; timeframes for supplying the agreed data and information; and 4.3.1.2 Information Exchange and Dissemination Tools ownership and access rights to shared data and infor- There is a wide range of technical methods to make mation (e.g., Procedures for Data Exchange in the information accessible to water managers, decision mak- Zambezi—box 4.25). ers, and other users. This section includes only an illus- trative sub-set of these tools. Information and data can • Guidelines on Data and Information Disclosure (T22) be made accessible through the following tools: ensure provision of information to affected stake- holders, to facilitate transparency, confidence, and • Geographic Information Systems (T23) can visualize dialogue. By encouraging dialogue on policies and multiple layers of data and information as maps, 66 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 4.25. Procedures for Data Exchange in the Zambezi In 2016 the Zambezi Watercourse Commission (ZAMCOM) Council adopted rules and procedures to give effect to the provisions on data sharing in the ZAMCOM Agreement and the Southern African Development Community (SADC) Protocol on Shared Watercourses. The rules and procedures “ensure that relevant and quality assured data and information are shared timely between the Member States in order to facilitate that the Member States—through ZAMCOM—will be able to take informed decisions in relation to the planning and management of the shared water resources in the Zambezi watercourse.” See Rules and Procedures for Sharing of Data and Information Related to the Management and Development of the Zambezi Watercourse at: http://zambezicommission.org/newsite/wp-content​ /­uploads/2016/07/16.03.29-Rules​_­ProceduresForDataSharing_Adopted-by-Council_FinalEditing_Ver10​ _FINAL.pdf. BOX 4.26. Mekong River Commission Data/Information Disclosure Guidelines The Mekong River Commission (MRC) Disclosure Guidelines set out the administrative rules and regulations on access to data, information, and knowledge held by the MRC Secretariat. The three access categories delineated under the guidelines are: unrestricted, available to the public; restricted, may be released to a specific audience following appropriate approvals; and confidential, not for release beyond the author and addresses nor to the public. The guidelines delineate several items within each category, which is not exhaustive but is intended to provide transparency on classification criteria and guidance on how to supplement the same. See MRC Disclosure Guidelines at: http://www.mrcmekong.org/assets/Publications/policies/MRC​-Disclosure​ -Guidelines-RevisedVer-May2015-final.pdf. tables, or graphics (e.g., The Danube Geographic Niger Basin Authority [NBA] Water Bulletins—­ ​ Information System [DanubeGIS]—box 4.27). ­ ox 4.29) b • Hydrological Bulletins (T24) are one way of • Annual and Sustainability Reports (T25) published presenting and disseminating hydrological by institutions or projects to report on progress and information; they are usually published in reg- to provide transparency and accountability (e.g., ular intervals on monthly, seasonal, or annual Lesotho Highlands Development Authority [LHDA], basis (e.g.,  International Boundary and Water NBI, Organisation de mise en valeur du Fleuve Sénégal Commission [IBWC] Technical Bulletins—box 4.28; [OMVS], Itaipu Binacional—box 4.30). Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 67 BOX 4.27. The DanubeGIS The DanubeGIS is a tool for integrating and storing the International Commission for the Protection of the Danube River (ICPDR) Contracting Parties’ relevant data resources in a harmonized format, and serves as a common basis for data usage in the ICPDR. The geographical area covered by the DanubeGIS is the territory of the Danube River Basin District, shared by 19 countries, of which 14 are ICPDR Contracting parties. The national members of the Information Management & GIS Expert Group (IMGIS EG) coordinate data collection in their countries and provide those datasets to the DanubeGIS. The DanubeGIS is built to provide a Danube Basin-wide platform to support the ICPDR in its reporting tasks, such as the implementation of the EU Water Framework Directive and of the EU Flood Directive. The GIS target groups are mainly experts working either with the ICPDR or in projects related to water management. This includes the 23 observers to the ICPDR, research institutions, universities, other stakeholders, and the general public. Users who are interested in more in-depth work with the available data can sign-up for a user account to reveal more expert system features. An advanced web map viewer allows those users to compose maps by combining any individual layers. In addition to Web Map Service, the Web Feature Service allows download of the datasets in various formats, including Geography Markup Language (an open interchange format for geographic data) and shape files. See DanubeGIS portal at: https://www.danubegis.org/maps. BOX 4.28. International Boundary and Water Commission Technical Bulletins Collated stream gaging records and records of water storage, of rainfall and evaporation stations, and of water quality measurements are published annually in International Boundary and Water Commission (IBWC) Bulletins titled Flow of the Rio Grande and Tributaries and Related Data. The Mexican and the United States Sections of the IBWC jointly prepare the Bulletins. The IBWC also produces water accounting reports, including daily Rio Grande flow condition/reservoir reports (which show daily flow conditions of the United States IBWC Rio Grande gaging stations), and weekly five-year cycle data sheets, which show minimum Mexican deliveries to the United States (350,000 acre-feet of water each year, on average, over a five-year cycle). See IBWC Water Bulletins at: https://www.ibwc.gov/Water_Data/water_bulletins.html. 68 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 4.29. Niger Basin Authority Water Bulletins The Niger Basin Authority (NBA) distributes hydrological information on the Niger Basin monthly. The bulletin includes basin statistics and hydrographs of the main gaging stations in the basin. The bulletin is available on the NBA’s website. See NBA Monthly Bulletin example at: http://www.abn.ne/images/documents/Bulletins/2017/bulletin​ _janvier_2017.pdf. BOX 4.30. LHDA, NBI, OMVS, and Itaipu Annual and Sustainability Reports Project and Institution Annual Reports Lesotho Highlands Development Authority (LHDA) See LHDA Annual Report example at: http://www.lhda.org.ls/lhda/reports/Annual%20Reports​ /­LHDA_2010_11.pdf. NBI See NBI Corporate Report example at: http://www.nilebasin.org/index.php/media-center/documents​ -publications/22-nbi-2015-corporate​­-report/file. Project and Institution Newsletters Water Waves by the Lesotho Highland Development Authority See Water Waves example at: http://www.lhwp.org.ls/phase2/documents/newsletter/Water%20Waves%20 October%202016%20PE.pdf. OMVS Le Journal Senegal Basin See Le Journal Senegal Basin example at: http://www.portail-omvs.org/sites/default/files/publications​/­files​ /­omvs_oct_2013_ndeg8.pdf. Project Sustainability Reports Itaipu Binacional See Itaipu Binacional Sustainability Report example at: https://www.itaipu.gov.br/pdfviewer​ .html?file=RS2015_English_VF_141216.pdf&titulo=Itaipu%20Sustainability%20Report%202015. Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 69 • Awareness Raising Materials (T26) may include press basin population (e.g., Kunene River Awareness Kit kits, leaflets, maps, postcards, posters, and various [RAK]—box 4.31; The Danube Box—box 4.32). multimedia to promote public awareness of basin threats, development challenges, outcomes, and 4.3.1.3 Monitoring, Forecasting, and Decision opportunities for participation. These materials can Support Tools be used to generate a sense of belonging of peo- Countries can only manage what they can measure. ple to the basin ecosystem and motivate contribu- Information is vital for sound water resources manage- tions to basin development and protection from the ment. Monitoring of the status of shared water resources BOX 4.31. Kunene River Awareness Kit The Kunene RAK is a bilingual (English and Portuguese) online and CD-ROM-based tool designed to support capacity development in the Permanent Joint Technical Committee (PJTC) and raise awareness of transboundary issues in Southern Africa, particularly in Angola and Namibia. The structure of the Kunene RAK (funded by the German Federal Ministry for Economic Cooperation and Development) was defined through participatory processes involving stakeholders from the two countries. Included within the Kunene RAK are self-learning resources supported by interactive visualization tools, maps, and documents. The intended audience is the broad spectrum of stakeholders in the Kunene, including government agencies, NGOs, education institutions, and the international community. See Kunene RAK at: http://www.kunene.riverawarenesskit.com/KUNENERAK_COM/INDEX.HTM. BOX 4.32. The Danube Box The Danube Box is a comprehensive educational tool for teachers and educators working with children between the ages of 9 and 12. The educational package, published by International Commission for the Protection of the Danube River (ICPDR), contains images, exercise sheets, role-playing games, quizzes, playing cards, plans for indoor and outdoor activities, cultural appendices (stories, legends, and recipes from the Danube countries), along with factual and scientific knowledge on ecology, geography, wildlife, cultural diversity, and everyday life in the past and today in the Danube countries. The idea of the Danube Box was developed within the framework of the “Green Danube Partnership,” which has existed among Coca-Cola, Coca-Cola Hellenic, and the ICPDR since 2005. The Danube Box is in use in Austria, Germany, Hungary, Bulgaria, and Romania. National versions are being planned for other countries. See Danube Box online version at: http://www.danubebox.org/. 70 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management provides information on long-term trends and short- Transboundary Waters Assessment Program [TWAP] term changes in a basin. This in turn strengthens fore- Indicator-Based Assessment, CAP-NET Indicators, casting capacity and early detection of extreme and the UNEP-DHI Indicator Builder—box 4.33; UN hydrologic events, such as floods or the on-setting of World Water Assessment Program [WWAP] Gender droughts, and inform adjustments to be made during Disaggregated Indicators—box 4.34). implementation. Tools that assist with monitoring, forecasting and decision support include the following: • Joint Monitoring Systems (T28) are usually based on agreement on the data and information to be shared, • Indicators (T27) are essential tools for monitoring frequency and responsible institutions. They can be change with respect to water availability, quality, eco- web-based, providing 24/7 access to water manag- system health, water demand and supply parameters, ers, or may otherwise be maintained as electronic and socioeconomic conditions in the basin and at the or paper-based systems (e.g., Danube TransNational global level (e.g., Global Environment Facility [GEF] Monitoring Network [TNMN]—box 4.35). BOX 4.33. Indicators The GEF TWAP assessment uses indicators of “stressors,” which fall under five key themes: water quantity (environmental water stress, human water stress, agricultural water stress); water quality (nutrient pollution, wastewater pollution); ecosystems (wetland disconnectivity, ecosystem impacts from dams, threat to fish, extinction risk); governance (legal framework, hydropolitical tension, enabling environment); and socioeconomics (economic dependence on water resources; societal well-being, exposure to floods and droughts) to provide a comprehensive picture of the state of transboundary river basins today. The TWAP portal enables a user to select from a number of indicators to analyze relative risks in a particular basin and basin country unit (the portion of each basin belonging to a respective country). See GEF TWAP River Basins portal at: http://twap-rivers.org/indicators/. CAP-NET has compiled indicators to measure progress on Integrated Water Resource Management. See CAP-NET Indicators: Implementing Integrated Water Resources Management at River Basin Level at: http://www.cap-net.org/documents/2008/09/indicators-implementing-integrated-water-resources​ -management-at-river-basin-level.pdf. UNEP-DHI has developed an online tool that enables users to explore and create indicator frameworks to support management and decision making for improved water resources management. It offers a comprehensive built-in indicator framework that users can modify and build on, as well as a growing library of indicators for creation of new, customized indicator frameworks. See UNEP-DHI Water Indicator Builder at: http://www.waterindicatorbuilder.com/home. Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 71 BOX 4.34. World Water Assessment Program’s Sex Disaggregated Indicators The World Water Assessment Program’s (WWAP’s) Toolkit on Sex-Disaggregated Water Data is comprised of four tools: a list of high-priority water indicators identified by an international expert group for which gender-disaggregated data is especially needed; specific methodologies for collecting and assessing such data; a set of guidelines for “in-the-field” data gathering with specific insights for different world regions; and a questionnaire for practitioners on gender-disaggregated interviews and data collection. The comprehensive list of priority gender-sensitive indicators fall under five broad topics: water governance; safe drinking water, sanitation, and hygiene; decision making and knowledge production; transboundary water resources management; and water for income generation for industry and agriculture. More specifically, the indicators relate to women’s water empowerment and participation in water decision making, income generation, and unaccounted for water-related working hours. See Sex-Disaggregated Indicators for Water Assessment, Monitoring and Reporting report at: http://www​ .unesco.org/fileadmin/MULTIMEDIA/HQ/SC/pdf/Sex_disaggregated_indicators_for_water_assessment​ _monito.pdf. BOX 4.35. Danube TransNational Monitoring Network (TNMN) The TNMN is based on national surface water monitoring networks and includes 77 monitoring locations. The monitoring locations are located just upstream or downstream of an international border; located upstream of confluences between the Danube and main tributaries or main tributaries and larger sub- tributaries; located downstream of the biggest point sources; or located according to control of water use for drinking water supply. Chemical sampling is conducted 12 times per year and biological sampling is conducted twice per year. The TNMN publishes an annual yearbook of that year’s collected data and is made available on the International Commission for the Protection of the Danube River (ICPDR) website. The procedure of TNMN data collection is organized at the national level. The National Data Managers are responsible for data acquisition from TNMN laboratories as well as for data checking, conversion into an agreed data exchange file format, and sending it to the TNMN data management center. The center performs a secondary check of the data and uploads the data into the central TNMN database. See TNMN Yearbooks at: http://www.icpdr.org/main/publications/tnmn-yearbooks. 72 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management • Impact Evaluation (T29) measures the effectiveness the basin, or from publicly accessible meteorological of operations or installed measures. Evaluations can data to mitigate impact of extreme events. Long- be used to monitor effectiveness of implementation term trend assessments through indicator moni- and lessons can be used to adjust existing operations toring provide data for long-term forecasting (e.g., or design new interventions (e.g., Rhine Effects of European Flood Awareness System and Columbia Measures on Flood Risk Assessment—box 4.36). Basin Forecasting—box 4.37). • Forecasting and Early Warning Systems (T30) are usu- • Decision Support Systems (T31) are usually, but ally based on data transferred from hydrometeoro- not necessarily, computerized systems to assist logical measurement stations along the river and in in day-to-day operational and long-term strategic BOX 4.36. Effects of Measures on Flood Risk Assessment The Rhine Effects of Measures on Flood Risk Assessment is an innovative and flexible instrument can be used to generate information about the effects and effectiveness of flood risk management measures on the reduction of flood risk at a river basin/tributary level, by, for example, assessing every six years the impacts of actions taken under flood risk management plans. In short, the main instrument consists of three interacting calculation modules resulting in an overall flood risk assessment. The damage assessment module tool calculates the damage using land use data, the extension of flood areas, hydraulic data, asset values, and damage functions. The risk assessment module tool calculates the risk by combining/multiplying the damage potential with the flood probability. The flood probability can be changed by the implementation of measures (such as dike relocation). The measure impact module tool quantifies the damage reduction on economic activity and infrastructure, human health and the environment, and cultural heritage. A flood risk change module tool combines the tools into a single instrument assessing the risk change/reduction resulting from implementation of measures. See Tool and Assessment Method for Determining Flood Risk Evolution or Reduction technical report at: https://www.iksr.org/uploads/media/237en_01.pdf. BOX 4.37. European Flood Awareness System and Columbia Basin Forecasting European Flood Awareness System The European Flood Awareness System (EFAS), a European Commission initiative, is the first operational European system for monitoring and forecasting floods across Europe. The aim of EFAS is to gain time for preparedness measures before major flood events strike, particularly for transnational river basins both in the Member States as well as on a regional level. It provides complementary, early flood warning information up to 10 days in advance to the National/Regional Hydrological Services and the European Response and Coordination Centre (ERCC). EFAS uses multiple, deterministic, medium-range weather box continues next page Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 73 BOX 4.37. continued forecasts as well as two sets of ensemble prediction systems (EPS) as inputs. The Operational EFAS consists of four centers including: • EFAS Computational center—European Centre for Medium-Range Weather Forecasts (UK) executes fore- casts and hosts the EFAS-Information System platform. • EFAS Dissemination center—Swedish Meteorological and Hydrological Institute, Rijkswaterstaat (NL), and Slovak HydroMeteorological Institute analyze EFAS on a daily basis and disseminate information to the partners and the ERCC. • EFAS Hydrological data collection center—REDIAM (ES) and ELIMCO (ES) collect historic and real-time discharge and water level data across Europe. • EFAS Meteorological data collection center—KISTERS AG and Deutscher Wetterdienst collect historic and real-time meteorological data across Europe. See EFAS portal at: https://www.efas.eu/. Columbia Basin Forecasting In the Columbia Basin, the hydrometeorological monitoring system includes real-time measurements for snow courses, precipitation stations and stream gauges, temperature gauges, as well as current reservoir levels, storage calculations, and inflow conditions for water balancing and ensuring flood space availability in reservoirs. The information is processed for seasonal, medium range (10 days), and short range (1–10 days) forecasting. Available hydrometeorological data from any part of the basin required by either Entity (implementers of the CRT; BC Hydro in Canada, and, jointly, the Bonneville Power Administration and the US Army Corps of Engineers in the United States) is provided by the other Entity on request via an online data system set up through the CRT Hydrometeorological Committee. See Columbia Basin: History of the Hydromet System article at: https://www.usbr.gov/pn/hydromet​ /­hydromet_hist.html. decision  making (e.g., Nile Basin Decision Support 4.3.2 Monitoring and Promoting Compliance System [DSS]—box 4.38). The issue of compliance is central to the design and • Decision Making under Uncertainty (T32) tools assist implementation of projects with transboundary impact with investment decisions with respect to projects and any agreements concluded between riparian that have a long time span and will thus be subject countries that are related to these. Monitoring and to changing conditions; for example, due to climate compliance mechanisms help provide confidence to change impacts (e.g., The Decision Tree—box 4.39). all  involved stakeholders that implementation and 74 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 4.38. Nile Basin Decision Support System The Nile Basin decision support system (DSS) is a water resources modeling and decision-making software framework that offers tools for storage, processing, interpretation, and visualization of water and related data; a suite of models for simulating river-lake-reservoir systems; a toolset for analyses of water resources problems and evaluation of alternative scenarios; a suite of tools for generating information needed for decision making; and toolsets for collaborative decision making in water resources. The Nile Basin DSS has been applied on a number of project cases at the national and transboundary levels. To ensure the long- term sustainability of the DSS, the NBI has established a water resources management unit at the NBI Secretariat. This unit is responsible for the operational application (at regional level), maintenance, capacity development, and further development of the DSS to respond to emerging needs. See Nile Basin DSS portal at: http://nbdss.nilebasin.org/support/home. BOX 4.39. The Decision Tree The Decision Tree offers a cost-effective, scientifically sound, replicable, and transparent method for demonstrating the robustness of a development project in the face of the risks posed by climate change, natural hazards, and other factors. The Decision Tree focuses first on identifying a project’s vulnerabilities. It offers a systematic step-by-step way to decide what level of analysis is appropriate to the project’s attributes—a project leader moves through only as many phases as are appropriate to the project. The overall procedure includes a feedback loop that addresses monitoring and evaluation, both of which are essential in a changing climate. The Decision Tree was demonstrated and applied to hydropower planning in Nepal—in the proposed Upper Arun Hydropower Project (UAHP) and to the Kosi Basin, through a closely related decision-making under uncertainty (DMU) approach. Both analyses are among the first of their kind to systematically incorporate both climate and non–climate-related uncertainties when assessing proposed water infrastructure. The Decision Tree application led to design changes to climate proof the UAHP. The applications also provide the starting point for a potentially broader geographic and sectoral analysis using the Decision Tree framework, which could be conducted in the future to assess, for example, national-scale energy sector planning in the face of climate change and other important uncertainties. See Confronting Climate Uncertainty in Water Resources Planning and Project Design: The Decision Tree Framework report at: http://documents.worldbank.org/curated/en/516801467986326382/pdf/99180​ -PUB-Box393189B​-PUBLIC-PUBDATE-8-19-15-DOI-10-1596-978-1-4648-0477-9-EPI-210477.pdf. Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 75 operation of a project are carried out as agreed. countries can be used to monitor, for example, flow Often, the inclusion of such tools and mechanisms in allocations or agreed construction or operating stan- international agreements that are concluded between dards (e.g., Farakka Barrage—box 4.40; Permanent countries to set down the rules of engagement for Indus Commission—box 4.41). the implementation of a development intervention are the key to final agreement on and adoption of the • Individual Experts (T34) based in the territory of the respective other country can be used to permanently document. monitor compliance with, for example, agreed flow Monitoring mechanisms and transparency can help and operation schedules. They may also be used to build trust and confidence among riparian countries. carry out site visits (e.g., Resident Egyptian Engineer Countries may engage individuals or monitoring teams at Owen Falls Dam—box 4.42). to check on compliance with agreements in regular intervals or on a permanent basis. Tools that have been • Technical Operators (T35) that jointly operate infra- structure, as well as the joint management mech- employed include: anism in general, contribute to transparency of • Site Visits (T33) carried out ad hoc or in regular inter- activities and thus promote compliance (e.g., Itaipu vals in the territories of the respective other country/ Control Room Team—box 4.43). BOX 4.40. Farakka Barrage The 1996 Treaty on Sharing of the Ganges Waters at Farakka between Bangladesh and India is an agreement to share surface waters at the Farakka Barrage near their mutual border. Under Article IV the Treaty created a Joint Committee of representatives nominated by the two governments who are tasked with setting up suitable teams to observe and record at Farakka the daily flows below Farakka Barrage and in the Feeder canal in India, as well as Hardinge Bridge point in Bangladesh. Thus, the daily flows are monitored and recorded in both countries along the Ganges River. See 1996 Treaty on Sharing of the Ganges Waters at Farakka between Bangladesh and India at: http:// extwprlegs1.fao.org/docs/pdf/bi-17351.pdf. BOX 4.41. Permanent Indus Commission The Permanent Indus Commission, set up under the 1960 Indus Waters Treaty between India and Pakistan, is required to undertake a General Tour of Inspection once every five years to gather relevant data connected to the various developments and works on the Indus river and tributaries. It is also charged with conducting tours of inspection of any works or sites when requested to do so by either Commissioner. See 1960 Indus Waters Treaty at: http://siteresources.worldbank.org/INTSOUTHASIA​ /­Resources/223497-1105737253588/IndusWatersTreaty1960.pdf. 76 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 4.42. Owen Falls Resident Egyptian Engineer Construction of the Owen Falls Dam (Nalubaale Dam) on the White Nile, near Lake Victoria in Uganda, started in 1949. Its three governing documents provided for the Arab Republic of Egypt to participate in the construction of the dam. Dam operation would control the flow of Nile waters and produce hydropower for Uganda. The Uganda Electricity Board was made responsible for the construction, administration, and maintenance of the dam, while discharges through the dam would be regulated on the instructions of the Resident Egyptian Engineer at the site, in accordance with arrangements to be made between the Egyptian Ministry of Public Works and the Ugandan Authorities “pursuant to provisions of agreements to be concluded between the two Governments.” This was to ensure compliance with downstream interests in sustained water discharge during the construction phase and operation of the dam. An “Agreed Curve” (outlined in the Exchange of Notes) dictates how much water should be released from Lake Victoria. This mathematical formula was developed to retain the original (natural) pre-dam relationship between lake level and outflow. Dam operators adjust the outflow based on the water balance of the lake computed every 10 days. See 1949 Exchange of Notes Regarding Construction of the Owen Falls Dam at: http://gis.nacse.org/tfdd​ /­tfdddocs/142ENG.pdf. BOX 4.43. Itaipu Control Room Team The Itaipu Treaty established Itaipu Binacional, an entity co-owned by Brazil and Paraguay. As a corporation endowed with legal, administrative, and financial capacities, as well as technical responsibility, it was tasked with building and operating the Itaipu Dam. The Itaipu Binacional Executive Board of Directors (12 members) is appointed by Brazil and Paraguay through their respective national utilities, Electrobras and Administración Nacional de Electricidad (ANDE). The Supervisory Board is made up of representatives from national governments and the utilities in equal number from both countries. An Itaipu Binacional publication (2012) states, “All company management decisions are the product of understanding and consensus between representatives from both governments, Electrobras and ANDE. The dam control room is operated 24 hours per day in six-hour shifts by a binational team. The control room is equipped with a computerized control and supervision system that acquires automatic electric and hydraulic information from power plant equipment. The binational team is instantly informed of any abnormal operating conditions.” See Itaipu Binacional portal at: https://www.itaipu.gov.br/en. Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 77 • Technical Entities (T36) that monitor the status of noncompliance unattractive. These tools are often shared water resources and the basin more gener- included in coordination frameworks (e.g., interna- ally collect a range of information that raises the tional agreements): visibility of environmental and social changes in • Compensation for Noncompliance (T37) has been the basin. The results of their assessments or data included by a number of countries in their respective collection may draw the attention of parties to basin management related agreements and has taken the negative consequences of noncompliance; for place on a case-by-case basis in case of accidents. instance, in the case of noncompliance with water It has also been included as a general rule in the exist- quality standards or agreed environmental flows ing global water conventions (e.g., Compensation (e.g., NBA and AGRHYMET—box 4.44; Ecosystem Mechanisms in the Iberian Basins—box 4.46). Monitoring through the ICPR—box 4.45). • Suspension of Decision Making and Participation Rights 4.3.3 Enforcing Compliance (T38) in the context of joint management mech- Even in the extreme situations of violation of agreed- anisms could potentially be used as sanctions for upon terms, sanctions to ensure compliance with noncompliance with agreements, including for non- these agreements can be difficult to implement in payment of membership contributions. (The authors practice. Raising the costs of noncompliance may are not aware of any existing international treaties assist enforcement. Various tools exist that raise the that would provide for such sanctions in the context costs of noncompliance and may therefore make of transboundary water resources management.) BOX 4.4 4. Niger Basin Authority and AGRHYMET The Niger River Basin covers an area of about 2,270,000 km2 in ten countries in West and Central Africa. Two regional bodies, the Niger Basin Authority (NBA) and the Agrometeorology, Hydrology, Meteorology Regional Center (AGRHYMET) provide the framework for cooperation among the riparian countries toward improving water resource management in the basin. The NBA’s mandate includes the monitoring of the conditions of the basin, done, in practice, through the NBA’s Observatory of the Environment. Member States must exchange information, consult each other on planned measures, and notify each other (through the Executive Secretariat) in the event that any proposed measure may have “significant adverse effects” on Member States. The AGRHYMET Regional Center, a specialized institute of the Permanent Interstate Committee for Drought Control in the Sahel (CILSS), focuses on data collection and information dissemination relating to food security, water resource management, desertification control, and climate change impacts. In order to improve natural resource management and agricultural production in the Member States, AGRHYMET and NBA conduct experimental hydrological forecasts in the Niger Basin and AGRHYMET delivers the seasonal West African hydrological forecast. See NBA portal at: http://www.abn.ne/index.php?lang=en. See AGRHYMET Regional Centre portal at: http://www.agrhymet.ne/eng/. 78 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 4.45. Monitoring through the International Commission for the Protection of the Rhine The 1999 Convention on the Protection of the Rhine provides a framework for sustainably developing the Rhine ecosystem and ensuring Rhine water is sufficient for drinking and preventing floods, among other objectives. The International Commission for the Protection of the Rhine (ICPR) prepares international measuring programs and studies of the Rhine; makes proposals for individual measures and programs of measures, where appropriate; and coordinates the Member States’ warning and alert plans for the river. Under Article 5(1) of the Convention, the Contracting Parties agreed to cooperate and inform one another of actions taken in their respective territory to protect the Rhine. In addition, under Article 5(2), the Contracting Parties committed to implement international monitoring programs and studies of the Rhine ecosystem in their respective territories and to inform the ICPR of the results. The ICPR gathers information on water pollution levels from more than 50 monitoring stations along the Rhine based on a detailed framework to which Member States have agreed. This allows the ICPR and its Member States to trace the intrusion of pollutants into the Rhine, observe changes in the river’s pollution levels, and ultimately determine whether their efforts to reduce river pollution have been impactful. Contracting Parties must immediately inform the ICPR and other potentially affected Contracting Parties when there is an accident that threatens the water quality of the Rhine or in the event of imminent flooding. See ICPR portal at: https://www.iksr.org/?L=3. BOX 4.46. Compensation Mechanisms in the Iberian Basins Cooperation between Spain and Portugal on international watercourses is regulated by a series of legal instruments dating back to the end of the 19th century. Earlier agreements (1864 and 1912) have focused on the border delimitation and on exploring the navigational conditions of the main rivers; while later agreements (e.g., the 1927 Agreement on the Douro River) focus on hydropower generation. The 1964 Agreement was the first that established a compensation mechanism as a means to ensure compliance with agreed limitations on withdrawals and flow diversions in both the Douro River and its main tributaries. The 1998 Albufeira Convention establishes an annual flow regime for all major transboundary rivers (Minho, Lima, Douro, Tejo, and Guadiana), defining mandatory flow volumes in sections upstream of the border, for Spain, and on the respective estuary or mouth for Portugal (only for the southern and more arid Tejo and Guadiana River Basins). Its Article 24 opens a door also for economic compensation in case private or public rights are affected as a consequence of noncompliance with the Convention. The agreed flow regime was also the object of an Additional Protocol to the Convention, which determines the minimum volumes allocated for each river basin, as well as the conditions for defining an exception regime, usually associated with drought periods. box continues next page Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 79 BOX 4.46. continued Only on one occasion, in 2005, did Portugal claim economic compensations for the damages incurred by Spain’s noncompliance with the agreed flow regimes in the Douro River. The compensation was quantified on the basis of the hydroenergy production losses downstream. However, the compensation never took place because Spain claimed exceptional circumstances as a consequence of the drought, which entails limiting water uses to “essential uses.” In practice, noncompliance with the agreed flow regimes are usually compensated with programed releases. This was the case in the hydrological year 2005–06 when Spain did not comply with minimum flows in the Guadiana River, and in the hydrological year 2008–09 when Spain did not comply with minimum flows in the Tejo River. See Douro Basin Case Study in Altingoz et al. 2018. 4.3.4 Payment for Benefits/Compensation for Costs 4.3.5 Implementation and Adjustment Tools *Cross-referenced with (T17–19) and (boxes 4.21–4.23). *Cross-referenced with (T12–13) and (boxes 4.14–4.16). Countries may use direct payments to compensate the Countries often jointly develop implementation and respective other country for the costs incurred in gen- operational plans for single sector or multisector basin erating the benefit for them. These payments have been management or operations, or for new uses on a trans- and are used on some occasions to finance the con- boundary watercourse. Such plans, or blueprints, are struction of the benefit-generating infrastructure or its prepared following completion of necessary diagnostic O&M costs. The respective tools include: assessments/studies; they usually set out the goals, objectives, and programs for managing water resources • Direct Payments (T17) for benefits received indepen- for a specific period. Tools for implementation and dent of compensation for costs (e.g., The “Canadian adjustment include: Entitlement” established by the CRT—box 4.21). • Compensation for O&M or Construction of Regulating • Multisector Development Plans (T12) usually cover a Infrastructure (T18) is a direct payment for bene- wide geographic scope and outline implementation fits received that is calculated based on the costs steps for multiple parties, such as River basin man- incurred by the other country in the generation of agement plans or Strategic Action Programs (e.g., MRC the benefits or otherwise (e.g., O&M payments for Strategic Plan 2016–20—box 4.14; Okavango Strategic regulating infrastructure in the Chu-Talas Basins— Action Program—box 4.15). box 4.22). • Climate Change Adaptation Plans (T13) recognize • Royalty Payments (T19) for the right to continued the need to build flexibility into management plans use of an asset for services provided (e.g., Royalty and to strengthen resilience against uncertain, yet payments for water transfer from Republic of South expected, climate change impacts (e.g., NBI Climate Africa [RSA] to Lesotho—box 4.23). Change Strategy—box 4.16). 80 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management • Single Sector Operational/Implementation Plans (T39) Roadmap towards Stakeholder Participation—box 4.48; are concluded between parties in regular intervals Gender Policy and Strategy of the MRC—box 4.49). to manage specific operations (e.g., Flow Release Determinations in the Columbia Basin—box 4.47). • Provisions for Extreme Events and Uncertainty (T41) are included in some international treaties to pro- • Stakeholder Participation and Inclusion Tools (T40) rec- vide for implementation flexibility in case of unex- ognize the value of involving all relevant stakeholders in pected events (e.g., Farakka Agreement Extreme managing the development of shared water resources, Event Provisions box 4.50). and giving potentially vulnerable groups a voice (e.g., Orange-Senqu River Commission (ORASECOM) See also Negotiations (T66) and (box 4.71). BOX 4.47. Flow Release Determinations in the Columbia The key planning tool to guide the operations of the dam facilities in the Columbia is the assured operating plan (AOP), which is drawn up every year for the sixth successive year (five years ahead of time). It is drawn with the specific goal of achieving optimum power benefits within the specified flood control protection under the Columbia River Treaty (CRT). The AOP is used to calculate the Canadian Entitlement to downstream power benefits. Once signed, the AOP becomes the default operating plan. Optimum operating rules are determined annually and included in the AOP based on the firm and secondary (nonfirm) energy and capacity. See AOP example at: http://cdm16021.contentdm.oclc.org/cdm/ref/collection/p266001coll1/id/3269. The CRT requires the USA Entity to develop a flood control operating plan (FCOP) in consultation with Canada, which is then used to develop the AOP. This plan prescribes the maximum reservoir levels at various points over the course of the year for four dams, and includes flood control storage reservation diagrams (Flood Control Curves) and associated criteria for each of the dams. The FCOP addresses both local flood control issues (immediately downstream of facilities) and system flood control requirements (as indicated at the Dalles in the lower Columbia River) to avoid damaging water levels throughout the system. The first FCOP was prepared in 1968, and major revisions were completed in 1972, 1999, and 2003. See FCOP example at: http://www.nwd-wc.usace.army.mil/cafe/forecast/FCOP/FCOP2003.pdf. A detailed operating plan (DOP) is based on the AOP. The Entities may prepare an annual DOP that may achieve more advantageous operations for benefits than would result under the AOP. The DOP must be accepted by mutual agreement, or the AOP for that particular year is applied. The DOP may include mutually agreed upon nonpower and non–flood-control benefits (such as fisheries). These deviations from the AOP can be drawn up into supplementary agreements if they become consistent over the years. In this manner, the flow regime associated with the operations can undergo modifications providing they do not undermine flood control. See DOP example at: http://www.nwd-wc.usace.army.mil/PB/PEB_08/docs/dop/08DOP.pdf. Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 81 BOX 4.48. Orange-Senqu River Commission Roadmap towards Stakeholder Participation In 2005 the Water Ministers of the four riparian countries instructed the ORASECOM to develop a strategy for stakeholder participation in the Orange-Senqu River. This process ultimately resulted in a “Roadmap,” which is envisioned as providing guidance on the series of actions that would need to be taken to progressively involve stakeholders in the development of a final strategy—the goal being that eventually “Orange-Senqu River Basin stakeholders actively and effectively participate with ORASECOM in the co-management and sustainable development of the Basin and its resources for enhanced livelihoods.” In order to reach this goal, the key focus areas of the Roadmap are to (a) facilitate effective horizontal and vertical communication and information exchange between all relevant role-players; (b) develop and strengthen institutional mechanisms for stakeholder participation in the management of the river basin; (c) build and strengthen capacity in basin forums, institutions, and stakeholders for effective participation in decision making and planning; and (d) clearly define and establish functioning channels of institutional interaction, including a Steering Committee, a Program Coordination Unit and a Technical Advisory Group at the Secretariat, and National Coordination Structures at the riparian level. A “Framework of Action” outlines the various activities to be undertaken and how they contribute to the achievement of the overall vision and the objectives of stakeholder participation for ORASECOM. As some of the activities are to be performed by a range of partners, the “Terms of Engagement” for development partners embarking on transboundary stakeholder projects in the basin are also set out in the Roadmap. See ORASECOM Roadmap toward Stakeholder Participation report at: http://www.orangesenqurak.com​ /­UserFiles/File/ORASECOM/ORASECOM%20Road%20Map%20for%20staleholder%20participation​ _version%205_April%202007.pdf. BOX 4.49. Gender Policy and Strategy of the Mekong River Commission The objective of the Commitment on Gender Mainstreaming in Water Resources Development in the Lower Mekong Basin gender policy and strategy, which was approved by the four member countries of the Mekong River Commission (MRC) in 1998, is to mainstream gender perspectives in all MRC development efforts to ensure that all MRC development programs benefit both men and women, and are carried out with the equal participation of men and women at all levels. To carry out its objectives, the strategy lays out six main components: (a) formulate gender sensitive policies; (b) obtain commitment and support of top level MRC officials and managers; (c) raise awareness of gender issues in organizational culture through training courses and events for all staff; (d) build capacity in gender and development through trainings on gender planning and analysis and coordination of formal education in gender research; (e) institutionalize gender responsive organizational structure and procedures including establishment of a steering committee for the Secretariat and gender focal points for line agencies, collection of sex disaggregated data, and box continues next page 82 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 4.49. continued implementation of gender responsive manuals and guidelines; and (f) disseminate necessary tools for implementing gender responsive development practices in all riparian languages. See MRC Commitment to Gender Mainstreaming in Water Resources Development in the Lower Mekong Basin report at: http://www.mrcmekong.org/assets/Publications/policies/MRC-Gender-SP-05-Jan-2013​ -Eng.pdf. BOX 4.50. Farakka Agreement Extreme Event Provisions The 1996 Treaty on Sharing of the Ganges Waters at Farakka, which determines the level of flows in the Ganges River at the Farakka Barrage, demonstrates a detailed method of prescribing resource allocation of water under varying situations. The barrage, constructed in 1975, diverts water from the Ganges into the Hooghly River to supply water for navigational use in Kolkata. The allocations are based on 75 percent of the mean annual flow measured between 1949 and 1988. This allows for some buffering in terms of variation in the hydraulic regime. The schedule to the Agreement details allocations to both India and Bangladesh for ten periods between January 1 and May 1, and these allocations are reduced in proportion to the flow, should it fall below these levels. However, the portion allocated to Bangladesh should not fall below 80 percent of its average allocation. If the flow of the Ganges falls below a specified level, Article 2(iii) of the Schedule mandates “immediate consultations to make adjustments on an emergency basis, in accordance with the principles of equity, fair play and no harm to either party.” See 1996 Treaty on Sharing of the Ganges Waters at Farakka between Bangladesh and India at: http:// extwprlegs1.fao.org/docs/pdf/bi-17351.pdf. 4.4 Coordination Frameworks evaluating and facilitating compliance, and dispute set- tlement). And they can allow for modifications of the Coordination frameworks define the rules, modes, and existing regime in order to be able to adapt to changing mechanisms of managing transboundary basins and needs and circumstances. the implementation of development interventions within these basins. These frameworks may provide International practice is rich with examples of coordi- prescriptive parameters for resource development and nation frameworks. There are a plethora of multilateral management and/or may define and identify the rights and bilateral transboundary arrangements providing and obligations of water users. They can ensure the for joint project development and water management. continuous integrity and stability of a regime (through Their content can range in scope from a localized governance structures, mechanisms for monitoring, issue-specific focus (e.g., building a navigation lock) to Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 83 basin-wide integrated management. Coordination makers expressing aspirational goals and intention framework tools are presented here under five sub­ to act. In most cases they are done by at least two categories: (a) Intention and Commitment Tools; countries; however, they may also be issued unilat- (b)  Implementation and Adjustment Tools; (c) Joint erally (e.g., Nukus Declaration—box 4.51). Management Mechanisms; (d) Financing Joint • Memoranda of Understanding (MoU) or Minutes of Management Mechanisms; and (e) Dispute Settlement. Ministerial Meetings (T43) are usually drawn up when countries wish to record in writing the terms 4.4.1 Intention and Commitment Tools of an agreement between them without drawing These tools are the initial expression of intention and up a formal international treaty. While not formal commitments by countries (or other stakeholders) with international treaties, these instruments may carry respect to basin or water resources management. The significant moral or political weight (e.g., MoU level of formality and binding nature of these coordina- on Sharing of Flood Data on the Brahmaputra—­ tion frameworks depends on the form in which they box  4.52). (Note: Some international treaties carry have been adopted; for example, under international the title “Memorandum of Understanding.” The legal law, a Declaration by Heads of State carries less legal binding force is determined by the process through formality than an international treaty. The level of for- which an agreement is concluded. At the same time, mality of the instrument the countries choose usually minutes of ministerial meetings can be given legal depends on the level of detail and how much bind- binding force if drawn up within the context of the ing  effect they want to give to their commitment. implementation of a treaty, where such treaty deter- A  Declaration typically includes general intention mines that these minutes will have legally binding statements whereas international treaties or commer- character [see box 4.56].) cial agreements will define specific rights and obliga- tions. Tools through which countries express their • International Treaties (T44) set out the parties’ mutual legal rights and obligations and are gov- intention and commitments to implement a develop- erned by international law. International treaties ment activity or manage basin resources include: carry many different titles (Convention, Agreement, • Declarations (T42) are usually adopted by Heads of Exchange of Notes, or even Memorandum of State or Government or other authorized decision Understanding); it is the process of ratification that BOX 4.51. Nukus Declaration The 1995 Nukus Declaration aimed at improving rational utilization of land and water in the Areal Sea Basin and securing sufficient river flows for preserving the rapidly disappearing Aral Sea. The Aral Sea Basin countries declared their intention to “recognize earlier signed agreements in force, contracts and other statutory acts regulating mutual relations between them on water resources in the Aral Sea Basin and accept them to steady performance.” Underpinning institutional arrangements, including the Executive Committee of the International Fund for the Aral Sea, the Nukus Declaration is an example of a joint declaration at the highest political level. See 1995 Nukus Declaration at: https://www.internationalwaterlaw.org/documents/regionaldocs/nukus​ _declaration_eng.pdf. 84 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 4.52. Brahmaputra Flood Control/Data Sharing Memoranda of Understanding India and China reached Memoranda of Understanding (MOUs) on flood control and hydrological data sharing regarding the Brahmaputra Basin in 2002. China agreed to provide flood season hydrological data (water level, discharge, and rainfall) to India at three stations located on the river from June 1 to October 15 every year. The MOU expired in 2007. Similar five-year MOUs were reached in 2008 and 2013. In 2013, China agreed to provide an additional 15 days of hydrological data (May 15 to October 15) each year on the river to India. The parties agreed to “further strengthen cooperation on transboundary rivers, cooperate through the existing Expert Level Mechanism on provision of flood-season hydrological data and emergency management, and exchange views on other issues of mutual interest.” Both sides recognized that transboundary rivers and related natural resources and the environment are “assets of immense value to the socioeconomic development of all riparian countries” and that the “cooperation on trans-border rivers will further enhance mutual strategic trust and communication as well as strengthen the strategic and cooperative partnership.” A revised implementation plan (containing technical details of provision of information, data transmission methods and cost settlement) was executed in June 2014. A similar MoU has been agreed also between China and Bangladesh. See 2013 Memorandum of Understanding Between the Ministry of Water Resources, the Republic of India and the Ministry of Water Resources, the People’s Republic of China on Strengthening Cooperation on Trans-border Rivers at: http://mea.gov.in/bilateral-documents.htm?dtl/22368. determines its legal nature, not the title. More than • Amendments and Supplementary Agreements (T46) 400 international treaties concerning transboundary can be used to change original terms of agreements freshwaters have been concluded since 1820 (UNEP in case they have not provided for flexibility to Atlas of International Freshwater Agreements, adjust to changing circumstances otherwise. For 2002), and they regulate anything from agreement example, the 1995 Mekong Cooperation Agreement on a small diversion project to the establishment provides for updating and altering the Agreement at of basin management principles and institutions any time through amendments that are agreed to by (e.g., Indus Waters Treaty—box 4.53; Columbia River all parties. Treaty—box 4.54). 4.4.2 Implementation and Adjustment Tools • Agreements of Private Law Character (T45) are typ- *Cross-referenced with (T12–13, 39–41) and (boxes ically concluded to specify commitments at the ­4.14–4.16, 4.47–4.50). project level; for example to distribute the benefits of an operation, such as in the case of power pur- • Multisector Development Plans (T12) usually cover chase agreements; or to establish special purpose a wide geographic scope and outline implementa- vehicles to develop and operate a project. They may tion steps for multiple parties, such as river basin be concluded between public and private parties management plans or Strategic Action Programs (e.g., ­ (e.g., Bhutan/India Power Purchase Agreements— MRC Strategic Plan 2016–20—box 4.14; Okavango box 4.55). Strategic Action Program—box 4.15). Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 85 BOX 4.53. Indus Waters Treaty The partition of the Indian subcontinent in 1947 raised new questions regarding the rights of India and Pakistan to the shared waters of the Indus basin. Negotiations led to the Indus Waters Treaty (IWT) in 1960. (The World Bank is a signatory of certain parts of the IWT.) The IWT divided the water use rights on six rivers comprising the Indus River system between the two parties. India was allocated the Eastern Rivers (the Sutlej, the Beas, and the Ravi), and Pakistan the Western Rivers (the Indus, the Jhelum, and the Chenab). Each country was allowed certain uses in the rivers allocated to the other, subject to certain qualifications. The IWT also established the Permanent Indus Commission, constituted to oversee treaty implementation. Under the IWT, the two Commissioners for Indus Waters shall meet regularly at least once per year (and when requested by either Commissioner), alternatively in India and Pakistan, in order to establish and maintain cooperative arrangements for treaty implementation; promote cooperation between the Parties in the development of the waters of the Indus system; and to make every effort to settle any question that may arise between the Parties concerning the Treaty. See 1960 Indus Waters Treaty at: http://siteresources.worldbank.org/INTSOUTHASIA​​ /­Resources/223497-1105737253588​/­IndusWatersTreaty1960.pdf. BOX 4.54. Columbia River Treaty The Columbia River Treaty (CRT) was ratified in 1964 to operate the water resources of the Columbia River Basin (CRB) “in a manner that will make the largest contribution to the economic progress of both countries.” After allowing for consumptive uses, including irrigation, the CRT focuses on flood control and power generation, the presumption being that cooperation in these areas would generate the “greatest benefit to each country” (CRT Preamble). The CRT called for Canada to develop reservoirs in the higher reaches of the CRB, sufficient to provide 15.5 million acre-feet of water storage. In compliance, Canada built three dams (in Canada): Duncan, Arrow/Keenleyside and Mica. The CRT further permitted the United States to construct, in the United States, the Libby Dam and the associated Koocanusa reservoir, which extends into Canada. Management of Columbia River flows by Canadian dams enables a number of dams downstream in the United States to generate more usable energy than they would otherwise, creating significant downstream power benefits. Under the CRT, these downstream power benefits are shared between the two countries. Flexibility within the agreement accommodates other interests of the Parties, such as fisheries and recreation. See Columbia Basin Case Study in Altingoz et al. (2018). 86 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 4.55. Bhutan/India Power Purchase Agreements The first major hydroelectric investment in Bhutan, a bilateral agreement between India and Bhutan in 1974, was the Chukha Hydel project. The Chukha plant connects to the Indian grid at Birpara in West Bengal. The Chukha Hydel project is based on a power purchase agreement (PPA) that is advantageous to both Bhutan and India. India absorbed the construction risk and market risk by agreeing to provide the required capital, construct the project in a turnkey arrangement, and off-take the excess supply of electricity from Chukha over the domestic consumption at a mutually agreed upon price, subject to periodic revisions for inflation and cost escalation. It would not have been possible for Bhutan alone to bear the financial risk. India provided the technology and financing and bore the completion risks and received, in turn, a low-cost reliable source of hydropower for its eastern electricity region. Under the contractual arrangement: India would provide the total investment on the project, 60 percent as grant and 40 percent as a loan to Bhutan; Bhutan would be required to repay the loan at a 5 percent interest rate in twelve equal installments, repayment beginning three years after the completion of the project. Bhutan would provide free land, timber, and firewood for the project and will not impose taxes on construction materials and capital goods procured for the project; employment at the project would be restricted to nationals of Bhutan and India. If necessary, low skilled staffs and laborers could be imported from a third country. Taking into consideration the time-series data of the previous 20 years, both Bhutan and India agreed upon prices for firm and secondary energy. In 1988 rupees, the selling price of firm energy would be Rs 0.27/kWh and secondary energy Rs 0.135/kWh. Out of its total generation, only 832 million kWh per year is to be considered as firm energy. Electricity derived from the project is to be supplied only to Bhutan and India. For 99 years India would buy all the electricity generated from the project in excess of Bhutan’s requirements. The two governments, after the end of each four-year period, would revise the sale price of electricity to India. See Risk Sharing in Hydropower Development: Case Study of the Chukha Hydel Project in Bhutan article at: http://wp.iwaponline.com/content/15/S1/109. • Climate Change Adaptation Plans (T13) recognize in managing the development of shared water the need to build flexibility into management plans resources, and giving potentially vulnerable groups and to strengthen resilience against uncertain, yet a voice (e.g., Orange-Senqu River Commission expected, climate change impacts (e.g., NBI Climate [ORASECOM] Roadmap toward Stakeholder Change Strategy—box 4.16). Participation—box 4.48; Gender Policy and Strategy • Single Sector Operational/Implementation Plans (T39) of the MRC—box 4.49). are concluded between parties in regular intervals • Provisions for Extreme Events and Uncertainty (T41) to manage specific operations (e.g., Flow Release are included in some international treaties to pro- Determinations in the Columbia Basin—box 4.47). vide for implementation flexibility in case of unex- • Stakeholder Participation and Inclusion Tools (T40) rec- pected events (e.g., Farakka Agreement Extreme ognize the value of involving all relevant stakeholders Event Provisions box 4.50). Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 87 Flexibility tools facilitate course adjustments along the • Periodic Reviews (T48) of agreements are a useful way toward realization of initial commitments or of tool to review and adjust commitments with respect implementation plans. Many adjustment tools con- to their underlying conditions. International trea- cern the implementation of international treaties over ties sometimes provide for their regular review time because, given the formal process of their conclu- (e.g., Periodic Review of the Mahakali and Farakka sion, they tend to have a long lifespan, unless ­otherwise Agreements—box 4.57). provided. Other adjustment tools may be used, for instance, to make ad hoc adjustments to operational • Conference Calls (T49) or other means of informal communications allow for ad hoc adjustment of plans in case of unexpected events. The different tools operational plans to unforeseen developments (e.g., addressing flexibility include: Columbia River Conference Calls—box 4.58). • Amendments and Supplementary Agreements (T46) can be used to change original terms in case interna- 4.4.3 Joint Management Mechanisms tional agreements have not provided for flexibility Countries often refer to the establishment of some to adjust to changing circumstances otherwise. For type of joint mechanism to manage and develop their example, the 1995 Mekong Cooperation Agreement shared water resources. Joint management mecha- provides for updating and altering the Agreement at nisms are a specific form of coordination framework. any time through amendments that are agreed to by They are presented here as a separate tool because of all parties. the rich experience and wide variety of structures successfully set up among riparian countries in • Minutes of Joint Management Mechanisms or Decision many basins. of Parties to an Agreement (T47) can be used to establish additional and more detailed legally As each transboundary waters situation has unique binding rules for implementation of commitments, characteristics and riparian countries pursue different if this is provided for in the treaty (e.g., IBWC objectives, in each specific case, the appropriate struc- Minutes—box 4.56). ture and mandate has to be identified for the respective BOX 4.56. Minutes of the International Boundary and Water Commission—Mexico/USA With the International Boundary and Water Commission’s (IBWC) use of Minutes, changes in underlying circumstances, such as sociopolitical situation, climate, and environmental change, can be addressed as needed. Significant decisions can thus reflect current and contemporary values while fundamentally maintaining the spirit and intent of the original arrangement. For example, Minutes have been used to adjust water allocations, as well as to address salinity issues that have arisen since the signing of the 1944 Treaty on the Utilization of Waters of the Colorado and Tijuana Rivers and of the Rio Grande. They have also been used to adjust the set delivery schedules of water allocated to Mexico, for example, due to infrastructure damage associated with an earthquake in April 2010. The ability of the IBWC to adapt, amend, and extend the institutional arrangement between the countries is a powerful tool to develop a resilient form of cooperation. See Minutes Between the United States and Mexican Sections of the IBWC at: https://www.ibwc.gov​/­Treaties​ _Minutes/Minutes.html. 88 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 4.57. Periodic Review of the Mahakali and Farakka Agreements Art. 12 of the 1996 Mahakali Treaty between Nepal and India provides that a review of the agreement will be conducted “by both parties at ten year intervals or earlier as required by either party and make amendments thereto, if necessary.” In the 1996 Treaty on Sharing of the Ganges Waters at Farakka, Art. X states that “[t]he sharing arrangement under this Treaty shall be reviewed by the two Governments at five year intervals or earlier, as required by either party and needed adjustments, based on principles of equity, fairness, and no harm to either party made thereto, if necessary. It would be open to either party to seek the first review after two years to assess the impact and working of the sharing arrangement as contained in this Treaty.” See 1996 Mahakali Treaty at: https://www.internationalwaterlaw.org/documents/regionaldocs/Mahakali​ _Treaty-1996.pdf. See 1996 Treaty on Sharing of the Ganges Waters at Farakka between Bangladesh and India at: http://extwprlegs1.fao.org/docs/pdf/bi-17351.pdf. BOX 4.58. Columbia Conference Calls Since the CRT was ratified in 1964, various agreements have been made between Canada and the United States to deal with issues as they arise. In the operation of the CRT, weekly alterations to the flow regime are determined by the entities through a weekly “conference call” (Thursday morning) to respond to unforeseen developments. The Treaty Flow Agreement is set for the following week starting Saturday morning. The Agreement is typically finalized by noon on Fridays. Within-week flow alterations may be accommodated as mutually agreed, but these are generally rare. Monthly alterations to address seasonal changes in flow, snow pack, and flood forecasting are conducted through treaty storage regulation, which is also determined by the dam operators as part of the operating procedures under the CRT. See Columbia Basin Case Study in Altingoz et al. 2018. joint mechanism. The five-dimensions analysis (see embed the operation in a multilateral or basin-wide part I: Summary Report—“Dimensions of Coordinated mechanism. The nature of the planned development Basin Management” section in chapter 2) can be used intervention will determine the breadth of the sectoral for design considerations, such as choosing the appro- mandate and level of integration adopted for the mech- priate geographic scope of a mechanism. For example, anism, as well as the capacity and skills that need to two-countries planning a joint investment in a river be available within the mechanism. As required by the basin that is shared by multiple countries may opt for participating parties, a joint mechanism may also have bilateral project-specific mechanisms or may opt to compliance and dispute settlement functions. Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 89 It is common that joint mechanisms evolve over- sectoral mandates, functions and powers, as well as lifes- time if they render substantial services to the partic- pan and level of integration. Here, the following two cat- ipating countries. For example, the joint mechanism egories of characteristics are presented in more detail: established by riparian countries of the River Rhine (a) Functions and Powers; and (b) Temporal Range and evolved from being focused on water quality to Level of Integration. being responsible, among others, for flood manage- ment, ecosystem conservation and to consider 4.4.3.1 Functions and Powers impacts of its activities on navigation. Joint man- Functions and powers include advisory, executive, agement mechanisms also provide permanent plat- regulatory and inclusiveness roles. A joint mechanism forms for dialogue that allow for deepening of may be vested with only one or a number of these cooperation between riparian countries. Depending roles at the same time, depending on its objective and on the purpose for which a joint mechanisms is purpose. being set up, the nature of the agreement based upon which it is set up may be different. They can be • Advisory Functions (T50) are usually adopted for joint mechanisms with technical mandates. They set up by any of the intention and commitment tools inform decision making through recommenda- presented above (see “Intention and Commitment tions or preparation of plans for adoption by their Tools” section), with international treaties being the member countries. Their roles can also extend to most common. consultative, coordinating and policy making sub- Joint management mechanisms have different character- functions (e.g., Lake Victoria Basin Commission istics in terms of membership (bilateral to multilateral), [LVBC]—box 4.59). BOX 4.59. Lake Victoria Basin Commission The LVBC was established in 2003 under the principle of subsidiarity within the Nile River Basin as a specialized apex institution of the East African Community (EAC) (a regional intergovernmental organization comprised of Kenya, Uganda, Tanzania, Rwanda, and Burundi). The establishment of the LVBC developed from the EAC’s Lake Victoria Development Program, a mechanism that began in 2001 to coordinate various interventions in the Lake Victoria Basin region and to turn the basin into an economic growth zone. The broad functions of the LVBC are to promote, facilitate and coordinate activities toward sustainable development and poverty eradication in the Lake Victoria Basin. The Secretariat of the LVBC is charged with coordinating all activities within the scope of the LVBC Protocol. The Secretariat’s advisory functions include: initiating the coordination and harmonization of policies and strategies related to the development of the LVBC; encouraging information and data sharing; convening meetings of the Sectoral Committees and other working groups; promoting research on sustainable development of the basin; and mobilizing resources to implement projects and programs. See LVBC portal at: https://www.lvbcom.org/. 90 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management • Executive Functions (T51) include the mandate to after acceptance by members (e.g., Lake Chad Basin implement activities and the powers to manage Commission—box 4.61; IBWC—box 4.62). financial resources on behalf of and for the benefit • Inclusiveness Functions (T53) can be attributed to of the member countries. Joint mechanisms with joint mechanisms to ensure that the widest possible executive functions would typically carry out diag- range of stakeholders are consulted or may partic- nostic studies; preparation of feasibility studies; ipate in the development of management tools or inspection and control; construction; O&M; and/or decision-making. For example, stakeholder consul- financing of projects (e.g., The NBI—box 4.60). tations and participation are important elements • Regulatory Functions (T52) include the authority in the management of the Great Lakes of North to control, monitor and report on the implementa- America and of Lake Tanganyika. tion of administration decisions; and prescribe or proscribe actions concerning, for example, issues 4.4.3.2 Temporal Range and Level of Integration of water allocation and water pollution. They may More and closer cooperation is not necessarily always also be involved in law and policy making, and their better; the mechanism framework should be adapted decisions in these matters may take effect directly or to the nature of the planned activity, the specific BOX 4.60. NBI The NBI Secretariat (Nile-SEC) is the executive and technical arm of the NBI. It is responsible for the overall corporate direction as well as serving as the ‘lead center’ for two programs: Basin Cooperation and Water Resources Management. The Eastern Nile Technical Regional Office (ENTRO) for the Eastern Nile Subsidiary Action Program (ENSAP) supports the Eastern Nile Council of Ministers and the ENSAP Team in preparing cooperative water resources investment programs and projects, strengthening institutions and providing secretariat support. ENTRO exercises its executive mandate through projects, including the Ethiopia Sudan Transmission Interconnection Project, which aims to connect the power grids of Ethiopia and Sudan to facilitate cross- border energy trade; the Eastern Nile Planning Model project, which focuses on gathering the knowledge, data, and information from both the ENSAP projects and country-specific information, and flood preparedness and early warning systems. The Nile Equatorial Lakes Subsidiary Action Program Coordination Unit is the executive and technical arm of the Nile Equatorial Lakes Subsidiary Action Program (NELSAP), an institution jointly owned by Burundi, the Democratic Republic of Congo, the Arab Republic of Egypt, Ethiopia, Kenya, Rwanda, Republic of South Sudan, Sudan, Tanzania, and Uganda. NELSAP oversees the implementation of jointly identified projects and promotes cooperative inter-country and in-country investment projects related to the common use of the Nile Basin’s water resources. See NBI portal at: http://www.nilebasin.org/. Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 91 BOX 4.61. Lake Chad Basin Commission The Lake Chad Basin Commission (established in 1964 by Cameroon, Chad, Niger, and Nigeria) has several executive and regulatory powers: (a) it prepares general regulations in order to implement the principles set forth in foundational documents and to ensure their effective application; (b) it follows the progress of the execution of surveys and works in the Lake Chad Basin as envisaged in the Convention, and keeps members informed at least once per year through systematic and periodic reports that each Member State submits to it; (c) it draws up common rules regarding navigation and transport; (d) it draws up staff regulations and ensures their application; and (e) it supervises the implementation of the provisions of the Convention and any documents annexed to it. See Lake Chad Basin Commission Basic Documents at: https://www.cblt.org/sites/default/files​ /­documentbase_eng.pdf. BOX 4.62. International Boundary and Water Commission Established originally in 1889, the International Boundary and Water Commission (IBWC) is responsible for applying the boundary and water treaties between the United States and Mexico and settling differences that may arise in their application. The IBWC is an international body composed of the United States Section and the Mexican Section, each headed by an Engineer-Commissioner appointed by his/her respective president. The executive and regulatory powers of the IBWC encompass the following rights and obligations: “distribution between the two countries of the waters of the Rio Grande and of the Colorado River; regulation and conservation of the waters of the Rio Grande for their use by the two countries by joint construction, operation, and maintenance of international storage dams and reservoirs and plants for generating hydroelectric energy at the dams; regulation of the Colorado River waters allocated to Mexico; protection of lands along the river from floods by levee and floodway projects; solution of border sanitation and other border water quality problems; preservation of the Rio Grande and Colorado River as the international boundary; and demarcation of the land boundary.” See IBWC portal at: https://www.ibwc.gov/home.html. characteristics of the individual basin and the needs advisory functions, policy development, implementa- and interests of the participating parties. Effective tion and monitoring and dispute settlement. The fol- coordination can be reached, for example, through a lowing nonexhaustive list provides a range of possible joint mechanism limited to information gathering and institutional structures, with different intended lifes- exchange mechanism without the need to take joint pans and levels of integration. A combination of the action through a permanent institution that performs various structures listed may be equally appropriate. 92 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management (As with intention and commitment tools, the title • Special Purpose Vehicles (T57) or joint entities to chosen to name the institution is much less important manage single projects can be used for the planning, than its actual mandate and powers.) implementation and management of joint invest- ments or otherwise co-financed operations. They are • Ad hoc Mechanisms (T54) can be established to deal often endowed with legal personality, administra- with unexpected emergencies, to carry out specific tive and financial capacity, and technical responsi- tasks or reviews, or to advise on a pressing technical bility for the entire operation, such as in the La Plata matter. As an example, Annex IV of the Danube River Basin, where Itaipu Binacional (Brazil and Paraguay) Protection Convention envisages the establishment and Entidad Binacional Yacyretá (Argentina and of standing and ad hoc expert groups, which can Paraguay) were created to oversee large hydropower help devise effective responses to changing circum- projects on contiguous stretches of the Paraná River. stances, such as climate change. • Joint Technical Committees (JTC) (T55) are usually • Basin Coordinating Committees or Councils (T58) are set up to analyze and advise on the solution for a working groups comprising of ministers or senior specific technical challenge. It could, for instance, representatives of main water-related agencies that include engineers and scientists to gather informa- meet in regular intervals. These can be established tion in each country, identify data gaps, serve as a at basin, sub-basin and/or national level serving repository, and evaluate available basin data. A JTC or complementing joint mechanisms at a higher may transform into a permanent body following level or they may be established as part of a Basin agreement to sustainably gather, share and maintain Authority. They can be advisors or decision makers information and data about the basin and relevant on basin planning, allocation of resources and finan- projects in each country. A JTC was, for instance, set cial matters. up to develop the LHWP (see box 4.63). • River Basin Organizations, Authorities, or Commissions • Single-issue Entities (T56) may be established perma- (T59) usually have a permanent secretariat that nently to manage a single basin-related issue area, includes experts with multidisciplinary technical such as the Lake Victoria Fisheries Organization.1 expertise, depending on the breadth of sectoral BOX 4.63. LHWP Joint Technical Committee In 1966, South Africa officially proposed the Lesotho Highland Water Project (LHWP) to Lesotho and a joint technical committee (JTC) was eventually formed in 1978, comprising experts from both countries. The JTC was mandated to gather information and undertake studies to investigate the feasibility of the LHWP. The studies were completed by 1986 and advocated a four-phased project that would capture the excess flows of the upper Senqu catchment and transfer the water from a series of storage dams via tunnels to South Africa, while generating hydroelectricity for Lesotho. The studies resulted in the a 1986 treaty between Lesotho and South Africa to implement the LHWP. See LHWP portal at: http://www.lhwp.org.ls/. Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 93 mandate and advisory functions, as well as a higher 4.4.4 Financing of Joint Management Mechanisms level policy- or decision-making body at the ministe- There are multiple ways in which countries finance the rial or heads of state level. They are often mandated creation of mutual benefits and compensation for to be the repository of shared basin data, to develop costs; as well as for providing the necessary budgetary basin management and investment plans, to raise requirements for joint management mechanisms. and/or manage funds for development projects and/ These tools are presented here under two categories: or to implement such projects (e.g., NBA—box 4.64; (a) Membership Contributions (Transfers); and (b) Chu-Talas Commission—box 4.65). Taxes and Tariffs (User Fees). • Entities with “Beyond-the-Basin” Mandates (T60) A joint management mechanism should have a sus- exist in some cases where the watershed is also tainable and appropriate financing system in place to used as a geographic zone for economic integration effectively implement its mandate. For permanent not directly related to basin and water resources institutions, such as river basin organizations (RBOs), management. Examples include the Amazon financing systems should aim to foster budget auton- Cooperation Treaty Organization, the now defunct 2 omy in the institution’s daily operations to make them Kagera Basin Organization, and the Mano River effective platforms for collaboration. A number of tools Union, which was originally established in 1973 as a can be utilized to ensure that mechanisms have ade- customs union aimed at strengthening the capacity quate resources to fulfill their functions; the financing to integrate all aspects of economic and social life needs in the basin and for projects are met; and that among riparian countries. desired development targets can be achieved. BOX 4.64. Niger Basin Authority The Niger River Basin (NBA) covers an area of about 2,270,000 km2 in ten countries in West and Central Africa. The 1980 Convention Creating the Niger Basin Authority (Niger, Benin, Chad, Guinea, Côte d’Ivoire, Mali, Nigeria, Cameroon, and Burkina Faso are Member States), as successor to the original River Niger Commission, defines the basic scope and mandate of the NBA. The legal framework was established to promote cooperation between the Member States and to ensure integrated development in all areas as part of development of its resources, particularly in energy, water, agriculture, forestry, transportation, communication, and industry. The NBA exercises its legal authority through the established Executive Secretariat, the Council of Ministers and a Summit of Heads of State and Government. The NBA functions primarily as an organization to promote cooperation among the member countries to ensure integrated development in all fields through integrated development of the basin resources. See Convention Creating the Niger Basin Authority at: https://treaties.un.org/doc/Publication/UNTS​ /­Volume%201346/volume-1346-A-22675-English.pdf. See NBA portal at: http://www.abn.ne/index.php?option=com_content&view=frontpage&Itemid​ =1&lang=en. 94 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 4.65. Chu-Talas Commission In the 2000 Agreement on the Use of Water Management Facilities of Intergovernmental Status on the Rivers Chu and Talas, signed by both governments in 2000, the parties agreed that the operation and maintenance costs for the facilities specified in the Agreement would be shared on a pro rata basis in accordance with the water volume received by each party. They further agreed to the establishment of a permanent commission “to ensure safe and reliable operation of water distribution facilities of interstate use” and “to arrange the working regimes and the range of necessary expenses for operation and maintenance” (Article 5). The Chu-Talas Commission offers a mutually beneficial mechanism for the Kyrgyz Republic and Kazakhstan to share responsibility for the water infrastructure used by both countries. The main tasks of the Commission are: (a) coordination and organization of activities to implement the 2000 Agreement; (b) comprehensive assessment and forecasting of the condition of transboundary water facilities of interstate use; (c) approval of norms and procedures for water use and allocation, assessment, and accounting of water resources; (d) approval of water-use quotas, operational regimes of water facilities of interstate use, and conditions for adjusting of those quotas and regimes, depending on actual availability of water resources and water-user demand; (e) approval of shares to fund actions enabling the required safety level for the infrastructure of interstate use; (f) establishment of procedures and organization of participatory actions during emergency situations, and coordination of measures regarding safe discharge of floodwaters and combating floods and mudflows; (g) organization of the sharing of hydrology prognosis, as well as information on the current status of the water management situation and other relevant information; (h) approval and coordination of implementation of monitoring programs for water resources and water facilities in the Chu and Talas Basins; and (i) organization of joint research, design, and other activities aimed at the development of water use in the Chu and Talas Basins. The two countries appoint the members of the Commission. The Commission has a permanent executive body, the secretariat, whose main tasks are prescribed in regulations covering preparation of the meetings of the Commission, administrative and organizational management, development of annual reports, and coordinating the Commission’s four working groups, which cover (a) legal and institutional issues; (b) allocation of water resources; (c) hydrotechnical works and reconstruction of facilities; and (d) economics, environment, monitoring, and data exchange. The Commission meets at least twice per year. See Chu and Talas Basins Case Study in Altingoz et al. 2018. The financing of management mechanisms can be car- governments through the tax base and subsequently ried out through three basic sources of sustainable diverted to the water sector; and tariffs are defined revenue, which can be categorized as the “3Ts”: here as user fees. Transfers, Taxes, and Tariffs. Transfers are payments 4.4.4.1 Membership Contributions (Transfers) in the form of grants, financial or in-kind contribu- tions from external sources (see also chapter 5: Third- Membership contributions can be calculated based on Party Tools), and/or member country contributions/ a wide range of allocation keys. Allocation keys should membership fee payments; taxes are funds raised by be organized through a regulatory or contractual Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 95 framework between the parties and/or the joint man- • Indicator Allocations (T62): party contributions are agement mechanism that determines criteria based on determined based on economic or basin-related cri- which the contributions are then calculated, including teria. Indicator examples include: for example: ° Ability to Pay: allows party contributions to be based on their ability to pay, calculated, for exam- • Principle of Equality Allocations (T61): each coun- ple, based on gross domestic product (GDP) or GDP try makes an equal contribution (e.g., in a basin per capita (e.g., International Commission for the shared by five countries, each participating country Protection of the Danube River [ICPDR]—box 4.67). contributes at a 20 percent rate); (e.g., Permanent Okavango River Basin Water Commission ° Basin Area: allows for party contributions to be [OKACOM]—box 4.66). derived from the relative share of the total basin BOX 4.66. Equal Contribution Cost Sharing in OKACOM Each OKACOM Member State (Angola, Botswana, Namibia) is responsible for covering the costs incurred by its delegation and related advisors in attending OKACOM meetings. In addition, Member States that host a particular OKACOM meeting are responsible for all costs associated with securing a venue for the meeting, distributing an agenda, and recording and distributing the meeting minutes. Otherwise, all other costs incurred or liabilities accepted by OKACOM in the performance of its duties are shared equally among the Member States, unless otherwise agreed by OKACOM. Reports prepared by OKACOM are to include estimates of the costs involved in implementing the Commission’s recommendations, and may also include proposals for the apportionment of these implementation costs among the Member States. See OKACOM portal at: http://www.okacom.org/. BOX 4.67. Economic Capacity Cost Sharing in the International Commission for the Protection of the Danube River The International Commission for the Protection of the Danube River’s (ICPDR’s) founding agreement foresees equal shares for member contributions. However, in the infancy of ICPDR it was decided that a new allocation with differing member contribution percentages would be installed. This categorization takes into account member’s capacity to pay in order to accommodate the financial situations of new members. It regrouped the ICPDR’s sixteen member countries into four categories according to their national budget (with the goal of equal contribution cost sharing over the long term). The share each category contributes toward the ICPDR budget is renegotiated annually. The European Commission bears a constant share of 2.5 percent of the overall ICPDR budget. In 2012, for example, member contributions ranged between US$37,000 (Category D) and US$129,000 (Category A). Table B4.67.1 presents the 2012 ICPDR member contribution category groupings. box continues next page 96 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 4.67. continued TABLE B4.67.1. ICPDR Member Contribution Categories Country category Countries A Austria, Czech Republic, Germany, Hungary, Slovak Republic, Slovenia; Bulgaria and Romania from 2008 B Croatia, Serbia; Bulgaria, and Romania before 2008 C Bosnia/Herzegovina, Ukraine D Montenegro; Moldova (exception since 2011) E EU—2.5% (constant) See Financial Sustainability of International River Basin Organizations report at: http://www​ .transboundarywaters.orst.edu/publications/publications/GIZ%202014%20Financing%20 International%20River%20Basin%20Organizations.pdf. area in a country. The financial contribution by a management mechanisms financed through these party could either be positively or negatively cor- tools illustrates that levying taxes or tariffs to support related to the basin area within a party’s territory. transboundary water management services is a com- plex undertaking. Real-world and hypothetical exam- ° Flow Contributions: allow for party contributions ples include: derived from the relative share of the total flow volume resulting from direct rainfall or runoff • Community Integration Tax (T63) is an example where within a country. Contributions can be either pos- the RBO relies on the tax regime that finances the itively or negatively correlated to flow volumes regional economic community to which it belongs and can also depend on the relative location of (e.g., International Commission of Congo, Oubangui the party vis-à-vis the basin. and Sangha River Basins [CICOS]—box 4.69). ° Multiple-Indicator Weighted Contribution (e.g., • Polluter Fees (T64) are a tariff based on the polluter MRC—box 4.68) pays principle or compensation for damage to the water resources. The financing of a joint basin man- 4.4.4.2 Taxes and Tariffs (User Fees) agement mechanism through polluter fees could be Although taxes and tariffs are used by some countries structure both for point source pollution, affecting and joint management mechanisms to cover the oper- only some water users, or non-point source pollu- ational budget of the latter, the use of these tools is still tion charging all users. rare in contrast to transfers. The choice of a financing system based on taxes can be established separately in • Benefit-Based User Fees (T65) includes for example each member country or directly at the basin organiza- the payment for hydropower generation benefits tion level. The small number of examples of joint obtained by users (e.g., Water purchase agreements Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 97 BOX 4.68. Indicator-Based Contributions to the Mekong River Commission The Mekong River Commission (MRC) started out through an equal contribution cost sharing scheme among the four member countries. Equal member contributions as of 2000 (US$195,000 per country) were used as a baseline to calculate gradual payment increases. The annual increase is based on a key composed of four indicators accounting for benefits and one accounting for economic capacity. The indicators are weighted individually, in reverse order for flow and normal order for all other indicators, and then added, which provides a percentage by which each member’s contribution is increased. The calculations are shown in the following tables. Table B4.68.1 presents the indicators and corresponding country data/ measurements. Table B4.68.2 presents the weighted indicators and corresponding percentage of annual increase of contribution by member states. TABLE B4.68.1. MRC Indicator-Based Cost Contributions: Country Data/Measurements Indicator Cambodia Lao PDR Thailand Vietnam 1—Catchment area (km ) 2 155,000 202,000 1184,000 65,000 2—Average flow (m /s) 3 2,860 5,270 2,560 1,660 3—Irrigated area (million ha) 0,161 0,075 1,414 1,512 4—Population (million) 9.30 4.70 23.2 19.8 5—Per capita GDP (US$) (1997) 252 259 876 287 TABLE B4.68.2. MRC Indicator-Based Cost Contributions: Weighted Indicators and Corresponding Percentage of Annual Increase in Contributions A.4  Weighted indicator Cambodia Lao PDR Thailand Vietnam Total 1. Catchment area (km2) 2 4 3 1 10 2. Average flow (m3/s) (reverse order) 2 1 3 4 10 3. Irrigated area (million ha) 2 1 3 4 10 4. Population (million) 2 1 4 3 10 5. Per capita GDP (US$) (1997) 1 2 4 3 10 Total 9 9 17 15 50 % of annual increase of contribution 18 18 34 30 100 See Financial Sustainability of International River Basin Organizations report at: http://www​ .transboundarywaters.orst.edu/publications/publications/GIZ%202014%20Financing%20 International%20River%20Basin%20Organizations.pdf. 98 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 4.69. CICOS Community Integration Tax The Heads of State and Government of the Central African Economic and Monetary Community (CEMAC) adopted an autonomous financing mechanism, the Community Integration Tax (CIT), which is applied at a 1 percent rate of the customs value of goods imported from third countries for consumption in all countries of the community. The custom collectors transfer the revenue from this tax to an account opened in the branches of the Bank of Central African States. Cameroon, the Central African Republic and the Republic of Congo, who are members of CEMAC, contribute to the International Commission of Congo, Oubangui and Sangha River Basins (CICOS) budget through the CIT, which now accounts for 70 percent of CICOS’ financing. The Democratic Republic of Congo, which is not a member of CEMAC, contributes the remaining 30 percent directly. See The Handbook for Integrated Water Resources Management in Transboundary Basins of Rivers, Lakes and Aqufiers report at: http://www.gwp.org/globalassets/global/toolbox/references/the-handbook​-for- integrated-water-resources-management-in-transboundary-basins-of-rivers-lakes-and-aquifers-inbo​ -gwp-2012-english.pdf. BOX 4.70. Financing Kariba Dam Rehabilitation The Zambezi River Authority (ZRA) is a financially autonomous organization that generates operating revenue through water tariffs charged to the Zambian and Zimbabwean power utilities (ZESCO and ZPC) for water used in the generation of electricity. The ZRA is not itself an electricity utility. The ZRA revenue formula agreed by all the parties is intended to provide the ZRA with sufficient revenues to carry out its mandated functions. The tariff structure includes two parts: a fixed monthly element, and a volumetric charge, also billed monthly. The formula is reviewed every three years, with tariffs adjusted annually according to the Consumer Price Index of the United States. Through the revenue formulae the ZRA was able to raise US$275 million toward the cost of the Kariba Dam Rehabilitation Project. See ZRA portal at: http://www.zaraho.org.zm/. between national power utilities and the Zambezi determine compensation payments, or to find an agreed River Authority [ZRA]—box 4.70). agreements. alternative to compliance with earlier ­ Many transboundary water agreements contain dispute 4.4.5 Dispute Settlement settlement provisions. In case of a dispute, it is helpful Dispute settlement tools can be used to determine if parties can refer back to prior-agreed dispute settle- questions of interpretation of and compliance with an ment procedures or mechanisms, as it may be difficult agreement, agree on solutions to restore compliance, to agree a posteriori once the dispute has arisen. Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 99 Dispute settlement provisions usually involve a multi- Basin where the Joint Committee is tasked with step approach where the final step is usually dispute addressing and resolving any issues and differences resolution by the binding decision of a third party, such that may arise on matters within the purview of the as an independent/impartial expert, court, or tribunal. Mekong Agreement. Various informal and formally agreed dispute settle- ment tools exist: • Complaint Review (T68) by a joint entity or man- agement mechanism (e.g., Columbia Permanent • Negotiations (T66) tend to be the dispute settle- Engineering Board [PEB]—box 4.72; Joint Committee ment tool that is first deployed by countries (or Review under the Farakka Treaty—box 4.73; other stakeholders) to settle any differences they Permanent Indus Commission Procedures for may have. It is also usually the first step in a mul- Dispute Settlement—box 4.74). tistep approach to dispute settlement outlined in international treaties (e.g., Kosi River Treaty • Arbitration Tribunals (T69) are usually set up based on agreement between the parties, who would Renegotiation—box 4.71). each nominate arbitrators (individually) as well as • Filing a Complaint (T67) with the other party or with the chair (usually jointly). They may involve third a joint management mechanism is often the first parties as arbitrators or to assist with appointment step in formalized dispute settlement procedures. of the tribunal in case parties cannot agree (e.g., This is for instance the case in the Mekong River Arbitral Procedures for the LHWP—box 4.75). BOX 4.71. Kosi River Treaty Renegotiation Because Nepal contended that the 1954 Kosi River Treaty was skewed in terms of the benefits that accrued to the two countries and that the scheme resulted in furthering India’s interests without paying proper attention to the well-being of the Nepalese people, the parties renegotiated the controversial provisions. The 1966 Revised Agreement between the Government of Nepal and the Government of India on The Kosi Project (Revised Agreement) provided, among other provisions, that: (a) any construction and other undertaking by India in connection with the project must be planned and carried out in consultation with Nepal, and those works and undertakings would be implemented only after securing approval from Nepal; (b) all lands acquired by Nepal would be leased to India for a period of 199 years from the date of the signing of the Revised Agreement at an annual nominal rate (the Original Agreement had conferred on India the “ownership” of all lands acquired by Nepal and subsequently transferred to India for the purpose of the project) and Nepalese sovereign rights and territorial jurisdiction, including the application and enforcement of the laws of Nepal on and in respect of the leased land, would continue unimpaired by such lease; (c) Nepal would have every right to withdraw water for irrigation, or for any other purpose, from the Kosi River Basin; and (d) India would pay royalties to Nepal for the generation of power or the use of stone, timber, and gravel obtained from Nepalese territory and used for construction, maintenance of the barrage, and other project-related activities. See Conflict and Cooperation on South Asia’s International Rivers: A Legal Perspective report at: https:// openknowledge.worldbank.org/handle/10986/15171. 100 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 4.72. Columbia Permanent Engineering Board The CRT established the Permanent Engineering Board (PEB) to provide an independent review of CRT implementation. The PEB collects statistics, ensures that the objectives of the CRT are met, and reports to the Canadian and the United States federal governments annually. It consists of two persons from Canada (one federal and one provincial) and two from the United States. The PEB is not an arbitration board but can “find fact” with operations, meaning that it can determine a view on how operations are being conducted; that “fact” may be accepted in any further tribunal or ruling. Moreover, the PEB can assist in resolving any contentious issues through dialogue and facilitation. The PEB does not decide or make rules, but the governments generally respect its recommendations. The PEB created the PEB Engineering Committee to assess technical elements of CRT operations. See Columbia Basin Case Study in Altingoz et al. 2018. BOX 4.73. Joint Committee Review under the Farakka Treaty The 1996 Treaty on Sharing of the Ganges Waters at Farakka established a Joint Committee (comprising an equal number of representatives from both countries and answerable to the previously established Indo-Bangladesh Joint Rivers Commission). It is responsible for examining any difficulty arising out of treaty implementation. Under the Treaty, a dispute between the countries is to be referred to the “Indo-Bangladesh Joint Rivers Commission” if the Joint Committee is unable to resolve it. If there is disagreement on adjustments following a review, India shall release “water at a rate not less than 90 percent of Bangladesh’s share according to the formula […] until such time as mutually agreed flows are decided upon.” See 1996 Treaty on Sharing of the Ganges Waters at Farakka between Bangladesh and India at: http:// extwprlegs1.fao.org/docs/pdf/bi-17351.pdf. BOX 4.74. Permanent Indus Commission Procedures for Dispute Settlement The Indus Waters Treaty (IWT) sets procedures for the settlement of differences and disputes. Article IX, “Settlement of Differences and Disputes,” provides that the Permanent Indus Commission first examines any question concerning the interpretation or application of the Treaty. See 1960 Indus Waters Treaty at: http://siteresources.worldbank.org/INTSOUTHASIA​ /­Resources/223497-1105737253588/IndusWatersTreaty1960.pdf. Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 101 BOX 4.75. Arbitral Procedures for the Lesotho Highlands Water Project Under Article 16 of the 1986 Treaty pertaining to the Utilization of the Waters of the Senqu/Orange River System, the project’s implementing institutions, Lesotho Highlands Development Authority (LHDA), the Trans-Caledon Tunnel Authority (TCTA), and Lesotho Highlands Water Commission (LHWC) “shall pay due regard to the overriding consideration that any dispute shall be resolved in a spirit of conciliation and that any impairment of the implementation, operation, and maintenance of the Project shall be avoided.” There are four levels of dispute resolution under the Lesotho Highlands Water Project (LHWP), two of which are internal. In the event of a dispute arising, LHDA or TCTA may request the LHWC to conduct and present an investigation. The LHWC may recommend the proper action to be taken at the end of its investigation or may recommend recourse to more formal procedures. The second dispute resolution level is a more formal meeting among the three institutions backed by a report prepared by LHDA and/or TCTA, or possibly by LHWC. Informal discussions among the institutions have tended to enable agreements by consensus. Third, if a dispute is not resolved by means of the above actions, it shall be made the subject of negotiation between the governments. If negotiation does not resolve the dispute, an Arbitral Tribunal is called on to issue a final and binding decision. An Arbitral Tribunal would comprise three persons with legal background, one appointed by each of the two countries and the third appointed by the other two selected arbitrators. Only two cases have gone beyond the second dispute-resolution level. See Treaty on the Lesotho Highlands Water Project Between the Government of the Kingdom of Lesotho and the Government of the Republic of South Africa at: http://www.fao.org/docrep/w7414b/w7414b0w.htm. Differing levels of dispute resolution exist across suc- who are asked to participate as neutrals. This case and cessful transboundary agreements but almost all cul- other Third-Party involvement in dispute settlement minate in some binding decision process. Generally, procedures is described in more detail under Third- the parties pay for the cost of the process and the final Party Engagement Tools in chapter 5. decision is considered an international obligation of the states involved. Noncompliance with a final deci- Notes sion would not extinguish the obligation and the deci- 1. See Lake Victoria Fisheries Commission portal at: http://www.fao​ sion could be subject to diplomatic, economic, and .org/fishery/rfb/lvfo/en. financial consequences. 2. See ACTO portal at: http://otca.info/portal/. As mentioned in the description of the arbitration tool, dispute settlement frequently involves third parties 102 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management Brahmaputra River Basin. © Jason Yu/iStock. Chapter 5 Third-Party Engagement Tools In addition to the tools that have been successfully Third parties can bring multiple services to the table, employed directly between and by countries to manage including know-how and additional financial resources. transboundary water resources in a coordinated man- Third-Party involvement can promote compliance by ner to achieve mutual benefits, third parties can offer a providing “weight of presence.” The presence of a neu- set of tools and services to client countries. Countries tral party can create space for dialogue, helping with may request the involvement of partners for technical the identification of benefits and reducing the risk of advice, to close financing gaps, for co-investment, or to harmful action by involved countries, for instance in facilitate coordination with other riparian countries. situations where such risk exists based on a pure Requests may also include support for the promotion “national-action rationale.” Their involvement can of compliance with international principles of trans- serve to encourage compliance and bring impartiality boundary water resources management and with spe- to monitoring implementation. cific agreements concluded with other riparian countries. Typical third parties assisting with trans- 5.1 Identification of Opportunities and Risks Tools boundary water resources management are bilateral and multilateral donor agencies, international financial Technical assistance (TA) brings in expertise from the institutions (IFIs), private sector entities, and civil outside for transfer of knowledge and skills. TA can ­society organizations. provide wide-ranging knowledge and skills to identify Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 103 development opportunities and projects and their • Experts to Conduct Assessments and Studies (T71), related impacts, prepare basin plans, or help countries which can provide cutting edge advice on new build accountable and efficient institutions to sustain- projects or development plans and communicate ably manage their shared water resources. best practices from the international experience. Development agencies and other actors frequently Development partners can help countries to “do better provide direct advice or engage experts to conduct for less” by bringing global or other experience to the studies to assist countries with basin development table. TA providers can assist in improving implementa- questions. Many of these assessments and studies tion efficiency, effectiveness and sustainability. TA can are being made publicly accessible so that a wider include financing of experts that can provide impartial group of stakeholders can benefit from the knowl- advice, data and analysis to shape new policies and pro- edge and insights gained through these assessments grams. It can be provided directly by third parties or third (e.g., World Bank Open Knowledge Repository parties can provide finance to countries so they can [OKR]—box 5.2). engage technical experts for their needs. The contribu- tions that can be made through TA tools are grouped here • Just in Time Notes, Analysis, and Advice (T72) to assist under the following four subcategories: (a) Neutral countries with on-demand analysis and recommen- Knowledge Provision; (b) Capacity Building; (c) Financing dations to achieve policy reform or other change, or Cooperation; and (d) Facilitation/Dialogue Processes. for transboundary dialogue or negotiations. 5.1.1 Neutral Knowledge Provision 5.1.2 Capacity Building Third-Party TA providers not only bring new knowl- Human resources development and institutional edge or global experience; when they come in as advis- capacity building can focus on development of techni- ers they can be valuable in providing a neutral, trusted cal knowledge for sound river basin management and knowledge base. Third parties can support the prepa- understanding, negotiations skills, or project imple- ration of new studies or updates of old studies that mentation skills (financial management, procurement, identify basin-wide biophysical, economic, environ- etc.). Experience demonstrates that lack of coopera- mental, and social characteristics; or provide modeling tion at the basin-level is often due to limited capacity expertise to examine various development scenarios, and, therefore, reluctance to engage with potentially including, for instance, future water availability, use, more skilled neighboring countries. Capacity building and expected demand and supply, and changing fea- can help “level the playing field,” including through tures of a basin, as well as the cumulative impacts of training on transboundary water governance and investments, land use strategies, and impacts of cli- hydro-diplomacy to enable more effective and bal- mate variability and change. Neutral knowledge provi- anced negotiations; technical capacity building on sion tools include: hydrometeorological instrumentation, river basin modeling, and water quality monitoring and analysis, • Data and Information Provision (T70) to provide and so forth. This can be delivered through various neutral and trusted/reliable data to countries and tools: verify data integrity (e.g., International Union for the Conservation of Nature’s [IUCN’s] Building • Tailored Workshops and Training Programs (T73) to River Dialogue and Governance [BRIDGE] program, provide intensive technical learning on specific top- which, among others, develops and manages an ics. Such programs could include participation from information and data portal/platform for the 3S one or multiple basin countries. The latter can, as a Basins in the Mekong Region—box 5.1). side effect, facilitate the building of trust and result 104 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 5.1. International Union for the Conservation of Nature Building River Dialogue and Governance Program Building River Dialogue and Governance (BRIDGE) is an International Union for the Conservation of Nature (IUCN) initiative (supported by the Swiss Agency for Development and Cooperation) that focuses on enhancing water governance capacities in nine transboundary basins in three regions across the globe. Emphasizing stakeholder learnings and consensus building, BRIDGE aims to catalyze transboundary cooperation for equitable and sustainable water resources development. In the Mekong region, BRIDGE activities are carried out in the Sekong, Sesan, and Sre Pok River Basins. Each activity is tailored to meet three main objectives: (a) establishing frameworks for institutional arrangements and trans-boundary collaborations; (b) enriching and fortifying knowledge sharing platforms; and (c) enhancing leadership and governance capacities. A key component of the 3S is the facilitation of dialogue and technical exchanges through the use of data and information derived from the basin. As part of these activities, a Sekong Basin Profile study was developed, including water quality sampling and analysis and results from field visits on the Sekong River Basin. Because water quality has been a crucial issue in the area due to the impacts of development, having reliable water quality data was critical for negotiation with provincial and national line agencies. The study also captured the demographic, economic, and political characteristics of the basin, making data and information available for officials and stakeholders. Regionally, BRIDGE facilitated coordination with the Centre for Development and Environment to source GIS maps for Sekong Basin Profile, leading to the development of working maps incorporating GIS layers at provincial and district scales. These maps have been made available through a 3S basin website developed and managed by BRIDGE. The site focuses on data and information, linking project documents and 3S basin data to provincial, national, and regional stakeholders. See BRIDGE portal at: http://www.3sbasin.org/. BOX 5.2. World Bank Open Knowledge Repository The World Bank is the largest single source of development knowledge. The Open Knowledge Repository (OKR) is the World Bank’s open access repository for its research outputs and knowledge products. The OKR now allows users to quickly access World Bank research and knowledge products according to the Global Practices and Cross-Cutting Solution Areas. Through the OKR, the World Bank collects, disseminates, and permanently preserves its intellectual property in digital form. The OKR contains more than 16,000 research and knowledge products including published books, editions of the World Development Report, Policy Research Working Papers, Economic and Sector Work studies, journal articles, and independent evaluation studies. See OKR portal at: https://openknowledge.worldbank.org/. Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 105 in a semidialogue process, helping countries iden- [United Nations Economic Commission for Europe tify and work through their common and diverg- {UNECE}]—box 5.4). ing interests (e.g., Joint Rivers Commission [JRC], Bangladesh Capacity Strengthening Program— • Twinning (T74) is a process that pairs an organiza- box  5.3; and Capacity Building for Cooperation on tional entity with a similar but more mature/experi- Dam Safety for the Kyrgyz Republic and Kazakhstan enced (“twin”) entity in another country to transfer BOX 5.3. Joint Rivers Commission, Bangladesh Capacity Strengthening Program In February 2015, the World Bank received a request from the Ministry of Water Resources, Bangladesh, for training of officials from the Joint Rivers Commission (JRC), Bangladesh, and other government ministries, in transboundary waters governance and hydrodiplomacy to build professional and institutional capacity to better work with its Brahmaputra and Ganges River co-riparian countries. In response to this request, the World Bank’s South Asia Water Initiative (SAWI) supported the government in designing a two-year capacity strengthening program that would see government officials attend external trainings at international institutions. Participants were nominated by the participating government agencies based on a match between technical and decision-making position and the scope of the training. See SAWI portal at: http://www.worldbank.org/en/aprograms/sawi. BOX 5.4. Capacity Building for Cooperation on Dam Safety for the Kyrgyz Republic and Kazakhstan In Central Asia, concern over the safety of more than 100 large dams and other water control facilities, located mostly on transboundary rivers, led to a United Nations Economic Commission for Europe (UNECE) project called “Dam safety in Central Asia: capacity building for regional cooperation.” The project aimed to prompt the countries concerned, first, to consider setting up or revising national dam safety regulatory frameworks to achieve their harmonization, and second, to pursue regional cooperation for information exchange and notification in case of accidents or emergency situations with dams.” Through the expertise provided by this project, the Kyrgyz Republic included regulations on emergencies and dam safety in its Water Code and Kazakhstan amended its Water Code to include issues of dam safety. Currently, the project is in its third phase and focuses on issues such as (a) training on the safe operation of hydro-technical installations: capacity building of officials and experts as well as of support to development of national training programs; and (b) regional cooperation: support to development of harmonized technical documentation, exchange of relevant data and information, early warning systems to ensure preparedness in the case of increased risks for accidents and others. See Capacity Building for Cooperation on Dam Safety in Central Asia article at: https://www.unece.org​ /­fileadmin/DAM/publications/oes/WaterSeriesNo.5_E.pdf. 106 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management relevant operational knowledge, including mana- ideas on how to address specific basin development gerial, financial, and technical skills and systems. challenges. Participants can include officials and/or Twinning can help organizations be more strategic technical specialists from single or multiple techni- in their initiatives as well as in use of funds and staff cal sectors, ministries, or countries sharing a basin. (e.g., Global Environment Facility [GEF] IW:LEARN Tours can showcase good practices in aspects of project twinning program—box 5.5). basin management and can also facilitate partici- pant dialogue to identify areas of collaboration (e.g., • Study Tours (T75) are exposure visits to learn from South Asia Water Initiative [SAWI] study tour to the good practice elsewhere. They can be used to gain Yellow River in China—box 5.6). BOX 5.5. Global Environment Facility Twinning Program  The Global Environment Facility’s (GEF) IW:LEARN project has facilitated about 30 twinnings involving 156 beneficiaries from 36 GEF projects. Twinnings have successfully built capacity of project and government staff to achieve improved project implementation and results, natural resource management, and higher success of project sustainability. For example, a 2013 survey of GEF IW:LEARN found that 75 percent of GEF project managers identified twinnings as a key tool in helping them overcome project management barriers. See GEF IW:LEARN Twinning portal at: http://iwlearn.net/learning/twinning/how-to. BOX 5.6. South Asia Water Initiative Study Tour to the Yellow River Technical specialists from Brahmaputra Basin riparian countries, Bangladesh, Bhutan, and India, and Myanmar participated in a one-week study tour to the Yellow River in China in April 2014 to witness a successful approach to a basin-level IWRM program. The similarity of management challenges between the Brahmaputra Basin and the Yellow River Basin offered a valuable opportunity for learning on regional cooperation in flood and sediment management, hydropower, and water allocation. The tour facilitated better understanding of the economic benefits of improved water resources management and the processes to realize them. The participants visited the Yellow River Water Resources Commission in Zhengzhou City and the Xiaolangdi Multipurpose Dam, and held meetings with various officials from the Ministry of Water Resources in Beijing. Lessons for the Brahmaputra context included: achievements in water resources management in China are based on robust policies and institutions; integrated measures for water resources management and regulation are needed to achieve sustainable water resources; watershed management with social and economic incentives is essential for basin-wide management; Yellow River flood management required hard and soft investments, and hard infrastructure is coupled with basin-wide information and technology to improve the effectiveness of flood management. See Managing Brahmaputra: Lessons from the Yellow River report at: http://documents.worldbank.org​ /­curated/en/831641467990347830/pdf/103356-BRI-China-Study-Tour-Net-Story-PUBLIC.pdf. Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 107 5.1.3 Financing Cooperation administration. They can be provided to finance In addition to membership contributions, multiple basin-management-related activities, such as the joint basin management mechanisms have been estab- preparation of basin plans or basin management lished with or partially rely on grant funding from models, as well as to support capacity building development partners for their activities. These and institutional strengthening. Bilateral and mul- resources are made available either directly to the tilateral development agencies and international organization or indirectly, when their use is adminis- financial institutions typically provide such grant tered by the development partner. Tools for Third- financing1 (e.g., Nile Basin Initiative [NBI] for the Nile Party finance include: Cooperation for Results [NCORE] Project—box 5.8). • Seed Financing for Joint Management Mechanisms • Multidonor Trust Funded Programs (T78) to pro- mote cooperation and integrated management of (T76) is provided by development agencies or civil transboundary water resources exist for multiple society organizations to assist with the establish- regions and at the global level (i.e., International ment of joint mechanisms. These funds are typically Waters window of the GEF). They have become an administered by bilateral partners to provide TA important grant funding source for RBOs and also until a joint management mechanism is set up with for the financing of transboundary water manage- legal personality to administer funds or to provide ment projects. These programs pool the funds from institutional capacity building. Financing can be multiple sources (bilateral and multilateral donors, provided for anything from office furniture to staff foundations, and private sector) and coordinate the training and operational expenses during the initial interests of partners for larger impact. Transaction phase until the organization is in the position to col- costs are lowered for river basin agencies because lect and administer membership fees from the coun- they deal with a single point of contact under a tries (e.g., Seed Financing for Permanent Okavango common administrative and reporting frame- River Basin Commission [OKACOM]—box 5.7). work (e.g., Cooperation on International Waters • Recipient-Executed Grants (T77) are provided in Africa [CIWA]; SAWI; Central Asia Energy and directly to basin management institutions for their Water Development Program [CAEWDP]; African BOX 5.7. Seed Financing for Permanent Okavango River Basin Commission Permanent Okavango River Basin Commission (OKACOM) signed an agreement with the Government of Sweden whereby Sweden pledged to provide US$2.2 million to help establish the OKACOM Secretariat and to fund its first three years of operation. Through the Swedish International Development Agency (SIDA), Sweden also supported the activities of the Secretariat for further years. This funding would decrease as OKACOM Member State funding increased over that time period toward financial autonomy and sustainability. See SIDA’s Support to OKACOM article at: http://www.okacom.org/okacoms-work/partners-and-projects​ /­partners/international-cooperating-partners/sida/sida-and-okacom. 108 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 5.8. Nile Cooperation for Results Project The Nile River Basin is a vital natural resource and economic lifeline for its 237 million inhabitants, in eleven riparian countries (Burundi, the Democratic Republic of Congo [DRC], the Arab Republic of Egypt, Eritrea, Ethiopia, Kenya, Rwanda, Republic of South Sudan, Sudan, Tanzania, and Uganda). The basin is characterized by a largely untapped potential for development, but with uneven rates of poverty and economic growth. Four of the Nile riparian countries are among the world’s ten poorest, with per capita incomes in the range of US$100–200 per year. Each Nile riparian country has ambitious national development plans for poverty alleviation that encompass development of the river’s resources. If unilateral plans are implemented without consideration of the larger river basin context, there is a risk that some of the national investments in water-related sectors could be suboptimal, harm neighboring states, or foreclose future development opportunities. Conversely, coordinated development and management of joint infrastructure could increase the returns on investment in the basin. Recognizing the need for a coordinated approach to basin-wide planning and development, riparian countries formed the Nile Basin Initiative (NBI) in 1999 as an intergovernmental entity committed to fostering cooperation, water resources management and water resources development. The World Bank supported the establishment of the NBI and the two related sub-basin organizations, the Eastern Nile Technical Regional Office (ENTRO) and the Nile Equatorial Lakes Subsidiary Action Plan Coordination Unit initially with seed financing and later through recipient-executed institutional development grants since 1999. As a result, the NBI has grown to an established regional institution. Participating countries have established a norm of jointly evaluating and approving the preparation of projects of transboundary significance identified by the NBI. Since 2013, with support from the Nile Cooperation for Results (NCORE), the NBI pivoted its focus from institutional strengthening towards consolidation and delivery—compiling previous work and applying newly built capacity to enable stronger service delivery. The NCORE is financed through a recipient-executed grant through the Cooperation in International Waters in Africa Multidonor Trust Fund. See NCORE Project at: http://projects.worldbank.org/P162304?lang=en. Water Facility [AWF]—box 5.9; Nile Basin Trust Fund multiple actors. This is even more so the case in the [NBTF]—box 5.10; Indus Basin Development Fund— situation that many basins are facing: one of increasing box 5.11). demand facing a declining trend in relative availability and quality of the resources. Countries generally move 5.1.4 Facilitation/Dialogue Processes in nonlinear paths from unilateral to cooperative The sharing and management of common pool action. Along this process, Third-Party facilitation can resources, such as transboundary freshwater resources, support interaction and communication toward can be challenging as it requires coordination of collaboration. Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 109 BOX 5.9. Multidonor Trust Funded Programs for Transboundary Waters The Cooperation for International Waters in Africa (CIWA) is a multidonor trust fund (MDTF) administered by the World Bank and financed by Denmark, European Commission, the Netherlands, Norway, Sweden, and the United Kingdom. The Trust fund finances upstream work in African international rivers, 75 percent of which goes to four priority basins—Nile, Niger, Volta, and Zambezi. See CIWA portal at: http://www.worldbank.org/en/programs/ cooperation-in-international-waters-in-africa. The South Asia Water Initiative (SAWI) promotes cooperation for integrated water resources management on the Great Himalaya River Basins among the riparian countries of the Indus, Ganges and Brahmaputra Rivers—Afghanistan, Bhutan, Bangladesh, China, India, Nepal and Pakistan. The Program and MDTF is administered by the World Bank and financed by the United Kingdom (through the Department for International Development), Australia (through the Department of Foreign Affairs and Trade) and Norway. See SAWI portal at: http://www.worldbank.org/en/programs/sawi. The Central Asia Energy and Water Development Program (CAEWDP) is an MDTF administered by the World Bank and financed by the European Commission, the Swiss State Secretariat for Economic Affairs, USAID, and DFID. The MDTF promotes an enabling environment for energy and water security at regional and national level in Central Asia, benefiting Afghanistan, Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan. See CAEWDP portal at: http://www.worldbank.org/en/region/eca/brief/caewdp. The African Water Facility (AWF) is a general fund administered by the African Development Bank and led by the African Ministers’ Council on Water (AMCOW). The AWF was established to mobilize resources to finance water resources development activities in Africa and has provided nearly US$130 million to more than 300 projects, of which seventeen are in transboundary basins. See AWF portal at: https://www.africanwaterfacility.org/en/. A neutral country, development agencies, or private studies and TA. Third parties can contribute in various sector sponsors can be valuable partners to facilitate ways: dialogue and coordination. Facilitation requires the ability of a third party to organize, convene, and medi- • Convener (T79) through facilitation of dialogue pro- ate various types of interaction at various levels of cesses to build trust and confidence among basin decision making (political and technical) and at differ- countries (e.g., the Petersberg Process and applica- ent times. Usually this process is complemented by tion to the Drin Basin—box 5.12). 110 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 5.10. Nile Basin Trust Fund The NBI was established as a transitional mechanism as a platform for dialogue and joint work, to better understand and use the common Nile Basin resources, and to harness benefits for equitable and sustainable regional economic development. In recognition of this step taken by riparian countries, in 2001, ten development partners came together to establish the Nile Basin Trust Fund (NBTF) to support pursuit of this shared vision in a coordinated manner. Canada, Denmark, the European Union, France, Finland, the Netherlands, Norway, Sweden, the United Kingdom, and the World Bank contributed US$203 million to the fund, with many additional donors providing coordinated support to the Nile countries in parallel. The NBTF was administered by the World Bank. NBTF financing helped establish the three Nile Basin institutions (Nile-SEC, ENTRO, and NELSAP-CU); it financed the implementation of the Shared Vision Program, as well as multiple other projects and basin development studies. Building on these seed funds, the countries are currently advancing regionally significant development projects in the order of US$6 billion, with $1.5 billion of the portfolio already under implementation. See Nile Basin Trust Fund article at: http://www.worldbank.org/en/programs/cooperation-in-international​ -waters-in-africa/brief/nile-basin-trust-fund. BOX 5.11. Indus Basin Development Fund The World Bank was a signatory to the Indus Waters Treaty (IWT) for certain specified purposes. Article V deals with the World Bank’s responsibilities to manage the Indus Basin Development Fund. The Fund was used to finance the sizeable replacement works that Pakistan needed to end its reliance on the Eastern rivers that were allocated to India for its water use. Pakistan did not have the capacity to finance these works, which included three dams, eight link canals, three barrages, and 2,500 tube wells. The 1960 Indus Basin Development Fund Agreement mobilized about US$800 million, mostly in grants from a number of partners, including Australia, Canada, Germany, New Zealand, the United Kingdom, the United States, and the World Bank (through loans), as well as contributions from India and Pakistan. (The IWT set out a schedule for India to provide a fixed financial contribution of £62,060,000, in 10 annual installments and paid to the Fund, during the transition period to help defray the costs of the replacement infrastructure.) A supplemental agreement was concluded in 1964 for additional contributions from the original participants to the Fund. See 1960 Indus Basin Development Fund Agreement at: https://iea.uoregon.edu/ treaty-text/1960-indusbasindevelopmentfundentxt. See 1964 Indus Basin Development Fund Supplemental Agreement at: http://treaties.fco.gov.uk/docs​ /­fullnames/pdf/1966/TS0068%20(1966)%20CMND-3139%201964%2031%20MARCH-8%20APRIL,%20 WASHINGTON%3B%20THE%20INDUS%20BASIN%20DEVELOPMENT%20FUND%20 (SUPPLEMENTAL)%20AGREEMENT%201964.PDF. Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 111 BOX 5.12. The Petersberg Process The Petersberg Process is a German initiative which resulted from the “Petersberg Round Tables on Trans-boundary Waters,” launched in March 1998 as a joint effort of the German Government and the World Bank. The first conference was held at Petersberg near Bonn, in 1998, and highlighted water as an opportunity for close regional cooperation from a global perspective. Four Round Tables facilitated an open debate on the problems of transboundary water management and the development of an integrated approach to resolving them. The issue was addressed from the perspective of development, environment, security, and economic policy. An informal circle, including ministers, senior policy makers, academics, representatives of international organizations, and NGOs outlined the problems of transboundary water management and examined regional case studies. Based on the Round Tables of Phase I, the German Ministry for the Environment, Nature Conservation and Nuclear Safety, and the World Bank decided to initiate Phase II of the Petersberg Process. The Phase II process supported a series of complementary activities that provided a forum for transboundary water management issues in Southeastern Europe (SEE). Operationally, six types of activities constituted the formal aspects of this regional dialogue process (a coordination group, roundtable dialogues, capacity building materials, targeted workshops, information management, and partnership building). These activities constituted the first time for SEE stakeholders to engage in a systematic and sustained process of dialogue and capacity building on transboundary water resource management in their region, in particular since the emergence of new states, post-conflict reconstruction, transition to market economies, and regional EU integration processes began. The themes addressed were of broad nature (management of rivers, lakes, and groundwater; adaptation to climate variability and change; balancing multipurpose uses; stakeholder participation) and each addressed a variety of transboundary water aspects. The process contributed to building capacity of a large range of SEE stakeholders at the regional, national, and local levels regarding transboundary water resources management, through cross-fertilization of knowledge and experiences and introduction of new elements and lessons learned from outside the region. At process roundtables, stakeholders communicated their aspirations and views on challenges and necessary responses regarding TWRM in their countries and identified cooperation opportunities. The process was influential in the preparation of the 2011 Memorandum of Understanding (MoU) for the Management of the Extended Transboundary Drin Basin, signed by the former Yugoslav Republic of Macedonia, Greece, Kosovo, and Montenegro. The Drin MoU provides the political framework for and defines the context of cooperation among the Drin Riparians. See Petersberg Process article at: http://www.twrm-med.net/southeastern-europe/regional-dialogue​ /­framework/petersberg-phase-ii-​athens-declaration-process. 112 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management • Broker (T80) to serve as a bridge between countries interventions (e.g., IUCN’s BRIDGE program, which that lack diplomatic ties or are at the minimum end of developed and manages an information and data the Level of Integration dimension (see “Dimensions portal/platform for the 3S Basins in the Mekong of Coordinated Basin Management” section in Region—box 5.1). chapter 2) (e.g., World Bank brokerage of Albania • Experts to Conduct Assessments and Studies (T71), and the former Yugoslav Republic of Macedonia which can provide cutting-edge advice on new proj- Memorandum of Understanding [MoU] concerning ects, latest methodologies, and technologies and the Lake Ohrid watershed).2 bring lessons learned from other projects they worked • Weight of Presence (T81): the mere presence of influ- on in various regions (e.g., World Bank OKR—box 5.2). ential third parties can give parties the confidence • Just in Time Notes, Analysis and Advice (T73) to assist to come together to discuss and agree on difficult countries with advice on policy reform or other issues, including water sharing. Although most interventions. examples of agreements that have been concluded due to the presence of influential witnesses commit- • Oversight Experts (T82) to ensure neutral advice ting to promoting compliance through diplomatic and impartiality of technical work. Experts could be means are peace agreements, it is conceivable that used to help with or supervise the design process this can also happen on difficult water sharing ques- carried out by countries jointly; this can build trust tions (e.g., 1942 Protocol of Peace, Friendship, and and confidence in data and information, as well as Boundaries, signed by Argentina, Brazil, Chile, and decision making. the United States as witnesses, who brokered the 1995 Cenepa War Itamaraty Peace Declaration; 2000 5.2.2 Project Finance Algiers Agreement between Ethiopia and Eritrea Basin development interventions, such as flow regula- with AU, EU, UN, and US as witnesses). tion, storage, or construction of irrigation schemes, may require large sums of money. Third parties can 5.2 Design of Intervention Tools assist with provision of finance for construction of 5.2.1 Neutral Knowledge Provision such infrastructure requirements. Financing can come *Cross-referenced with (T70–71, 73) and (boxes 5.1–5.2). from private or public sources. Although private financing primarily looks at profitable investments, Neutral knowledge provision can be as critical during public funds would focus on financial sustainability in the design stage as during the indentification of oppor- the long-term to provide public services. In addition, tunities stage of a basin development process. riparian countries can turn to bilateral or international Information, TA, and expertise provided by third development organizations for access to finance pro- parties are often used by countries in the design of ­ vided on concessional terms. Concessional financing complex development interventions. The tools are the for water management is available both on consider- same as for the earlier stage of engagement; these ations of achieving important human development include: goals by providing access to a resource that is vital for • Data and Information Provision (T70) to provide life, but also because sustainable and peaceful water neutral and trusted/reliable data to countries and and related-ecosystem management is recognized as verify data integrity for the design of development providing a (global) public good. Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 113 The multiple tools provided by private and public third used by developing countries and transition econo- parties to finance projects related to transboundary mies to invest in transboundary basin development. water resources include: A regular source of concessional finance are IFIs, such as the World Bank and regional development • Grants (T83) are nonrepayable funds. They are typ- banks (e.g., International Bank for Reconstruction ically provided for project finance in some of the and Development [IBRD] and International least developed countries or countries in or emerg- Development Association [IDA] Financing Terms— ing from conflict. They are also often used as a co-­ box 5.13). financing tool to fund institutional strengthening, policy, or sector reform alongside of infrastructure • Project Finance Guarantees (T85) are risk mitigation measures insuring political, loan, or payment risks investments. in order to promote investments. In developing • Loans and credits (T84) are provided based on agree- countries, the presence of multilateral or bilateral ment for future repayment of the principal amount risk insurance brings additional comfort to investors usually along with interest or other financial and are often the key to making complex invest- charges. Concessional finance in the form of loans ments reality (e.g., World Bank Group Guarantee and credits at lower-than-market rates is very often Mechanisms—box 5.14). BOX 5.13. International Bank for Reconstruction and Development and International Development Association Financing Terms In the World Bank, the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA)a offer concessional loans and credits. IBRD loans are low cost and predictable. Borrowers benefit from long maturities (up to 35 years), transparent LIBOR-based pricing, built-in hedging productsb to manage financial risks over the life of the loan, and the ability to customize repayment schedules according to project needs or debt management requirements. IDA credits have no interest rates although there is a small service charge and a commitment fee on undisbursed balances. The repayment period for IDA credits varies from 25 to 40 years depending on the income level of the country, with a 5- to 10-year grace period. Very often, different IFIs come together and co-finance investment projects or programs with other development partners. In co-financing, expenditures from a common list are jointly financed by the co-financiers. The funds are disbursed in agreed proportions. See IBRD Lending Rates and Loan Charges at: http://treasury.worldbank.org/bdm/htm/ibrd.html. See IDA overview at: http://ida.worldbank.org/about/what-ida. a. IBRD countries are those with a per capita income of minimum US$1,045. IDA countries are those with a per capita income less than US$1,045. b. These include currency conversions and swaps, interests rate conversions and swaps, interest rate caps and collars or commodity swaps. http://treasury.worldbank.org/bdm/pdf/IFL_MajorTermsConditions_en.pdf. 114 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 5.14. World Bank Guarantee Mechanisms The World Bank (IBRD and IDA) provides loan or payment guarantees in the context of specific investment projects. Loan guarantees provide risk mitigation to commercial lenders with respect to debt service payment defaults caused directly or indirectly by government failure to meet specific payment and/or performance obligations arising from contract, law, or regulation. Payment Guarantees provide risk mitigation to private projects or to foreign public entities with respect to payment default on non—loan-related obligations by government. All World Bank guarantees require a sovereign counter-guarantee and indemnity, comparable to the requirement of a sovereign guarantee for Bank lending to subsovereign and nonsovereign borrowers. Also under the World Bank Group, the Multilateral Investment Guarantee Agency (MIGA) provides guarantees in the form of political risk insurance for cross-border direct investments for a wide range of private sector clients. International Finance Corporation (IFC) provides credit guarantees for private sector participants as their primary clients. See World Bank Guarantees Program at: http://www.worldbank.org/en/programs/guarantees-program#1. Public–Private Partnerships (P3) (T86) combine the • Broker (T80) to guide the countries through the skills and resources of both the public and private sec- design process, ensure transparency and broker an tors through sharing risks and responsibilities. They agreement which becomes the basis for the imple- are frequently used to finance public assets or services. mentation of a project (e.g., World Bank brokerage Financing is often a combination of equity and debt. In of Albania and FYR Macedonia MoU concerning the addition to hedging risk for a private investor, a P3 can Lake Ohrid watershed). benefit a government through private expertise for designing, building, financing, maintaining, and/or • Weight of Presence (T81): the presence of a trusted and neutral partner can become the key to country agree- operating an investment (e.g., Financing the Nam ment on coordinated basin development interven- Theun 2 Project—box 5.15). tions, such as the replacement works financed through the Indus Basin Development Fund (see box 5.11). 5.2.3 Facilitation/Dialogue Processes *Cross-referenced with (T79–81) and (boxes 5.11 • Project Finance Safeguards (T87) promote country and 5.12). compliance with international standards and legal principles. They require, for example, the assess- As with the identification of opportunity stage, the ment of transboundary impact as part of the project convening and facilitation roles played by third parties environmental impact assessment. They can also can be the key to agreement on the design of a devel- be a means to initiate or facilitate riparian country opment intervention. As with the previous phase, discussions on projects with transboundary impact third parties contribute in the following ways: during the preparation and design stage, such as the • Convener (T79) through facilitation of design pro- notification requirement under Operational Policy cesses to facilitate decisions among basin countries 7.50 on International Waterways (e.g., World Bank (e.g., The Petersberg Process—box 5.12). safeguard policies and OP 7.50—box 5.16). Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 115 BOX 5.15. Financing the Nam Theun 2 Project The Nam Theun 2 Project (NT2) includes the development, construction, and operation of a 1,070 MW transbasin diversion power plant on the Nam Theun River; a 450 km2 reservoir on the Nakai Plateau in the Lao People’s Democratic Republic, including a 39-meter-high dam northwest of the plateau; a powerhouse 350 meters below the plateau; a regulating pond below the powerhouse; and a 27 km channel from the regulating pond to the Xe Bang Fai River Basin, also a tributary of the Mekong River. NT2 will generate 1,070 MW of electricity, of which 93 percent will be exported to Thailand. The project was financed through $330 million of equity and US$920 million of debt from equity loans and guarantees from Multilateral Development Banks (including the World Bank, Asian Development Bank, European Investment Bank, and the Nordic Investment Bank), export credit agencies (COFACE of France, EKN of Sweden, and GIEK of Norway), bilateral financing agencies (French Development Agency, PROPARCO, and the Export–Import Bank of Thailand), international commercial banks providing finance in hard currencies (including BNP Paribas, Crédit Agricole Indosuez, ANZ from Australia, Société Générale, Fortis Bank, and Bank of Tokyo-Mitsubishi), and Thai commercial banks providing finance in Thai baht. The Project follows a “Build Own Operate Transfer” public–private partnership framework with a concession period of 31 years (25 of which are operating years) after which the government acquires the rights to the facilities free of charge. The project was developed by the Nam Theun 2 Power Company (NTPC), which is owned by two private consortiums of shareholders: Eléctricité de France (EDF) owning 40 percent, Electricity Generating Public Company Limited of Thailand owning 35 percent, and the remaining 25 percent equity owned by the Lao PDR Holding State Enterprise. The expectation is that the government will receive between US$1.9 to US$2 billion in revenue over the first 25 years of operation until 2023, at which point it will receive full ownership rights to the project and the entirety of the revenue it creates. The P3 was made possible through three main contracts: the shareholder agreement to establish NTPC; the concession agreement for a period of six years of construction and 25 years of operation between NPTC and the Lao PDR government; and the power purchase agreement (PPA) with Energy Generating Authority of Thailand and Electricity Du Lao. Shareholders included two private international companies (functioning as the Head Contractor and the Principal Subcontractor) and two public entities, Lao Holding State Enterprise (LHSE) from Lao PDR in charge of the revenues and ETPC from Thailand in charge of supplying the energy. LHSE, representing the government of Lao PDR, needed financing for equity participation, mainly provided through IFIs loans and grants (AFD, ADB, European Investment Bank, and the World Bank). World Bank, MIGA, and ADB guarantees were fundamental for commercial banks to invest in the project. See Nam Theun 2 Project Overview at: http://www.worldbank.org/en/country/lao/brief​ /­nam-theun-2-project-overview-and-update. 116 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 5.16. OP 7.50 Projects on International Waterways Projects on international waterways may affect relations between the World Bank and its borrowers and between states (whether members of the World Bank or not). The World Bank recognizes that the cooperation and goodwill of riparians is essential for the efficient use and protection of the waterway. Therefore, it attaches great importance to riparians’ making appropriate agreements or arrangements for these purposes for the entire waterway or any part thereof. Through this policy (OP 7.50), the World Bank ensures that the international aspects of a project on an international waterway are dealt with at the earliest possible opportunity. If such a project is proposed, the World Bank requires the beneficiary state, if it has not already done so, formally to notify the other riparians of the proposed project and its project/program details. If the prospective borrower indicates to the World Bank that it does not wish to give notification, normally the World Bank itself does so. The notification ensures that potentially affected countries are informed of planned projects in shared basins. Following notification, if the other riparians raise objections to the proposed project, the Bank in appropriate cases may appoint one or more independent experts to examine the issues in accordance with BP 7.50. Should the Bank decide to proceed with the project despite the objections of the other riparians, the Bank informs them of its decision. The following exceptions are allowed to the Bank’s requirement that the other riparian states be notified of the proposed project: (a) For any ongoing schemes, projects involving additions or alterations that require rehabilitation, construction, or other changes that in the judgment of the Bank (i) will not adversely change the quality or quantity of water flows to the other riparians; and (ii) will not be adversely affected by the other riparians’ possible water use. This exception applies only to minor additions or alterations to the ongoing scheme; it does not cover works and activities that would exceed the original scheme, change its nature, or so alter or expand its scope and extent as to make it appear a new or different scheme. In case of doubt regarding the extent to which a project meets the criteria of this exception, the executive directors representing the riparians concerned are informed and given at least two months to reply. Even if projects meet the criteria of this exception, the Bank tries to secure compliance with the requirements of any agreement or arrangement between the riparians; (b) Water resource surveys and feasibility studies on or involving international waterways. However, the state proposing such activities includes in the terms of reference for the activities an examination of any potential riparian issues; and (c) Any project that relates to a tributary of an international waterway where the tributary runs exclusively in one state and the state is the lowest downstream riparian, unless there is concern that the project could cause appreciable harm to other states. See OP 7.50—Projects on International Waterways (Operations Manual) at: https://policies.worldbank.org​ /­sites/ppf3/PPFDocuments/2660090224b0825462f9.pdf. Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 117 5.3 Implementation and Compliance Tools (e.g., Global Environment Facility GEF IW:LEARN project twinning program—box 5.5). 5.3.1 Neutral Knowledge Provision *Cross-referenced with (T82). • Study Tours (T75) are exposure visits to learn from good practice elsewhere. They can be used to gain During the implementation and compliance stage, ideas on how to address specific basin develop- neutral third parties can be engaged to help with inde- ment challenges. Tours can showcase good prac- pendent monitoring of compliance and to assist in tices in aspects of basin management and facilitate identifying any necessary adjustments to be made due participant dialogue to identify areas of collabo- to changes in circumstances. Two tools can be of par- ration (e.g., SAWI Study Tour to the Yellow River ticular importance during this stage: box 5.6). • Data and Information Provision (T70) to provide neu- • Equipment, Software, and Technology Provision (T88) tral and trusted data to monitor compliance and to strengthen a country’s ability to carry out cer- identify opportunities for adjustments. tain basin management tasks, such as data analysis • Oversight Experts (T82) to monitor implementation, and manipulation (e.g., Third-Party equipment and and to alert on questions of compliance and neces- technology provision to Georgia—box 5.17). sary adjustments. 5.3.3 Promoting Compliance The financial tools provided by third parties and legal 5.3.2 Capacity Building agreements attached to it, can be used to promote the *Cross-referenced with (T73–75) and (boxes 5.3–5.7) implementation and adherence to international agree- Capacity building remains an important activity for the ments reached between riparian countries for the strengthening of joint management mechanisms also management of their shared resources. Examples of during the implementation and compliance stage as financial tools used include the following: there may be staff turnover or new staff is hired with expanding institutional mandates and new projects • Implementation Trust Funds (T89) have been set up to facilitate the implementation of a small number coming on board. Capacity building can be delivered in of international water agreements. The Secretariat various ways: of the 1992 UNECE Convention on the Protection • Tailored Workshops and Training Programs (T73) to and Use of Transboundary Watercourses and provide intensive technical learning on specific top- International Lakes administers a trust fund that can ics (e.g., JRC, Bangladesh Capacity Strengthening fund TA to assist countries with the Convention’s Programs [SAWI]—box 5.3; and Capacity Building for obligations, such as review of national laws to Cooperation on Dam Safety for the Kyrgyz Republic improve water quality standards. The Indus Basin and Kazakhstan [UNECE]—box 5.7). Development Fund has been set as a multidonor trust fund (MDTF) to finance irrigation replacement • Twinning (T74) is a process that pairs an organiza- works in Pakistan to implement the provisions of tional entity with a similar but more mature/experi- the Indus Waters Treaty (IWT) (see box 5.11). enced (“twin”) entity in another country to transfer relevant operational knowledge, including mana- • Payment and Loan Guarantees (T90) can potentially gerial, financial, and technical skills and systems. be designed such that they can be used to guaran- Twinning can help organizations be more s ­ trategic tee compliance; for example, to guarantee compli- in their initiatives and use of funds and staff ance with storage reservoir release schedules for 118 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 5.17. Equipment Provision to Georgia The National Meteorological and Hydrological Services of Georgia (NMHS) has received assistance from multiple sources in carrying out its functions including: (a) Beginning in 2006, the World Bank assisted the NMHS in conducting an assessment of economical efficiency of hydrometeorological provision in Georgia. This was followed by the installation of the United States weather-forecast model (WRF-EMS) for a limited area, installation of a German weather-forecast model (HRM) for a limited area (in 2007), and installation of a hydrological model (FEWS) for the Rioni River Basin in 2008. (b) Cooperation with the World Meteorological Organization (WMO) began in the 1990s when the NMHS purchased and installed a satellite meteorological information-receiving system and a telecommunications system (MESSIR-COM). In 2003, with the WMO’s support, Georgia purchased and installed an air meteorological information receiving system (SADIS). In 2008, WMO provided support for reequipping the Tbilisi Meteorological Station with modern measurement devices. WMO also provided training for more than 20 specialists. (c) In 2003, USAID assisted the NMHS with the reequipment of two meteorological stations with modern measuring devices and rehabilitation of the stations’ buildings, reequipment of seven hydrological gauges with modern measuring devices, and equipping the agency with satellite Internet (WEB-SAT). More recently, USAID has helped the NMHS develop a website, has equipped the NMHS with a portable water discharge-measuring Doppler device (2007), and has helped install a water-resources distribution simulation-model (Mike Basin 2007). (d) The Government of Finland has also supported Georgia’s efforts to reequip itself by providing for: the reequipment of seven hydrometeorological gauges with modern measuring means and 10 devices, as well as reequipping the hydrometeorological department with a portable water-discharge measuring Doppler device. See The Role of Hydrometeorological Services in Disaster Risk Management report at: http:// documents.worldbank.org/curated/en/960511468037565188/pdf/709420WP0P12910f​ Hydrometerological0.pdf. downstream hydropower production or irrigation provided any such noncompliance can be mone- benefits. These can be structured either as (a) loan tized and results in a payment obligation owed by guarantees to cover commercial lenders against pay- the relevant foreign public entity or a foreign gov- ment defaults by the private sector where such pay- ernment. Such guarantees are contemplated for the ment default occurred because of noncompliance by Nachtigal Project in Cameroon, which is located on upstream dam operators; or (b) payment guarantees a national river basin (box 5.18). Similar guarantees to cover the private sector or other stakeholders, could also be done at the cross-border level, as the including countries, against such noncompliance, World Bank can finance a guarantee for a nonloan Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 119 BOX 5.18. Guarantee Arrangement for Lom Pangar/Nachtigal Dams Lom Pangar Dam reservoir will unlock the energy production potential of a downstream run-of-river (ROR) dam cascade, as well as increasing the energy productivity of Edea and Song Loulou existing dams, in the Sanaga River Basin in Cameroon. The dam will store water during the wet periods and releasing it during dry periods. The reservoir will increase the guaranteed average water flow on the Sanaga River Basin from 720 m3/s to 1,040 m3/s year-round, thus benefiting downstream hydropower production, among other uses. ROR dams are envisioned to be developed by the industrial sector for auto consumption, under electric and water sector reforms to supply the national grid and contribute to basin management. Among these ROR dams is Nachtigal. Lom Pangar will be financed through World Bank, Europe Investment Bank and African Development Bank concessional lending. To hedge the risks of Nachtigal and to help Cameroon mobilize private financing, the project (currently under preparation) will include payment and loan guarantees. The payment guarantees will be based on the monetization of the loss of energy production as a consequence of Lom Pangar deficient water flow regulation. Therefore, the guarantee would not only be hedging risk but also promoting compliance of the upstream Dam operating agreement. See Hydropower Development on the Sanaga River Technical Assistance Project at: http://projects.worldbank​ .org/P157733?lang=en. service related to government payment obligations with such plans could be made a disbursement con- in favor of another foreign public entity or a for- dition of a loan promoting compliance with risk and eign government (e.g., a cross-border guarantee has impact mitigation plans (e.g., World Bank Safeguard been designed for the planned Banda Gas Project). 3 Reform—box 5.19). The key issue is whether the obligation being guar- anteed can be monetized (e.g., calculated hydro- • Procurement Standards (T92) applied to projects financed by IFIs may include requirements that electricity generation loss in case of deviation from oblige the contractor to observe certain environ- the release schedule). mental, social, health, and safety standards (e.g., • Financing Agreements (T91) that are concluded World Bank Procurement Reform—box 5.20). between the project financier and the beneficiary country can be used to include legal covenants to 5.3.4 Dispute Settlement Tools promote adherence to implementation standards by Third parties may assume responsibilities in dispute including disbursement conditions. For example, as settlement procedures, such as playing a facilitating a result of the World Bank’s safeguards reform, envi- role through mediation and conciliation or appoint- ronmental and social commitment plans become ment of arbitrators or neutral experts (NEs). Judicial or part of the financing agreement; these could include review bodies can also be designated to intervene implementation of a project in such a way that when differences or disputes arise. Parties may choose transboundary harm is mitigated. The compliance to submit their dispute to a Third-Party decision maker 120 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 5.19. World Bank Safeguard Reforms On August 4, 2016, the World Bank Board of Executive Directors approved a new environmental and social framework (ESF) that substitutes former Operational Policies with ten new Environmental and Social Standards (ESS). This new reform will enter into force in early 2018. Similarly, a new reform in procurement could be used to drive improvements with environmental, social, health, and safety (ESHS). Although indirect, these tools could help facilitate compliance of basin agreements. The World Bank could hold a riparian borrower accountable to the ESS through the legal agreement, and the borrower could also promote compliance by holding the contractor accountable through work contracts. Under the Safeguards Reform, the World Bank will require the borrower to prepare and implement projects so that the borrower meets the requirements of the new ESS.a This could be done through the existing borrower’s ESF. The borrower’s ESF could be enhanced by different measures and actions to address gaps and strengthen the framework when required in order to comply with the new ESS. These measures and actions will be part of the environmental and social commitment plan (ESCP). The ESCP will form part of the legal agreement, including, as necessary, obligations of the borrower to support the implementation of the ESCP. See the World Bank’s ESF at: http://www.worldbank.org/en/programs/environmental-and-social-policies​ -for-projects/brief/the-environmental-and-social-framework-esf. a. http://documents.worldbank.org/curated/en/383011492423734099/pdf/114278-WP-PUBLIC-13-4-2017-11-23-38-EnvironmentalandSo cialFrameworkWeb.pdf. BOX 5.20. World Bank Procurement Reform Environmental, social, health, and safety (ESHS) requirements will be included into the World Bank’s new bidding procedures, employment requirements and contracts. More importantly, ESHS performance security will be part of works contracts. Along with other safety and labor standards, specifications shall be drawn from the Environmental Impact Assessment and Environmental and Social Management Plans. Among the practical considerations is the possibility of the employer (the borrower) to withhold payments when there is lack of compliance with the ESHS specifications. The inclusion of Environmental and Social considerations in the legal agreement through the ESCP and the inclusion of ESHS performance securities in works contracts could also support compliance of basin agreements (although indirectly). For example, a prohibition to pollute a shared water source could be enhanced if appropriate water treatment or alternative disposal is included in the Environmental Mitigation Plan. If the borrower fails to do so, the borrower would no longer be in compliance with the legal agreement with the World Bank. The borrower, in turn, could also hold the contractors accountable through the ESHS performance security. Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 121 because it provides the certainty of a neutral, orderly, where the dispute revolves around very techni- and principled dispute settlement procedure and may cal issues. An NE or expert commission would be increase certainty that the dispute will be resolved. appointed by the parties or by a third party to inves- The steps countries can take with the engagement of tigate and issue a decision, which may be binding third parties may include: on the parties or subject to appeal (e.g., the Baglihar Difference—box 5.22). • Mediation (T93) involves a Third-Party mediator who conducts the negotiations between contending par- • Reference to an Arbitration Tribunal (T96) or ties on the basis of proposals made by the mediator, Independent Court (T97) is adopted as a tool usu- which are aimed at a mutually acceptable solution. ally only as the last resort in a multistep dispute settlement procedure. It refers the final decision • Conciliation (T94) is the process of settling a dispute to an independent third party, which decides by referring it to a commission of experts, whose based on law. This procedure is typically preagreed task is to investigate the dispute and propose ways between the parties in an international agreement. to resolve it by combining elements of inquiry and However, it always remains an option and can be mediation (e.g., Mediation and Conciliation under done also by an ad hoc joint agreement once the the Organisation pour la Mise en Valeur du fleuve dispute has emerged (e.g., Arbitral Appointment Sénégal [OMVS]—box 5.21). in the Sava Basin—box 5.23; the Gabčikovo- • Appointment of a Neutral Expert or Expert Nagymaros Case before the International Court of Commission (T95) is particularly useful in cases Justice [ICJ]—box 5.24). BOX 5.21. Mediation and Conciliation under the Organisation pour la Mise en Valeur du fleuve Sénégal When differences between Member States owing to interpretation or application of the 1972 Organisation pour la Mise en Valeur du fleuve Sénégal (OMVS) Convention arise, Article 24 indicates that Member States shall first resolve them via conciliation and mediation. If the Member States cannot reach agreement, the dispute is to be submitted to the Commission of Mediation, Conciliation, and Arbitration of the Organization of African Unity (the third party). The Commission’s decision can be appealed to the International Court of Justice. Article 5 of the 2002 Senegal River Water Charter reemphasizes the need to peacefully solve conflicts that arise within the Basin, and identifies the obligation to negotiate as a key water law principle for cooperation. The informal dispute resolution mechanisms under Article 24 of the OMVS Convention have been praised as particularly well-functioning. See OMVS Convention at: http://www.portail-omvs.org/sites/default/files/fichierspdf/textes-de-bases-de​ -_lomvs.pdf. See Senegal River Water Charter at: http://www.portail-omvs.org/en/presentation/eng-cadre-juridique​ /­water-charter-senegal-river-basin. 122 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 5.22. The Baglihar Difference In 2005, Pakistan claimed that a “difference” had arisen between India and Pakistan concerning India’s construction of a run-of-river (ROR) hydropower plant on the Chenab River, the Baglihar Project, in contravention of the Indus Waters Treaty (IWT). Although the primary use of the waters of the Chenab River was allocated to Pakistan, India was allowed certain uses of the river, including ROR power plants, subject to certain conditions. Pakistan alleged that the design of the Baglihar Plant was in violation of a number of conditions and would permit India to obstruct and control the flow of the Chenab. Pakistan raised three technical objections to the design of Baglihar, relating to the dam’s storage capacity, spillways, and power intake tunnels. Pakistan claimed that Baglihar did not conform to paragraph 8 of Annexure D to the IWT (Generation of Hydro-Electric Power by India on the Western Rivers): It alleged that the plant design was not based on correct, rational, and realistic estimates of maximum flood discharge at the site; the pondage exceeded twice the pondage required for firm power; and the intake for the turbines for the plant was not located at the highest level consistent with satisfactory and economical construction and operation of the plant as a ROR plant. India contended it was fully in compliance with the IWT and neither Baglihar’s height nor storage capacity disqualified it under Annexure D. Following failed negotiations, the World Bank was called upon to exercise its role under the IWT with regard to appointing the neutral expert (NE) (in the absence of an agreement between the parties to appoint an NE, or the appointment of an NE by a third party agreed upon by the countries, the World Bank, in consultation with the countries, appoints the NE). The decision of the NE on all matters within the NE’s competence would be final and binding. The NE directed the parties to share costs equally. See Baglihar Difference Expert Determination at: http://siteresources.worldbank.org/SOUTHASIAEXT/ Resources/223546-1171996340255​/­BagliharSummary.pdf. BOX 5.23. Arbitral Appointment in the Sava Basin In the event of a dispute referred to an arbitration tribunal under the Framework Agreement on the Sava River Basin, the designated arbitrators must agree on the choice of the president of the arbitration tribunal within two months following the designation of the second arbitrator. If they are unable to reach an agreement, then each party in dispute can request from the president of the International Court of Justice (ICJ) designation of the chairman of the arbitration tribunal, within two months. Additionally, if any one of the parties has not designated its arbitrator within two months following the delivery of the notification to the secretariat of the Sava Commission, the other party can inform the president of the ICJ who shall, within two months, designate the chairman of the arbitration tribunal. After his or her appointment, the chairman of the arbitration tribunal will request the party that did not designate the arbitrator to do so within two months. If the party does not comply, the chairman will inform the president of the ICJ who shall make the appointment within two months. See Framework Agreement on the Sava River Basin at: http://extwprlegs1.fao.org/docs/pdf/mul45452.pdf. Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 123 BOX 5.24. Gabčikovo-Nagymaros Case before the International Court of Justice The Gabčikovo-Nagymaros case arose out of a treaty signed in 1977 between Hungary and Czechoslovakia concerning the construction of a system of locks on the Danube River, to be operated jointly by the parties and designed for the production of electricity, improved navigation, flood protection, and regional development. Construction began in 1978. In the face of growing domestic ecological concern and criticism, the Hungarian government suspended works on its part of the project in 1989. The Hungarian government contended that the construction of the system of locks would inflict unjustifiable environmental harm on the ecology of the Danube and its surrounding wetlands. It argued that the ecological risks of the project were unacceptable. The Slovak Republic, which succeeded Czechoslovakia as a party to the project, denied these allegations and proceeded unilaterally with a provisional solution consisting of a single barrage on its side (Variant C), which resulted in a major reduction in the flow of the Danube downstream into Hungary. As a result of this unilateral action by the Slovak Republic, Hungary decided to terminate the 1977 Treaty. Despite efforts at mediation by the Commission of the European Communities, Hungary and the Slovak Republic were unable to resolve their differences. Hungary and the Slovak Republic (which succeeded to Czechoslovakia’s rights and obligations under the Treaty) executed a special agreement to refer the dispute to the International Court of Justice (ICJ) for adjudication. Three questions were submitted for resolution by the ICJ: (a) whether Hungary was entitled to suspend and subsequently abandon the works on the project; (b) whether the Slovak Republic was entitled to proceed with a provisional solution for damming the Danube River on the Slovak Republic territory; and (c) the legal effects of Hungary’s notification to terminate the 1977 Treaty. The ICJ was also requested to determine the legal consequences, including the rights and obligations of the parties, arising from its judgment on these three questions. The ICJ ruled that Hungary was not entitled to suspend the project and that by doing so it was showing its unwillingness to comply with multiple provisions of the Treaty. The court found that the Slovak Republic had the right to start construction on “Variant C” but the Slovak Republic violated Hungary’s international rights by putting it into operation in 1992. When “Variant C” was put into operation it violated the terms of the 1977 treaty, which was still in effect even though Hungary had sent notice of termination. The court further decided that Hungary’s notification of termination of the Treaty and related instruments on the basis of ecological necessity was not a legal termination, and, consequently, the Treaty is still in force and governs the relationship between the Parties. The court did not issue any specific orders. It concluded, “Hungary and the Slovak Republic must negotiate in good faith in the light of the prevailing situation, and must take all necessary measures to ensure the achievement of the objectives of the Treaty of 1977, in accordance with such modalities as they may agree upon.” The court added that the parties should take evolving international environmental norms into account, as it recognized that the project might cause environmental harm and that the Treaty required the parties to consider these norms. See Gabčikovo-Nagymaros Case at: http://www.icj-cij.org/files/case-related/92/092-19970925-JUD-01​ -00-EN.pdf. 124 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 5.4 Coordination Frameworks • Assistance for Building Institutions (T100) to ensure joint mechanisms are appropriately set up, tak- 5.4.1 Engagement Frameworks Preparation and ing into account scope and mandate (e.g., UNECE, Implementation United Nations Economic and Social Commission TA can be provided by third parties to assist countries for Asia and the Pacific [UNESCAP] and Organization with preparing and implementing engagement frame- for Security and Cooperation in Europe [OSCE], works, including through assistance in the drafting of along with governments of Sweden, Estonia, and the legal instruments, establishing institutions or joint man- United Kingdom provided assistance to the Kyrgyz agement mechanisms and defining rules and procedures. Republic and Kazakhstan to establish the commis- • Co-Signatory of an Agreement (T98) taking on spe- sion called for under Article 4 of the 2000 Chu-Talas cific obligations agreed to between parties as a party Agreement—box 5.27). to the agreement (e.g., the World Bank as a signatory • Assistance for Preparing Rules and Procedures to the IWT—box 5.25). (T101) to describe operations for managing shared • Assistance for Drafting Legal Instruments (T99) resources and ensuring efficient and sustainable with precision and incorporation of best practice performance of institutions (e.g., the GEF and the provisions/clauses from international experience ­ World Bank supported the preparation of rules and (e.g., United Nations Development Program [UNDP] procedures for water utilization, and protocols for supported a Panel of Experts [multidisciplinary data/information sharing and exchange and notifica- committee] to negotiate a cooperative framework tion/consultation for the Mekong River Commission treaty for the management of the Nile—box 5.26). [MRC]—box 5.28). BOX 5.25. World Bank Co-Signatory to the Indus Waters Treaty The World Bank is a signatory to the Indus Waters Treaty (IWT) for certain specified purposes. This is the only international waters treaty that is signed by a third party. The purposes for which the Bank signed the Treaty are specified in Articles V and X, and Annexures F, G, and H of the Treaty. Article V deals with the financial provisions, including the establishment and administration of the Indus Basin Development Fund. Article X deals with emergency situations that might have interfered with completion of the works funded under the Indus Basin Development Fund. Annexure F deals with the NE to be appointed to resolve differences between the two parties. Annexure G deals with the Court of Arbitration to be established to resolve disputes between them. Annexure H deals with the arrangements during the transitional period when Pakistan was discontinuing its reliance on the Eastern Rivers. The responsibilities of the World Bank under Articles V and X, and Annexure H were completed in the 1970s. The remaining responsibilities of the World Bank relate to settlement of differences and disputes under Annexures F and G.2. See 1960 Indus Waters Treaty at: http://siteresources.worldbank.org/INTSOUTHASIA​ /­Resources/223497-1105737253588/IndusWatersTreaty1960.pdf. Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management 125 BOX 5.26. Panel of Experts to Negotiate a Framework Treaty for the Nile The Nile Basin countries have negotiated a cooperative framework treaty for the management of the Nile, the “Agreement on the Nile River Basin Cooperative Framework.” The process, which commenced in 1997 and was initially supported by United Nations Development Program (UNDP), was prepared through a Panel of Experts, a multidisciplinary committee in which each country was represented with three members. UNDP funding supported regular meetings of the Panel of Experts from 1997 to 2000 as well as national consultations and study tours to the Mekong and the Senegal River Commissions in order to draw applicable lessons for the Nile river basin through the review of other institutional frameworks. The Panel of Experts reported regularly to the Council of Ministers of Water Affairs on the progress of the framework preparation. See Cooperative Framework Agreement http://www.nilebasin.org/index.php/nbi/cooperative-framework​ -agreement. See Agreement on the Nile River Basin Cooperative Framework at: http://www.nilebasin.org/index.php​ /­media-center/documents-publications/30-cooperative-framework-agreement/file. BOX 5.27. Third-Party Assistance to Establish the Chu-Talas Commission The Republic of Kazakhstan and the Kyrgyz Republic share the waters of transboundary Central Asian rivers Chu and Talas, which provide essential resources for irrigation of agricultural lands as well as opportunities for the generation of hydropower. Because all the facilities for the rivers’ regulation—dams, water reservoirs, and canals—are located upstream in the territory of the Kyrgyz Republic and Kazakhstan depends on the operation and proper maintenance of these facilities, the two countries decided to establish a legal basis for the joint operation of this infrastructure. In January 2000, the Agreement on the Use of Water Management Facilities of Intergovernmental Status on the Rivers Chu and Talas was signed by Kazakhstan and the Kyrgyz Republic and subsequently ratified by their Parliaments in 2002. Under Article 5 of the Agreement, the parties committed to establish a permanent commission to determine the operation mode for water infrastructure and the share of each party in funding O&M costs. In 2003 OSCE, United Nations Economic Commission for Europe (UNECE) and UNESCAP initiated the project “Support for the Creation of a Transboundary Water Commission on the Chu and Talas Rivers between Kazakhstan and Kyrgyzstan” (Chu-Talas I) with funding from the United Kingdom, Sweden, and Estonia. The project facilitated the establishment of a bilateral Commission in 2006. In particular, the project allowed developing the Statute of the Commission. The main activities of the Chu-Talas Commission focus on (a) approval of water box continues next page 126 Promoting Development in Shared River Basins: Tools for Enhancing Transboundary Basin Management BOX 5.27. continued resources allocation in the Chu and Talas River Basins between Kazakhstan and the Kyrgyz Republic; (b) determination of measures to maintain water facilities of inter-State use and provide for their routine and capital repair; and (c) approval of a financing plan for the above measures. The establishment of this sustainable coordination structure, which includes a permanent secretariat as well as experts and working groups, enables joint and transparent decision making on water allocation and maintenance costs by the two parties, as well as relevant information sharing, efficient implementation of joint projects, prevention, and rapid settlement of problematic situations in the Chu and Talas River Basins. See Support for the Creation of a Transboundary Water Commission on the Chu and Talas Rivers Between Kazakhstan and Kyrgyzstan UNECE final report at: https://www.unece.org/fileadmin/DAM/env/water​ /­Chu-Talas/OSCE_Chu_Talas_Final_Report.pdf. BOX 5.28. Global Environment Facility and World Bank Support to the Mekong River Commission The Mekong River drains a basin area of about 795,000 km2 in six countries: China’s Yunnan Province, Myanmar, the Lao People’s Democratic Republic, Thailand, Cambodia, and Vietnam. Third parties have provided support in particular to the downstream countries for coordinated management since the 1950s. The United Nations Development Program (UNDP), with strong donor involvement, brokered the Agreement on the Cooperation for the Sustainable Development of the Mekong River Basin among the Lower Mekong countries: Cambodia, Lao PDR, Thailand, and Vietnam. The Agreement governs basin planning and management; outlines requirements for notification, consultation and prior agreement for planned measures; and establishes the Mekong River Commission (MRC). The MRC is funded through contributions from the four Member Countries, and through technical and financial contributions from 13 countries, the European Union and the World Bank. One example of Third-Party TA in the basin was the support by the Global Environment Facility and the World Bank (with co-financiers Finland, Japan, and France), under the Water Utilization Project (WUP) of the MRC Secretariat. The WUP helped to develop a Decision Support Framework, tools for the joint use of the basin’s resources, including robust hydrological simulation models, and Rules on Mekong Water: (a) the Rule on Notification of the riparian neighbors in case of interventions in the water system that may affect the neighbors; (b) the Rule on Sharing of Data, which now allows a more comprehensive and reliable collection and use of hydrological information; and (c) the Rule concerning the maintenance of the minimum required flow, which was changed into a Procedure after negotiations facilitated by the World Bank. See Agreement on the Cooperation for the Sustainable Development of the Mekong River Basin at: http:// www.mrcmekong.org/assets/Publications/policies/agreement-Apr95.pdf. See Mekong River Water Utilization Project at: http://projects.worldbank.org/P045864​ /­mekong-river-water-utilization-project?lang=en. 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