Case studies

Case Study of Transboundary Dispute Resolution: the Lesotho Highlands Water Project

Authors: Aaron T. Wolf and Joshua T. Newton

Figure 1: Map of the Senqu River (Lesotho Highlands Project, TFDD, 2007)..

Background

Development in Lesotho has been limited by its lack of natural resources and investment capital. Water is its only abundant resource, which is precisely what regions of neighboring South Africa have been lacking. A project to transfer water from the Senqu River to South Africa had been investigated in the 1950s, and again in the 1960s. The project was never implemented due to disagreement over appropriate payment for the water.

Table 1: Features of the Lesotho Highlands.

a Values for lakes under "Annual Flow" are for storage volumes.
b Source: Kulshreshtha (1993)
c Sources: Gleick ed. (1993); UN Register of International Rivers (1978)
Remaining data from TFDD, 2007..

The problem

Lesotho, completely surrounded by South Africa, is a state poor in most natural resources, water being the exception. The industrial hub of South Africa, from Pretoria to Witwatersrand, has been exploiting most of the local water resources for years and the South African government has been in search of alternate sources. The elaborate technical and financial arrangements that led to construction of the Lesotho Highlands Water Project (LHWP) provide a good example of the possible gains of an integrative arrangement including a diverse "basket" of benefits.

Attempts at conflict management

In 1978, the governments of Lesotho and South Africa appointed a joint technical team to investigate the possibility of a water transfer project. The first feasibility study suggested a project to transfer 35 m3/sec, four dams, 100 km of transfer tunnel, and a hydropower component. Agreement was reached to study the project in more detail, the cost of the study to be borne by both governments.

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 m 3 /sec. A treaty between the two states was necessary to negotiate for this international project. Negotiations proceeded through 1986 and the "Treaty on the Lesotho Highlands Water Project between the Government of the Kingdom of Lesotho and the Government of the Republic of South Africa " was signed into law on October 24, 1986.

It is testimony to the resilience of these arrangements that no significant changes were made despite the dramatic political shifts in South Africa at the end of the 1980s until 1990.

Outcome

The Treaty spells out an elaborate arrangement of technical, economic, and political intricacy. A boycott of international aid for apartheid South Africa required that the project be financed, and managed, in sections. The water transfer component was entirely financed by South Africa, which would also make payments for the water that would be delivered. The hydropower and development components were undertaken by Lesotho, which received international aid from a variety of donor agencies, particularly the World Bank. Phase IA of the Lesotho Highlands Water Project was completed in 1998, at a cost of $2.4 billion. Phase IB of the project was completed in early 2004, as a cost of approximately $1.5 billion.

The 1986 treaty provided for the construction of additional Phases: II-IV. However, changes in the projection of water demand in South Africa, along with concerns over negative social and environmental impacts of the project, have lead to negotiations on the future phases. In 2004 a feasibility study of Phase 2 began between the nations of South Africa and Lesotho.

Although Environmental Action Plans (EAPs) were carried out for both Phases IA and IB, EAPs for Phase IA were carried out while construction for the phase was already underway. It was in the course of Phase IB EAPs in 1994 that the need for an instream flow requirement became apparent (see http://www.metsi.com/LHWP/ifr.htm#motivating). After studies of the biophysical, social and economic effects of the project were carried out, an Instream Flow Requirement (IFR) policy was implemented in 2002. In particular, river reaches and communities downstream of the project sites were considered in the assessment, whereas EAPs of Phase I considered only those areas only upstream of the project sites.

Lessons learned

• Even with power disparity, there is possibility for agreement over water resources through economic benefits.

South Africa is a much more powerful nation than Lesotho, but Lesotho has abundant water resources, which, through the Highlands Project, will benefit both nations economically and through the provision of water to South Africa. It is possible even when there is such a wide gap between nations in terms of power, to collaborate for the mutual gain of both countries.

• It is more economically sound to begin impact studies before nations start to construct projects.

It was shown through the Lesotho Highlands Water Project that if impact studies are started after the initiation of a major hydro-project, the costs for the project go up as necessary components for the project may not have been considered pre-study. For the Phase II of the LHWP, studies are being conducted to judge the feasibility of a project that was designed more than 15 years to ago to investigate in a more comprehensive manner the possible impacts of the project.

• Renegotiation clauses in an agreement can prevent issues from arising for the nations involved.

The LHWP treaty also exemplifies the importance of providing for renegotiation of project terms. In the absence of such a provision, the additional phases of the project might have been implemented without adequate consideration of their feasibility

Creative outcomes resulting from resolution process

The Lesotho Highlands Water Project provides lessons in the importance of an integrated approach to negotiating the allocation of a "basket" of resources. South Africa receives cost-effective water for its continued growth, while Lesotho receives revenue and hydropower for its own development.

Timeline

References

Gleick, P.H., ed. Water in Crisis. A Guide to the World's Fresh Water Resources, New York : Oxford University Press, pp. 13-24.

Kulshreshtha, S.N. (1993). World Water Resources and Regional Vulnerability: Impact of Future Changes. RR-93-10, IIASA, Laxenburg, Austria.

Transboundary Freshwater Dispute Database (TFDD) (2007). Oregon State University.
Available on-line at: http://www.transboundarywaters.orst.edu/

United Nations. (1978). Register of international rivers, Water Supply Management, 2 (1). New York: Pergamon Press.

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