Arbitration the only way to resolve water dispute

The publication of "Water Talks? If only it could" by the Singapore government ruffles the Malaysia's feathers the second time this year. The first time was in January when Singapore published all four Water Agreements signed between Singapore and Johor and some private exchanges between top leaders of both countries on the water issue.

It is apparent that Singapore has, not inadvertently, crossed the inviolable line of international diplomacy by publishing confidential documents relating to the water issue.

Malaysia had reasons to be furious and was right in ticking Singapore off for breach of confidence in making public such top-level confidential matters. The Singapore government, in its recent publication of "Water Talks? If only it could" has again deliberately floundered its dealings with its closest neighbour. This would invariably cause more ructions making it more and more difficult for both countries to cut the Gordian knot.

Be it as it may, the Water Agreements, made public by Singapore, serve to provide invaluable information to enable interested Malaysians to have a better understanding of the current water dispute.

So far, the highlight of the dispute appears to be on the price of raw water Singapore draws from Johor. Since 1961 (not 1927) Singapore has been paying only 3 sen per 1000 gallons of raw water, which is dirt cheap by any standard. However, this is not the only cost to Singapore because it has to pay for the leasing of land including water catchment and waterworks areas, the development of water supply facilities including dams, treatment plants, pipelines etc and their operation and maintenance.

Payment for the raw water constitutes only one side of the equation. On the other side, Johor is buying treated water from Singapore. Since 1961, the price of treated water supplied to Johor has been fixed at 50 sen per 1,000 gallons. This rate, when compared to the current estimate of weighted average water tariff for Johor (after the recent 30% increase) of RM7.15 per 1,000 gallons, is also dirt-cheap.

Furthermore, it is estimated that Singapore is currently supplying about 35 million gallons of treated water per day (mgd) to Johor, about double the stipulated quantity, which Singapore is obliged to sell to Johor.

Therefore, the price of raw water is not the only bone of contention. Surprisingly, no party, not even Singapore, has touched on the quantity and price of treated water, which Johor is buying from Singapore under the Water Agreements.

It is significant to note that though the 61 and 62 Agreements provide for the review of the rates for raw and treated water after the expiry of 25 years i.e. in 1986/1987, both countries apparently chose to defer to review year 2002, a delay of 15 years.

The 1990 Agreement is supplementary to the 1962 Agreement and is based on the MOU between the two countries signed on 28th June 1988. Amongst others, it reaffirms Singapore's right to draw water from Johor river "subject to the terms, provisions, conditions and stipulations" of the 1962 Agreement.

It is important to note that the MOU was drawn up during the period when the 61 and 62 Water Agreements were due for review. Surely the subject of water rates would have been brought up during the discussions between both parties, which lead to the signing of the MOU in 1988.

It could have been a deliberate move by both parties then not to discuss the price reviews for if Malaysia wanted to revise the price of raw water, Singapore too would surely want an increase in the price of treated water supplied to Johor. Moreover, Johor was then dependent on Singapore for its treated water supply and drawing much more than its entitlement as well. Preserving the status quo was a win-win situation for both.

By publishing "Water Talks. If only it could" Singapore has obviously played its trump card and given up all hope of reaching in the present generation an amicable solution to the present impasse with Malaysia on the water issue. It looks like Singapore is prepared to sit it out until the expiry of the three agreements, one in 2011 and the others in 2061 and has little hope of renewing any of them. In the mean time, it has gone ahead with its NEWater and desalination schemes.

For Malaysia, if it still insists to revise the rate for the raw water, the only recourse is through arbitration in accordance with the provisions of the Water Agreements. These provisions stipulate that where disputes cannot be resolved, they shall be referred to arbitration in accordance with the law of Johor relating to arbitration. Or alternatively, as the Water Agreements are enshrined in the Separation Agreement, which was registered in the United Nations, the dispute can be resolved by the International Court of Justice.