CASE STUDY

GABCIKOVO-NAGYAMAROS PROJECT CASE (HUNGARY V.SLOVAKIA) 1993

Official citation- I.C.J. reports 1997,p.7

TABLE OF CONTENTS
Chapter No. Chapter-1 Chapter-2 Chapter-3 Chapter-4 Chapter-5 Chapter-6 Topics Background of the case ............................................. Facts of the case......................................................... Issues raised by both the parties................................ Judgement.................................................................. Contribution............................................................... Abstract......................................................................

Chapter-1

BACKGROUND OF THE CASE

The joint Hungarian-Czechoslovak project was agreed upon on 16 SEPTEMBER 1977 in BUDAPEST TREATY concerning the construction and operation of the GabcikovoNagymaros System of Locks as a joint investment. It was a large barrage project on Danube. The 1977 Treaty entered into force on 30 June 1978. According to its Preamble, the system was designed to attain the broad utilization of the natural resources of the BratislavaBudapest section of the Danube River for the development of water resources energy, transport, agriculture and other sectors of the national economy of the Contracting Parties. The joint investment was thus essentially aimed at the production of hydroelectricity, the improvement of navigation on the relevant section of the Danube and the protection of the areas along the banks against flooding. At the same time, by the terms of the Treaty, the contracting parties undertook to ensure that the quality of water in the Danube was not impaired as a result of the Project, and that compliance with the obligations for the protection of nature arising in connection with the construction and operation of the System of Locks would be observed. The 1977 Treaty describes the principal works to be constructed in pursuance of the Project. It provided for the building of two series of locks, one at Gabcikovo (in Czechoslovak territory) and the other at Nagymaros (in Hungarian territory), to constitute a single arid indivisible operational system of works to prevent floods, improve river navigability and hydro-electricity production. The Treaty further provided that the technical specifications concerning the system would be included in the Joint Contractual Plan which was to be drawn up in accordance with the Agreement signed by the two Governments for this purpose on 6 May 1976. It also provided for the construction, financing and management of the works on a joint basis in which the Parties participated in equal measure. This case raise some significant questions for the first time that the parties to the dispute raised a plea for orders of specific performance before the Court and this was the first ever dispute in which the Court was directly asked to consider the consequences of the legal developments in the field of environmental protection. Even though the relationship between

the law of treaties and the law of State responsibility had generated much general concern, the Court in the past, had not been presented with an occasion to pronounce on these issues.

Chapter-2

FACTS OF THE CASE

This gabcikovo-nagyamaros project intiated by the Budapest treaty of 1977 between the Hungarian peoples republic and czechoslavik socialist republic for the construction on Danube river. The four main purpose of this project are electricity production, navigation, flood protection and regional development. The project was to consist of a bypass canal on the Slovak territory which was designed to produce peak flow electricity, and the downstream step on the Hungarian territory which was designed to produce a constant flow of electricity. In order to provide for the adverse impact that a project of this scale was likely to have on the environment, the 1977 Treaty contained provisions specifically to limit the extent of the possible adverse environmental impact. The Treaty had categorically provided that the construction of the project should not in any way impair the quality of water in the Danube, preservation of the natural environment was to be ensured and the fishing interests were to be secured. The detailed implementation of the project was to be carried out in accordance with a series of interrelated agreements, out of which the most crucial was the joint contractual plan. The said plan contained provisions with regard to the technical details of the project as also the financial responsibility for its construction. In fact, after the emergence of the dispute, both the disputing parties commissioned various studies as to the scientific impact of the project, however, it became abundantly clear from the pleadings of both the contesting States that no serious environmental impact assessment had been carried out before the conclusion of the Treaty. The part of project which had generated in Hungary, the Hungarian Government suspended the works in 1989 alleging grave risk to Hungarians environment and Budapest water supply. The Slovak Republic/Slovakia, which succeeded Czechoslovakia as a party to the Project, denied these allegations and undertook an alternate project wholly on Slovak territory. Czechoslovakia decided to continue with the implementation of the project in a limited form on its territory (which was referred to as the so-called Variant C). This arrangement involved a unilateral diversion of the waters of the Danube and was forcefully opposed by Hungary. Hungary finally terminated the 1977 treaty with effect from 25 May, 1992. Czechoslovakia proceeded with Variant C and dammed the Danube on 23 October,

1992. On 1 January 1993 Slovakia became an independent state. A series of negotiations were carried under the aegis of the European Communities and in April 1994 the Special Agreement for Submission to the International Court of Justice of the Differences between the Republic of Hungary and the Slovak Republic Concerning the Gabcikovo-Nagymaros Project. Under Article 2 of the special agreement, the Court was requested to decide the dispute on the basis of the 1977 Treaty and the rules and principles of general international law, as well as such other treaties as the Court might find applicable. This unilateral operation, has allegedly had, and will continue to have, significant detrimental effects on Hungarys environment and access to the water of the River Danube. Despite efforts at mediation by Commission of the European Committees, Hungary and Slovakia were unable to resolve their differences, and in 1993 the dispute that referred to the International Court of Justice for adjudication. At this point of time, it would also be interesting to note that this case was noted internationally as the first environmental case to be decided by the ICJ.

Chapter-3

ISSUES RAISED BY BOTH THE PARTIES

ISSUES PRESENTED (1) Whether the environmental concerns expressed by Hungary created a state of necessity under customary international law; (2) Whether Slovakia was legally entitled to unilaterally plan and operate an alternative project; and; (3) Whether Hungarys notification of the termination of the treaty of 1977 was legal.

HUNGARIAN ARGUMENTS The Danube River is capable of supplying approximately 60% of Hungarys drinking water. Water from the Danube River is of particularly high quality because of a bankfiltering process in which water seeps from the Danube through a naturally filtering bioactive pebble bed into an area aquifer hundreds of meters deep. The reservoir will substantially reduce the rate of water flow, causing sediment to accumulate along both the floor of the reservoir and river. Toxins such as iron, manganese, and other industrial pollutants that would normally be transported downstream will settle along the floor of the reservoir. The sediment will also provide a breeding ground for harmful bacteria. Both the toxins and the bacteria will infiltrate the aquifer and enter drinking water supplies, polluting the ground water reserves within ten years. As the sediment accumulates, it will have to be dredged. Dredging of the reservoir and riverbed will reintroduce the harmful pollutants into the surface water, while also destroying the bioactive pebble bed responsible for the natural filtration of the river water. Destruction of the pebble bed will permit additional organic micro pollutants and microbes to enter and contaminate the aquifer. Leaching of hydrocarbon compounds from the asphalt layer lining the power canal will further pollute the river water. The diversion of the river channel will disconnect the main river from a complex system of tributaries

that play an essential role in the self-purification of the Danube River. The water table upstream of the Dunakiliti Dam will rise, causing soil saturation and reducing the productivity of farm land. Below the dam, the water table will lower, reducing crop production and increasing drought susceptibility. The corresponding fluctuation in the water table will affect the forest habitat of the region and potentially result in the destruction of 50,000 acres of floodplain. The loweringof the aquifer will also jeopardize the freshwater supply of local inhabitants. The complex ecological nature of the river basin in the area of the G-N Project means that the basin serves as a fertile ground for the development of an extremely diverse collection of flora and fauna.The complex ecological nature of the area also renders the flora and fauna highly susceptible to changes in the environment. Extensive ecological disruption caused by diverting the river from its natural channel for 25 kilometers will likely destroy an estimated 80-90% of the 5000 animal species that inhabit the area. The fish population alone is likely to fall by 25%. Commercial fish yields will likely fall by a staggering 90%. Although this Project was intended to increase the flood control level of the region, there is concern that the quality of the reservoir embankments and the walls of the canal do not meet international standards of structural stability. Concern also exists that the Project lacks measures to prevent accidental flooding or to protect the surrounding area from floodwaters. This Project facilities are constructed in the area of a geologically young fault. Geological and seismological characteristics of the region were little understood at the time the Project was conceived. In fact, at the time of conception, no geological or geophysical evaluations of the impact of the G-N Project had been conducted. The complicated nature of the region has, however, become apparent during the course of preliminary construction. Without further studies to determine the necessary modifications to this Project, the parties would be risking human and economic disaster with financial losses running ten times the cost of the whole investment. The economic costs of maintaining and operating this Project, coupled with the costs of measures to moderate environmental damage and the value of lost agricultural production will dwarf the value of energy produced over the life of the Project. Diversion of the Danube into the power canal will physically isolate the villages of Dobrohost, Vojca, and Bodiky from the rest of Slovakia. The physical separation, coupled

with the environmental devastation and the reduced agricultural production will cause a rural exodus from these villages. The diversion into the power canal will also deprive Hungary of access to the economic resources of 25 kilometers of the Danube River. This access was one of the primary rationales for locating the international border along the median of the Danube river.

SLOVAKIA ARGUMENTS Slovakia asserts that Hungary has grossly exaggerated the environmental dangers of the G-N Project. It contends that it is not only possible to mitigate much of the Projects feared environmental damage, but the Project will have significant environmental benefits. Slovakiaasserts, for example, that the Dunakiliti reservoir will actually improve water quality by slowing erosion and slowing the rate of the Danube, thereby permitting larger quantities of water to pass through the bio-active pebble layer and dilute the currently polluted aquifer. According to Slovakia, the Hungarian projections of reduced water quality due to the decrease in oxygen content of the river, the increasing silt of the reservoir, and the infiltration of toxins are based on scant scientific research and are contrary to reports from international experts. Slovakia also notes that the current water table in the Danube Region may fluctuate by as much as seven meters, creating less than ideal conditions for agricultural production. The G-N Project will reduce the fluctuations in the aquifer level, raise the water table where crops have been susceptible to drought, and lower the water table where crops have been damaged by inundation. The harm caused by the change of the hydraulic regime will most likely alter the wildlife habitat in the meadow-forests and fish habitat. Slovakia argues that the impact on the meadow forest can be mitigated by timing discharge of water from the Dunakiliti reservoir and the construction of low stony barrages in the old river bed. In fact, the Project will bring water to regions of the Danube meadow-forests in Hungary that are currently drought-ridden throughout much of the year. The G-N Project is also the most economically efficient means of controlling floods in this region of theDanube. Further, Slovakia asserts that a number of comprehensive studies attest to the geological stability ofthe region and the structural integrity of the Project facilities.

Chapter-4

JUDGEMENT

With respect to the first issue, the Court held that for the state of necessity exception to apply with respect to the Gabcikovo-Nagymaros project, the following factors would have to be established by Hungary: The environmental concerns constituted an essential interest of Hungary. Hungarys environmental concerns were threatened by grave and imminent peril. Suspension and abandonment of construction works was the only way Hungary could have safeguarded its environmental concerns. Hungarys suspension and abandonment of construction works did not impair theessential interests of Slovakia. Hungarys obligation under the 1977 treaty did not arise out a peremptory norm of general international law. The 1977 treaty did not, either explicitly or implicitly, exclude the possibility of invoking the state of necessity exception with respect to Hungarys obligations under it Hungary not contributed to the occurrence of the state of necessity

However, the fifteen judge bench standard found it difficult to conclude that Hungarys environment was in fact threatened by grave and imminent peril; and held that a mere apprehension of a possible peril is not sufficient to meet this, as it must simultaneously be grave and imminent. The court also noted that the dangers Hungary outlined were mostly of a long term nature and uncertain. Moreover, suspension and abandonment were not found to be the only means available to Hungary to safeguard its environmental concerns. Thus, the state of necessity exception was found to be inapplicable in the instant matter. With respect to the second issue, the court held that while Slovakia was entitled to unilaterally plan and construct its alternative solution to the project, it did not have the right to put that alternative solution into operation, because it violated the express purpose of the

1977 treaty, as well as Hungarys territorial integrity and sovereign independence. Moreover, Slovakias operation of the alternative solution did not constitute a lawful countermeasure under international law, because the deprivation of Hungarys right to an equitable share of the use of the Danube River was in excess of the injury suffered by Slovakia.In light of the arguments put forth by Hungary vis--vis the existence of state necessity,impossibility of performance of the 1977 treaty, the occurrence of fundamental change of circumstances, material breach of the 1977 treaty by Slovakia; the ICJ found that Hungarys notification of termination of the 1977 treaty was at best premature, and did not have the effect of terminating the 1977 treaty under International law. LEGAL CONSEQUENCES OF JUDGMENT It is of cardinal importance that the Court has found that the 1977 Treaty is still in force and consequently governs the relationship between the Parties. That relationship is also determined by the piles of other relevant conventions to which the two States are party, by the rules of general international law and, in this particular case, by the rules of State responsibility; but it is governed, above all, by the applicable rules of the 1977 Treaty as a lex specialis. The Court observes that it cannot, however, disregard the fact that the Treaty has not been fully implemented by either party for years, and indeed that their acts of commission and omission have contributed to creating the factual situation that now exists. Nor can it overlook that factual situation - or fine practical possibilities and impossibilities to which it gives rise - when deciding on the legal requirements for the future conduct of the Parties. What is essential, therefore, is that the factual situation as it has developed since 1989 shall be placed within the context of the preserved and developing treaty relationship, in order to achieve its object and purpose insofar as that is feasible. For it is only then that the irregular state of affairs which exists as the result of the failure of both Parties to comply with their treaty obligations can be remedied. The Court pointed out that the 1977 Treaty is not only a joint investment project for the production of energy, but it was designed to serve other objectives as well: the improvement of the navigability of the Danube, flood control and regulation of ice-discharge, and the protection of the natural environment. In order to achieve these objectives the parties accepted obligations of conduct, obligations of performance, and obligations of result.

It is clear that the Project's impact upon, and its implications for, the environment are of necessity a key issue. In order to evaluate the environmental risks, current standards must be taken into consideration. This is not only allowed by the wording of Articles 15 and 19, but even prescribed, to the extent that these articles impose a continuing - and thus necessarily evolving obligation on the parties to maintain the quality of the water of the Danube and to protect nature. The Court is mindful that, in the field of environmental protection, vigilance and prevention are required on account of the often irreversible character of damage to the environment and of the limitations inherent in the very mechanism of reparation of this type of damage. New norms and standards have been developed, set forth in a great number of instruments during the last two decades. Such new norms have to be taken into consideration,and such new standards given proper weight, not only when States contemplate new activities but also when continuing with activities begun in the past. For the purposes of the presentcase, this means that the Parties together should look afresh at the effects on the environment of the operation of the Gabcikovo power plant. In particular they must find a satisfactory solution for the volume of water to be released into the old bed of the Danube and into the side-arms on both sides of the river. In the Judgment, the Court concluded that both Parties committed internationally wrongful acts, and it has noted that those acts gave rise to the damage sustained by the Parties; consequently, Hungary and Slovakia are both under an obligation to pay compensation and are both entitled to obtain compensation. The Court observed, however, that given the fact, that there have been intersecting wrongs by both Parties, the issue of compensation could satisfactorily be resolved in the framework of an overall settlement if each of the Parties were to renounce or cancel all financial claims and counterclaims. At the same time, the Court wishes to point out that the settlement of accounts for the construction of the works is different from the issue of compensation, and must be resolved in accordance with the 1977 Treaty and related instruments. If Hungary is to share in the operation and benefits of the Cunovo complex, it must pay a proportionate share of the building and running costs.

Chapter-5

CONTRIBUTION

Gabcikovo-Nagymaros

project prompted the constitution of a Special Environmental

Chamber of the ICJ. It also clarified the Courts jurisprudence with respect to the state and non-state components of environmental protection in as much the Court held that these were grounded in general international law. The Court confirmed customary nature of at least part of International Environmental Law, although without referring to any specific norm. The following paragraph of the Courts judgment confirms this contention: The Court has no difficulty in acknowledging that the concerns expressed by Hungary for its natural environment in the region affected by the Gabcikovo- Nagymaros project related to an essential interest of that State, within the meaning given to that expression in Article 33 of the Draft of the International Law Commission. Neither of the Parties contended that new peremptory norms of environmental law had emerged since the conclusion of the 1977 Treaty, and the Court will consequently not be required to examine the scope of Article 64 of the Vienna Convention on the Law of Treaties. On the other hand, the Court wishes to point out that newly developed norms of environmental law are relevant for the implementation of the Treaty and that the parties could, by agreement, incorporate them through the application of Articles 15, 19 and 20 of the Treaty. These articles do not contain specific obligations of performance but require the parties, in carrying out their obligations to ensure that the quality of water in the Danube is not impaired and that nature is protected, to take new environmental norms into consideration when agreeing upon the means to be specified in the Joint Contractual Plan. Thus, confirmation of the customary nature of at least part of International Environmental Law was given in three ways. Firstly, it was acknowledged that environmental interests may amount to essential interests in the meaning of the customary rule providing for the state of necessity defense. While an interest is conceptually different from a norm, the existence of a legally protected interest assumes that such interest has legal relevance

irrespective (in this case) of any treaty. Secondly, the Court talked of newly developed norms of environmental law relevant for the implementation of the Treaty. This seems a clear reference to norms belonging to international customary law. Thirdly, in order to support its conclusion that environmental interests can in fact amount to essential interests, the Court expressly referred to paragraph 29 of its Advisory Opinion on the Legality of Nuclear Weapons, thus suggesting that the general obligation mentioned in paragraph 29 had the same basis as the essential character of environmental protection. Therefore it can possibly be inferred from these observations that a new dimension was added to the Courts jurisprudence vis-a-vis International Environmental Law. Further, the case concerning Gabcikovo- Nagymaros project is an apt example of how the International Court of Justice, tries to achieve a result that is acceptable to both litigants and that, consequently, stands the best chance of being complied with by the two sovereign litigants. The case highlighted the unique role that the ICJ may play when two interdependent states have reached a deadlock after lengthy negotiations. Through their special agreement, Hungary and Slovakia asked the Court to define and resolve the legal aspects of their dispute. But the special agreement also provided that the parties shall immediately after the transmission of the Judgment enter into negotiations on the modalities for its execution and that, if they were unable to reach agreement within six months, either Party may request the Court to render an additional Judgment to determine the modalities for executing its Judgment. In this way, both parties were actively using the principal judicial organ of the United Nations to assist them in defining the fundamental legal parameters of a process of on-going negotiations that was directed towards achieving a political result that was mutually acceptable. Gabcikovo- Nagymaros Project prompted the constitution of a Special Environmental Chamber of the ICJ. It also clarified the Courts jurisprudence with respect to the state and non-state components of environmental protection in as much the Court held that these were grounded in general international law. The Court confirmed customary nature of at least part of International Environmental Law, although without referring to any specific norm. The following paragraph of the Courts judgment confirms this contention: The Court has no difficulty in acknowledging that the concerns expressed by Hungary for its natural environment in the region affected by the Gabcikovo- Nagymaros Project

related to an essential interest of that State, within the meaning given to that expression in Article 33 of the Draft of the International Law Commission. Neither of the Parties contended that new peremptory norms of environmental law had emerged since the conclusion of the 1977 Treaty, and the Court will consequently not be required to examine the scope of Article 64 of the Vienna Convention on the Law of Treaties. On the other hand, the Court wishes to point out that newly developed norms of environmental law are relevant for the implementation of the Treaty and that the parties could, by agreement, incorporate them through the application of Articles 15, 19 and 20 of the Treaty. These articles do not contain specific obligations of performance but require the parties, in carrying out their obligations to ensure that the quality of water in the Danube is not impaired and that nature is protected, to take new environmental norms into consideration when agreeing upon the means to be specified in the Joint Contractual Plan. Thus, confirmation of the customary nature of at least part of International Environmental Law was given in three ways. Firstly, it was acknowledged that environmental interests may amount to essential interests in the meaning of the customary rule providing for the state of necessity defense. While an interest is conceptually different from a norm, the existence of a legally protected interest assumes that such interest has legal relevance irrespective (in this case) of any treaty. Secondly, the Court talked of newly developed norms of environmental law relevant for the implementation of the Treaty. This seems a clear reference to norms belonging to international customary law. Thirdly, in order to support its conclusion that environmental interests can in fact amount to essential interests, the Court expressly referred to paragraph 29 of its Advisory Opinion on the Legality of Nuclear Weapons, thus suggesting that the general obligation mentioned in paragraph 29 had the same basis as the essential character of environmental protection. Therefore it can possibly be inferred from these observations that a new dimension was added to the Courts jurisprudence vis-a-vis International Environmental Law. Further, the case concerning Gabcikovo- Nagymaros Project is an apt example of how the International Court of Justice, tries to achieve a result that is acceptable to both litigants and that, consequently, stands the best chance of being complied with by the two sovereign litigants. The case highlighted the unique role that the ICJ may play when two interdependent states have reached a deadlock after lengthy negotiations. Through their

special agreement, Hungary and Slovakia asked the Court to define and resolve the legal aspects of their dispute. But the special agreement also provided that the parties shall immediately after the transmission of the Judgment enter into negotiations on the modalities for its execution and that, if they were unable to reach agreement within six months, either Party may request the Court to render an additional Judgment to determine the modalities for executing its Judgment. In this way, both parties were actively using the principal judicial organ of the United Nations to assist them in defining the fundamental legal parameters of a process of on-going negotiations that was directed towards achieving a political result that was mutually acceptable.

Chapter-6

ABSTRACT

In the case of gabcikovo-nagyamaros, hungary and Czechoslovakia entered into Budapest treaty on 16 september 1977 by which there would be created on Danube between two states a barrage system, a dam, a reservoir, hydro-electric power stations and a 25kilometre canal for diverting the Danube from its original course through a system of locks. A dispute developed in the light of hungarys growing environment environment concerns and result of this hungary suspended the work on project in 1989 while Czechoslovakia proceeded with a provisional solutions as from 1991 which involved damming the Danube at a point on Czechoslovakian territory. In 1992, hungary announced the termination of treaty of 1997 and related instruments. The case came before international court ultimately by way of special agreement in 1993 between hungary and Slovakia. This case essentially revolved around the relationship between the treaty and subsequent environmental concerns. The court emphasized that newly developed norms of environmental law were relevant for the implementation of the treaty , while the awareness of vulnerability of the environment and the recognition that environment risks have to be assessed on the continuous basis have become much stronger in the years since the treatys conclusions. However, the court found that the treaty was still in force and hungary was not entitled to terminate it. Therefore, it can be concluded in the Gabcikovo- Nagymaros Project case the Court upheld the parties to a bargain which both regarded as at an end, and no longer wanted applied in its original terms. Principle would suggest that a contract repudiated by both parties was a dead letter, and the Court should have been concerned only with delineating the legal consequences of its termination. The decision can only be defended as a pragmatic one. The Court seems to have been influenced by the serious financial and political implications of a finding that the contractual regime had been frustrated. Slovakia had already expended huge sums of money on the project and did not want it abandoned. On the other hand, completion of the project in its original form was

absolutely unacceptable to Hungary and also posed serious environmental threats. Yet by asking the parties to negotiate a solution, possibly with the help of a third party, it was arguable that the Court was abdicating the very responsibility that the parties had assigned to it. However, it seems that the Court applied the Rule of pacta sunt servanda, as reflected in Article 26 of the Vienna Convention of 1969 in letter and spirit.