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River treaties and changing values.

The Columbia River Treaty (CRT) is a bilateral agreement between Canada and the United States that provides for the co-operative development of the Columbia River Basin. The agreement was negotiated in 1961 and finalized in 1964. As a product of its time, the treaty emphasises the values of flood control and power generation. The treaty is silent with respect to other values including fisheries, recreation, aesthetic, and biological diversity values. These values have all assumed increased importance within global discourse since the CRT entered into force. The CRT will continue in force until at least 2024 although it also has the potential to remain in force indefinitely if neither party elects to terminate.

One of the virtues of a long term treaty is that it provides the certainty that the two parties require to justify the significant capital investments that were required to realize the power and flood control benefits both parties desired from the cooperative development of the Columbia. In the case of the CRT, the key investments were the construction by Canada of the Duncan, Mica, and Keenleyside dams and the construction by the United States of the Libby dam. The main benefits to Canada included the generating capacity installed at Mica, some downstream benefits occurring in Canada on the Kootenay River as a result of the storage behind Libby, as well as a 50% share of the incremental capacity and energy benefits accruing to US dams on the mainstream of the Columbia and directly attributable to the operation of the Canadian treaty storage.

The CRT obliges Canada to operate the Canadian storage in such a way as to ensure the realization of these power and flood control values. The CRT does not require Canada to operate these facilities for other purposes that the US might consider to be valuable such as the provision of fish flows to improve flow and temperature conditions for migrating salmon in the lower portion of the Columbia. By the same token, the CRT does not permit Canada to operate treaty storage to, for example, provide minimum flows for whitefish, or to protect trout redds in the reach of the Columbia below Keenleyside.

Day-to-day operation of treaty facilities is in the hands of two designated entities, BC Hydro (BCH) for Canada and the Bonneville Power Administration (BPA) and the Army Corps of Engineers for the USA. Oversight is provided by a joint Permanent Engineering Board (PEB) that, as the name suggests, is concerned to ensure that the power and flood control benefits of the treaty are realized.

But if times change and values change, how can a long-term treaty such as the CRT accommodate changing values? Is one party entitled to tear up the treaty or unilaterally modify its terms? The response of international law is a very definite "no". The ruling idea of the Law of Treaties is that of pacta sunt servanda (treaties are binding and should be interpreted and applied in good faith). The Vienna Convention on the Law of Treaties permits very few exceptions to this rule and changing values in the appreciation of a resource like the Columbia is not one of those exceptions. This characteristic of treaties highlights an important distinction between treaties and long-term commercial contracts. Take, for example, a long term domestic contract to buy and sell natural gas at a fixed price. When world oil prices increased dramatically during the 1970s, it was a relatively easy matter for the federal government to introduce legislation regulating the price of oil and natural gas in interprovincial trade thereby re-writing long-term commercial contracts. There is no legislative authority that has the competence to re-write the terms of an international treaty.

So, how has the CRT fared? Has it continued to serve the interests of the parties and the residents of the basin? In general I think it has. I believe that it has been successful for two linked reasons. The first reason is simply that the CRT did not allocate all available storage within the Columbia to the treaty. In particular, of the 12 million acre feet (MAF) of live storage behind the massive Mica Dam, only 7 MAF is dedicated to the CRT. This means that while the treaty storage has to be operated for flood control and power purposes, there are no similar constraints on the non-treaty storage. Aware of this potential, the two entities, BPA and BCH have negotiated a series of Non-Treaty Storage Agreements (NTSAs) that allow the entities to call upon this storage to meet other needs, especially fish flows.

The second reason is that since the two entities must deal with each other on a continuing day-by-day basis to ensure smooth and co-ordinated operation of the Columbia River system and interconnected grids, they are constantly able to explore win-win arrangements that serve the interests of both parties. Furthermore, the CRT enables them to do this without needing to consult Ottawa and Washington DC except in the most important cases. The arrangement between the entities is characterized by a culture of co-operation facilitated by the common disciplinary backgrounds of the key actors, rather than a culture of conflict. An example may help illustrate the point.

In 1973, the US Army Corps of Engineers completed the construction of the Libby Dam and closed its gates. Since then, operations of Libby dramatically altered the natural hydrograph of the Kootenay River. The spring freshet was stored and gradually released to facilitate the generation of power, not only at Libby but also at Canadian generating facilities downstream of Kootenay Lake. But there was a snag, a serious snag. By changing the hydrograph, the operation of Libby compromised a population of sturgeon that inhabited the stretch of the Kootenay River between Libby and Kootenay Lake. It soon became clear that there had been no new recruitment of young sturgeon since Libby had commenced operation. As a result, Kootenay sturgeon were listed under the US Endangered Species Act and the Corp of Engineers became obliged to operate Libby to maximize the chances to recruit new sturgeon rather than to optimize power generation.

BC Hydro argued that this change in operation of Libby was a breach of the CRT, which caused power generation losses to BCH on the Kootenay River downstream of Kootenay Lake. While the dispute almost went to arbitration under the terms of the CRT, in the end, the two entities were able to reach an agreement. The terms of the agreement allowed the Army Corps of Engineers to operate Libby for fish flow purposes, and in return, BCH obtained additional flexibility in the way in which it operated the Arrow Lakes storage behind Keenleyside. Each side secured its interest in a win-win solution.

The Libby dispute and its solution offer two lessons for us. On the one hand, it points out how a treaty regime may be threatened by changing values and how unilateral operation by one party to accommodate those values may compromise co-operative approaches. But on the other hand, the solution to the dispute illustrates the point that a long history of cooperation between technical entities may allow the parties to identify innovative solutions that are preferred to the zero sum results of an arbitral award.

Nigel Bankes is a Professor with the Faculty of Law at the University of Calgary in Calgary, Alberta.
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Title Annotation:Feature on Water and the Law; The Columbia River Treaty
Author:Bankes, Nigel
Geographic Code:1USA
Date:Jun 1, 2004
Previous Article:Thinking like a watershed.
Next Article:Life and water in Palliser's triangle.

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