Guided by the spirit of managing the Okavango River Basin as a single entity, the three sovereign states of Angola, Botswana and Namibia agreed to sign the "OKACOM Agreement" in 1994, in Windhoek, Namibia. The Agreement commits the member states to promote coordinated and environmentally sustainable regional water resources development, while addressing the legitimate social and economic needs of each of the riparian states. The three countries recognize the implications that developments upstream of the river can have on the resource downstream. Most of the river is currently undeveloped and is recognized as one of the few "near pristine" rivers in the world.

Namibia and Botswana are two of the driest countries in southern Africa, and the Okavango River plays an important role not only in the lives of local populations residing along the river, but also at national level. Water-based tourism is the second largest foreign currency earner for Botswana, and most tourism activities are centered on the delta system, which forms part of the larger Okavango River system. The river sustains over half a million people who utilize the plant and animal resources found in the river to create livelihoods. For Namibia, the "Kavango River" as it is known in that region, is a potential source of water to the dry city of Windhoek. The Okavango Delta has rich biological diversity and is internationally recognized as a site of ecological importance. It has, as a result, been declared a RAMSAR Site (a wetland of international importance).

The OKACOM Agreement establishes the Permanent Okavango River Basin Water Commission (OKACOM), also referred to as the "Commission", whose objective is "to act as technical advisor to the Contracting Parties (the Governments of the three states) on matters relating to the conservation, development and utilisation of the resources of common interest to the Contracting Parties (basin member states) and shall perform such other functions pertaining to the development and utilisation of such resources as the Contracting Parties may from time to time agree to assign to the Commission". The role of OKACOM is to anticipate and reduce those unintended, unacceptable and often unnecessary impacts that occur due to uncoordinated resources development. To do so it has developed a coherent approach to managing the river basin. That approach is based on equitable allocation, sustainable utilisation, sound environmental management and the sharing of benefits. The 1994 OKACOM Agreement gives it legal responsibility to;

In early 2007, OKACOM reviewed its organizational structure to bring it in line with the Revised SADC Protocol on Shared Watercourses, and gave the OBSC formal status and recognized it as a permanent and formal internal body of OKACOM with defined functions, roles, responsibilities as well as operational procedures. In 2004, the Commission recognized the need to establish a Secretariat which would implement the decisions of the Commission and started the process of putting this in place. Eventually, in April 2007, the three contracting parties signed a new agreement of the "Organizational Structure for the Permanent Okavango River Basin Water Commission". This agreement establishes the Secretariat as an internal organ of OKACOM, along with the Commission and the OBSC. The Secretariat is responsible for providing administrative, financial and general secretarial services to OKACOM. Headed by an internationally recruited Executive Secretary, this organ will also be instrumental in information sharing and communication on behalf of OKACOM.