Nestle Waters: A history of backroom deals and exploitative extraction practices

Beyond all of the reasons why the proposed Nestle bottling plant is bad for Oregon and the City of Cascade Locks (addressed in greater detail here), it is also important to remember that Nestle has a bad track record in real communities across America.

This article, from an April 2008 issue of Bloomberg Businessweek, profiles the fight over a proposed Nestle bottling plant in McCloud, California. Both McCloud and Cascade Locks were seen by Nestle as attractive potential sites for bottling plants because of their abundance of water and high unemployment rates. In McCloud, however, the initial dealmaking process between city council members and Nestle representatives remained hidden from the public until after the fact:

Few of McCloud’s residents knew about the agreement. That is, not until September, 2003, when board members posted a notice in McCloud’s post office announcing a town meeting to unveil the plan. Local business owner Richard McFarland did a double take when he saw the flyer. Like many in McCloud, he knew the town had long wanted to sell its water. But this was the first he’d heard about a contract or Nestlé. For McFarland, as for others, the name Nestlé raised a red flag. Wasn’t this the company boycotted in the 1970s for promoting infant formula over breast milk to mothers in the Third World? Plus, Nestlé was the biggest food company in the world. How much water would they be sucking out of what many considered a sacred mountain with a world-class fishing river and a sensitive hydrology?

McFarland wasn’t opposed to a new industry coming to town. But he had lots of questions, especially since his reclaimed-lumber business abuts the old mill. A few days later, on Sept. 29, he and 100 other residents piled into the elementary school gym for the Nestlé town meeting. As they waited for it to start, a TV beamed a continuous loop of CEO Jeffery extolling his company’s environmental credentials. Many assumed a discussion would be had, questions fielded, and the community would then work together to assess options. They thought they were there to hear about a proposal. But after Kampa and Palais did their PowerPoints, the crowd was dumbfounded when the gavel struck and Dragseth and the other four board members voted unanimously to sign the contract right then and there. The deal was done.

In Mecosta County, Michigan, Nestle attempted to again fast-track its way through the approval process, this time claiming that their proposed bottling plant would have no negative impacts on the surrounding lakes, rivers and wetlands of the area. However, local activists soon discovered Nestle’s claims of no hydrological impacts were based on fundamentally flawed environmental models provided by Nestle itself:

Nestle representatives claimed the company’s studies demonstrated that pumping 400 gallons per minute (gpm) — 210 million gallons a year — would not harm the wetlands, stream and lakes.

A group of Big Rapids-area citizens formed Michigan Citizens for Water Conservation (MCWC) and began asking questions; they also asked Nestle to release its expert reports to the public. MCWC’s experts advised that pumping would reduce the flow of the stream 28 percent and the level of two lakes by as much as 6 inches, a substantial loss for the critical headwater stretch of this diverse riverine system.

Then MCWC’s experts discovered that Nestle’s computer model was flawed: It included a “boundary” — a fixed assumption that the headwater lake and stream had an infinite amount of water. Incredibly, the model would never show impact.

Even more concerning than the questionable tactics Nestle uses to gain approval to extract water from communities in the first place, the downright malicious legal actions that they pursue to maintain or expand their access to that water at all costs is what should really worry any citizen.

Back in Mecosta County, despite repeated legal objections and outcry from locals and scientists over anticipated impacts, Nestle was granted a permit to extract 400 gallons per minute (GPM) – the same amount originally requested in its faulty “impact free” proposal – from the Little Muskegon River. The MCWC filed suit, hoping to obtain an injunction that would force Nestle to stop extracting any water. In what appeared to be a great victory against Nestle, the presiding judge ruled that, “the proposed extraction would cause substantial harm at any rate of pumping, violate long-standing water law principles and impair the water resources, contrary to environmental laws.” Following the ruling, Nestle lobbyists descended on Lansing, attempting to gain support within the statehouse for the corporation. At the same time, Nestle’s lawyers filed an emergency appeal that would allow the plant to keep pumping water at a reduced but still unsustainable rate of 250 GPM during the appeal process. Within one day of the original injunction, the pumping resumed. Making matters worse for the MCWC and the Little Muskegon River Watershed, Nestle’s team of lawyers and lobbyists were successful in convincing the appeals court and lawmakers that the profits of a corporation were more important than healthy lakes, rivers and wetlands:

In the appeal, Nestle argued that 100-year-old water law principles that protect the integrity of flows and levels of Michigan’s lakes and streams from exports should be relaxed so Nestle could have a fair share of Michigan’s water to sell out of the local watershed and Great Lakes Basin. Shockingly, the Department of Environmental Quality and other state departments sided with Nestle.

In 2005, the Court of Appeals adopted a “reasonable use balancing test” that changed fundamental water and property law, ruling, for the first time in the state’s history, that water could be exported from a watershed if the commercial or community benefits of the export outweighed the harm of its extraction.

Down deep, Michigan water law had sprung a leak: Any person or corporation could now argue a right to export and sell anywhere in the world if it could claim enough incidental benefits for the community from its private control and sale of water.

By its remand to allow some level of pumping under the injunction, the Court of Appeals pitted riparians, citizen groups and citizens against large corporate interests to fight — gallon for gallon — how much water could be exported at the expense of a lake or stream. Michigan water was for sale and it would be up to citizens, not the government, to defend it.

In cases where lobbying and legal appeals fail to bring about favorable results for Nestle Waters, they have also shown they are not above attempting to litigate a community into submission, like they did in the town of Fryeburg, Maine, starting in 2005.

After initially granting Nestle permission to establish a bottling plant in a residential area, the Fryeburg Planning Commission reversed their decision due to concerns over increased noise, pollution and traffic that would result from such a plant and the associated truck traffic. Needless to say, Nestle was extremely displeased with the reversal and sued the town of Fryeburg as well as concerned citizen groups who pushed for the reversal by the Planning Commission. Despite repeatedly facing defeat in court, Nestle continued to appeal and file new lawsuits in an apparent attempt to bankrupt the opposition. The citizen’s group, Western Maine Residents for Rural Living, found itself over $20,000 in debt after a series of five separate lawsuits filed against them by Nestle’s legal team. Nestle’s goal in this case seems to be twofold: removing opposition by rendering them financially unable to continue litigation as well as serving as a warning to other small towns or citizen activist groups considering opposition to Nestle bottling operations in the future.

Nestle has employed a variety of distressing tactics over the last decade in attempts to get what they want, from clandestinely scouting potential pumping sites and forcing approval through city and town councils to resorting to legal actions in order to either continue extracting water at damaging rates or to bankrupt communities out of the debate.

Cascade Locks is not the first, nor will it be the last small town that Nestle attempts to exploit for profit, so it is important for all concerned citizens to be aware of their practices before it is too late. Some towns, like Enumclaw, Washington, were already aware of the dangers of doing business with a multinational corporation like Nestle and put a stop to any attempts to establish a bottling plant. Hopefully the citizens of Cascade Locks will have a similar revelation before it’s too late.

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2 Comments

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2 responses to “Nestle Waters: A history of backroom deals and exploitative extraction practices

  1. Pingback: Protesters march against Nestle water plant

  2. Pingback: Portland Protests NESTLE CORPORATION’s Open Warfare on Their Water Supply | Patriot News II

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