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Despite Abundance, New Talk About Limits

Nestle Waters plant stirs Great Lakes security debate

October 24, 2002 | By Keith Schneider
Great Lakes Bulletin News Service

Johanna Miller
  Nestle’s new bottling plant in Mecosta County prompted a blockade last April and new public awareness that free trade, globalization, climate change, population increases, and other worldwide mega-trends are steadily turning the Great Lakes into ever more prominent targets for exploitation.

BIG RAPIDS, MI  — Until two years ago, Mecosta County was notable for nothing more or less than the decent state university campus here and 40,000 generally well-behaved Midwesterners who regularly attend church and send their children off to school on yellow buses. They never for a moment worried that the clean, fresh water flowing past their homes or from their taps would ever run dry. Mecosta County, after all, sits squarely in the middle of the largest supply of fresh water on earth.

Then came the water war.

On December 6, 2000, the Perrier Group, a subsidiary of Swiss-based Nestle S.A., the world’s largest food company, applied to the local health authorities for permission to drill two water wells on an 800-acre private hunting preserve in the county’s southern reaches. The company’s purpose: to establish a source for a new bottling plant to package and ship its popular Ice Mountain brand of spring water throughout the upper Midwest.

The authorities granted permits in just five weeks. Like a hot match put to a fuse, the quick approvals touched off a stunningly fierce debate about who controls Michigan’s underground reservoirs of fresh water -- water so abundant and pure that half of the state’s 9.9 million residents draw theirs straight from the ground.  In a world where clean, fresh water is ever more scarce, resolving the control issue has become a legal and political priority that has ramifications for Michigan and every other Great Lakes state.

Though Perrier spent handsomely to smooth the way in Michigan —  it hired both a public affairs group to massage the media and a respected political consultant to guide needed permits through the regulatory agencies — the company’s arrival in Mecosta County has been greeted with lawsuits, political unrest that has divided state Republicans and is influencing the 2002 Michigan gubernatorial campaign, and legislative proposals to strengthen the state government’s authority to manage water.

Perhaps most importantly, Nestle’s presence has generated new public awareness that free trade, globalization, climate change, population increases, and other worldwide mega-trends are steadily turning the Great Lakes into ever more prominent targets for exploitation. In short, sleepy Mecosta County is suddenly the epicenter of a new public reckoning in Michigan and the upper Midwest over the security of the Great Lakes -- which hold 20 percent of the world’s surface fresh water -- and the underground aquifers that supply them.

Various Stages For Debate 
The struggle is playing out in different theaters of confrontation, including a courtroom on Elm Street here. Next May, Circuit Court Judge Lawrence Root is scheduled to preside over a 10-day trial to decide whether a multinational corporation has the authority to privatize Michigan’s groundwater, put it into plastic bottles, and sell it by the hundreds of millions of gallons annually across state lines. The trial was prompted 13 months ago, after a group of Mecosta residents, calling themselves Michigan Citizens for Water Conservation (MCWC), filed a lawsuit that argued water, like air, is a common resource that is held in public trust and should be managed for the public benefit.

State water and public trust laws, the citizens argue, do not allow wholesale diversions of pure water out of its natural basin for commercial sale nationwide and are “unreasonable.” If the state sanctions such commercial activity, MCWC asserts, commercial interests around the world could target Michigan as a choice source for massive diversions of fresh water to faraway, thirsty destinations. At its core, argue opponents, Perrier is defining and promoting water as merchandise, a valuable commodity to be commercialized and sold, thereby vastly increasing its vulnerability to significantly more development, exploitation, and overuse.

“For the first time in Michigan’s history others eye our water resources for their gain and economic growth outside of the state, and outside the Great Lakes basin,” said James M. Olson, the attorney arguing the case for the citizens group. “The focus is suddenly on capturing or claiming private ownership of Michigan’s water for sale, shipment and use elsewhere. Fundamentally, Michigan should not and cannot allow private expropriation of water for sale inside or outside the state without first affirming its ownership interest.”

The Perrier Group, which recently changed its name to Nestle Waters North America, says such arguments have no basis in Michigan law. The company’s lawyers assert that there is no difference between what Nestle Waters is doing and what dozens of other companies do when they pump groundwater to make soft drinks, brew beer, pack fruits and vegetables, and a hundred other commercial activities. State law, they assert, allows for “reasonable” use of groundwater as long as there is still enough available for everybody else who pumps it from the same source.

Moreover, say executives, the company’s extensive groundwater monitoring program in Mecosta County show the company’s withdrawal of up to 576,000 gallons a day is “insignificant” in an underground reservoir that holds billions of gallons. Nestle’s plan to pump over 210 million gallons a year to its new bottling plant is virtually unnoticeable, say scientists, in a Great Lakes basin that contains six quadrillion gallons, or three billion times as much.
“The project will provide significant benefits to the community and the state,” said Nestle in a prepared statement that promised up to 200 jobs. “The salaries and benefits paid to employees, as well as the amounts spent with contractors in constructing, operating, and maintaining the facilities, and in marketing the products, will provide economic strength and diversification to the community and the state.”

In interviews, legal authorities generally agree that the Michigan Citizens for Water Conservation has an uphill struggle to prove that Nestle’s use of Mecosta’s groundwater is “unreasonable” under state law. Michigan’s water policy, what there is of it, reflects the 19th century belief that there’s so much fresh water here it will always be abundant. In other words, anybody can take as much as they want for free so long as they don’t harm their neighbors.
Citizens Make Their Point
Still, by challenging Nestle in court and exposing the weaknesses in state water statutes, Michigan Citizens for Water Conservation nevertheless is closing in on one of its top goals: rational state water laws fit for the 21st century. During the past year, as the citizens group prepared for its days in court, the issues at stake in their case steadily penetrated the public consciousness and became a political issue with an uncommonly long reach in and out of Michigan.

At its heart the Nestle Waters case is not only about the nerve of a rich and powerful outsider taking Michigan’s pure ground water at no cost and then selling it for a fortune. It’s also about the wave of public dismay that swept across Michigan when residents learned that Michigan’s governor, Republican John Engler, actually encouraged the company. The Engler administration awarded Nestle nearly $10 million in local property and state education tax abatements, job training, and infrastructure grants to take Michigan’s water.

 It’s as though the King of Saudi Arabia allowed Exxon to tap his oil fields for free. Some argue it's worse than that, because fresh water is actually more valuable. At the local convenience store a gallon of bottled water costs more than $8.00, six times more than a gallon of gasoline.

These controversial subsidies, which Michigan Citizens for Water Conservation both discovered and disclosed, helped to spur three separate citizen blockades since April at the company’s new bottling plant in Stanwood, and added Mecosta County to the growing number of global hot spots in the worldwide grassroots campaign to block multinational corporations from privatizing water.

There is no doubt that Nestle Waters America anticipated that its proposal to pump more than 200 million gallons of water into a $100 million plant in central Michigan would stir interest. Periodic shortages of water around its pumping plants in Florida and Texas had already sparked citizen protests and greater state scrutiny. Just before arriving in Michigan, Nestle Waters abandoned its proposal to build a new Midwest bottling plant in Wisconsin after a bruising fight with local residents.

Nestle Anticipates Huge Economic Returns
But whatever Michigan might bring the company in corporate heartache, the potential bottom line results seem worth the fuss. Nestle Waters, the bull of the American bottled water industry, produces the Ice Mountain brand in the Middle West, Poland Springs in the East and 13 other brands in 75 bottling plants nationwide. The company controls a third of the $6.5 billion national bottled water market, which is growing 11.5 percent annually, according to Beverage Marketing Corp., a New York research and consulting firm.
With potential profits amounting to tens of millions of dollars annually from its Michigan plant alone, Nestle spent generously to get connected in Lansing and in local government. It also dispatched Brendan O’Rourke, its young and beguiling plant manager, to persuade residents at dozens of public events that the plant’s water withdrawals were safe, and its jobs were vital to the regional economy. The strategy, so far, has paid off handsomely. First came the nearly $10 million state subsidiy. Months later, the Michigan Department of Environmental Quality, notoriously pro-business during the Engler years, approved drilling permits for the company’s permanent wells. Last May, 17 months after its bottling proposal became public, the first bottles of Ice Mountain rolled off the lines and executives say the plant is meeting all of its business forecasts.
A Political Turning Point
The question now is whether Nestle is the first of a long line of multinational marketers able to dip their straws in Michigan’s pure water, or potentially the last. The Michigan citizens group is trying to oust the company; the gubernatorial candidates say they are ready to pass legislation to make sure other companies don’t follow suit.
State Sen. Ken Sikkema, a Republican of Grandville who began his political career far enough to the right that he authored and passed Michigan’s “takings” law to limit government’s authority to oversee natural resources, found in the Nestle case an opportunity to track back to the moderate middle. Mr. Sikkema, who chaired a legislative task force on the Great Lakes last year, introduced legislation this year that would give local and state government officials authority and resources to vastly step up their power to regulate water.

One of Mr. Sikkema’s proposals would even require communities to confirm that adequate supplies of ground water were available for future needs before large water withdrawals were considered. It is the first time Michigan has proposed to link a community’s economic development plan with its water supply, and represents a decided step forward in the state’s thinking about how to improve the economy and protect the environment.

As the issue grows Nestle appears unnerved and grumpy. Nestle executives are more cautious than ever in their public statements; they did not respond to requests to be interviewed for this article. And Nestle is also pressuring its opponents to keep quiet. Its attorneys have sent letters to several members of the Michigan Citizens for Water Conservation warning of possible legal action if they continue making what the company considers “false and defamatory statements.”

In no small way Nestle’s venture into Michigan is a turning point. The state is blessed with such abundant natural resources that a 19th century culture of use and abuse has persisted in spite of a sorry history of home-grown extinctions, including the passenger pigeon, which flocked here by the tens of millions until every last one was killed a century ago. But the near-automatic permitting of Nestle’s wells, and the generous subsidies for the new bottling plant seemed to jar people.

It produced a new kind of discussion about the state’s willingness to conserve the essential stuff of life. Even militants on the right understand that without adequate water supply protections and clear rules for withdrawals and exports, the state leaves itself open to water marketing schemes from across the globe, and potential shortages and environmental damage at home. For the first time in a Michigan gubernatorial election candidates from both major parties have seized on the security of the state’s fresh water to introduce the idea that abundance is illusory and there really are limits to growth.

Keith Schneider, a regular contributor to Gristmagazine.com, the New York Times, and the Detroit Free Press, is program director of the Michigan Land Use Institute. A version of this article was published by Gristmagazine.com on October 23, 2002. For more of the Institute’s coverage of Great Lakes water security issues  see our Great Lakes Water Security special report.

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