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Granholm Said Yes To Nestle Diversion After Court Said No

Groups criticize intervention in high profile water case

December 23, 2003 | By Keith Schneider
Great Lakes Bulletin News Service

  Governor Granholm’s rationale for supporting Nestle Waters was seen as a slap at a citizens group she supported as a candidate, and echoes the company’s own public line about protecting jobs.

Until last week, nothing about the way that Democratic Governor Jennifer M. Granholm does her job resembled the closed-door operating style of her predecessor, conservative Republican Governor John Engler. Mr. Engler was ruthless, secretive, and so intent on helping the state’s business community evade environmental laws that he encouraged his senior aides to regularly meet in private with executives to hammer out agreements that generally led to more ecological degradation. 

Granholm, on the other hand, values a more inclusive approach to governing, inviting citizens, as she said in her inaugural address, to “come into the halls of government” and participate in important decisions. Moreover, her senior environmental advisors are battle-tested public interest attorneys who made their careers by listening to all sides and upholding the law.

But last week the governor did something that environmentalists called surprisingly Engleresque. Ms. Granholm and her senior environmental and economic advisors unexpectedly shut out a feisty citizens group and aided the world’s largest food company in a two-year-old David and Goliath legal struggle that affects all of Michigan. The issue: The security of the state’s treasure trove of fresh water. By convincing a state appellate panel to stay a lower court decision, the administration effectively helped Nestle Waters North America win something the company lost after a grueling, 19-day circuit court trial earlier this year. Nestle can keep pumping millions of gallons of spring water from wells in central Michigan’s Mecosta County.

The administration’s action comes in response to Mecosta County Circuit Judge Lawrence C. Root’s ruling on November 25 that ordered Nestle Waters to shut down its spring water wells by midnight on December 16. In issuing the order, Judge Root determined that Nestle did not have the right to pump and sell drinking water for sale out of its natural basin, and that those very same wells were in clear violation of three state environmental laws because they were draining a system of lakes, streams, and wetlands and producing unreasonable harm to landowners and the environment.

A Public Relations Offensive
The citizens group that brought the lawsuit, Michigan Citizens For Water Conservation, saw the ruling as establishing new safeguards for lakes, streams, and wetlands. Judge Root’s decision also protects food companies, manufacturers, resorts, and other Michigan businesses that depend on access to ample supplies of fresh water because it assured that Michigan businesses can not be outmaneuvered by fabulously rich and powerful multinational corporations that are eyeing Michigan’s liquid gold for out-of-state sale as drinking water.

The company, however, launched a public relations offensive that framed Judge Root’s decision as immediately threatening 120 workers at its Ice Mountain bottling plant in Stanwood and hundreds more at companies that supply the plant. Nestle also spread fear in the business community by casting the decision as a threat to any Michigan company that uses groundwater in products — canned food and beverages, for instance — that are shipped out of state. The citizens group asserts that is an exaggerated if not non-existent threat.

Although Judge Root wrote that his ruling applied only to spring water companies that tap Michigan’s water for sale out of its natural basin, Nestle successfully gained the advantage for its message in the business and political community, and especially with the governor and her advisors. Behind the administration’s decision to summarily dismiss Michigan Citizens for Water Conservation, according to administration officials and those who participated, was a trail of private phone calls, closed-door meetings between company executives and senior Granholm advisors, and effective schmoozing by the company’s Lansing representatives.

The company’s offensive culminated in a private noontime meeting on December 15 among company lawyers and Granholm representatives; Steve Chester, the director of the state Department of Environmental Quality; Skip Pruss, his deputy; and David Hollister, the director of the state Department of Labor and Economic Growth. During the meeting, Granholm’s senior aides agreed to appeal Judge Root’s shutdown order, a decision that amounted to a slam-dunk victory, at least temporarily, for the company. Judge Root has scheduled his own hearing for January 13.

A False Emergency
Jim Olson, the Traverse City-based lawyer for Michigan Citizens for Water Conservation, said he did not find out about the meeting or the administration’s decision until the next morning, when he received a call from Mr. Pruss and Mr. Chester that came too late to allow an effective response.

In the aftermath, not surprisingly, executives and employees of Nestle Waters North America said they were relieved, and environmental leaders said they were infuriated. Most importantly, though, Mr. Olson insisted that had the governor kept her inaugural promise to “bring in an air of innovation” he and his clients could have made a big difference in helping the administration make a more reasoned decision that suited the needs of the company, protected landowners and the environment, and made Gov. Granholm look very smart.

One important fact that was missed, said Mr. Olson, is that there was no emergency. Nestle filed an affidavit in Judge Root’s court that said it would continue to pay its bottling plant workers at least until January 31 — more than enough time for the administration to work with all parties to develop a response.

“Michigan Citizens for Water Conservation accomplished a great victory that protects the integrity of the state’s water, and prevents the sale and export of drinking water outside of its natural basin,” Mr. Olson said. “It’s a wall of protection. The administration should have come out strong for that principle. They could have insisted on more time to evaluate their options. Instead they accepted everything the company said and gave Nestles everything they wanted, including pumping almost without limit and no conditions in return.”

“It was a terrible decision made on her part without consideration,” said Lana Pollack, president of the Michigan Environmental Council and an important ally of the governor’s. “That is the good news and the bad news. The governor didn’t think. She just took her advisors’ word. I think she got bad advice and followed it to a bad result.”

The Trade-off Game
In interviews, the governor’s advisors framed their decision to intervene in almost exactly the same terms as Nestle Waters: The court-ordered deadline would idle 120 workers at Nestle’s new $150 million Ice Mountain bottling plant at a time when the heaviest rains in years had saturated the streams, wetlands, and lakes that everybody was so worried about. In other words, in weighing harms, the administration was convinced that shutting the wells would do little to improve environmental conditions but cause tremendous hardship to the plant’s workers.

The governor, her aides said, also was committed to passing a comprehensive groundwater protection statute; they hope that the urgency and business uncertainty created by Judge Root’s ruling would convince Republicans in the Legislature to help her.

“This is about jobs and this is about developing comprehensive water policy for the state,” said Dana Debel, the governor’s environmental advisor. “The judge’s decision was out there and by midnight on Tuesday, if a stay was not granted, 120 workers were on notice they’d be laid off the next day. Let’s not allow the judge’s decision to create panic in the business community.”

Earlier Promises
It’s not as if Gov. Granholm didn’t see the Nestle case — or the clear issues it raised about the safety of the state’s fresh water — coming her way. As attorney general and a Democratic candidate for governor two years ago, Granholm criticized her predecessor for violating federal water law by issuing Nestle the spring water well drilling permits without first consulting other Great Lakes Basin governors. She issued a formal attorney general’s opinion calling the pumping of spring water in Mecosta County a “diversion or export of water from the Great Lakes for use outside the basin” in September 2001. That same month, Michigan Citizens for Water Conservation filed its lawsuit in circuit court in Big Rapids to prevent Nestle from pumping.

Two months later she stood in the rotunda of the state Capitol with Terry Swier, the president of Michigan Citizens for Water Conservation, and told a large news conference that the Nestle plant was “Exhibit  A”  in the case for new state water policy and that she would work with legislators, the environmental community, and others to craft a comprehensive water policy to protect the Great Lakes and all water resources that feed into them.

The formal opinion and the news conference helped candidate Granholm distinguish herself as a champion of Michigan’s environment and the fresh water that is the state’s global ace in the hole. No other region on earth has such a ready supply of a resource that is increasingly scarce almost everywhere else. Granholm further illustrated her commitment to protecting the state’s fresh water assets by developing a campaign platform that focused on the issue, and her stump speech included this line: “We will defend our most valuable and vulnerable resource, water.”

In a speech in 2002 in Grand Rapids, then-candidate Granholm also said: “As precious to us as blood is to the body, water is our defining resource — and it is our solemn duty to protect our legacy, our endowment, and the character of Michigan by becoming the world’s best water guardians.”

Improvements and Disappointments
As governor, Ms. Granholm's record on preserving the state’s fresh water is vastly better than former Gov. Engler’s. Her Department of Natural Resources in September formally protected the Pine and Upper Manistee rivers in northern Michigan as state Natural Rivers, the first such designations since 1988. Mr. Chester has brought enforcement cases against a large dairy factory farm in southern Michigan to halt water pollution caused by manure flowing into streams, and another case against a developer in Traverse City that filled in water-purifying wetlands.

But Gov. Granholm’s record also includes signing a Republican bill that allows some shoreline landowners on Lake Huron and Lake Michigan to bulldoze beaches to clear weeds caused by low Great Lakes water levels. And while she also signed several other incidental bills that direct the DEQ to study groundwater supplies and mediate disputes over water, her administration has yet to propose the comprehensive water policy that she promised. Even if she did, it is not at all clear that it would gain any traction in the Legislature. A similar comprehensive water protection statute proposed by Republican Senate Majority Leader Ken Sikkema of Grandville went nowhere last year.

Ms. Debel said the administration believes that the court ruling in the Nestle case produced the political urgency that could motivate lawmakers. But Ms. Pollack and other environmental leaders interviewed for this article said that the administration’s action last week is likely to have the opposite effect.

“I spoke to the governor and she focused on what needed to be done and what she was going to do about legislation,” said Ms. Pollack. “I said, ‘Well, the amicus brief you just filed could only weaken the chance of real success.’ It relieved the pressure. And in my opinion it gave a measure of credibility to the Nestles’ arguments. The governor’s office said they were only seeking a stay of the court order to shut down the wells, and not affecting the substance of water policy. I say that’s a distinction without a difference. By filing the amicus brief they undermined the chance of success in the legislature.”

Keith Schneider, a journalist and editor, is deputy director of the Michigan Land Use Institute in Beulah. You can reach him at keith@mlui.org. A version of this article was published in the December 24 issue of Metro Times in Detroit, at www.metrotimes.com.

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