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Some Business Groups Resist Water Reforms

Michigan lawmakers listen, stall Great Lakes protection bills

November 4, 2004 | By Andy Guy
Great Lakes Bulletin News Service


Some Michigan farmers fear that regulation of large-scale water withdrawals could hamper their ability to irrigate their crops.

LANSING — Brushing aside what some experts say is the potential for costly lawsuits, gradual environmental decline, and long-term economic instability, some of Michigan’s top business organizations are opposing a decades-long movement to protect the Great Lakes Basin from large water withdrawals by strengthening the state’s almost nonexistent water-use policies.

Influential lobbying groups such as the Michigan Chamber of Commerce, the Michigan Farm Bureau, the Michigan Forest Products Council, and the Michigan Manufacturers Association say they support stronger legal protections against bulk diversions of Great Lakes water to thirsty states and nations outside the basin. But these organizations, joined by several smaller business associations, generally view proposals to regulate water withdrawals that stay within the basin as unnecessary and burdensome threats to future investments and growth that will reduce the state’s competitive edge in the global economy. Their active lobbying on the issue has stalled a series of water policy reforms within the state Legislature.

“We’re not in a time when new regulations are readily accepted,” said Ben Kudwa, the executive director of the Michigan Potato Industry Commission. “We’re seeing layoffs, watching hundreds of thousands of jobs leave Michigan, and that can be traced back, in part, to government regulation,” he claimed.

By staking out aggressively anti-regulatory positions, experts close to the debate said, the business community has successfully delayed the push for updating Michigan’s water policies, which are based on 19th-century legal and scientific concepts. Unlike those of most other states around the Great Lakes basin, Michigan’s water policies still do not enforce basic legal standards to evaluate new water withdrawal proposals, track water use, or ensure adequate supplies to sustain economic activity and safeguard lakes, rivers, and underground aquifers. Experts on constitutional and international trade law say that without such standards, the state remains vulnerable to the large-scale water withdrawals that so many of its citizens and business leaders fiercely oppose.

“Undeniably, the business community’s goal is to make sure that their economic interests are met,” said state Senator Patty Birkholz, a Republican from Saugatuck who chairs the Senate’s Natural Resources and Environmental Affairs committee. “The process of making a new policy is taking longer than some would like. But the challenge is to create something that ensures business can not only stay in Michigan but also grow and succeed here.”

Wanted: Stable Water Policies
Since March 2002, Michigan lawmakers have introduced six different proposals in response to both public fears of mass water exports and existing shortages and conflicts between competing water users around the nation’s most freshwater-rich state. Only two modest proposals, however, have become law.

One measure, sponsored by Representative John Moolenaar, a Republican from Midland, empowered the state Department of Environmental Quality to regulate disputes over groundwater withdrawals. The other, sponsored by Senator Birkholz, directed the department to map the state’s underground water resources and created a special task force to study sustainable water use.

Water experts warn that the stakes for Michigan could not be higher. Underlying the escalating policy debate is a growing awareness that ready access to clean, fresh water for growing food, manufacturing products, and providing a unique quality of life is the region’s primary natural advantage in the modern economy. The point is amplified by the fact that fresh water is becoming increasingly rare and valuable as pollution and over-consumption exhaust world supplies.

Michigan, on the other hand, is surrounded by the largest freshwater ecosystem on the planet. But the absence of a clear policy to manage and plan for increasing water demand is already raising problems for residents and businesses and threatening environmental quality. And while many business groups steadfastly resist a new law to regulate withdrawals from the state’s vast reserves, policy experts contend that such a law may be the most effective way to ensure continued economic expansion and prosperity.

“The most common criticism of traditional water law such as that in Michigan is that it really provides no predictability or certainty in terms of continued use,” said Christine Klein, a professor of natural resource and land use law at the University of Florida who is an expert in the differing legal regimes that govern water use in the eastern, western, and southern United States.

According to Ms. Klein, who until recently taught environmental policy at Michigan State University, it is typical for large water users to at first oppose attempts to change traditional water laws. But, Ms. Klein said, industrialists, farmers, and other stakeholders who rely on stable access to water resources typically find that comprehensive water use standards can work to their advantage. Clear standards can help clarify the rules of the economic development game, guarantee water rights, and secure business investments.

Water Disputes Highlight Legislative Delays
In Michigan, the absence of clear water withdrawal standards has led to shortages in three counties that are either adjacent to or near Great Lakes. According to local health officials, residents in Saginaw County registered 235 complaints about empty water wells in the eight years prior to 2004. It also has sparked high-profile legal clashes between businesses and citizens. The most notable case is ongoing in Mecosta County, where Nestle Waters North America, a large international company, is locked in a multi-million legal battle with a small nonprofit group known as Michigan Citizens for Water Conservation over the legality of a spring water bottling operation.

What’s more, water policy experts generally believe that the lack of clear guidelines to evaluate local withdrawals and avoid harmful projects weakens the moral and legal authority of states like Michigan to resist them. They also say that it leaves the door open for bulk water diversions outside the Great Lakes, a universal concern among the state’s business leaders.

“If Michigan is afraid that neighboring states and other states farther away want to take Great Lakes water, the best thing Michigan can do is to put in place comprehensive regulations of in-state water use,” Ms. Klein said.

Since signing the Great Lakes Charter in 1985, Great Lakes governments and two Canadian provinces have worked in partnership to develop a common policy for managing all major water withdrawals in the basin. Their goal is to create rules that balances economic development with environmental protection and thereby strengthens the region’s authority to prevent ill-advised water projects and diversions.

Michigan, however, has a reputation throughout the basin as a laggard in terms of implementing the Charter’s requirements: It signed the agreement, but has yet to implement it in a meaningful way. Now, 20 years later, the Great Lakes states and provinces are negotiating a new amendment to expand the Charter and further define regional water withdrawal standards.

Michigan Governor Jennifer Granholm, a Democrat, introduced her proposed Water Legacy Act in March 2004 to bring the state into compliance with the 1985 agreement and claim a more credible seat at the basin bargaining table. But, under pressure from the state’s influential business community, the Republican-led Legislature refuses to give the proposal a hearing.

A Fear of Change
Legislators apparently agree with the arguments of some business advocacy group: New laws to regulate water withdrawals ultimately will hinder Michigan’s economic performance. The most vocal advocates for business contend that in a state like Michigan, which is surrounded by 95 percent of the U.S. water supply, initiatives such as those proposed at the state and regional level are unwarranted intrusions into the private sector and could damage established businesses, including ongoing farm and manufacturing operations.

“The biggest fear in agriculture is that you will have a regulator hanging over your head saying that you have to suspend irrigation in the middle of the summer and abandon your crop,” said Ben Kudwa of the Michigan Potato Industry Commission

Added Mike Johnson, the director of regulatory affairs for the Michigan Manufacturers Association: “I’m not sure standards to regulate water withdrawals will result in a happy ending. It will take away our natural economic advantage. New regulations at increased costs are like shooting yourself in the foot. Limiting your own access just to say others can’t take [the water] seems crazy.”

“Sixty five billion gallons of water flow over Niagra Falls everyday,” Mr. Johnston added. “And all these proposals aim to regulate withdrawals down to 100,000 gallons per day. That’s ridiculous.”

Such sentiments clearly frustrate those who favor modernizing the state’s water laws. Some assert that many in the business community fail to see the contradictions in their positions.

“It’s confusing,” said Jeff Irwin, executive director of the Michigan League of Conservation Voters. “The business people who depend on water say we need to study and plan for our water use and have predictability in terms of access to the water resource. But when it comes to a policy proposal that aims to guarantee those rights, they’re argument is that any new rules threaten to inject uncertainty into the system, chill investments, and cause further job loss. That’s backward. Protecting the resource for the long-term will create the predictability they value and sustain our prosperity.”

“The Michigan Farm Bureau fears change,” added Bill Bobier, a policy advisor to the Michigan United Conservation Clubs and a former Republican state lawmaker. “They have forgotten that they, the farmers, are the big winners when it comes to new policies to preserve a healthy water resource.”

Andy Guy, who writes extensively about securing the Great Lakes in the global economy, is a journalist who directs the Great Lakes Water Project and manages the Michigan Land Use Institute’s regional office in Grand Rapids. Reach him at aguy@mlui.org.

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