Special Report

The Perrier Group announced in 2000 that it planned to build a $60 million bottling plant in either Osceola County or Mecosta County in central Michigan. The size of the proposed operation dwarfs that of other bottling plants in Michigan. So does the size of the Perrier Group’s market share. As the leading water bottler in the nation, the Perrier Group’s market share is twice that of its nearest competitor (Danone). The company’s growth represents 34 percent of the industry’s expansion in the United States from 1992 to 2000.

The company’s hopeful business plan soon came under intense scrutiny, however, from citizens concerned about the broader effects of such a high-capacity well. Still more questioned whether the company was actually preparing to profit from a highly public resource without authorization to sell it out of its natural basin.

Some residents and business leaders, on the other hand, embraced the company’s plan as a way to diversify the local economy with a clean, stable industry. The Perrier Group plans to invest $101 million and create 80 jobs in six years, according to the Michigan Economic Development Corporation. The company attempted to alleviate concerns by conducting studies of local aquifers and the effect of its proposed operations. But residents remain alarmed because of questions the studies left unanswered and news of residential wells drying up in places like Big Rock, Texas, where the Perrier Group started bottling water in the early 1990s.

I. WHO CAN EXPORT MICHIGAN’S WATER?

The question of whether the Perrier Group has the right to transfer Great Lakes water out of a central Michigan watershed for commercial sale nationwide is already the subject of several legal arguments. The public interest group, Michigan Citizens for Water Conservation, filed a lawsuit in early September 2001 that asserts Michigan law does not allow wholesale off-tract and out-of-basin sale of water. MCWC also requested earlier in 2001 that the Michigan Attorney General consider whether the Water Resources Development Act applies to the Perrier Group’s transfer of pure water out of the Great Lakes Basin.

Federal Law

The U.S. Water Resources Development Act states that ìno water shall be diverted or exported from any portion of the Great Lakes within the United States, from any tributary within the United States of any of the Great Lakes, for use outside the Great Lakes basin unless such diversion or export is approved by the governor of each of the Great Lakes states.”

Although the WRDA does not contain a definition of the word ìdiversion,” the Great Lakes Charter ó the treaty between Canada and the United States that led directly to the Act ó defines ìdiversion” as ìa transfer of water from the Great Lakes basin into another watershed, or from the watershed of one of the Great Lakes into that of another.” It further defines ìGreat Lakes basin water resources” as ìthe Great Lakes and all streams, rivers, lakes, connecting channels, and other bodies of water, including tributary groundwater, within the Great Lakes basin.”

Michigan Governor John Engler invoked this understanding of the WRDA last March when the village of Webster, near Rochester, NY, advertised ìcrystal clear well water” for sale in the New York Times and the Wall Street Journal. Gov. Engler immediately advised the village that it risked violating federal law.

ìWebster is located within the (Great Lakes) basin,” Gov. Engler wrote to then-Mayor Wilbur Bey, ìand even though the water in question is groundwater, it appears to be hydrologically connected to Lake Ontario. If this proves to be the case, then the diversion or export of this water out of the basin will require the approval of each governor from the eight Great Lakes states.”

Both the Water Resources Development Act and Great Lakes Charter apply to pure water, a natural and public resource. Food products, such as beverages and processed foods, are traditionally exempt. Food products, by definition, have additives (flavors and other ingredients) and are ìtradable goods.” They are not essential elements of life, or ìpublic goods,” as pure water is.

The Perrier Group and the DEQ contend that the company’s bottled water is a tradable food product exempt from the Water Resources Development Act. Michigan Attorney General Jennifer Granholm, however, offered on September 13, 2001, a different opinion.

Ms. Granholm wrote to Gov. Engler: ì(Perrier’s) proposal would result in the withdrawal of groundwater from a spring that feeds the Little Muskegon River, a tributary to Lake Michigan. I know you agree with me that groundwater hydrologically connected to the Great Lakes and their tributaries is covered by the WRDA.” She concluded that the Perrier Group’s proposal would constitute an out-of-basin diversion of Great Lakes water within the meaning of the federal law.

Ms. Granholm further advised Gov. Engler to work with other Great Lakes governors, using a consultation process in the WRDA, ìto determine whether and to what extent this and similar water removal proposals should be permitted.” She warned that Michigan must fully investigate these water diversion questions and develop an effective and consistent system for addressing future proposals. Failure to do so may send a signal that ìcould trigger a massive water grab as users seek to remove Great Lakes water before such removals can be scrutinized.”