Multinationals Exploit Groundwater Sources, and People Suffer

Privatizing water supplies is only a pretext for multinational corporations to take control of the precious resources of the people at large, activists in US charge. With sales of over $35 billion worldwide in the bottled water market, corporations are doing whatever it takes to buy up pristine springs in some of the country's most beautiful places.

Especially notorious is Nestlé, which controls one-third of the U.S. market and sells 70 different brand names -- such as Arrowhead, Calistoga, Deer Park, Perrier, Poland Spring and Ice Mountain. It draws its supplies from as many as 75 springs located all over the US. Nestlé's latest target is McCloud, located in the shadow of Northern California's snow-capped Mt. Shasta. The town of McCloud has worked hard to try to reinvent itself in recent years. McCloud is a former timber town that is learning how to stand on its own feet again after the lumber companies bottomed out and took off.

The town has less than 1,400 people and a high school of four students. But one thing McCloud does have is an abundance of water -- pristine spring water that comes from Shasta's glaciers and feeds some of the world's best fly-fishing rivers. Four years ago, residents learned that Nestlé, the world's largest food and beverage company, intended to build a 1 million-square-foot water-bottling facility in McCloud. Without any public input or environmental impact assessment, the multinational was given a 100-year contract to pump 1,600 acre-feet of spring water a year and a seemingly unlimited amount of groundwater.

Although residents were caught off guard by the company's interest, they have been organizing and litigating and educating. "There is concern about traffic, air pollution, what is going to happen to our water," said Debra Anderson, head of the McCloud Watershed Council, a citizen group that organized in the wake of the announcement. "What if there is a drought? They have the right to continue to pump. What happens to the town of McCloud, the people in it?"

The contract is heavily loaded against the community, it is felt Not only that. The McCloud residents are also sought to be shortchanged by Nestle. At a shelf price of $10.32 per gallon, 1,600 acre-feet would gross $5,380,451,712. If Nestlé nets one-fifth of what that water sells for, it would make over $1 billion a year. But it will pay the community a despicably measly 000087 cents per gallon for the water it takes from McCloud's springs.

Interestingly while Nestlé maintains the rights to the water, the legal responsibility for the springs remains with the town. "This would leave the people of McCloud holding the legal bag for any environmental violations resulting from Nestlé's operations and any resulting lawsuits," the Watershed Council's website says.

After the contract was signed in October 2003, residents quickly formed two organizations, the McCloud Watershed Council and Concerned McCloud Citizens, which took Nestlé and the McCloud Community Services District to court because their contract never included an environmental impact report and so violated the California Environmental Quality Act (CEQA).

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In March 2005, the Siskiyou County Court ruled in favor of the community groups and the contract was voided. But Nestlé appealed and was victorious in the appellate court, and this round of legal battles ended just last month when the state Supreme Court decided not to hear the case. But the battle continues. On its part Nestlé seems to have its infiltration of rural towns down to a science, it is charged. The best places are the ones where they can play the jobs card.

Nestlé's PR rep, Lisa Yarbrough explained, "The McCloud community has suffered through the decline in the local timber industry. The local mill, once the primary community employer, has completely terminated its operations. This proposed water bottling project would provide a means to use the town's abundant renewable natural resource (spring water) to bring back jobs and economic stability to the community." But the company’s contribution to the local economy in McCloud is questioned. For instance, in Mecosta County, Michigan, where Nestlé opened a spring water bottling plant a few years ago, locals have yet to see the promised economic rewards.

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"We've found that they mostly hire temp workers," says Donald Roy, who is involved with a citizen action group. "They pay many of them $10 an hour, no benefits, for a temp position, and then they can lay them off and not have to worry about compensation." Activists are worried that if Nestlé does come to McCloud it will actually hurt the economy. The small town would see a huge influx of diesel trucks, about 400-600 trips a day, on its narrow country roads. And the effects on tourism could be detrimental. The facility alone, 1 million square feet, would be the largest building in Northern California -- dwarfing the town.

The McCloud River is one of the most beloved rivers in the state of California, explains Brian Stranko of the group California Trout, which works to protect the state's wild fish. "It is unique -- it doesn't matter if you like to fish or hike or walk -- it is a really pristine watershed of mixed conifers with amazing wildlife -- some of which is threatened or endangered."

The plant will also affect not just the McCloud River but an entire watershed, reducing stream flow to the McCloud River Falls, Squaw Creek, Soda Springs, Big Springs, Muir Springs and Mud Creek -- all places that are important to McCloud's heritage and its future. An estimated 77 percent of Northern California's water comes from that area -- so the impact on communities downstream, many of them agricultural, could be dire.

The bottling plant would also put fisheries at risk -- a resource that helps sustain many of the area's small businesses and is vital to tribal people who are working to restore salmon populations. There is also a serious concern that Nestlé is allowed to drill bore holes -- which are sideways holes into the spring that allows more water to come out. "The problem with that is that causes more water to come out than is recharged," said Debra Anderson.

"It can cause a subsidence. The water in the aquifer is what's holding the ground up. The other concern, because we are on a fractured system, is that they could tap into something underneath the water -- if they hit a lava tube, we could end up losing our water because it would destroy the aquifer." One should also remember Nestle’s track record. For over 20 years, it has faced pressure for its aggressive marketing of infant formula in countries with little clean water, which has led to a reduction in breastfeeding and increased risk for infants.

According to Global Exchange, the policy "has cost the lives of over 1.5 million infants around the world. But Nestlé's irresponsible attitude towards children doesn't end there. As a leading exporter of cocoa from the Ivory Coast, Nestlé has also been implicated in the ongoing abuse and torture of child cocoa laborers." McCloud is one small town that is part of a much larger problem with enormous consequences worldwide. "Water is a precious resource that shouldn't be bought or sold," said Gigi Kellert who works for Corporate Accountability International.

Keeping water as a public trust is paramount to maintaining ecologically healthy communities and safe, affordable drinking water for everyone. In McCloud, Nestlé is literally locking up a spring that has been a part of the public commons and a place for people to visit and appreciate, says Tara Lohan, a leading activist. And for the Winnemem Wintu, it is also a sacred place. "We believe this is a public trust issue," said Mark Franco of the tribe. "We have to protect the water, not just for ourselves, but for everyone. That water doesn't belong to us. We don't claim it. How can you mitigate the loss of something like that when they are mitigating your people's history and landscape?"

Across the country, organizations like Corporate Accountability International are launching initiatives to help people "think outside the bottle" and realize the environmental and social implications of drinking bottled water. They are also urging communities to enact legislation to protect their water resources from corporate abuse and for people to help support rural communities that are challenging multinationals with unlimited financial resources.

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