As Flint suffers and Nestlé prospers, many are asking: Who owns the rights to Michigan water?

2018-06-21T07:51:22+00:00 June 14th, 2018|

By Trevor Bach
Photo by Brittany Greeson

On a chilly spring Wednesday in April, more than 50 people congregated at Salem Lutheran Church, a sprawling beige brick building on Martin Luther King Avenue in Flint, Michigan, a couple miles north of downtown. Outside were two full-size buses waiting to transport the group to Lansing, where they would march on the Capitol. A few days earlier, even as many of the city’s potentially lead-tainted pipes remained unreplaced, Governor Snyder had announced the state was ending its free bottled water program, and residents were furious. “This is a travesty,” LeeAnne Walters, a Flint resident and mother of four who helped expose the original crisis, told reporters after Snyder’s announcement. “It doesn’t matter what the tests say. There’s still a huge gap and a lack of trust in people who are telling us it’s safe.”

Michiganders’ anger over Snyder’s announcement was compounded by the April 2nd revelation that the administration’s Department of Environmental Quality had approved a highly controversial request from Nestlé to sharply increase the volume of water the company pumps from a well it operates in rural Osceola County — even after more than 80,000 people had voiced their opposition. In the same month the state decided to stop giving free bottled water to Flint, it was, effectively, giving away millions of gallons to a multinational corporation. Besides a one-time $5,000 permit application fee, under Michigan law Nestlé, the largest food and beverage company in the world, must pay the state only $200 in annual administrative fees to bottle and sell 400 gallons a minute of Michigan groundwater.

In the same month the state decided to stop giving free bottled water to Flint, it was, effectively, giving away millions of gallons to Nestlé, a multinational corporation.

“The water in the state belongs to the people — it doesn’t belong to Nestlé,” Peggy Case, president of Michigan Citizens for Water Conservation, a nonprofit that has long battled the company, told Belt. “As far as we’re concerned, the state has no right to give it away.”

But the law, the DEQ determined, was on the company’s side.

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Nestlé, which first began bottling water from a canal in Switzerland in 1834, now has around 100 bottled water facilities in 34 different countries, Bloomberg Businessweek reported, and typically sets up its operations in locations where local water regulations are lax. At times the company has also fought extracted legal battles to win pumping rights, and has generally secured what many consider outlandishly favorable terms, like an annual $524 payment to the U.S. Forest Service for the extraction of 30 million gallons from one source in drought-prone southern California.  

The company set up a bottling factory in Stanwood, Michigan, some 50 miles north of Grand Rapids, in 2000, after searching the Midwest for a new location to source its Ice Mountain brand. The rural area is part of the Muskegon River watershed and offers an abundance of spring wells; Nestlé eventually set up seven different pumping sites, including one at White Pine Springs, some 40 miles north of the Stanwood factory. In 2001 the site was cleared to pump 150 gallons per minute; in 2015 Nestlé won approval from the DEQ to pump 250 gallons per minute, and then promptly requested another increase, to the 400-gallons-per-minute request that would, against the backdrop of the Flint Water Crisis, drag on for months and ignite a caustic debate over the rights of the state’s natural resources.

“There are poor people in the state of Michigan that … can’t drink their water because it’s unsafe,” Nicholas Schroeck, director of Wayne State University’s Transnational Environmental Law Clinic, told Belt. “And here we’re allowing the commodification of water and allowing big, wealthy corporations to bottle our water and sell it at a profit.”

Nestlé needs DEQ approval for the pumping increase under a state law that dates back four decades: the 1976 Michigan Safe Drinking Water Act, which granted the agency regulatory power over the public water supply. But the legal basis that allows the company to extract the resource for free actually extends back centuries. When Michigan entered the Union in 1837 (the centrality of water to the area was obvious even then — the state’s name derives from an Ojibwe term for “large lake”) the state adopted the British common law principle regarding ownership of public resources known as Riparian rights: Any landowner is entitled “reasonable use” of the water body on their land as long as that use doesn’t harm their neighbors’ access to the resource.  

“This is the larger point: no one really owns water in Michigan,” Schroeck said. “Even though you own property, you don’t really own that water. You have a right to use that water, and your right to use that water is subject to limitations like harming natural resources.”  

The law also applies to groundwater rights, granting the property owner — in this case Nestlé — access to the water reserves beneath the owner’s land for reasonable use. But the nature of use is not restricted. “So long as groundwater withdrawal is not harming a wetland or the surface water of a stream or a river, and you’re not harming neighboring property owners, that use is likely to be deemed as reasonable,” Schroeck said. “Regardless of what the end product is.”

But in light of the Flint crisis, where thousands of Michiganders were denied clean water because of a state-caused disaster, a state law that grants a billion-dollar company direct access to the same precious state resource for profit seemed especially perverse. “It’s bullshit,” Peter Lucido, a Republican state representative from Macomb County, north of Detroit, told me. “And here’s why: I turn my water spigot on — I have to pay for how much I’m consuming. So my bill is more than Nestlé’s permit every month.”

Last October, before the DEQ went on to approve Nestlé’s request, Rep. Lucido introduced a bill that would charge bottled water companies operating in the state five cents per gallon of water extracted. Lucido estimates the law would cost Nestlé $20 million a year, which would be used to repair the state’s aging water infrastructure, including sewer and drainage systems critical to public health. Companies that extract nonrenewable resources like oil and natural gas from the state are forced to pay for it, he pointed out; why shouldn’t companies that extract water?

Mich. Rep. Lucido introduced a bill that would charge bottled water companies five cents per gallon of water extracted. Lucido estimates the law would cost Nestlé $20 million a year, which would be used to repair the state’s aging water infrastructure.

“There’s nothing big business, private enterprises, get for free,” said Rep. Lucido. “So why are we allowing it?”

Critics have pointed to the Snyder administration’s notorious corporate ties. Michigan’s DEQ is currently run by Heidi Grether, a former BP oil executive who helped manage Gulf Coast restoration efforts after the infamous 2010 oil spill; Snyder’s election and reelection bids were largely funded by corporate titans including the DeVos family and David Koch, as well as employees of major companies like Dow Chemical, Whirlpool, DTE Energy, and Absopure — another water bottling company that operates in the state.

The administration also had a direct Nestlé connection, fueling suspicions of a conflict of interest. The governor’s previous chief of staff, Dennis Muchmore, who resigned in January 2016 to work in public affairs, is married to lobbyist Deb Muchmore, who has served as Nestlé’s Michigan spokesperson.  

“The Muchmores have a personal interest,” the filmmaker Michael Moore wrote in HuffPost in February 2016, “in seeing to it that Nestles (sic) grabs as much of Michigan’s clean water as possible — especially when cities like Flint in the future are going to need that Ice Mountain.”  

Under the new increase, Nestlé’s bottling operation in Osceola County, operating at full capacity, could extract some 210 million gallons of water per year. It’s a staggering amount — equivalent to a small lake — but also hardly exceptional. There are some 3,000 wells in the state permitted to extract 100,000 gallons of groundwater or more per day. Nestlé constitutes the biggest user among bottled water companies — in addition to Absopure, Arbor Springs also operates out of the state but extracts far less than many large farms and industrial operations: a recent Detroit Free Press analysis, using 2015 DEQ data, ranked Nestlé’s bottling operation as Michigan’s 23rd biggest groundwater extractor. The largest was the drug giant Pfizer, which extracted 6.9 billion gallons for use at its Kalamazoo-area factory — more than 30 times the volume allowed under Nestlé’s new permit.

Yet to observers the absolute volumes are besides the point — there’s an obvious distinction between an operation that uses water and one that simply takes it, even if both are aimed at generating profit. “The difference is [farmers are] putting it into food, and the water that’s remaining goes back into the ground,” said Case of Michigan Citizens for Water Conservation. “Whereas Nestlé is putting groundwater in plastic bottles and selling it. Our issue is with the privatization of water — putting it up for sale when it doesn’t really belong to you.” And after allowing Nestlé to extract the resource for free, she pointed out, the state was then buying it back to provide Flint residents.

Nestlé’s latest request was first reported on by the Grand Rapids Press, in late October 2016. The company had already won a draft DEQ approval for the increase, and clearly hadn’t been expecting much resistance for final approval: a $36 million expansion of the company’s bottling plant was already underway. But the revelation set off an unprecedented firestorm of public interest: once the request was reported on thousands of people contacted the DEQ, forcing the agency to extend its public comment period. Public meetings were scheduled, and the approval process dragged on for months. By late April 2017, the end of the public comment period, 81,862 people had contacted the DEQ over the issue, forcing the agency to hire temporary staff to process the influx.

It was easily the most attention on a water extraction issue in state history — most requests may receive only a couple dozen or fewer comments — and the public’s opinion was overwhelmingly clear: Of all the letters, only 75 voiced support for the pumping increase. Eight hundred and forty-two were deemed neutral by the DEQ. The rest — 80,945, or 99 percent — were opposed. On April 2 of this year, the state approved the request anyway.  

“Why even have a public comment if you’re not going to consider it?” said Rep. Lucido. Michiganders were overwhelmingly against the increase, he continued. “And you’re telling us, ‘tough shit.’ … It’s arrogance.”

“Our issue is with the privatization of water — putting it up for sale when it doesn’t really belong to you.”

Upon announcement of the Nestlé approval, DEQ director Grether defended the agency’s action. “The scope and detail of the department’s review of the Nestlé permit application represents the most extensive analysis of any water withdrawal in Michigan history. We cannot base our decisions on public opinion because our department is required to follow the rule of law when making determinations.”

Grether was making a technical point — it was the agency’s interpretation of existing law that was most relevant, not how residents felt about the law — but to many the justification felt hollow. At Salem Lutheran, the outraged Flint residents wrote protest messages on Nestlé water bottles before boarding the buses headed for Lansing. The group, flanked by media, crowded into the stately halls of the Capitol, delivering a clear message: “Water for Flint!” they shouted in unison. “Not Nestlé!”

A few weeks later, on May 11, it appeared to be Nestlé — not the state — who finally heard them. The company announced it was donating 100,000 bottles to Flint every week through Labor Day, picking up where the state left off. For many community activists however, the move by Nestlé was seen as a “public relations stunt.” In her weekly column, “Thinking for Ourselves,” Shea Howell wrote that “Nestlé is ‘donating’ water that the entire state is paying for.” She went on to say that “Nestlé’s efforts to deflect our concern is foolish. … Until Flint’s entire water system is replaced, the State has a moral obligation to provide bottled water.”

 

Banner photo: Members of New Era Detroit, a community activist group, handing out water in Flint, Michigan. The group has called for a boycott of Nestlé. Photo by Brittany Greeson.

Trevor Bach is a journalist based in Michigan.

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