Bottle this

Dec 17, 2003 at 12:00 am
When it comes to managing fresh water, the leaders of both major political parties share a rare ideological consensus: Michigan’s 19th century policy of encouraging people to use as much water as they want, whenever they want, needs a 21st century update.

This became apparent in 2002, when Republican gubernatorial candidate Dick Posthumus and state Sen. Ken Sikkema, R-Wyoming, proposed separate, comprehensive water-management statutes to protect the quality and security of Michigan’s fresh water. That same year Democrat Jennifer M. Granholm won the governor’s office in part on her campaign pledge to implement a comprehensive water statute because "it is our solemn duty to protect our legacy, our endowment, and the character of Michigan by becoming the world’s best water guardians."

But in an era defined by increasing limits on government’s will to regulate industry, the consensus has produced little legislative momentum.

Mecosta County Circuit Court Judge Lawrence C. Root’s startling decision last month to order the shutdown of four high-capacity spring water wells in central Michigan owned and operated by Nestle Waters of North America could change that. The ruling in the most prominent dispute over the use of Michigan’s water in years could have other significant repercussions.

Three important lessons

First, the Nov. 25 ruling should help business leaders see just how vulnerable their companies are to increasing competition for Michigan’s abundant fresh water. Without strong laws based on groundwater’s crucial importance to maintaining lake and stream levels, the traditional access to fresh water that Michigan’s tourism, manufacturing, farming, food-processing, and other indistries have long enjoyed remains in danger.

Global interests desperate for new supplies of fresh water will go to extraordinary lengths to get them. Even with the Root decision, Michigan still has no broad state protection from an unlimited number of water bottlers who, like Nestle Waters, seek to pump billions of gallons of public groundwater for private, out-of-state sale. As U.S. Republican House Majority Leader Dick Armey said three years ago during a stop in Traverse City, "I’m from Texas and, down there, we understand that whiskey is for drinking and that water is for fighting over. You are going to have to protect your Great Lakes."

Second, the ruling offers a lesson to business executives who support the steady erosion of public-interest regulation and law enforcement. Root’s ruling is a textbook example of the inevitable economic costs of such lackadaisical regulation. Just as purposely weakening regulation of corporate business practices led to vast financial scandals that damaged the economy and cost ordinary Americans billions of dollars in lost investments, weak natural-resource protection eventually leads to serious environmental and economic damage.

In the Nestle Waters case, the business-at-any-cost attitude of the former Engler administration and its Department of Environmental Quality produced a deliberately narrow interpretation of state environmental statutes that eased the way for the new wells. Now Nestle Waters’ $150 million investment in its new 700,000-square-foot bottling plant is in jeopardy. Root noted that the company had received fair warning.

"Defendant Nestle was cautioned that it was proceeding in building a bottling plant at its own risk should I decide plaintiffs’ claims have merit such that there might be no water to be bottled in the plant," he writes in the 67-page ruling.

Third, the ruling challenges the state’s extremely conservative property-rights movement to at last stand up for its principles in a meaningful way. The movement should defend landowners whose rights and property values are actually damaged by harmful behavior that was encouraged by a business-friendly government agency. To date property-rights activists have built the movement on the back of alleged harms fostered by government actions they think will restrict use of their land. The Nestle Waters case, though, turns to a significant degree on the real damages to property rights caused by government cooperation, not restriction.

Big battle in Big Rapids

Such sharply defined issues are precisely what the Michigan Citizens for Water Conservation (MCWC) underlined in September 2001 when it sued Nestle Waters, bottlers of Ice Mountain spring water. The filing in state circuit court in Big Rapids came a month after the DEQ approved Nestle’s plan to drill four wells and pump hundreds of millions of gallons of spring water annually from a shallow aquifer in Mecosta County to a bottling plant in nearby Stanton.

MCWC charged that pumping so much water would produce unreasonable harm to a stream, a chain of small lakes, several wetlands, and the property rights of landowners downstream. The group also asserted that withdrawing so much water expressly violated the Michigan Environmental Protection Act, the Wetlands Protection Act, and the Inland Lakes and Streams Act, all of which prohibit industrial activity that harms aquatic resources. Lastly, the group argued that bottling spring water, a public resource, and removing it from the watershed was illegal under Michigan’s common water rights law, which is shaped by cases dating to the 19th century.

The company, which ships its bottled water throughout the Midwest, disputed each assertion. It argued that pumping would have negligible affects on the environment, would not harm downstream property owners, and was expressly approved by permits that were thoroughly reviewed and authorized by the DEQ.

The case, the most extensive and intensive in the history of the 49th Judicial Circuit, was heard by a 55-year-old jurist who was raised in Big Rapids, educated at Ferris State and the University of Detroit Law School, and has served on the bench since 1976. Root’s decision, written after a 19-day trial and based on thousands of pages of documents and court transcripts, is a tour de force of judicial prose while paying painstaking attention to scientific and legal detail. It sent a legal blast wave through public interest, business, and political circles statewide.

Not surprisingly, MCWC members were ecstatic when they realized the ruling called for a shutdown of Nestle’s pumping operation by Dec. 16. "We got everything we wanted," says Jim Olson, the group’s attorney.

Continued controversy

A Nestle Waters statement calls the ruling "extreme" and an "ominous signal" to the state’s water users, and promised an appeal. A company lawyer, Michael Haines, says Root "fundamentally misunderstood the scientific evidence and testimony presented during trial," and warned other industrial companies that if "Ice Mountain’s insignificant effect is considered a violation" then "what water user — industrial, commercial, golf course or farmer — would not be in similar violation?"

Richard K. Studley, senior vice president of government relations for the Michigan Chamber of Commerce, agrees. "This is a company that went to great lengths to comply with the law and received the necessary permits from the appropriate state agency," Studley says. "One of the concerns is the amount of uncertainty the decision could create about the regulatory process and the permitting process."

Olson says such concerns are misplaced. He says Root’s ruling clarifies for the first time who has primary authority in the competition for water between "surface owners" and those who pump groundwater. In instances in which surface owners are harmed by groundwater pumping, Olson says, the surface owners’ rights prevail. He adds that the tourism industry, manufacturers, food companies, utilities, and farmers should celebrate the decision because it protects their access and right to the ample supply of fresh water that is the source of their wealth. "A multinational company like Nestle Water can’t just come in and take that water and sell it out of the watershed," he says.

Root’s ruling blames both the company and the DEQ for any regulatory uncertainty. Nestle Waters, said the judge, provided DEQ with volumes of scientific data purporting that there would be no environmental harm, but it was discredited by trial evidence, including testimony by the company’s own experts.

Root rebuked DEQ for too narrowly interpreting both the Wetland Protection Act and the Inland Lakes and Streams Act when it determined that neither applied to the Nestle spring water bottling operation. "With all due respect," wrote the judge, "that conclusion is simply wrong."

Water politics

For the moment, elected leaders in both major parties and senior officials of the DEQ say they are "monitoring" the case. It’s possible that the Granholm administration could intervene, though it is not at all clear on which side.

Chamber official Studley says any intervention should defend the original DEQ decision to permit pumping, a position that Mike Cox, Michigan’s Republican attorney general, is likely to share. Olson says that would be a political mistake for Granholm, who has called for a strong state water protection statute. He urges her to join the citizens group in defending Root’s ruling in the appellate courts.

And several noted state environmental leaders say Root’s decision is a clear invitation to Granholm and senior Republican legislative leaders to collaborate on a new water management statute that secures the state’s supply.

"Gov. Granholm promised comprehensive groundwater legislation in the 2002 campaign," says Noah Hall, a lawyer and water policy expert with the National Wildlife Federation in Ann Arbor. "Ken Sikkema promised comprehensive groundwater legislation. This state needs a straightforward, comprehensive permitting program that reviews new groundwater withdrawals to make sure there are no impacts. We need standards for reasonable use of water." Keith Schneider, a journalist and editor, is deputy director of the Michigan Land Use Institute. Reach him at [email protected]. Send comments to