By Amanda Frye and Mark Gutglueck
Federal officials and conservation groups reached an agreement on June 6 that will potentially end the Nestlé Corporation’s drafting of 162 million gallons of water yearly from the San Bernardino National Forest. The Swiss corporation for 26 years has continued to utilize water taken from an environmentally sensitive area based on a permit that expired three decades ago.
Under the Arrowhead Mountain Spring Water brand, Nestlé bottles the forest groundwater, which it obtains from near the headwaters of Strawberry Creek at the 5,200-foot elevation level within Strawberry Canyon in the San Bernardino Mountains using a series of tunnels, boreholes and horizontal wells.
In 1992, Nestlé inherited what it maintains is the right to draft water from Strawberry Canyon from a series of predecessors-in-interest, including an expired permit for a pipeline right-of-way to transport water through the San Bernardino National Forest in the San Bernardino Mountains, based upon its buy-out of Perrier. Perrier had acquired the still-active permit when it purchased the BCI-Arrowhead Drinking Water Company, formerly called Arrowhead Puritas, in 1987. That permit, which expired in 1988, allowed a pipeline across the forest which transported water extracted from a significant below-ground source located in the San Bernardino Mountains. In 1978, Arrowhead Puritas, had renewed that permit for transporting the harvested water from Strawberry Canyon extracted through the boreholes and horizontal wells for ten years. Under that permit, Arrowhead Puritas was allowed to continue that activity, for which it paid the U.S. Government $524 per year, a standard fee for such uses in all National Forests. The Arrowhead Drinking Water Company, owned by Beatrice Foods, had assumed water drafting operations from a series of predecessors. Among those predecessors, Nestlé maintains, were B.F. Coulter, President of Arrowhead Hot Springs Hotel Company, who staked a claim on water as early as 1887; Arrowhead Springs Corporation; California Consolidated Water; the Arrowhead Hot Springs Company, the. Arrowhead Cold Springs Company and Arrowhead Puritas. Several elements of Nestlé’s claims are open to challenge, however, as they are based upon a tangle of asserted water extraction rights, some of which are documented, others of which were presumed upon a dubitable basis, including some of which have no showing in the public record. Several of these water claims were for the hotel properties far below Nestlé’s mountain top drafting operations. The San Bernardino National Forest was formed in 1893. Federal surveys and public notices allowed owners to stake claim to rights within a 90-day filing period in 1894. Nestlé’s predecessor-in-interest did not stake claim for property or water rights on the newly formed San Bernardino forest lands.
In 1988, the water extraction permit expired and was not renewed. Pending a U.S. Forest Service review of the water drafting arrangement, Perrier was allowed to continue to operate in Strawberry Canyon, and continued to pay the $524 per year fee. In 1992, when Nestlé acquired the Arrowhead brand from Perrier, it inherited the Strawberry Canyon operation and continued to pay the $524 annual fee without renewing the permit, which at that time existed under the name of “Arrowhead Mountain Spring Water Co.,” which is not a legal entity. Nor is that name in the corporation chain of title, according to Nestlé’s attorney, Rita McGuire.
Nestlé’s activity was never favored by environmentalists, who for over two decades to no avail pushed the U.S. Forest Service to undertake an intensive review of Nestlé’s water extraction in Strawberry Canyon. As the statewide drought which first manifested in 2011 advanced, environmentalists became more insistent in their demands. In 2015, as environmental groups were gearing up to file a lawsuit claiming the U.S. Forest Service had violated protocols and harmed the ecology of the mountain by allowing Nestlé Waters North America and Perrier to continue operations in Strawberry Canyon for 27 years after the permit to do so expired, United States Department of Agriculture Secretary Thomas Vilsack, who oversaw the U.S. Forest Service, ordered a review of the expired permit through the National Environmental Policy Act process. In the meantime, Nestlé continued its water extraction, pumping in excess of 62 million gallons of water annually from the San Bernardino Mountains. Environmentalists, in the form of the Center for Biological Diversity, the SOS Project, and the Courage Campaign filed a federal lawsuit in 2015, seeking to have the Forest Service halt Nestlé’s use of wells and piping in the forest. The plaintiffs alleged that Nestlé’s continued diversion of water after the permit had expired was illegal and that the continued water pumping was wreaking ecological damage to Strawberry Canyon. In September 2016, U.S. Judge Jesus Bernal ruled that Nestlé’s water use should not be interrupted because its predecessor, Perrier, had made efforts to obtain a new permit from the Forest Service and had not gotten a response from the agency. In November 2016, the Center for Biological Diversity, the SOS Project, and the Courage Campaign appealed Bernal’s ruling.
Also in 2015, the environmentalist groups lodged protests with the water rights division of the California Water Resources Control Board, alleging Nestlé was diverting water without rights, making unreasonable use of the water it was taking, failing to monitor the amount drawn, making inaccurate reports of the water drafted, and wreaking environmental damage by its action.
On December 21, 2017, the California Water Resources Control Board issued its findings pertaining to the investigation the state had conducted with regard to Nestlé’s San Bernardino Mountain water use. The state board’s conclusion was Nestlé had asserted it had water rights and was able to marshal evidence that it had the right to divert up to 26 acre-feet of water (8.47 million gallons) per year, while it was actually drafting 192 acre-feet (62.56 million gallons). Thus, the California Water Resources Control Board determined, Nestlé is extracting on a yearly basis 166 acre-feet (54.09 million gallons) of water it does not have a right to take.
“While Nestlé may be able to claim a valid basis of right to some water in Strawberry Canyon, a significant portion of the water currently diverted by Nestlé appears to be diverted without a valid basis of right,” the California Water Resources Control Board stated, while further asserting that Nestlé’s use of water for Arrowhead bottling “could be unreasonable if it injures public trust resources, such as instream habitat for certain species, in such a way that it outweighs the beneficial use.” The California Water Resources Control Board’s water rights division recommended that Nestlé immediately end its 166 acre-feet (54.09 million gallons) of unauthorized diversions.
The U.S. Forest Service review of the operation has yet to be completed, and Nestlé continues the water extraction in Strawberry Canyon under the expired permit. The appeal of Bernal’s ruling was yet ongoing when this week the Center for Biological Diversity, the Courage Campaign and the SOS Project agreed to dismiss their appeal of Judge Bernal’s ruling to the 9th U.S. Circuit Court of Appeals conditional upon the Forest Service making a decision with regard to the renewal or cancellation of Nestlé’s permit. In the settlement, the groups reserved the right to challenge any new Forest Service decision. Under the terms of the settlement, the U.S. Forest Service must decide within 30 days whether or not to issue a new permit for the pipeline and Nestlé’s associated activities in the San Bernardino National Forest.
“We are encouraged that the Forest Service is finally fulfilling its duty to the public by ending Nestlé’s more than 30 years of unpermitted water taking from the San Bernardino National Forest. Any objective, scientifically rigorous analysis will demonstrate what biologists have been saying for decades: the Nestlé operation is detrimental to the health and vibrancy of our public lands and should be discontinued,” said Miranda Fox, campaign manager at the SOS Project. “We want to ensure that Strawberry Creek and its ecosystem are properly managed for generations to come.”
Alix Dunn, Nestlé’s spokeswoman said, “We greatly appreciate the work of these organizations to ensure that, 31 years after validly submitting a permit renewal application for transmitting water across federal land, the USFS [United States Forest Service] will take action soon. As a federal court has determined, federal law states clearly that the prior permit remains in full force and effect, and so we vigorously dispute any inappropriate allegations made regarding our permit status. We appreciate the strong emotions on all sides of this issue, and have worked hard throughout this process to provide the USFS with all requested information for them to be able to make a fully informed decision in this matter, including conducting approximately 70 separate environmental studies and investing more than $1.5 million to fund a detailed environmental analysis. We have also submitted a voluntary adaptive management plan to the USFS. This plan provides transparent, science-based methods for managing water collection at Arrowhead Springs and adjusting our operations when conditions meet interim triggers. We look forward to collaborating with the USFS to develop the final adaptive management plan.”
Nestlé, the world’s largest water-bottling company, earned $8.3 billion in profits from its water business in 2016. U.S. Geological Survey reports from July 2017 show that, despite heavy winter precipitation across California, Strawberry Creek’s streamflow levels were the lowest since the agency began keeping track 96 years ago.
“This agreement stops Nestlé and the Forest Service from relying on a permit that expired 30-years ago, but Strawberry Creek still desperately needs protection,” said Ileene Anderson, a senior biologist at the Center for Biological Diversity. “The real tragedy is that Nestlé is sucking the creek dry to bottle water for profit, dooming plants and wildlife that have relied on it for tens of thousands of years. We’ll keep fighting to protect Strawberry Creek and our forests from commercial exploitation.”
The environmental groups have called upon the Forest Service to deny Nestlé a new permit, the groups say, “in order to safeguard the public land, water, plants and animals of the San Bernardino National Forest.”
Eddie Kurtz, the executive director of the California-based Courage Campaign Institute, said, “While we are glad to have slayed Nestlé’s ‘zombie’ permit, we fear that the Forest Service’s action will ultimately do little to protect this national forest – owned collectively by all Americans – from continued exploitation by Nestlé, one of the largest and most profitable corporations in the world. If the Forest Service issues a new permit that again prioritizes Nestlé’s obscene profits over ensuring sufficient water remains to protect this fragile ecosystem, that will not be a viable solution. This fight will be far from over.”
By Amanda Frye and Mark Gutglueck