The United States Forest Service and the Forest Service’s San Bernardino National Forest Superintendent Jody Noiron find themselves in the middle of an escalating controversy between environmentalists and the Swiss-owned company, Nestlé Waters North America, relating to the expired-but-yet-in-effect permit that company has to extract millions of gallons of water annually from a pristine spring in the San Bernardino Mountains.
On one hand, environmentalists maintain the U.S. Forest Service has been remiss in allowing Nestlé to continue to tap into a spring system in Strawberry Canyon in the San Bernardino Mountains despite the expiration of that company’s permit to do so in 1988. The environmentalists claim the U.S. Forest Service has exercised at best laissez faire regulation of Nestlé, the largest water user in the San Bernardino National Forest, over the years, and that Nestle’s year-round diversion of substantial amounts of water have reduced the vegetation and the large diversity of riparian species associated with Strawberry Creek. They say the situation has been exacerbated by the ongoing drought and that the U.S Forest Service has neglected its duty to protect the ecology and life the Strawberry Creek watershed supports.
Conversely, Nestlé maintains that the Forest Service’s undertaking of an environmental review process of the impact of the continued channeling of water out of the canyon is one that intrudes on the multi-national corporation’s established water rights and entitlement to do business. Nestlé maintains it should not be subject to the review process for the renewal of its special use permit in Strawberry Canyon and that the federal agency’s action violates California procedures related to the pumping of water.
The water in question ends up as a product widely recognized, being commercially available as Arrowhead bottled water. The questions that have evolved are 1) should a company be allowed to monopolize a natural resource that if left in place would sustain a natural ecosystem on public lands; and 2) even if the corporate utilization of that water wreaks environmental havoc, does the company possess superseding water rights that perpetuate its ability to continue to draw that water?
Nestlé of North America, a corporate subsidiary of the Swiss-owned Nestlé Corporation, inherited an expired United States Forest Service permit, which it assumed from Perrier, when it bought out that entity in 1992. Perrier had acquired the permit when it purchased the Arrowhead Puritas Water Company in 1987. That permit allowed the holder to extract water from a significant below-ground source in the San Bernardino Mountains. The Arrowhead Springs Company formed in 1909, drawing surface water from Strawberry and Coldwater Canyon near the old Arrowhead Resort at approximately 2,000 feet. In the 1930’s, a special use permit was obtained from the Forest Service and tunnels, boreholes and horizontal wells were placed at the higher elevation of 5,200 feet at the headwaters to Strawberry Creek.
The Arrowhead Springs Company merged with the Los Angeles-based Puritas Water Company in 1929. In 1978, Arrowhead Puritas renewed its permit for the removing of water by means of groundwater harvesting boreholes and horizontal wells from Strawberry Canyon, for which it paid the U.S. Government $524 per year, a standard fee for such uses in all National Forests. That permit expired 27 years ago, but the corporate successor to that company continues to pay the miniscule fees associated with that permit and utilizes for commercial purposes water thousands of times in excess of that used by local domestic users who even before California Governor Jerry Brown’s executive order limiting water use statewide had their access to mountain water cut off.
During the early and middle part of the 20th Century, the Arrowhead Water Company and then the Arrowhead Puritas Water Company enlarged the pipes used to tap into the aquifer below and around Strawberry Creek and over the years built the company into the largest purveyor of bottled water on the West Coast based upon the quality of that water and a successful marketing strategy.
According to industry analysts, Perrier, which was then a privately-held company, paid over $400 million to acquire the Arrowhead Puritas operation 28 years ago. Among some in the know, it was believed Arrowhead Puritas had hornswoggled the French company, given that the permit on the Strawberry Canyon spring water was due to expire the following year.
The U.S. Forest Service, however, did not bring the curtain down on Perrier’s continued drafting from the source nor on Nestlé when it inherited the operation in Strawberry Canyon from Perrier in 1992. Furthermore, the Forest Service did not undertake a review of the permit. Rather, the company simply stayed current on its permit fee and neither the Forest Service nor any other arm of the federal government interfered with the operation, which entailed Nestle/Arrowhead continuing to have free rein over the Strawberry Canyon water. Following the elapsing of the permit in 1988, Perrier and then Nestlé continued to pay the $524 annual fee attached to the permit, and continued to extract water unabated from Strawberry Springs, conveying the water away in a stainless steel pipeline.
There is no limitation imposed on Nestlé’s water withdrawal from Strawberry Canyon. Efforts to quantify how much water, precisely, Nestlé is using have yielded inexact results and Nestle has until only recently asserted that it need not give figures because it is proprietary information. Neither the U.S. Forest Service, nor the state of California, nor the County of San Bernardino nor any local water agency has required that the water being taken from Strawberry Canyon, which is drawn not from a naturally occurring spring but wells and tunnel borings into the side of the mountain which feeds a spring, be measured.
Headquartered in Vevey, Switzerland, Nestlé is the largest food company in the world measured by revenues. According to its 2014 report to its stockholders, bottled water accounts for seven percent of the company’s revenue. Much of that is from the Arrowhead brand, although the company does market filter purified water under the Nestlé brand and it owns the Perrier, Aquarel, Aqua Panna, Contrex and Vera brands. Extrapolating from Forest Service records, up until the current drought the company appeared to be drawing upwards of 100 million gallons from Strawberry Canyon annually. An extrapolation based upon internal Nestlé documents puts the company’s Strawberry Canyon water consumption significantly beyond the 100 million gallon mark.
The Center for Biological Diversity, The Courage Campaign and the Story of Stuff Project, represented by attorneys Lisa T. Belenky, Justin Augustine, Rachel S. Doughty, Matt Kenna and Douglas P. Carstens, on October 13, 2015 filed a civil complaint in U.S. District Court in Riverside alleging the U.S. Forest Service has allowed the Nestlé Corporation, functioning as the Arrowhead Mountain Spring Water Company, to continue to take water from the San Bernardino National Forest, despite the expiration of its permits to do so in 1988. Named in the suit are the United States Forest Service, Randy Moore, in his official capacity as the Pacific Southwest Regional Forester and Jody Noiron, in her official capacity as forest supervisor for the San Bernardino National Forest. Nestlé and Arrowhead Water are not named in the suit.
According to the suit, Nestlé and Arrowhead Water are utilizing a system known as the West Strawberry diversion structure, consisting of eleven access points that are tunnels, boreholes, and horizontal wells drilled as deep as 490 feet into the mountain, to collect and then convey the water in a metal pipe that travels several miles down the mountain, including within the bed of Strawberry Creek and its tributaries and their adjacent riparian habitat as well as outside of these areas. “The majority of the diverted water is then piped into trucks, eventually to be bottled and sold throughout the United States under Nestlé’s signature premium brand name: Arrowhead Springs,” the suit states. “Removal of large amounts of water at the highest elevations of the watershed is having an environmental impact at the well, borehole, and tunnel sites as well as throughout the entire downstream watershed.”
Since the filing of the lawsuit, the U.S. Forest Service has evolved a protocol for undertaking what environmentalists have maintained is a long-overdue analysis, under the guidelines of the National Environmental Policy Act, known by its acronym NEPA, of the past, current and potential future impact of the pumping taking place under the auspices of Nestlé Waters North America’s special-use permit in Strawberry Canyon.
When the US. Forest Service announced in March that it would undertake the NEPA study, it said that it would take as long as five years to complete and that in the meantime, that is, for the five year duration, Nestlé would be able to continue to operate under the auspices of its expired special use permit. This induced howls of protest from environmentalists and pointed criticism of Moore and Noiron. Under the terms of the protocol, the Nestlé permit will be perpetuated unless the five-year study demonstrates there is demonstrable ecological harm occurring as a consequence of the operations.
Despite the perception of the environmentalists that the U.S. Forest Service is being far too permissive with that protocol, Nestlé is taking the diametrically opposite tack and submitted on May 2, 2016, comments to the USFS regarding the proposed renewal process. According to a press release heralding the 82 pages of comments, Nestle Waters North America is “concerned that the action proposed by the Forest Service would disrupt established water rights and the long-standing legal process of regulating water use in the State of California. The proposals currently being suggested by the Forest Service would create a situation in which the federal government overrides more than a century of California law. This would have potentially far-reaching consequences for businesses, agencies, individuals and other water rights holders throughout the state.”
Within the comments, Nestlé Waters North America notes that the Forest Service in 1929 issued a special use permit for the taking water in Strawberry Canyon to one of Nestle’s corporate predecessors and that succeeding special use permits related to the Strawberry Canyon water were reissued in 1931, 1934, 1946, 1960, and 1976. The comments then reference Special Use Permit #7285, which was issued by the Forest Service in 1978 with regard to the water in question, “and continues to govern Nestle Water North America’s use of Forest Service land with in the right-of-way across the San Bernardino National Forest.”
Furthermore, according to the comments, “Nestlé Waters North America has legal concerns with the Forest Service’s proposed action. The state’s governing legal framework, which is designed to allocate and manage water supplies within its boundaries, should not be superseded by federal permit actions. The Forest Service’s proposed action is a significant departure from the prior special use permits for the right-of-way, and from Nestlé Waters North America’s request to reissue Special Use Permit #7285, and thereby raises significant legal, technical, and practical implications.
According to Nestlé, “The Forest Service’s adaptive management plan as drafted imposes subjective standards, sets triggers based on arbitrary considerations, and lacks a valid, scientific basis for determining the effects of water withdrawals from Strawberry Canyon. Due to the fact that timing and flow can be more important than volume, there is no scientific basis to assume that a reduction in Nestlé Waters North America’s water collection will have any impact on the triggering conditions in the proposed adaptive management plan, much less constitute the sole impact.”
Nestlé further maintains, “The 1978 special use permit remains In effect as a matter of law. Pending issuance of a new special use permit, Special Use Permit #7285 automatically remains in effect as a matter of law. The Forest Service’s proposal is a substantial departure from prior permits and Nestle Waters North America’s use of the right-of-way. The Forest Service’s proposal is inconsistent with Its own regulations. The processing of an application for renewal of an existing use of National Forest lands, such as Nestlé Waters North America’s application, ordinarily follows a streamlined process for renewal. The Forest Service’s proposed restrictions on Nestlé Waters North America’s water collection would be ‘arbitrary and capricious.” The proposed action would create problematic precedent nationwide. The vast majority of public land in the United States is located in the West, where water is too often in scarce supply. The Forest Service, in particular, owns approximately 20 percent of the land in California and between five and 40 percent of the land in other western states. If the Forest Service asserts a right to regulate third party use of state-regulated water within national forest boundaries (a right it does not have under federal or state law), all parties with state-based water rights will be threatened, the hierarchy of senior water rights undermined, and long-term economic expectations thrown into doubt.”
Buried in its comments, Nestlé did make reference to a issue that environmentalists would likely seize upon in making their case that the special use permit should not be renewed. In a reference to categorical exceptions within the renewal process, the comments state, “the Forest Service’s scoping process is required to analyze whether an ‘extraordinary circumstance’ would result from reissuance of the special use permit that would preclude its use. The determination of whether an ‘extraordinary circumstance” would arise is based on whether reissuance of the special use permit ‘may have a significant effect on the environment,’ including an effect on certain specified resource conditions such as flood plains, wetlands, or wilderness or national recreation areas. There is no information or data demonstrating that Nestlé Water North America’s use of the land within the right-of-way (within the scope of the Forest Service’s regulatory control and discretion) results in an ‘extraordinary circumstance.’”
Some environmentalists may contest that assertion.
The pending Nestlé application has forced some degree of disclosure, such as it is. In response to a report that Nestlé had been drawing in excess of 100 million gallons of water from Strawberry Creek annually, the company recently put out that it had taken 36 million gallons from that source in 2015 and had taken nearly eight million gallons less in 2014, when it captured 28 million gallons. The company did not reveal how much water it had taken down from the mountain in previous years.
The Forest Service’s Robert Hawkins, who is working on the Forest Service’s adaptive management plan, said the service was assimilating the comments received from the public, including from Nestlé, and incorporating them into the penultimate draft of the plan. He said the Forest Service would withhold its statements until the next draft of the plan is completed.
Steve Loe, a retired Forest Service Wildlife Biologist with over 30 years of working in the Strawberry Creek Watershed, told the Sentinel,“The public, including individuals and conservation groups have been attempting to get Nestlé and the Forest Service to voluntarily protect the stream, riparian habitat and wildlife for over two-and-a-half years during this historic drought. Nestlé refuses to meet with the public to work on protecting the stream and the Forest Service has been intimidated by Nestlé ‘s threats. The Forest Service finally is making Nestlé pay for and provide for analysis to see how much water the National Forest needs to be healthy.”
Loe said, “This huge amount of water removal is having an adverse effect on the stream during this drought. No stream in Southern California has excess water at this time.”
Loe continued, “This is public land and there are many laws, regulations, policies and a land management plan that say permits need to comply with all of these and protect the National Forest. When the Forest Service first issued the permit in 1929, 87 years ago, the Forest Service had no idea what the effect would be on the stream. Now we have come so far in better understanding the surface water/groundwater relationships and what is needed to protect streams and natural resources. The Forest Service never promised Nestlé or their predecessors all the water they could take forever regardless of impact. That is why they were 10 year permits, in case something changed. Something has changed for sure. There are threatened and endangered species, including the Least Bell’s vireo, southwestern willow flycatcher and southern rubber boa. These animals would be stressed already by the drought, but the continued removal of as much groundwater as possible is pushing the ecosystem to the limits. Climate change is affecting this area and there has been significantly less rainfall and snow. Species habitat requirements and their need for water is much better understood. It is time to see how much water can be taken and still protect the public resources. It is time to stop water removal to let the watershed recover from the drought and conduct the needed studies.”
Loe said, “Nestlé now appears to be building a case for a large damage claim against the Forest Service if they try to use ‘their’ water, based on Nestlé’s friend of the court documents and NEPA input. Thank God, the federal government and State of California and Water Resources Control Board have strong laws, policies and regulations to protect natural streamflow and fish and wildlife in the use and allocation of the state’s water. It is the people of the state who own the water, not Nestlé. It is the Forest Service’s job to protect the National Forest.
I believe the State and Federal Government are going to stand up and defend the right of the State and Federal Government to protect our public resources from US and foreign corporations only interested in their profits.”
In its comments, Nestlé stated it would likely comply with restrictions the Forest Service might place on the drawing of water from Strawberry Canyon, but did not concede that it was legally obliged to do so. “Nestlé Waters North America will commit to adhere to an objective and scientifically sound adaptive management plan, but must do so voluntarily in order to comply with the law,” the comment document says.