USFS Renews Nestlé’s San Bernardino Mountain H2O Extraction Permit

By Mark Gutglueck
After a three decade delay, the U.S. Forest Service on Wednesday moved to conditionally renew for three years Nestlé’s expired permit to draft water from the San Bernardino Mountains on terms that will likely limit the Swiss Company’s extraction of water to roughly five-eighths of the combined surface and spring water it has been diverting from ecologically fragile Strawberry Canyon in recent years.
The water Nestlé removes from Strawberry Canyon at the approximate 5,000 foot elevation level in the San Bernardino National Forest by means of a series of boreholes, horizontal wells and pipes is bottled and marketed under the Arrowhead Spring Water brand. Based on a tangle of water rights claims that in some cases are valid, in other cases disputed, and in yet others based on conflations or questionable interpretations of the public record and in still others demonstrably inapplicable, Nestlé and its litany of predecessors-in-interest have been capturing water at various elevations in the San Bernardino Mountains for over a century and utilizing it for commercial purposes. The word “Arrowhead” was time and again associated with many of those water pumping and bottling operations, including the names used by the Arrowhead Hot Springs Company, the Arrowhead Cold Springs Company and Arrowhead Puritas.
The Arrowhead Puritas Company obtained a permit from the U.S. Forest Service to pipe water out of Strawberry Canyon several decades ago. In 1978, Arrowhead Puritas renewed that permit for transporting the harvested water from Strawberry Canyon for ten years. While still holding that permit, for which it paid $524 per year, Arrowhead Puritas morphed into the BCI-Arrowhead Drinking Water Company. In 1987, Perrier purchased the BCI-Arrowhead Drinking Water Company, in so doing acquiring the still-active permit. Prior to the permit expiring the following year, Perrier applied to renew it. Such a renewal required a U.S. Forest Service review of the water drafting arrangement and its environmental/ecological impact, which at that point the U.S. Forest Service did not have the immediately available resources to carry out. In a gesture of compromise, Perrier was allowed, pending the eventual Forest Service review, to continue to operate in Strawberry Canyon by simply continuing to pay the $524-per year fee to perpetuate the water extraction under the terms of the expired permit. 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 a name in the corporation chain of title to the claimed water rights, 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 protocol 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, diverting, between 1992 and 2015, with the exception of 2004 where documentation shows no record of extraction, from 84 acre-feet (27,371,520 gallons) to 508 acre-feet (165,532,525 gallons) of water per year 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 complaints with the water rights division of the California State 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 State Water Resources Control Board staff 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 staff’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 had drafted an average 192 acre-feet (62.56 million gallons) per year. Over its span of operations, Nestlé some years extracted more than it did during other years, with 1998 being its peak year of diversion, when it drafted 508 acre-feet, of which the State Water Resources Control Board staff determined “356 acre-feet or greater” was “unauthorized.” Thus, according to the California Water Resources Control Board staff, Nestlé is likely taking water to which it is not entitled.
“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 staff stated in its report of the investigation carried out over the previous two years, 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 unauthorized diversions.
Earlier this month, with the U.S. Forest Service review of the operation not yet completed, Nestlé’s water extraction in Strawberry Canyon under the expired permit continuing and the appeal of Bernal’s ruling yet ongoing, the three environmental groups pursuing that appeal agreed to dismiss it conditional upon the Forest Service making an expedited decision with regard to the renewal or cancellation of Nestlé’s permit. In the settlement, those groups – the Center for Biological Diversity, the Courage Campaign and the SOS Project – reserved the right to challenge any new Forest Service decision.
In a decision memo issued on June 27 and signed by San Bernardino National Forest District Ranger Joseph Rechsteiner, The U.S. Forest Service gave Nestlé clearance to renew its permit for three years with a potential two year extension. That continued water extraction will, however, be subject to a comprehensive and complex set of conditions and restrictions, such that it is not likely that Nestlé will be able to divert water from Strawberry Canyon in the quantities it had previously.
Rechsteiner said the conditions under which the permit is granted include those specified in the Forest Service’s Land Management Plan for the San Bernardino National Forest and an adaptive management plan which will flex with the conditions in the environs in Strawberry Canyon and the adjoining areas utilizing the same water table, such that overdrafting of the aquifer will trigger a cessation of Nestlé’s water diversion until the threat to the local ecology ends.
“I have decided to approve the continued occupancy and use of National Forest System lands for the extraction and transmission of water using existing improvements, subject to resource mitigation measures designed to ensure compliance with the Forest Service’s Land Management Plan,” Rechsteiner wrote. “My decision to approve the continued use and occupancy of existing facilities with conditions is based on the agency objective to authorize and manage special uses of National Forest System lands in a manner which mitigates natural resources and public health and safety concerns. The resource mitigation measures are designed to ensure that the impact to natural resources will be minimal [and] may improve resource conditions when compared to the existing condition. These resource mitigation measures protect and do not infringe upon water rights for developed spring water held by Nestlé under California state water law, as described by a recent report from the California Water Resources Control Board staff. The adaptive management plan provides the permittee with operational flexibility in how those resource measures will be addressed.”
The permit grants Nestlé, Rechsteiner said, access to the area within Strawberry Canyon where the water diversion is occurring, including a right-of-way occupying approximately 4.5 acres of National Forest System land along with improvements which include two water collection tunnels; ten horizontal wells located within four concrete vaults; five electronic monitoring telemetry sites and associated equipment; four helicopter landing areas; 5.7 miles of access trails, of which 4.5 miles of trail are along the water transmission lines; 4.5 miles of 4-inch steel water transmission pipe and associated valves; 2.75 miles of above-ground pipeline; 1.75 miles of buried pipeline, along Forest road I N24; and 20 pipeline support bridges. The permit also authorizes administrative use and maintenance of Forest Road I N24 on a shared basis.
Conditions of the permit include a requirement that Nestlé maintain limited operating periods at various times throughout the year, some of which overlap, to protect threatened, endangered and sensitive species habitat. One of the limited operating periods, running from March 15 through September 15, is for the protection of the least Bell’s vireo. Another runs from May 1 to August 31 to protect the southwestern willow flycatcher. Both of those are federally listed protected species, and any disturbance-related activities in Strawberry Canyon within a mile of their suitable habitat is to be limited during their breeding seasons. Nestlé must also maintain a limited operating period prohibiting activities within approximately a quarter mile of a California spotted owl nest site during its breeding season running from February 1 through August 15, unless surveys confirm that the owls are not nesting.
Nestlé is also to install, supply water to and maintain two wildlife “drinkers,” one in the vicinity of its designated tunnels 2 and 3, and the other near its well 7 complex. Nestlé further must irrigate to support the survival of native special status vegetation and provide for wildlife habitat linkages if it is determined that less than 70 percent of expected aquatic life forms and communities are present based on riparian studies. Nestlé must maintain surface water flow to support macro invertebrate populations and riparian vegetation, and must cease or limit water diversion if it is determined that invertebrate populations providing a base of food chain to riparian dependent wildlife resources are not maintained to the Forest Service’s standards and expectations.
Nestlé is also required, under the permit, to conduct hydrologic and riparian studies to better understand the relationship between water withdrawals, surface flows, and riparian habitat in order to ensure that water withdrawals under state law are also consistent with the standards outlined in the Land Management Plan for the forest.
“The initial studies provided by the permittee suggest that water extraction is reducing surface flow in Strawberry Creek,” Rechsteiner wrote. “The effect of this flow reduction has not been thoroughly studied. The permittee will study comparison sites in adjacent unmanaged drainages to determine what conditions would exist in Strawberry Creek without water extraction in the upper watershed. Based on this analysis, the overall watershed condition for the East Twin Creek watershed (which includes Strawberry Creek) is currently “impaired function.” Studies completed by Nestlé and validated by Forest Service field work have demonstrated that the current water extraction is drying up surface water resources (springs and streams) that would have normally been perennial water resources. This extraction of water under the existing permit is not in accordance with the subsequent adoption of Standard 46 of the Forest Land Management Plan. Surface water diversions and groundwater extractions, including wells and spring developments may only be authorized when it is demonstrated by the user, and/or agreed to by the Forest Service, that the water extracted is excess to the current and reasonably foreseeable future needs of forest resources as required by the Land Management Plan. Implementation of resource mitigation measures will allow for Nestlé’s water extraction activities consistent with applicable state water rights and the Land Management Plan. Overall these changes will move the watershed condition up one level to “functioning at-risk” as described further in the specialists’ reports. This change in watershed condition is consistent with Land Management Plan direction and will help move the watershed towards the desired condition.”
Contained within the Rechsteiner’s decision document is substantial reference to the California Water Resources Board and its staff’s investigation, carried out starting in 2015 and concluding in December 2017, of Nestlé’s water use in the San Bernardino Mountains. That investigation touched on whether Nestlé had water rights in the San Bernardino Mountains and whether it was exceeding those rights.
“I recognize that the State of California regulates water rights through the State Water Resources Control Board (SWRCB),” Rechsteiner stated. “The SWRCB staff offered to assist the Forest Service in our review, and the forest supervisor accepted their offer in May of 2016. The SWRCB, Division of Water Rights also received several water rights complaints against Nestlé starting on April 20, 2015, including a complaint that Nestlé was diverting water without a valid state water right. The SWRCB released their report of investigation on December 20, 2017. The State Water Resources Control Board concluded that a significant portion of the water currently diverted by Nestlé appears to be diverted without a valid basis of right, after examining a variety of water rights claims put forward by Nestlé and finding them flawed. The SWRCB concluded Nestlé’s claim to a pre-1914 water right is not valid.”
Rechsteiner also reiterated the California Water Resources Control Board’s finding that a celebrated water rights case litigated in court between competing private entity water users early last century did not supersede requirements that water users establish their claims in accordance with the 1913 Water Commission Act, which established the exclusive means of appropriating water in California through a comprehensive permitting scheme, and which Nestlé’s predecessors-in-interest bypassed. The California Water Resources Control Board did conclude that Nestlé, through its predecessors-in-interest, has established pre-1914 water rights to 26 acre-feet (8.5million gallons) of water per year from the San Bernardino Mountains, although the rights Nestlé holds apply to Indian Springs, which is at an elevation level well below Strawberry Canyon and in a different tributary from the current water system. Nevertheless, the State Water Resources Control Board concluded those rights could be applied to the Nestlé’s current operation.
The SWRCB does have the authority to prevent the wasteful and unreasonable use of all water and it can take action to ensure that water use does not dessicate surface water, but the board does not have the authority to require an entity to acquire a permit for extracting percolating water, that is, water making its way into the water table and not remaining on the surface. Thus, Nestlé’s diversion of groundwater may continue, but only with the permission of the overlying landowner, in this case the U.S. Forest Service.
According to the California Water Resources Control Board’s December 2017 report, Nestlé can theoretically make a valid claim to that portion of the water it has collected that percolates, or would have percolated, into the water table. Nestlé cannot, however, according to the California Water Resources Control Board, make a valid claim to water it has been collecting that would have flowed into the creeks, rivulets or other surface water manifestations.
The State Water Resources Control Board staff’s report of its investigation, released on December 20, 2017, stated on page 33, “Some amount of the water being diverted by Nestlé from the Strawberry Canyon springs and wells is developed water that would have surfaced elsewhere in the watershed and contributed to surface flow.”
While the report does not specifically quantify that water, a table provided within the report summarizes approximately how much water was diverted by Nestlé under its assertion of rights in 1998, the year in which maximum annual diversions occurred. That table reflects that 126 acre-feet of groundwater was diverted by Nestlé that year, precisely 100 acre-feet more than its established pre-1914 water rights. Nestlé also diverted that year 356 acre-feet or more of surface water. By one interpretation of the complex set of restrictions to be applied to Nestlé’s permit, the company will not be allowed to divert more than 126 acre-feet of water per year going forward. That 126-acre-foot figure would be further reduced if monitoring shows that water diversions are having a deleterious impact on Strawberry Canyon’s ecology.
Today, two days after Rechsteiner released his decision, Kenneth Petruzelli, who is with the California Water Resources Control Board’s Water Rights Division, told the Sentinel, “We just saw the Forest Service decision. I went over it in general but not in any great detail. We’re still talking about it and in the process of considering it, so we haven’t been able to assess it fully yet.”
With regard to the study the California Water Resources Control Board made and released last December, Petruzelli said it is not binding. “It was a staff report and not an order from the [California Water Resources Control] Board,” he said. “It offered its conclusions and recommendations, which was that Nestlé immediately cease any unauthorized diversions and that if Nestlé wants to divert water in excess of the 26 acre-feet annually for which it likely has a valid pre-1914 claim, it should be required to determine first what the impact of those diversions are, whether there is sufficient water available for extractions without causing unreasonable injury to public trust resources, and that it must apply for and receive a water rights permit before diverting or using water.”
Precisely the degree to which Nestlé will need to reduce the amount of water it is extracting from Strawberry Canyon pursuant to the renewed permit is indeterminate at this time, Petruzelli said. “That’s a complicated question which will depend on the results of the various hydrologic and riparian area studies and modeling that is done as this proceeds,” he said.
In reaction to Rechsteiner’s decision, Alix Dunn, Nestle Waters North America spokesperson, said, “Nestlé Waters North America appreciates the time and effort the U.S. Forest Service dedicated to this decision regarding the permit renewal process at Arrowhead Springs,” conflating Nestlé operations at 5,000-foot elevation Strawberry Canyon with water sources further down the mountain near the 2,000-foot level. “We will carefully review the specifics of the decision, and will continue to comply with all permit requirements. Our cooperation throughout this process includes conducting and providing the USFS with 70 separate environmental studies and reports.
“Californians are passionate about water and so are we,” Dunn continued. “We take our responsibility as a California water steward seriously and Arrowhead’s successful operations for more than a century point to our commitment to long-term sustainability.”

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