Nestle’s Bottled Water Contract Pulled Under Community Pressure

Groups working to protect the McCloud River watershed earned a major victory last year when Nestle Waters of North America agreed to cancel its contract for massive water extraction from the McCloud watershed.  The Protect Our Waters (POW) Coalition – comprised of California Trout, Trout Unlimited, and McCloud Watershed Council – has been battling the project since 2003 when the contract was approved without any environmental review.  Through court actions, community education, and solid science, the Coalition demonstrated to Nestle that its efforts to force the ill-conceived project on the residents of McCloud could not succeed.  (The Firm represented California Trout and Trout Unlimited in this process.)   Nestle is not giving up, however, and the Coalition is working to ensure that any new proposal by Nestle is accompanied by meaningful environmental and economic review before being considered by local elected officials.


The Nestle battle began when the McCloud Community Services District agreed to a contract giving Nestle the right to bottle 520 million gallons of pure spring water per year and unlimited quantities of groundwater.  The contract was negotiated with little input from the public and absolutely no environmental review.  The Superior Court agreed with the Concerned McCloud Citizens (represented by attorney Don Mooney) that the District's actions violated the California Environmental Quality Act (CEQA), but was reversed by the Court of Appeal.  Since that decision, the California Supreme Court’s decision in Save Tara v. City of West Hollywood has made clear that CEQA review is required for contracts whenever the project’s features are well defined at the time the contract is entered.  Because of the high level of planning and design that Nestle has already completed, this decision means that the District must complete its environmental review prior to entering  any new contract with Nestle in McCloud.


Given the growing scrutiny of the POW Coalition, Nestle recognized that it could not escape CEQA review for the million square-foot bottling facility it planned to develop in McCloud, which required permits from Siskiyou County.  The County had released a draft EIR in 2006, but the document was deeply flawed: the project description failed to describe the full scope of water diversions that could be allowed; experts found that the report’s analysis failed to address the project’s impacts to local stream flows; mitigation measures were unenforceable; and a range of impacts to the community of McCloud were simply ignored.  The EIR also failed to consider the climate change impacts of bottling and trucking to Southern California millions of gallons of water.  The Attorney General weighed in with detailed comments, concluding that the EIR was “fundamentally and basically inadequate.”


As the likely effects of the Nestle project became clear, many local residents began to question whether bottled water production would really be the economic savior that some had expected.   The Coalition retained economic experts to work with the community to begin to develop economic development strategies that will build on and enhance local resources, rather than simply exploit them.  The Coalition also has been reaching out and working with other communities in the U.S. affected by water bottling.  In December, McCloud residents testified at Congressional hearings on the environmental risks of water bottling facilities.


In the face of mounting community pressure and growing concerns with the validity of the environmental review for its project, Nestle decided last fall to terminate the water contract. The company has made clear, however, that it intends to continue to pursue a new contract with the District.  The Coalition is urging the District to resume negotiations only after it has gathered sufficient information about the environmental and economic effects of the proposed withdrawals to allow an informed community dialogue on the subject.  The Supreme Court’s recent decision in Save Tara should help persuade the District that this is the right course to take.