Underground profits: Nestle’s clutch on Michigan water

Is Nestlé paying enough to pump spring water near Evart for its Ice Mountain plant?

STANWOOD, Mich. (WOOD) — The Michigan Department of Environmental Quality will soon decide whether or not to approve Nestle’s permit application to increase its pumping limits to 400 gallons per minute at the White Pine Springs operation in Osceola County.

Unless you live in the areas where Nestle pumps water, you probably don't remember the less-than-warm welcome it received when it set its sights on Michigan spring water in the late 1990s. Archived newspaper articles show skepticism toward the company, then wearing the Perrier name, and its plans to open an Ice Mountain bottling plant in Mecosta County.

Nestle would need water to bottle, so it moved to have pumping wells in Mecosta County’s Morton Township and Osceola County’s Osceola Township, near Evart.

Despite public pushback, the company got proper approval from the MDEQ and local entities and broke ground in 2001. By 2003, the company had permission from the MDEQ to pump 400 GPM — the same amount it is currently seeking to pump in Osceola Township — from its Morton Township site, named Sanctuary Springs.

After Nestle filed the application to draw more water in Osceola County and opponents started speaking out, Target 8 took a closer look at the company’s history in Michigan and how it has made billions off our water -- all while paying next to nothing.

YEARS IN COURT

Michigan Citizens for Water Conservation sued Nestlé and its Sanctuary Springs site in 2003, arguing the pumping was harming the environment.

After a three-week civil trial, Mecosta County Circuit Court Judge Lawrence Root agreed with MCWC. His decision cited expert testimony showing a four- to six-inch drop in wetlands surrounding the Sanctuary Springs site in just seven months.

“He rejected flatly the computer model of Nestle,” Jim Olson told Target 8 in a phone interview.

Olson is a Traverse City attorney who represented MCWC during the lawsuit. He also is the founder and president of nonprofit For Love of Water.

Most recently, his group worked with water experts to put together a 113-page report disputing Nestle’s current application with the MDEQ.

“They don't have any field data to support that (claims it Nestle is not harming the environment). It's just a model calibration internal to the model, which is not tied to reality,” Olson argued.

Olson says what Nestle is trying to do now in Osceola County is no different than what it tried to do in Mecosta County in the early 2000s.

The MCWC's lawsuit against Nestle continued until 2009, when the conservation group and the company finally agreed the yearly pumping average cannot exceed 218 GPM at the Sanctuary Springs site.

Since that average was set in Mecosta County, Target 8 asked the MDEQ why it wouldn’t become precedent for the Osceola County site just 25 miles away.

In an email, the MDEQ said Target 8 should take the question to a legal expert.

GROUNDWATER FOR POCKET CHANGE

State law requires the MDEQ to charge just $200 per year for Nestle to pump, bottle and sell Michigan’s water.

If you break that down based on its current application to increase to 400 GPM in Osceola County, Nestle would pay just 55 cents per day to pump over half a million gallons.

If homeowners only paid that rate for residential water service, their bills would be about $17 a month.

In addition to pumping sites in Mecosta and Osceola counties, Nestle has a contract with the city of Evart. Unlike the state fee, though, Evart charges Nestle the same rate residents pay — $3.50 per 1,000 gallons of water.

The city manager told Target 8 the city makes roughly $200,000 per year off that contract. That means that in Evart alone, Nestle is getting about 57,142,857 gallons of water per year to bottle and sell.

Evart's contract with Evart expires in 2025.

The fees Nestle pays don’t even begin to make a microscopic dent in the company's water profits. According to its annual report, the company made $7.4 billion in water sales in 2016.

For Maryann Borden, whose property backs up to Twin Creek in Osceola Township, those profits are baffling.

“I couldn't say it politely how it makes me feel because that's just criminal,” she told Target 8.

APRIL PUBLIC HEARING

Borden has lived in the same house since she was 8 years old.

“When I realized what they were going to do, they were going to bottle this water and send it somewhere else, it was like someone hit me in the solar plexus,” Borden said.

Borden’s 16 years of distaste for the company led to her speaking out at the MDEQ’s public hearing in April.

At the time of that packed hearing at Ferris State University, the department had received close to 400,000 responses to Nestlé’s current increase application.

But that night, the department told Target 8 that the law isn't written in a way to let public opposition impact its final decision.

“The number of comments are something we can't review under the law. Under the law, our primary responsibilities are to look at whether water is safe to drink and whether or not it will have an adverse impact on the resources in the area,” MDEQ Public Information Officer Melody Kindraka told Target 8.

A CLOSER LOOK AT THE DATA

Nestle has consistently said its pumping has no adverse impact, citing nearly two decades of research and monitoring.

“Our long-term data record of over 17 years does not support any declining water levels (groundwater or surface water) in the area. Water levels naturally fluctuate every year with every season. In addition, structures such as dams, which are present on both Chippewa and Twin Creek, affect water levels of those streams,” Arlene Vincent-Anderson, natural resource manager for Ice Mountain, wrote in an email statement to Target 8.

Borden said that's different than what she's seeing in her backyard.

“If they've been monitoring for [17] years, I mean, what are their thoughts? When they see this happening? Do they think, 'Oh, this is OK?'” she wondered.

She says the land behind her house looks a lot different now than when she was a young girl playing in her favorite playground, Twin Creek. The creek runs from Nestle's White Pine Springs operation in Osceola County.

“In my own backyard, the Twin Creek that I grew up with has not changed for decades. It was the same creek that went from point A to point B year after year,” Borden recounted. “Recently, now there are huge mud bars in the middle of this lovely little stream and the water struggles to go around them and then there's the thick grasses that have come along.”

Borden invited Target 8 to look at the creek. She pointed out a monitoring device, similar to a yard stick, that Nestle put in the creek when it first began monitoring it for its White Pine Springs site.

Twin Creek, Nestle, water guage
A Nestlé water gauge in Twin Creek.

Based on the water erosion on the device, Target 8 observed the creek once sat at seven inches, but in mid-April — after the winter thaw — the water level was at 3.5 inches.

There's no way to prove that difference is because of Nestle’s pumping, but Borden worries the creek will only get lower if its request is approved by the MDEQ.

“The laws seem to be on their side and so it's a long progress to change the laws and we need to get people in Lansing on our side that are about the fact that this is the Great Lakes state,” Borden said.

FOLLOWING THE MONEY

Elected officials in the Great Lakes state have received donations from Nestle and its lobbyists for decades.

Target 8 tracked the donations through FollowTheMoney.org, a nonpartisan nonprofit that monitors campaign contributions from around the country.

Nestle's donations are not large amounts, but the timing may be strategic.

The database shows Nestle Waters North America has made five donations totaling $6,250 in Michigan. Most of that, $4,750, has gone Michigan’s Fourth Congressional District in the U.S. House of Representatives, currently held by U.S. Rep. John Moolenaar, R-Midland. His 4th District seat covers where Nestle has pumped water since the beginning of the century.

But those donations don't start until the 2010 election, so Target 8 kept digging.

Most of the money went to elected officials who oversee Osceola County and thus Nestle's White Pine Springs site. The 2010 election was also shortly after pumping restrictions were finalized in Mecosta County after years in court.

The site shows a few additional donations outside of the 4th District. In 2010, Nestle made a donation of $500 to Michigan’s 102nd State House District candidate Linda Howard, who lost the primary. That district oversees Nestle’s operations in Mecosta County. Then, in 2016, Nestle gave $1,000 to U.S. Rep. Bill Huizenga’s re-election bid for Michigan’s 2nd Congressional District. The Republican from Zeeland was re-elected.

FollowTheMoney.org also makes it possible to see which groups lobby on behalf of corporations. The site notes one of Nestle’s main players is Lansing-based Muchmore, Harrington, Smalley & Associates, LLC. That agency has donated all over Michigan for a variety of clients for decades, but its website states it worked strategically to get approval for Nestle’s Ice Mountain bottling facility that opened in Stanwood in the early 2000s.

MHSA’s second biggest political donation ever, according to the site, was $14,913 made to Michigan Attorney General Bill Schuette for his re-election campaign in 2014. In 2010, MHSA donated $5,000 to Schuette’s campaign.

Some may remember that in 1994, Schuette was elected as a state senator for Michigan’s 35th district --the district that oversees Osceola County and, eventually, Nestle’s White Pine Springs. In 1998, MHSA made its first-ever political contribution to Michigan’s 35th district and Schuette's re-election: $2,250. Schuette maintained that post until 2002, which is after Nestle moved in.

MHSA has made consistent donations to other seats that oversee Nestle operations dating back to 1996, but the lobbying firm does that for several seats statewide.

These are not earth-shattering amounts of money and the MDEQ approved Nestle’s plans at the beginning of the new century, not these politicians. Nonetheless, Target 8 asked both Nestle and the MDEQ if the company having a hand in Michigan's political cookie jar is ethical.

Nestle said its donations stopped after its political action committee -- commonly referred to as a PAC -- dissolved. State documents show that was finalized in April 2015. Target 8 is still working to determine if the 2016 campaign contributions were made before the PAC dissolved.

The MDEQ sent this statement:

"As a government agency, the department's decision-making abilities on permit applications are based solely on the criteria established by law, without respect to any outside influences like donations, political or otherwise."

HELPING THE LOCAL ECONOMY

In addition to saying its pumping does not harm the surrounding land and waterways, Nestle has consistently discussed its pride in improving the local economy in areas where it maintain operations.

For this report, Natural Resource Manager for Ice Mountain Arlene Vincent-Anderson sent the following email statement:

“We are proud that we have been operating sustainably in Michigan for 15 years. We’re also proud of our positive economic contributions the state, including 270 full time employees (90 percent of them live locally), over $19 million in annual payroll, $1.3 million in annual taxes and over $267M in capital investment in Mecosta / Osceola counties since our operations began.

"We are a clean industry that leads in environmental stewardship. We are looked to as experts when there are environmental concerns in the area. We are always open to working with the local authorities to find additional ways we can further our relationships and continue bringing benefits to the local area.”

"According to Ice Mountain paperwork passed out at the MDEQ’s April public hearing, 90 percent of the local employees actually live within 45 miles on Stanwood. Fifty-one live near Osceola Township and Evart.

"The paperwork also states “We believe corporate responsibility is more than just good business. It’s a bond we share with the communities in which we live and serve.”

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