Resource Pages

Apr 20, 2013

The next crisis: peak water

The war for water is underway and Nestle is a key player. Some background:

Stop Nestles Waters - Fryeburg is a small town in Maine – that has quickly become ground zero in Maine's looming water wars.

After Nestle built a nearby bottling plant, Nestle (in this cause in the guise of Poland Springs water) wanted to drill a new well in nearby Denmark, ME, and pipe water to a water-loading station in a Fryeburg residential area.

At first the town planning commission said yes, then reversed themselves due to impacts on the town (noise, traffic, pollution, etc).

To say Nestle was unhappy is an understatement.

They've sued and (and appealed) the town five times. Nestle's lost all four (one is still pending), and in one instance, Nestle's lawyers argued in front of the Maine Supreme Court that their right to grow market share superceded the town's right of control:

I'd gather Nestle's goal isn't so much a legal victory as a financial one; repeated litigation serves the dual purposes of bankrupting small towns – and serves as a warning to opponents who are considering fighting the world's largest food and beverage multinational.

For example, the citizens group fighting Nestle's repeated lawsuits finds itself $20,000 in debt, with yet another appeal on the table.

Nestle's legal team attempted to subpoena the private, personal financial records of local opponents to Nestle's water bottling plant in McCloud.

Stop Corporate Abuse – The World Bank [has] launched a new partnership with global corporations including Nestlé, Coca-Cola and Veolia. Housed at the World Bank's International Finance Corporation, the new venture aspires to "transform the water sector" by inserting the corporate sector into what has historically been a public service. The new partnership is part of a broader trend of industry collusion to influence global water policy.

The venture aligns global corporations that have major financial stakes in water governance with the World Bank, one of the world's leading development institutions. Nestlé Chairman Peter Brabeck-Letmathe has been appointed to chair the Water Resources Group, which has already received $1.5 million in IFC funding. Nestlé is the world's largest water bottling corporation.

Advocates for people's access to water point to this as the latest example of water corporations' efforts to interfere in legitimate, democratic water governance. The Water Resources Group presents a conflict of interest to the World Bank's goal of poverty alleviation. It also advances an approach to water governance that is in incompatible with the U.N. recognized human right to water.

"This is an unmistakably activist campaign by the private water industry to gain funding and credibility for a radical power grab, with the help of the World Bank," said Corporate Accountability International's Senior Organizer Shayda Edwards Naficy. "According to the World Bank, 34% of private water contracts are in distress or terminated before maturity. Last April, the IFC's Compliance Advisor Ombudsman reported that an astounding 40 percent of complaints received from all regions and sectors were water-related. This is evidence that water privatization has been fraught with a range of problems, including broken promises for expanded service, wasted public funds and threats to human rights, especially for the lowest income families. For the Bank to sanction this approach despite a track record of failure points to compromised decision-making at the Bank due to pervasive partnerships with and financial stakes in corporations."

Currently, 90 percent of the world's water-users access water through public delivery. Turning these systems over to private corporations would result in rate hikes, cutoffs and significant layoffs of water sector employees. Focusing on the private sector also distracts from the need to support governments in protecting human rights.