Michigan Citizens, Tribe Challenge State Permit for Nestlé’s Water Grab

By Jim Olson

I don’t mean to dampen the joy of spring in Michigan, but amidst headlines over Line 5 and unconscionable groundwater contamination from PFAS, we need to embolden our governor, our state officials, and every citizen who cares about water, justice, and the rule of law to join another battle.

We need to hoist the mast of Michiganders’ most precious resource (if you seek a water wonderland, look about you), and rally to prevent the private encroachment on our public water, health, and our communities. Private landowners have a right to reasonable use of water for the benefit of their land. But reasonable use does not mean robbing large volumes of water from the headwaters of our streams, lakes, and wetlands—water taken for free and sold elsewhere for private gain.

Collaborative effort

As I write this, Ross Hammersley, Rebecca Millican, and Bill Rastetter, lawyers for Michigan Citizens for Water Conservation (MCWC) and the Grand Traverse Band of Ottawa and Chippewa Indians (GTB), are filing legal arguments before a Michigan administrative law judge who will rule on the legality of a permit that would allow a bottled water company—Nestlé—to sever another 210 million gallons from our watersheds without paying a penny for the privilege to sell our public water.

MCWC, the GTB, and their lawyers need your help. This is a call to action to prevent the loss of the state’s sovereign water that is supposed to be managed by government for the benefit of citizens. If the state does not honor its paramount responsibility this way, our water and watersheds will be subordinated to private interests. It is up to citizens to join together to make sure our leaders act in the public interest.

“When the tribal signatories to the 1836 Treaty of Washington ceded title to approximately 14 million acres so that the United States could grant statehood to Michigan in 1837, the Tribes (including the Grand Traverse Band of Ottawa and Chippewa Indians) retained inland usufructuary rights to fish, hunt, and gather plants that are property rights protected by the United States Constitution,” explains William Rastetter, tribal attorney for the Grand Traverse Band of Ottawa and Chippewa Indians.

“These property rights in the fauna and flora resources dependent upon the Muskegon River tributaries and related wetlands are likely to be impacted by Nestlé’s increased water withdrawal. Because the 1836 Treaty also imposes a duty upon the State of Michigan to preserve habitat upon which treaty-reserved resources are dependent, Governor Whitmer’s administration should be reexamining the 2017 permit issued to Nestlé instead of defending the diminishment of Michigan’s water resources.”

A year ago, in 2018, Michigan’s Department of Environmental Quality (DEQ) under the control of the then–Governor Snyder administration issued another permit to Nestlé, the bottled-water giant, to extract 400 gallons per minute (gpm) or 210 million gallons a year of groundwater that forms the headwaters of two cold, blue-ribbon trout streams in northern Michigan. MCWC, the nonprofit organization that won the 9-year court battle against Nestlé in 2009, and the Grand Traverse Band, whose tribal treaty fishing and hunting rights are protected by the constitution, filed petitions for contested cases to overturn the permit.

“Our members live along the affected creeks and have standing,” writes Peggy Case, president of the MCWC board of directors. “Our members statewide are also involved as we connect the dots between the privatization of the water of the commons by Nestlé in Mecosta and Osceola counties—for profit only—with the injustice of water shut-offs in Detroit and water poisoning in Flint, all related to attempts to privatize municipal water systems.”

“The hearing on the permit begins May 20 and we are in major fundraising mode to pay the attorneys for the work to prepare for this hearing. It is, of course, our hope that the new Department of Environment, Great Lakes, and Energy (DEGLE) will simply determine that the permit was not issued within the requirements of statute and they will withdraw it. It is our contention that none of the three permits for this well were properly issued by the DEQ in accordance to law.”

These cases will soon come to trial, and the results will affect all of us. Recently, the administrative law judge accelerated the trial dates by ordering the parties to file written expert testimony, exhibits, and file legal arguments over the legality of the permit. The hearing will conclude in June.

At stake in this case is nothing less than the future of who controls Michigan’s sovereign, public water. Why? Because much like the way the former Snyder administration manipulated a now-dubious Line 5 tunnel under the Straits of Mackinac, the Snyder regime granted Nestlé the permit for 210 million gallons a year—by twisting and ignoring the water laws of Michigan that were specifically designed to address the known harms and risks to Michigan’s cold-water streams and wetlands from bottled water operations. If the permit is left to stand, the world will know that Michigan plays fast and loose with its water laws—and the rule of law—and it asks nothing for the taking and sale of its water. If this permit is not overturned, Michigan may as well post an advertisement in Fortune magazine: “Come and get Michigan’s pure water! It’s free.”

The Price of Water to Citizens and Profit to Private Water Marketers is a Failure of Justice

That’s right; an applicant pays an annual $200 administrative fee and one-time payment of $5,000 to defray DEQ’s expenses incurred when reviewing a bottled-water proposal. The state also charges only a nominal fee for a company in Detroit to tap into its public water supply for a few pennies, bottle it, and sell it at great markup.  Not a penny is paid to the people of Michigan for the privilege to sever and sell the state’s sovereign water. The taste of a multinational water bottler’s excessive profiteering doesn’t sit well when people in Flint reel from the lack of access to water safe from the risk of lead poisoning, or tens of thousands of people in Detroit continue to suffer the indignity and harm to families and health from water shutoffs because they cannot afford the high price of water to meet their basic needs. The taste of water injustice in Michigan is bitter indeed. 

This Isn’t the First 210 Million Gallon a Year Permit

Before the DEQ issued the permit to Nestlé in 2018, MCWC had already established in the earlier lawsuit against Nestlé in Big Rapids that removing 400 gallons a minute of groundwater near the headwaters of a Michigan stream, wetland, and lake complex causes substantial and unlawful harm. For every gallon Nestlé pumped and piped to the Stanwood bottling plant, the headwaters lost nearly a gallon. It doesn’t take long to understand that, if you remove nearly 400 gallons per minute (gpm) or 576,000 gallons a day from the headwaters of a creek that flows at the rate of 1,000 to 2,000 gpm, the flows drop by 20 to 35 percent. When flows drop, water levels drop. When water levels drop, the stream narrows, habitat changes, and the entire ecosystem and riparian and public uses, such as fishing and boating, are impaired. As a rule of thumb, in summer months, these effects can start showing up when the flows in creeks are diminished by even 10 percent.

The lessons learned from the MCWC lawsuit and appellate court decisions are important for the basic questions that will be decided by an administrative law judge and, ultimately, new DEGLE director Liesl Clark. But there’s one difference: after the first MCWC trial in Big Rapids, Michigan amended the Safe Drinking Water Act (SWDA) and the Great Lakes Preservation Act (GLPA), which added a water withdrawal law in 2008. Both of these laws contain specific provisions with more stringent standards for bottled water, largely because of what everyone learned in the earlier trial and appellate decisions:

1. Existing and actual real-time data of flows and levels before and during pumping, and the calculation of the effects from the reduction of flows and levels from pumping groundwater near headwater streams is critical. Without calculations based on existing data of what happens to a stream when pumping occurs at different rates, the effects and impacts cannot be reasonably or accurately predicted and determined;
2. Computer modeling with input from selected monitoring data of groundwater and stream flows and levels is not reliable without strong correlation to the calculations and effects based on actual existing data;
3. Pumping groundwater at rates over 125 gpm from headwater areas during the drier summer months significantly reduces stream flows and the levels of streams, wetlands, and lakes, and results in substantial or unreasonable harm;
4. Pumping at 200 gpm to 400 gpm most anytime during the year will result in similar effects, impairment, and harm.

The Snyder Administration Skipped the Special Bottled Water Permit Required by the SWDA and GLPA

Because of lessons learned through scientific and judicial scrutiny, the SWDA added Section 17 to address pumping for bottled water. A few key provisions require:

1. If a water withdrawal totals more than 200,000 gallons a day (gpd), the applicant must comply with all of the standards for bottled water in Section 17 and Section 32723 of the GLPA;
2. The use of existing hydrologic, hydrogeological, and environmental data or conditions to make a “reasonable determination” of harm or violations of all applicable standards in the law;
3. Compliance with all of the standards in Section 32723, including the requirement of existing data and conditions, determining individual and cumulative impacts, and assuring no violation of riparian and public trust law and rights in a lake or stream; and
4. No adverse resource impacts, individual and cumulative impacts from previous or nearby withdrawals; and
5. Compliance with other laws, such as “no impairment” under the Michigan Environmental Protection Act or the “non-diminishment” standard under applicable treaties.

So, why are the MCWC and GTB contested cases before the administrative tribunal? Because we are a country and democracy founded upon the rule of law, and the former administration and Nestlé manipulated and loosely interpreted these laws in favor of Nestlé’s permit for 400 gpm or 576,000 gallons a day.

Here’s what happened:

• Nestlé had obtained a permit to install a water well for 150 gpm or 216,000 gpd under a different law in 2001, but never placed it in production. After the effective date of the 2008 amendments, in 2009, the company applied for approval of the 2001 well for bottled water under the SWDA. But rather than require the company to submit a full application under Section 17 of the SWDA and Section 32723 of the GLPA, DEQ simply approved the water source. Nestlé argued that the well was pre–existing, but it was not, because it had never been put in production.
• Then in 2015, Nestlé was allowed to register another 100 gpm, bringing the total to 250 gpm or 360,000 gpd, but under a different section of the law. Once again, DEQ did not require a full application and determination for bottled water production wells totaling more than 200,000 gpd under Sections 17 and 32723.
• In 2016, Nestlé applied for another 150 gpm, totaling 400 gpm, or 400,000 gpd. And, again, the DEQ allowed the company to register and obtain a permit under a different provision, but did not require an application for bottled water under Sections 17 and 32723.

Three times Nestlé and DEQ missed or avoided the more stringent bottled water requirements under Section 17 of the SWDA and Section 32723 of the GLPA. Three strikes and you’re out, right? Wrong. In late fall 2016, Garret Ellison, investigative journalist for the MLive Media Group, discovered a DEQ notice that Nestlé would receive a permit for bottled water under the SWDA. The application and supporting information had never been posted. When it was discovered that Nestlé had never filed any application or obtained any permit under Sections 17 and 32723! Public outcry forced the DEQ to advise Nestlé that it had to submit an application under these sections for bottled water production. Nestlé finally, for the first time since the 2008 amendments to the SWDA and GLPA, submitted an application under Sections 17 and 32723 for its bottled water well for 150 to 400 gpm. However, despite thousands of public comments, the public hearing, and scientific and legal reports showing the DEQ and Nestlé had not complied with these laws, the DEQ manipulated and parsed the application into small pieces to avoid the standards and approve the permit.

MCWC and the Grand Traverse Band are heroes for contesting the Nestlé permit. They are calling the Snyder regime’s DEQ on the carpet for turning its back on Michigan’s water laws at a time when Michigan and the Great Lakes are being eyed with envy for its lakes, streams, and groundwater. State officials didn’t follow the law; in fact, they deliberately shaved and relaxed the legal standards in favor of Nestlé so that officials could approve the permit they were going to issue in the first place.

We Have a New Governor, New Director at DEQ (now DEGLE), and New Attorney General

Thank you, MCWC and Grand Traverse Band for representing all of the citizens of Michigan and taking government to task for violating our water and Great Lakes laws and the public trust. You deserve our wholehearted support. We have new leaders. Let all of us demand and make sure our new leaders and new DEGLE nullify the Nestlé permit and require full review under the rule of law, not the political marketplace. For more information and to get involved, visit the MCWC’s website www.saveMIwater.org.

Also consider contacting your elected leaders and ask them to take a stand against Nestlé: Governor Gretchen Whitmer, 517-373-3400; attorney general Dana Nessel, 517-335-7622.

Jim Olson, President and Founder

Jim Olson, President and Legal Advisor at FLOW, is a national expert on water and environmental law. Olson represented Michigan Citizens for Conservation court victory that protects Michigan streams, lakes, wetlands, fish, and riparian and public uses from removal of tributary groundwater for bottled water operations.

Here’s how the former Michigan DEQ manipulated and parsed the deal.

• It considered the 2009 and 2015 approvals preexisting, even though they were not applied for or permitted under Sections 17 and 32723. That meant the DEQ didn’t review the 150 gpm and 100 gpm (total of 250 gpm) or determine it was in compliance with the adverse impacts, impairment, and other standards of the bottled water Sections 17 and 32723.
• It considered and determined to issue the 2018 permit (totaling 400 gpm at that point) as an application for 150 gpm, and confined its impact analysis to the 150 gpm. It also did not consider the cumulative impacts of the previous 250 gpm along with the request for the final 150 gpm (400 gpm or 576,000 gpm total).
• Then it issued the 2018 permit for 400 gpm in two parts. First, it allowed the 250 gpm based on previous approvals, even though they were not lawfully permitted under Sections 17 and 32723; second, it approved the additional 150 gpm or 400 gpm total with a requirement that Nestlé would submit monitoring and other information to comply with the existing hydrogeological and environmental conditions after the fact—even though the determination is required to be based on existing data and conditions.
• Finally, despite the clear finding in the MCWC v. Nestlé earlier lawsuit that computer models alone were not reliable, DEQ allowed Nestlé to submit logs of flows, levels, and other measurements it used to fix the boundaries and input in the computer model, but did not require real–time calculations of flows and levels based on complete existing data and conditions to determine the effects and impacts required by Sections 17 and 32723.