Wisconsin Judge Upholds Foxconn Decision, Undermining the ‘Compact’ Designed to Prevent Great Lakes Diversions

By Jim Olson, FLOW President and Founder

In a major ruling involving the Great Lakes Compact, a Wisconsin administrative law judge (ALJ) has upheld a decision by the State of Wisconsin to authorize a major diversion of Lake Michigan water primarily to benefit a single customer, the Foxconn Corporation, a Taiwanese multinational electronics manufacturing company. 

The ALJ ruling involves an exception to the Compact’s ban on diversion in the case of “straddling” communities or counties that are partly in, and partly out, of the Great Lakes watershed.  FLOW filed an amicus brief in March opposing the diversion, and we will continue to press the case that the Foxconn diversion is in conflict with both the plain language and the intent of the Compact.

In short, under the Compact a diversion out of the Great Lakes Basin or watershed to a straddling community must be “solely for public water supply purposes,” defined as “largely residential,” with some recognition of commercial or industrial customers.

The Wisconsin Department of Natural Resource (DNR) in April 2018 approved this new diversion of up to 7 million gallons a day of Lake Michigan water delivered via the city of Racine into a neighboring, mostly vacant part of the Village of Mount Pleasant to serve one customer, Foxconn, and its planned 1,000-plus acre manufacturing complex to produce liquid crystal flat-screen panels.

Petitioner public interest organizations challenged the approval because diversions to straddling communities are prohibited unless “solely for public water supply purposes,” which means “largely residential customers.” The administrative law judge (ALJ), like the Wisconsin DNR, rejected these arguments, and instead interpreted the exception broadly, in effect, changing the very definition and plain meaning of the Compact and standard. 

The Compact calls for strict application and narrow interpretation of the “straddling community” exception because the intent of the Compact is to keep water in the Basin and protect the integrity of water and needs of communities inside the Basin.

But the Wisconsin ALJ basically rejected the arguments made by FLOW and others, reasoning for himself that public water supplies serve both residential and industrial customers, so it was well within the exception standard. The judge completely ignored the “largely residential” limitation. In short, he added new words to the “straddling community” exception standard in the Compact to justify a diversion of Great Lakes water to aid a private international corporation. 

The Foxconn diversion is hardly “residential.” The decision threatens the integrity of the Compact’s ban on diversions and could result in massive quantities of water to flow outside the Basin —not a good outcome for the

Jim Olson, FLOW President and Founder

Great Lakes and the 40 million people who live in the Basin. The decision also ignored the legal principle that these waters are subject to the public trust doctrine, which prohibits transfers of public trust resources for primarily private purposes.