Drinking problem

Are we heading for corporate control of the world’s fresh water? At nearby Mount Shasta, a small-town conflict over a proposed water-bottling plant is as global as it is local.

There’s something magical about an ice-cold half-liter bottle of pure spring water. It’s not just the liquid inside—it’s something else, something that hints at the awesome organizational power of the human race. Harnessing the administrative and mechanical power it takes to fill a bottle of water from a snowcapped peak and deliver it thousands of miles to a consumer’s thirsty lips is truly a mind-boggling enterprise.

Even the package is beautiful to behold. While tiny beads of condensation drip slowly down the icy mountain depicted on the label, words of encouragement entertain the water drinker. “Live like a rock star,” the bottle reads. “Feel like a movie star.” And it’s true—celebrities do seem to love bottled water. You always see them sipping it in those promotional documentaries they make to push their latest offerings.

But then, who doesn’t drink bottled water nowadays? Gyms and parks still have water fountains, but does anyone use them anymore? In corporate boardrooms, they used to keep a pitcher and glasses on the table for thirsty capitalists—now everyone sits there with his or her own hygienic, factory-sealed bottle.

In fact, the individual-sized water bottle may be the ultimate symbol of our modern consumerist society. It is convenient, portable, disposable and even a bit fetishistic—a perfect triumph of the power of marketing. Somehow, the companies that sell this stuff have been able to convince us to buy something that falls from the sky for free. What’s more, we’re willing to pay more for it than what we pay to put gasoline in our cars.

Bottled water is now so popular it has become a $35 billion business. Industry experts predict that with sales growth approaching 15 percent, bottled water soon may be the world’s most preferred packaged beverage. But how often do we think about where that water is coming from?

Increasingly, it is coming from places like McCloud, a quaint village of about 1,300 people on the eastern slope of Mount Shasta.

The 14,000-foot-tall volcano is an icon for Sacramento and the rest of the state. Parts of an ancient glacier still can be found there, and Shasta’s steep slopes are an important headwater in California’s river system. Even if we don’t live in its shadow, even if we never visit, it seems somehow to belong to all Californians.

The Mercantile Building in downtown McCloud used to be the town’s company-owned general store. Now Nestlé rents office space there for its public-relations campaign.

Photo By Tom Angel

But a fight over a bottled-water plant proposed in McCloud is raising questions about who should be allowed to control—and make money off of—the water under Mount Shasta. More than that, critics of the project say the McCloud story is about a global struggle over “the commons” and how much profit corporations should be allowed to make from basic resources—like water—once believed to belong to all of us.

Nestlé Waters North America, a subsidiary of the Swiss multinational food giant Nestlé—the largest food company in the world—wants to build an enormous water-bottling plant at the site of an abandoned lumber mill just a few blocks from McCloud’s cute-as-a-button downtown.

The new plant would pump and bottle millions of gallons of spring water for the company’s popular Arrowhead label.

It is a prospect that thrills some in the town—many of whom who are still reeling from the loss of the mill and the employment it provided. But it frightens other residents, who fear that Nestlé will draw down the local water table; wreak havoc on the peace and quiet the town now enjoys; and drive away potential tourists, who are currently the town’s main source of revenue.

The issue breaks along jagged and unreliable lines of class, ideology and age. Some old-timers say it’s the well-off, part-time vacationers and new arrivals that don’t want the plant, but just as many longtime (and full-time) residents seem to have misgivings. Both sides accuse the other of spreading misinformation about the project.

“People need to wake up and see that the contract [with Nestlé] doesn’t give them anything,” said Sid Johnson, a ranch caretaker, nine-year McCloud resident and project opponent. “We’ve got … a foreign corporation coming in to buy our water supply for peanuts.”

The town’s complicated deal with Nestlé is contained in a 43-page contract between Nestlé and the McCloud Community Services District (MCSD), which happens to be the only local form of elected government operating in McCloud.

The contract, however, has been a hugely divisive issue, so much so that it is currently the subject of a lawsuit brought by a group called Concerned McCloud Citizens. They point out that the contract allows the town to sell an almost unfathomable amount of spring water—some 1,600 acre feet per year—for a somewhat unimpressive sum of around $350,000 a year. Not a bad price for some 521 million gallons of water. Nestlé also will be able to pump an unlimited amount of groundwater to use as it sees fit, a proposition that many project opponents fear will suck the water right out of their own wells.

Pipe dreams: Those in favor of the Nestlé plant say McCloud has already recovered as much water as the company could possibly use by replacing a century-old redwood pipe with this new, ductile iron pipe. If a plant is approved, Nestlé plans to install a separate food-grade pipe.

Photo By Tom Angel

“You know, there’s no inflationary clause, and they’re taking a huge amount of water for that [$350,000],” Johnson said. “They pollute with their plastic containers. I just hate to see it come about with people not knowing the facts.”

Concerned McCloud Citizens sued the district in Siskiyou County Superior Court, alleging that the contract was foisted onto the community without public participation and that the services district overreached its authority in approving the plant.

For help with their case, the McCloud citizens turned to Davis environmental attorney Don Mooney.

“One thing that was clear was that the decision was already made,” Mooney said. “They just went in and signed this very detailed contract with Nestlé,” without fully considering the potential environmental impacts of such heavy pumping.

A Siskiyou Superior Court judge agreed, issuing a final ruling in July saying that the district could not legally seal the deal until an environmental review was completed, throwing the contract into legal limbo.

“These people come in and dangle some money in front of these little towns and get a deal done before there’s any kind of public process,” Mooney complained. “Now at least there will be a process where the public gets to hear it and comment on it.” But Nestlé has already vowed to appeal the ruling, most likely in Sacramento’s 5th District Court of Appeal.

A pint of bottled water currently sells (as an individual unit) for about a dollar—that works out to about $8 a gallon, retail. Nestlé’s deal allows it to buy that water for less than $.0008 per gallon. What’s more, it locks the deal in for 50 years, with an automatic 50-year extension. If fresh spring water, already a scarce resource in most parts of the world, can fetch $8 a gallon already, imagine what it will be worth in 2105.

Nestlé and its proponents in town say those numbers don’t tell the whole story, pointing out that the plant’s real economic impact on the town will come in the form of as many as 300 direct and “secondary” jobs.

With Mount Shasta in the background, McCloud’s water supply sits in a steel holding tank.

Photo By Tom Angel

Nestlé commissioned UC Davis business professor Robert Smiley to prepare a study on the economic benefits that the new plant would bring to McCloud.

Smiley’s report showed that once the plant is in full production mode, it will throw $25.5 million into the local economy, pay $1 million in property taxes and “generate $367 million in total economic output in the county.” In a county where unemployment hovers around 10 percent and the per-capita income is $24,063, a stimulus of that size is hard to say no to.

Dawn Snure, who has lived in McCloud for five years and in Siskiyou County most of her life, said the plant is much needed.

“This could revitalize the town, make it a healthy community,” Snure said. “Those of us who live here and work here need jobs to stay here. The water industry is a lot more environmental than the timber industry. I feel it’s a good compromise.”

Snure, however, may already have tasted the benefits of Nestlé’s presence in McCloud. She was interviewed at an office on the town’s one-horse main drag, at a place called the McCloud Community Resource Center. It looks like the kind of place a tourist might stumble into to ask where a night’s lodging or a good sandwich could be found. But the center is actually a nonprofit community space that offers Internet, after-school tutoring and other services to town residents. It also happens to be the headquarters of Nestlé’s community-outreach project in McCloud. Last year, Nestlé donated $6,500 to the center so it could publish a community newsletter. It also rents office space to Dave Palais, a Nestlé public-relations man who serves as the public face of the corporation in its dealings with McCloud.

Palais’ office in the center is small and unassuming, equipped with little more than a sagging couch for guests and a small desk and chair for Palais. The walls are wood-paneled and covered with children’s drawings. Palais himself, when I met him by accident at the center, was dressed in a gray T-shirt, long gym shorts and a pair of beige loafers that had seen better days. Either Palais is a master of disguise—deliberately avoiding the pitfall of being labeled a “city slicker” by any potentially suspicious townsfolk—or he’s a bit of a slob.

His first gesture in our interview was to offer an ice-cold bottle of Arrowhead. Naturally, Palais is in favor of the plant.

“We’re just trying to become a customer of the district,” he said. “We’re not buying [the town’s] water rights. I’m not going to deny our overall goal is business, but I’m proud of this company, and I believe we’re here to do the right thing.”

Don’t fear the fountain: Davis resident and water-rights activist Nancy Price says the bottled-water industry has undermined our trust in public water systems and lulled us into accepting water privatization.

Photo By Larry Dalton

Palais has been accused by some residents of hoodwinking the service district’s board into signing the contract. Many project opponents say the board (which one critic derided as “two loggers and two housewives”) had little experience in big-business negotiations and sprung the Nestlé deal on the town in 2003 without any warning at all.

But, as Palais points out, the board had been actively pursuing a water-bottling plant since 1998. The district met with four other companies during that time, including Dannon, which wanted a controlling interest in the town’s water rights. Failing to get it, Dannon set up shop a few miles over the hill from McCloud in the nearby town of Mount Shasta.

“[MCSD] had contacted us back then, and at that time we had no plans to come this far north,” Palais said. After deals with other companies fell through, he said, Nestlé and McCloud decided to give each other another chance.

“We’re still here, and we’re still working on it. We’re not going anywhere,” he said, lamenting that the company had already put around $1.5 million into the deal and was still years away from bottling any water.

Palais also was quick to point out that, if it wanted to, Nestlé probably could just as well have built its plant without going through the trouble of negotiating a contract with McCloud.

“The contract is just a water-supply contract,” he said. “It has nothing to do with the facility. We’re buying a piece of private property. As long as we go through [the environmental-review process], we can drill a well and try to pump water from it. Or we can find another source. That’s the irony. … If there’s no contract, the guarantees [for the town] disappear.”

The area around Mount Shasta is fast becoming the bottled-water capital of Northern California, if not the entire state.

A wrench in the waterworks: Davis attorney Don Mooney helped one group of McCloud citizens halt—temporarily—the Nestlé water deal. He convinced a Superior Court judge to throw out the company’s contract with the McCloud Community Services District pending environmental review.

Photo By Tom Angel

There are currently four water-bottling plants operating there, including the huge Crystal Geyser plant in Weed and the aforementioned Dannon plant in the town of Mount Shasta. Another new project is said to be in the works by an unknown company that recently bought land in Dunsmuir. Together with two existing, smaller plants near Dunsmuir, these facilities will suck billions of gallons of fresh water from the region’s aquifer over the next few decades and won’t have to pay for any of it. They’ll pay taxes on their property and provide a few hundred jobs and likely will give generously to local clubs and community groups, but because the county has no ordinance protecting its groundwater, any landowner, large or small, has the right to drill a well and take however much water he, she or it wants. Because the aquifer is mainly spring-fed, a company also can bottle the stuff under the coveted “spring water” label.

“Nestle has been focusing on spring water as their marketing niche,” said Nancy Price.

Price lives in Davis, far from the slopes of Mount Shasta. But she has been monitoring Nestlé’s efforts in McCloud and around the United States. She is co-chair of a group called Alliance for Democracy, which opposes the increasing privatization of water and water supplies.

She worries that “the bottled water has replaced the thermos” and that Americans will so willingly shell out two bucks to buy water when they used to just go to the tap.

“It’s an absolute stroke of advertising genius. We have perfectly good municipal water systems. But the entire nation has succumbed to the idea that if you want drinking water, you have to buy it,” Price lamented.

Over the past 10 years, Price said, Nestlé has been very successful at buying up small, regional spring-water companies and then getting local agencies to let them pump and bottle ever-increasing amounts of water.

Poland Spring in Maine, Ice Mountain in Michigan, Zephyrhills in Florida and, of course, Arrowhead all are Nestlé brands. And, naturally, the best spring water comes from remote, rural places that many people have never heard of, places like McCloud. “Nestlé’s modus operandi is to go into these small communities and strike a deal before anybody can get themselves organized,” Price said.

What’s happening in McCloud may become more common, thanks to our thirst for bottled water—and thanks to the bottled-water industry’s phenomenal success in marketing what used to be free.

Penny Heil, left, sees the Nestlé plant as a boon for McCloud’s struggling economy. Her friend Nancie DeRoss, right, is just as passionately opposed. Heil says the townspeople are “still neighbors, still friends.”

Photo By Tom Angel

“You know, when I went to college, you didn’t have to carry your own water around. Now all of the students I see around campus have to carry water in their backpacks. I’m not quite sure how I survived,” said UC Davis business professor Robert Smiley.

In fact, as Smiley notes in his report, people ages 18 to 34 are much more likely than their parents to see bottled water as a common, natural consumer good. “This demographic shift also bodes well for the bottled-water industry,” the report concludes.

Smiley told SN&R that the bottled-water industry will continue to be an attractive option for towns like McCloud whose main industry has left town.

“I think if the demand is there, and the geology is right, this is an option that can soften the blow from a departing industry,” Smiley explained.

McCloud was born a company town—planned, managed and completely controlled by the McCloud River Lumber Co., which became known to residents as “Mother McCloud.” Although the company transferred many of its assets and, most importantly, its water rights to the townspeople in 1963, the specter of Mother McCloud still haunts the town—its streets are laid out in a grid that seems just a little too orderly, and many of its houses, if one can look past the extra rooms and added porches, all are strangely similar to each other.

The mill, once a bustle of activity, with buzz saws screaming from dawn to dusk and a steady stream of trucks rumbling in and out, now sits silently on the edge of town. Huge wooden warehouses await deconstruction. Rusting cargo containers bearing the logos of long-extinct logging firms sit on disconnected train tracks amid fields of weeds and wildflowers. For many residents, watching the town wither has been like keeping a deathwatch on a bedridden friend.

“This town has had a tough life, but even with the closing of the mill, it has survived,” said local business owner and plant supporter Penny Heil. “A lot of people have had to move away, and so many of those who didn’t are working two or three jobs just to live here because they love it so much.”

Mike Stacher, who recently became the general manager of the MCSD, has inherited the controversy left to him by the previous board of directors. He is a self-described optimist, a lifelong resident of the area and a man who seems unaccustomed to sitting in the hot seat. His support of the project, he said, comes out of the realization that McCloud doesn’t have many other options.

Spring fever: Mike Stacher, general manager of the McCloud Community Services District, stands in front of the historic springhouse where water from Intake Springs, one of three springs that make up McCloud’s water supply, is gathered.

Photo By Tom Angel

“As far as I’m concerned, any money we get is more than we were getting yesterday. … I’ve heard people talk, and I’ve heard them say ‘environmental.’ And in the end of their dissertations, they say, ‘Has Nestlé given up enough money?’ The greed is not a factor to me. Is Nestlé going to make billions, and we’re only going to make hundreds of thousands? You know, it’s not a factor to me. We made the best deal that we thought we could at the time, and I still think it’s a good deal.”

Stacher said he has heard the environmental arguments—that there is not enough water to go around or that drilling a borehole into the spring will rupture the lava tube it may be flowing through and cause the water to be lost. He doesn’t buy either. For one thing, he said, McCloud captures four times as much water as it actually uses. And scientists he’s talked to tell him that the real danger of putting in boreholes lies in liberating more water than can be controlled, he said.

To Stacher, the Nestlé deal is a chance for McCloud to get back on its feet.

“I would have been happy for just the jobs,” he said. “We are deficit spending all the time—we budget in the deficit for necessary services. In a place that has no business, about the only way to make new revenue is to get into the customer’s pockets, and the customers are tired of us getting into their pockets.”

For many in McCloud, the issue is strictly economic. But around the state, people are beginning to wonder about the whole nature of the bottled-water business. Water is, after all, the most important ingredient for life on Earth. Is it right, they ask, to turn it into a commodity?

“Water in general is part of the commons and should not be privatized,” said Nancy Price.

And Price sees McCloud’s experience as being important far beyond the town limits. “To me, it’s part of this whole effort to make enormous profits from everything in the natural realm,” she said, likening the efforts of the big water companies to the biotech industry’s rush to patent the genes of living creatures.

John Gibler, a policy analyst for Public Citizen’s Water for All campaign, agrees. Gibler said the current mania in government over privatizing social services dovetails neatly with the never-ending corporate quest for control over basic resources.

“Getting bottled water culturally so accepted is a really dangerous precedent for moving water privatization generally forward,” he said. “Because you can point to it and say, ‘Of course it’s a commodity. What are you drinking right there?’”

In some parts of California, bottled water is already the only option. In the San Joaquin Valley, Gibler said, farmworkers already are surviving strictly on store-bought water.

“The farm-labor camps that have been around for a while have really old pipes, and it’s very poor-quality water,” he said. “Many people in rural communities … have kind of already de facto had their water supplies privatized, because they need to go to the water vending machines or the store to buy bottled water to get by. It’s ironic that some of the hardest-working and lowest-paid people in the state are having to buy the most expensive water in the state.”

With worldwide water consumption roughly doubling every 20 years, control over fresh water is likely to emerge as the defining issue of the 21st century. From Stockton, where water privatization has become an expensive headache for ratepayers and politicians alike, to Michigan, where another huge Nestlé water plant has stirred up residents, or Bolivia, where a Bechtel subsidiary’s takeover of the local water supply planted the seeds for this summer’s civil unrest, corporations quietly have begun treating water as if it were just another commodity.

“Water should be for the people, and it shouldn’t be for making a profit,” said Sid Johnson. “If you think about the kind of attitude we’re creating, we’re selling our private water supplies off all across the country. I’ve gone out and bought bottled water and never thought a thing about it. Now I’m thinking about it, and it’s just the most ridiculous thing I can think of.”

Cosmo Garvin contributed to this report.