The Environment

Privatization, Public Health and the “Water Lords”

By Julian Vigo

Michigan Court of Appeals, the U.S. state’s second-highest court, ruled against Nestlé’s Ice Mountain water brand last month.

The court ruled that Nestlé’s commercial water-bottling operation is “not an essential public service” nor is theirs a public water supply. This is a huge victory for Osceola Township, a small Michigan town that blocked Nestlé from building a pumping station that doesn’t comply with its zoning laws.

Nestlé fought the township where five indigenous tribes represented by the Chippewa Ottawa Resource Authority (CORA) were worried that the increased water withdrawal for the new booster pump station would affect the flora, fauna, wetlands and streams in the area where the state has a legal obligation to protect the habitat for tribal use under a 182-year-old treaty.


Nestlé had received approval to increase the pumping rates from 250-gallons-per-minute to 400-gallons-per-minute from the Michigan Department of Environmental Quality. However, Osceola was unwilling to cede Nestlé’s attempt to control water in its authority and in 2017 denied Nestlé the increase of water it planned to pull from the ground.

Towards the end of 2017, a lower Michigan court wrote that water was essential for life and framed Nestlé’s operations of extracting and bottling water was an “essential public service” that met a public demand thus trumping Osceola township’s zoning laws.

This case is emblematic of the types of battles that local governments face when squaring-off toe-to-toe with large multi-national corporations that are attempting to privatize water around the country and around the world.

Ironically, even Nestlé’s own investigation into the repercussions of its pumping such immense quantities of water from Michigan’s aquifers demonstrates that increased pumping could harm Michigan’s wetlands.

Yet, for over three years Nestlé argued that its own research had not suggested this in order to pull more water and profits. There is little stopping companies like Nestlé which are setting up camp across the planet, attempting to manipulate local and national laws to extract vast quantities of water to bottle and then sell back to the very people whose aquifers they are depleting.

Privatizing water

This is not a new story—we have been here before, again and again as media reports of Pepsi-Cola’s and Coca-Cola’s depletion of water in the Indian state of Tamil Nadu where in 2015 in Perundurai, an agricultural region, hundreds of farmers demonstrated for several weeks against a plan by Coca-Cola to build a five-billion-rupee ($75 million) bottling plant.

The Tamil Nadu development authority initially approved the plant’s request to withdraw four million liters of groundwater a day only to find itself gripped by months of protests after which the authority reversed its decision.

Then again in 2017, Tamil Nadu experienced the worst drought in over 140 years and both companies stopped these plants from drawing water from the Thamirabarani River.

It is no secret that Pepsi-Cola and Coca-Cola are largely regarded by Indians as foreign interlopers that have colonized the region’s water table in order to make billions of dollars in profits while appropriating the scarce water supplies that should have been reserved for local farmers and citizens. But Michigan and Tamil Nadu are merely two of hundreds of areas around the world affected by companies privatizing water.

Skip over to Serbia and approximately 80 percent of the water in the market is foreign-owned with Coca-Cola and Pepsi-Cola making up about 40 percent of the water ownership in the country.

Economic asset

Bechtel joined forces with Befesa, Abengoa and Edison to create the company Aguas del Tunari in Bolivia, just prior to its ventures in Iraq, which put in a bid to the local government to privatize the water of Cochabamba.

In November of 1999 the citizens of Cochabamba protested the privatization of their water system and the additional 200 percent increases in water rates that Aguas del Tunari implemented. By April 2000, Aguas del Tunari was kicked out of Bolivia and replaced by a public company.

In South Africa where the right to water is written into the country’s constitution, many companies have been lobbying the government to privatize the country’s water supplies.

Nestlé is one of the usual suspects in this panorama, having foreseen the increasingly lucrative value of water as an economic asset. Former Nestlé CEO, Peter Brabeck-Letmathe, has gone on record as saying that the notion that water is a human right is “extreme.”

As a result of this statement, Nestlé South Africa has been under pressure to justify its water extraction operations for its PureLife bottled water brand.

“Water lords”

Environmental activists have, since the 2002 World Summit on Sustainable Development in Johannesburg, been acutely aware of the encroachment of private industry on South Africa’s constitutional protection of public water.

Following the release of the German documentary Bottled Life (2012), which details Nestlé’s exploitation of water around the world, consciousness of the corporate “water lords” has increased as more and more activism is focused on keeping tabs on these corporations.

Some countries, however, have a legacy of awareness around colonial encounters with natural resources. Immediately after Ghana’s independence, President Kwame Nkrumah established a policy of nationalization which was in vigor until the period of market liberalization when water privatization began in the country.

During the 1990s, privatization caused water fees to increase by 95 percent and as a result one-third of Ghana’s population has no access to clean water.

Meanwhile, according to Bloomberg, privatization in Brazil would ostensibly make the country’s current water crisis go away, as if poor Brazilians who are currently unable to drink or shower in clean water can go into their local shop daily and whip out their credit card in order to buy a 20-litre supply of water for their families.

Public good

Still, despite the well-known harms of privatization—for the poor especially—some Brazilians are opting in favor of the private model.

In a country that has the world’s largest freshwater reserves but has also suffered years of a water crisis, Brazilians increasingly view the privatization of its water as the solution. Much of Rio’s raw sewage ends up in its rivers, and only 29 percent of the country’s water is treated.

This attitude was recently reflected in law in December when the government’s lower house approved measures that are expected to result in the privatization of water.

Similarly, many governments in South Asia, the Middle East, South America, and Africa have turned to privately-owned water tankers in order to fill the depletion of its local water supplies.

Hiring private water suppliers instead of investing in long-term solutions will not hold. The water crisis around the world is not being addressed because to do so would involve criticizing the many multi-nationals making a killing through pulling and depleting public water supplies in the name of profits.

Ecologist, January 31, 2020