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Via America’s Lawyer: Peter Mougey and Farron Cousins talk about how Nestle extracted more water from California than it’s permit allowed.

Transcript:

Peter Mougey:
Nestle is a company that could best be described as a natural resource extraction business. Most people probably associate the name Nestle with chocolate chip cookies. But for decades, they’ve been working to privatize water systems around the globe. In the State of California, Nestle was granted permits decades ago to extract water from San Bernardino National Forest. But recently, an investigation found that the company’s permits not only expired 20 years ago, but that the amount of water they were pumping out of the area was nearly four times greater than what their permits allowed them to take.

The California State Water Board found that the company was bottling and selling more than 30 million gallons of water a year when their permits only allowed for eight. Nestle has been pumping spring water out of the area since 1947, but rather than giving the company a massive fine or some other punishment for essentially stealing the water from one of the country’s most drought-damaged areas of the US, the state has given them the opportunity to reapply for the permit so they can continue robbing the United States of its natural resources.

Many years ago, the former president of Nestle was on the record saying that water is not actually a basic human right. Therefore, his company should be able to extract water [inaudible 00:01:33] from any area of the world and then sell it back to the locals.

Nestle always seems to be ready to capitalize on tragedy. When reports came out about the deadly levels of lead in the water of residents of Flint, Michigan, Nestle announced they were going to increase their water extraction in Michigan, further starving residents of clean water. In third world countries across the globe that are already suffering from resource scarcity, Nestle partners with corrupt government officials to extract water in areas where people are dying of thirst. Lawsuits in these instances show that the company has been using forced child labor in some developing countries.

You probably shouldn’t expect the company to do the right thing in California. Their history shows that they almost never do the right thing. The worst part is that the government is going to continue bending over backwards for them, even if it means starving their own citizens of water.

Joining me now to discuss this is Farron Cousins, executive editor of The Trial Lawyer magazine. Farron, the Nestle issue, the lawsuit in California, what can you tell us about the lawsuits?

Farron Cousins:
This lawsuit actually started several years ago brought by about three different environmental organizations, because they took the initiative and understood that Nestle was operating well outside of any kind of permit capacity that they ever had. You had previously mentioned that this past year, they took about 30 million gallons. In the years before that, they were taking close to 62 million gallons out of an eight million gallon a year permit that, as you also pointed out, expired 20 years ago.

Peter Mougey:
I hate to do the math on how many gallons that is. What in the world could be their defense when their permit’s at eight million gallons, and they’re pulling as much as 60 million gallons a year?

Farron Cousins:
See, what’s interesting about that is that Nestle has not defended the fact that they were taking well over what their permit was for. Instead, through this really convoluted legal argument that goes back close to 150 years, they’re trying to argue that this whole area around San Bernardino … there used to be a massive hotel there, the Arrowhead Hotel. It’s been passed down from company, to different ownership, to this one, to that one.

At some point in the past, around the 1940s, Nestle and the companies they eventually bought got interest in that hotel. They purchased the property. Since that is where the water is basically extracted from, they’re saying that all the way back through 150 years now when the permit was first granted for companies to come in and extract that water, we’re basically grandfathered into that old contract, the old permit. We can go to the mountain area, extract whatever water we want, because again, 150 years ago, you said it was OK. I don’t know what’s changed in 150 years.

Peter Mougey:
Of course, they never shot any formal approval or anything.

Farron Cousins:
Exactly.

Peter Mougey:
You think they could actually lose their permit? Would somebody revoke their permit?

Farron Cousins:
You would think in a perfect world that’s how this would work. We know, a 20-month investigation found that they’re taking, at least on an average year, four times more from the area than they’re allowed to. We know that the permit is only essentially for the base of a mountain. That is the only area where they can extract water from, yet they’re doing it about 5,000 feet above that. They’re operating without regard to anything that was said in the permit and still arguing that, “Nope, this is ours.”

The California Water Board, they could’ve given them a fine. They could’ve thrown people in prison, but instead, they said, “Look, why don’t you just apply for a new five-year permit. We’ll take a look at things. We’ll go from there. Anything else you need, just let us know. We’re going to make sure this is OK. But if you don’t do all of these things, like reapply or let us know what you’re going to do, we might eventually in the future have to give you a fine.” They really are doing whatever they can to make Nestle happy when Nestle has been stealing water from the State of California. If they want to claim 150 years, then they’ve been doing it for 150 years. They’re just letting them get away with it.

Another part of the argument, though, I got to say is the fact that Nestle is trying to argue that there’s different kinds of ground water. There’s the surface water and then the actual underground reservoir. They say, and according to the California Water Board, you can’t regulate the surface water. Nestle is arguing that all of the water they take is surface water, so it’s not regulated. It belongs to anybody who gets there first, because it’s percolated water, which means it travels through underground streams and reservoirs and goes to different places. They’re arguing all these weird scientific things, that it’s very difficult to prove or disprove in court. I unfortunately really think they have a shot at winning this, especially given how lax the regulators have been in this situation.

Peter Mougey:
Yeah, you wonder. The regulators are asleep at the switch. You think that if they would hold a few people accountable, you wouldn’t see this kind of repeated pattern. Let’s broaden this up a bit. Nestle, if you were to look at their practices around the globe, is this an isolated instance or part of a pattern and practice around the country, around the world?

Farron Cousins:
It’s absolutely a pattern of practice. To be honest, what they’re doing in California is far more tame than anything else they’ve done around the world. Starting here in the US, what they’re doing in California, they’ve done in Michigan, they’ve done in Pennsylvania. They’re doing it in Ohio with the water extraction.

They had an issue a few years back which they were also sued for, selling baby formula decades ago in African countries. They would go there. They would teach the women in these developing countries that, “Look, our formula is just as healthy for your infant. Switch to this. Here’s a free trial.” What would happen during those free trials is that the women would begin to naturally stop lactating, since the babies were not nursing. Then they were forced-

Peter Mougey:
They were forced to use it.

Farron Cousins:
Right, and then it goes on from there. Child slavery in cocoa fields, and Côte d’Ivoire in Africa, forced labor in Thailand for fishermen catching fish to be made into Purina cat food. What would happen in this instance is that these people would go … these Thai fishermen would say, “We want to work for you.” They’d say, “There is a fee to come work for our company.” They wouldn’t tell them exactly what that fee is. When they found out after they had started working and signed the contracts, the fees were so high that the workers essentially made no money and found themselves in this kind of indentured servitude towards Nestle for years. They couldn’t get out of it. They couldn’t break the contracts. The government knew this was happening but refused to stand up to Nestle.

We have deforestation in Ghana. We have greenwashing in Canada by the company who says, “Don’t worry, our water bottles, totally recyclable. Everybody recycles these things. They don’t end up in landfills.” Complete lies. Everywhere this company goes, destruction follows. It doesn’t matter if it’s with their bottled water, that part of the company, if it’s with their chocolate processing, the forced labor they’re using with that, their cat food, for God’s sakes.

Every part of this company is just so corrupt, and it’s at a level that most people don’t realize. It’s chocolate chip cookies, it’s Nesquik. But no. I hate to use the word evil, but if you were going to describe a corporation as evil, I think Nestle [crosstalk 00:09:24].

Peter Mougey:
When you have that many examples that the culture just seems to permeate with problems everywhere you look. If you look at the regulations, state, federal, international, how can you control, or bridle, and get this company under control to follow the regulations and hold them accountable? What can be done?

Farron Cousins:
We need, as a country, as a planet, really … water has to be classified as an absolute right for human beings. Nestle, as you mentioned, has said that, “No, water’s a need.” By classifying it as a need rather than a right, the government lets it go. We need a strong government in this particular instance when it comes to things like protecting the rights to water, protecting the rights to air. That’s what’s next. That’s where it goes from here, is they’re going to start saying, “No, this air around this mountain around our property is privatized. You want to come over here and breathe, you’re going to have to pay us a fee.”

We have to stop it before it reaches this ridiculous level of escalation. I’m sure 200, even 150, years ago, we never thought we’d be looking at a situation where water in this country would be privatized, especially when we have more than 3,000 different locations in this country, where the water is technically not even safe to drink right out of the tap. Nestle understands that. That’s part of the business model is we know the water is so tainted with lead and other pollutants in this country that if we get the market, if we extract more water here and there, we’re going to make a killing, because this is the only clean water that people in this country will have left to drink.

Peter Mougey:
We really shouldn’t allow companies to capitalize on places like Flint, Michigan, where people can’t drink out of the tap and then allow Nestle to come in and extract the ground water, further exacerbating the problem. It, just from a fundamental right purpose, doesn’t seem to make any sense.

Farron Cousins:
Absolutely, but when we just let these corporations come in and do whatever they want, and as we’re seeing in California with the actual regulators just saying, “OK, here’s everything we’re going to do for you. All you have to do is just reapply for your permit. We know you’ve been taking four to eight times more water than you were allowed to do. You’ve been doing that for 20 years, or 30 years, or 40. But just reapply. Everything’s fine. Everything’s good. These environmentalist lawsuits are going to go away, even though you’ve clearly broken the law.”

There’s no reason why fines shouldn’t have been imposed on this company in California 15 years ago, 10 years ago, last year. At any point, they could’ve been busted right out of the gate for violating a permit. If you or I were to get a permit to dig a hole in our back yard, and we operated outside of the parameters in that permit-

Peter Mougey:
Sure, we’d be held accountable for that.

Farron Cousins:
Exactly. The police would show up at your door. You’d go to court. You probably wouldn’t be thrown in jail, but you would have to face some kind of penalty for it. We have a company here that is taking water out of California that was under a massive drought for close to five years, where people couldn’t water their lawns. They had to regulate their shower times. Nestle was taking 62 million gallons of water a year and selling it back to them, because they needed water and couldn’t get it.

Peter Mougey:
Farron, thank you very much for coming.

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Mike Papantonio is an American attorney and television and radio talk show host. He is past president of The National Trial Lawyers, the most prestigious trial lawyer association in America; and is one of the few living attorneys inducted into the Trial Lawyer Hall of Fame. He hosts the international television show “America’s Lawyer”; and co-hosts Ring of Fire Radio, a nationally syndicated weekly radio program, with Robert F. Kennedy, Jr. and Sam Seder.