California Drought Brings the Hammer Down on Arrowhead’s “Free Water”

The fight between Nestlé and the California State Water Resources Control Board finally bubbled over last month after years of finger-pointing. In an April 23, 2021 letter, the board  ordered that Nestlé  cease-and-desist “unauthorized diversions and threatened unauthorized diversions from Strawberry Creek in San Bernardino County…”

The letter, which according to the New York Times is not enforceable right now, is the latest escalation in a long struggle between state water officials and Nestlé ’s bottling operation for Arrowhead spring water in San Bernardino National Forest in southern California.

According to The Desert Sun, the case involves an old water rights claim, environmental groups calling afoul, expired permits, and underfunded federal oversight. The board began receiving complaints about Nestlé ’s activity in 2015 and published their findings in 2017.

Nestlé ’s bottling of Arrowhead water dates back to the late 1800sThey have claimed pre-1914 water rights in San Bernardino National Forest dating back to 1865.

Pre-1914 water rights, also called appropriative rights, is one part of the two-headed monster of California water law. It gives a water user an automatic water permit whereas riparian rights allow for non-permitted water extractions for domestic and agricultural use in the immediate area near the water source.

Nestlé  believes its water rights allow it to collect 271 acre-feet, or 88.3 million gallons a year from mountain spring boreholes above Strawberry Canyon in San Bernardino National Forest, and send them down a four-inch wide pipe, for processing into Arrowhead water bottles.

State water board officials, based on their 2017  investigation found Nestlé ’s pre-1914 water rights invalid since the original water rights are riparian rights, not appropriative.

They argue Nestlé can only divert 7.26 acre-feet based on a 1909 water rights claim, of 2.39 million gallons of water annually.

The board justifies their actions based on the drought, citing Governor Gavin Newsom’s water resilience plans during the “second consecutive dry year.” The board’s original investigation happened during the worst years of the 2011 to 2017 drought.

There is a bit more to the story. Nestlé ’s pipe used to transport water from Strawberry Canyon springs to a holding tank is built on national forest land. The company held a permit to operate the pipe with the United States Forest Service, but it expired in 1988.

One of the environmental groups opposed to Nestlé, the Center for Biological Diversity, comically called it a “zombie permit.”

In June 2018, the U.S. Forest Service resolved the expired permit with Nestlé  by giving the company a special use permit for five years that requires an adaptive management plan to study, assess, and report Nestlé ’s operational impact on the area.

In a 2016 letter to state water officials, Nestlé  said, “In the 84 years since Del Rosa, no water use has alleged an injury to its water rights due to the diversions by California Consolidated Water Company or its successors-in-interest from the Strawberry Creek headwaters. Further, there has been no evidence that the scope of the springs’ use is not within the original intent of the appropriation…” Del Rosa Mutual Water Company v. D.J. Carpenter, et al, is a 1931 San Bernardino County Superior Court which affirmed Nestlé’s existing water rights.

The board says it has received “4,000 comments and thousands of pages of information from the public alleging continued excessive water diversions…” It sounds damning, but there is no dry riverbed, trapped fish, homes without water, or other smoking gun.

Much of the intent behind the state board’s action against Nestlé, who recently sold Arrowhead and its North American water companies to a private equity firm for $4.3 billion, seems to be driven by fears about the drought, and dissatisfaction with the company’s operations, rather than what is going on or their actual impact on the environment.  How this dispute is resolved will determine whether a bottle of Arrowhead water becomes as rare and expensive as a bottle of fine wine.

Evan Harris is the media relations and outreach manager for PRI.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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