Nestlé granted three-year permit to keep piping water out of California national forest

Ian James | The Desert Sun

Show Caption Hide Caption Next to Nestlé's bottled water pipeline, a creek trickles Where two creeks meet in the San Bernardino National Forest, one is flowing and the other is just a trickle. Nestlé's bottled water operation is undergoing an environmental review.

The U.S. Forest Service has granted Nestle a new three-year permit to continue operating its bottled water pipeline in the San Bernardino National Forest.

The agency announced the decision Wednesday, saying the permit has been offered to the company “with measures to improve the watershed’s health” along Strawberry Creek.

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The Forest Service took up the matter in 2015 after a Desert Sun investigation revealed Nestlé was piping water out of the mountains under a permit that listed 1988 as the expiration date. The revelation that officials had allowed the company to use the permit without a review for 27 years generated an outpouring of opposition and prompted the permit review, as well as a lawsuit by environmental groups and an investigation by California regulators.

Nestlé’s special-use permit allows the company to use its pipelines, horizontal wells and water collection tunnels in the mountains north of San Bernardino.

District Ranger Joe Rechsteiner said in a statement that the decision ensures “the water withdrawal and conveyance infrastructure is under a current permit, and it provides for protection of forest resources.”

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The permit comes with new conditions, including a requirement that the company take less water if necessary to maintain “minimum flows” of surface water.

The Forest Service said the watershed’s health is now rated as “impaired” and that water extraction will be allowed “when there is water available consistent with the forest’s Land Management Plan.”

The agency said that the company has 60 days to accept the terms of the permit, and that the three-year period will provide time to conduct more studies to “inform a longer-term decision.”

Nestlé acquired the operation in 1992, and has been paying $624 per year to the Forest Service for the permit. In 2016, Nestlé piped 32 million gallons of water from its sources in the national forest.

The Forest Service says its permit fees aren’t based on the volume of water it removes, but rather on the market value of using national forest lands. The agency said the initial fee for the new permit will be about $2,050 per year.

Nestlé's opponents have urged federal officials to shut down the company’s pipeline, arguing the siphoning of water harms spring-fed Strawberry Creek and the wildlife that depends on it.

Nestlé denies causing harm to the environment and has insisted it’s entitled to keep using the lucrative namesake source of Arrowhead 100% Mountain Spring Water.

The company collects water using a system of 10 gravity-fed boreholes and two water tunnels drilled deep into the mountainside. The water flows downhill through a 4.5-mile steel pipeline to a roadside tank, where it’s pumped into tanker trucks and hauled to a bottling plant.

Alix Dunn, a spokesperson for Nestlé Waters North America, said the company “appreciates the time and effort the U.S. Forest Service dedicated to this decision regarding the permit renewal process at Arrowhead Springs.”

“We will carefully review the specifics of the decision, and will continue to comply with all permit requirements,” Dunn said in a statement, adding that the company has cooperated with the agency by providing dozens of environmental studies and reports.

Nestlé SA, headquartered in Vevey, Switzerland, is the world's largest food company, and its Paris-based subsidiary Nestlé Waters is the world’s largest water bottling company. Nestlé Waters North America is the biggest bottled water company in the United States.

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Water from Arrowhead Springs was first bottled for sale more than a century ago. It’s named after the famed arrowhead-shaped natural rock formation on a mountainside north of San Bernardino and the springs near it — both hot and cold. The hot springs were once the central attraction of a glamorous resort, which closed in the late 1950s and now stands vacant at the base of the San Bernardino Mountains.

The wells and water pipelines on the mountainside have been authorized under various permits since 1929. Forest Service officials have said Nestlé’s most recent 1978 permit, which was issued to predecessor Arrowhead Puritas Waters Inc., remained in effect while they reviewed the company’s renewal application.

In 2016, the Forest Service had released a proposal to issue Nestlé a longer five-year permit. The agency said the new three-year permit may be extended for two one-year periods — if that time is needed for additional studies.

The decision was announced three weeks after environmental groups reached a settlement with the Forest Service in their legal fight over the permit. In the settlement, the groups agreed to drop their appeal and the agency agreed to issue a decision within 30 days.

The three groups — including the Center for Biological Diversity, the Story of Stuff Project and the Courage Campaign Institute — sued in 2015, accusing the Forest Service of violating the law by allowing the company to continue drawing water from the national forest. They’ve argued that the taking of water threatens a sensitive habitat and rare species ranging from mountain yellow-legged frogs to birds such as Southwestern willow flycatchers.

A federal judge sided with the Forest Service in 2016, ruling that the existing permit was still valid because in 1987 the company's predecessor requested a permit renewal and didn’t receive a response.

Nestlé says it has valid water rights in the national forest. But starting in 2015, critics filed several complaints with California’s State Water Resources Control Board questioning the company’s water rights claims.

State officials conducted a 20-month investigation and concluded in December that the company doesn’t seem to have valid rights for much of the water it’s been drawing from the forest north of San Bernardino. Nestlé disputed the findings, arguing in a written response in February that it has rights to take at least 88 million gallons each year – nearly three times as much as the amount that ran through its pipes in 2016.

State officials have said they’re studying comments that have been submitted in response to their investigation, and they may revise their report based on those comments.

The Forest Service said its decision “leaves any issue concerning the extent of Nestlé’s water rights to the State Water Resources Control Board,” which has authority over questions of water rights.

Nestlé’s opponents had been hoping for a different decision from the federal government.

"We're disappointed with the Forest Service's decision to issue a new permit, particularly in light of the ongoing investigation by the State Water Board into Nestlé's shaky claim to a water right,” Michael O'Heaney, executive director of The Story of Stuff Project. “While we need time to more fully understand the decision, in the days ahead we will certainly be studying our options for ensuring that the public's natural resources are protected."

Rechsteiner explained his decision in a 33-page memo, saying there are no “extraordinary circumstances” that would warrant additional analysis through an environmental assessment. In a seven-page appendix, he outlined an “adaptive management plan” that would require the company to reduce water extraction if necessary to maintain the flow of surface water downhill from Nestlé’s water sources.

The company had previously proposed voluntary measures, but Rechsteiner decided on mandatory conditions. He wrote that Nestlé will be required to carry out additional environmental and hydrologic studies, and to take less water “if monitoring shows that water extraction is impacting surface water flow.”

“The initial studies provided by the permittee suggest that water extraction is reducing surface flow in Strawberry Creek. The effect of this flow reduction has not been thoroughly studied,” Rechsteiner said. He said the company’s studies and field work by government officials “have demonstrated that the current water extraction is drying up surface water resources (springs and streams).”

The company will be required to study other sites in adjacent watershed for comparison, he wrote, “to determine what conditions would exist in Strawberry Creek without water extraction.”

The Forest Service is asking the company to submit a study plan, which may involve “suspending extraction for set time periods to evaluate any changes in streamflow.”

Last October, Desert Sun journalists visited Strawberry Creek to investigate how Nestlé’s use of water may be affecting the watershed. At a fork in the creek, the eastern branch was a free-flowing stream, but the western fork — downhill from Nestlé’s boreholes and water tunnels — was just a trickle, forming a series of shallow puddles hidden in a thicket of trees and bushes.

Under the new permit, the company will be required to monitor the streamflow downstream from its water sources and install “shut-off valves or other flow control devices.”

The extraction of water “will only be authorized when it is demonstrated by the user, and/or agreed to by the Forest Service, that the water extracted is excess to the current and reasonably foreseeable future needs of forest resources,” Rechsteiner wrote.

The Forest Service received more than 40,000 comments from the public on the permit renewal proposal. Some people voiced concerns that if Nestlé is tasked with carrying out studies, the findings may be biased.

Responding to that point, Rechsteiner said although Nestlé will pay to conduct the studies, as is typical, “the qualifications of the scientists and resource specialists completing the work will be reviewed and approved by Forest Service staff,” and the studies will be independently reviewed.

The company will be required maintain “minimum flows” in two locations near the springs and boreholes: 20 gallons-per-minute in one spot and about 6 gallons-per-minute in another.

“Nestlé must manage extraction to maintain those minimum flows,” the agency said. “If the initial actions do not maintain minimum flows, all extraction must cease until flows reach minimum levels required to meet hydrological and biological concerns.”

Some of the activists who’ve been pressing to shut down Nestlé’s pipeline said the measures seem insufficient.

“This new permit will allow Nestlé to continue draining this fragile watershed without adequate resource protections,” said Lisa Belenky, a lawyer for the Center for Biological Diversity. “The Forest Service downplayed information about the damage Nestlé’s bottled-water operation is already doing and failed to do a robust environmental analysis, as the law requires. It doesn’t appear that the limited mitigation measures are adequate to prevent Nestlé from destroying plants and wildlife that have relied on Strawberry Creek for thousands of years.”

Ian James writes about water and the environment for The Desert Sun. He can be reached at ian.james@desertsun.com or @TDSIanJames.