NESTLE PLANT CONTINUED

The Sierra Club opposes the proposed 1-million square-foot Nestlé Bottled Water Plant in McCloud
at the foot of Mt. Shasta. For the Sierra Club and other national and international groups, water is a
human right—not a commodity available only to those who can pay corporate prices, but a public
trust that must be defended for the benefit of the natural environment and all people, who have a right
to safe, affordable, and sufficient water.

The bottled water industry, led by Nestlé, Coca Cola (Dasani), and Pepsi Cola (Aquafina),
aggressively promotes nonessential uses of bottled water, portraying it as a healthy, trendy drink – that
you can have any time and any place - without mentioning that it can cost 1,000 times as much as
tap water and is less regulated than tap water. Another important issue is that the manufacture and
trucking of plastic bottles uses nonrenewable fossil fuels while spewing greenhouse gases into the air.
Furthermore, the manufacture and discard of plastic bottles pollute our environment and impact public
health.

California taxpayers already pay to operate a colossal and integrated statewide water supply
system—the combined State Water Project and the federal Central Valley Project—to provide safe
drinking water at a fraction of the cost of bottled water.

Because pristine fresh spring water sources are found in rural areas of many states, Nestlé moves
into these communities having already made political connections and with the promise of economic
development and jobs before the community as a whole has the time to respond with their own
discussion or study of alternatives. This has happened in southwestern Maine and in northern Michigan
where, now, community groups have come together to challenge these bottling operations and debate the
environmental impacts.

The same happened in McCloud. First, in a quick and little discussed move, the Country Supervisors
amended the groundwater ordinance to allow water to be exported out of the county in bottles. Then,
with almost no community discussion, the McCloud Community Services District signed the contract with

Nestlé in 2003 to build this 1-million square foot bottling plant and distribution center for its Arrowhead
label. Nestlé would pay 1/64 of a cent per gallon, while selling it back to the public at thousands of
times the price. Nestlé will use 1,800,000 gallons of spring water per day, with unlimited access to
groundwater and 8,600 acre-feet of water annually from the McCloud River pipe at Lakin Dam based
on their ownership of the CalCedar saw mill site on the north edge of McCloud.

A draft environmental impact report (DEIR) circulated in July 2006 described construction of the
Nestlé bottling facility at the CalCedar mill site, construction of new pipelines to that facility from
Intake, Lower Elk, and Upper Elk Springs, and upgrades to existing McCloud Community Services
District water pipelines, springhouses and water collection infrastructure.

It was unprecedented that over 4,000 comments from the general public nationwide were received at
the Siskiyou County Planning Department, along with expert technical comments, including on the taking
of the state’s public trust waters, the impact of the international trade agreements on the county and
state’s ability to protect the bioregion and water resources, and the impact of global warming on
availability of water for the environment and local communities.

Now concerned local and county residents and others are waiting to review the final EIR, expected
to be released in September. It will contain responses to hundreds of comments submitted by the general
public, organizations, agencies, and the Winnemem Wintu Tribe.

Comments like the following cited fatal flaws with the Draft EIR. The DEIR mitigations pertaining to potable water
supply and the Water Supply Contingency Plan are blatantly deficient. Nestlé plans to operate for at least
100 years, yet the regional water supply and demand estimates are examined for only 19 years. It directs
that in periods of drought or shortage, McCloud residents will be required to conserve water while
Nestlé will be able to take their full allotment.  What will be the effect of global warming on the
sustainability of the local and regional natural water systems? The Governor signed landmark legislation
in 2006 to Reduce Greenhouse Gas Emissions (AB32) and California EPA has released a study on
the adverse impact to water supplies due to climate change in the next 50 years, yet the Nestlé contract
locks up water for 100 years.

How will Nestlé mitigate its immeasurable contribution to the plague of plastic bottles that
will never be recycled? The Great Pacific Garbage Patch is a concentration of floating plastics the size
of Texas in the northern Pacific gyre that will continue to grow and harm ocean species as long as
we produce and use unnecessary plastic products.  The EIR does not fully study the impacts on wild

fish and other aquatic biota. For example, Squaw Valley Creek is a primary tributary of the McCloud
River and as such is an important spawning and rearing area for McCloud River Rainbow Trout. Yet,
the EIR dismisses its flows as “artificial” and recommends only monitoring.

Cumulative air and watershed impacts inside and outside the county have not been adequately
covered. The DEIR anticipates 600 heavy-duty truck trips and a similar number of light-duty truck trips to
and from the Nestlé water bottling facility every day, and inadequately compensates for the predictable
reduction in service and safety.

The DEIR failed to address the issues of community sovereignty and community rights potentially at risk
by the terms of the international trade agreements such as the North American Free Trade Agreement
(NAFTA ) and the family of World Trade Organization (WTO) agreements. NAFTA has a
provision called Investor-to-State that allows a foreign corporation or investor to bring suit before a
secret international tribunal and demand compensation for economic losses arising from local,
state or federal regulations in the country where they have invested. The General Agreement on Trade in Services (GATS) of the WTO covers all kinds of economic activities involved in the proposed Nestlé
Bottling Plant project: from implementing land-use and zoning, to doing site studies, to pumping water,
to trucking, to wholesaling and retailing, and to advertising. GATS has a chapter on Domestic
Regulation that says regulations must be “no more burdensome than necessary to ensure the quality of
the service.” Thus regulations intended to protect the quality of water or to prevent water from being
used unsustainably, or zoning regulations preventing the siting of more bottling plants in the county could
be ruled “more burdensome than necessary” by a WTO trade court, if Nestlé SA, the Swiss food and
beverage giant that is the parent company of Nestle Waters North America were to challenge the
regulation.

Do you think the benefits outweigh the costs of this bottled water plant?
For more information, visit the Sierra Club website at www.sierraclub.org/committees/cac/water/

~ Vicki Lee, Chair
Corporate Accountability Committee