The Way Life Should Be? Vol. XII: LexisNestlé (Water under a Dilapidated Bridge)
As declining infrastructure and environmental degradation are part and parcel of neo-liberalism’s infinite growth model, it stands to reason that the most fundamental element of life—water—should eventually become commodified and privatized. This has already occurred to a frightening degree, though the process is not yet complete. We would do well to understand precisely what this entails and what methods are being used to achieve these ends.
With a market in excess of $19 billion in the US alone and a price point that’s nearly 2,000 times more expensive than tap water and four times more expensive than regular-grade gasoline, the market for bottled water is enormous, and its potential, if you’ll pardon the pun, is as of yet still largely untapped. It will not stay that way for long, though. According to a 2017 OECD policy paper, plans are already underway to create “a global public–private platform for knowledge exchange and effective engagement, collaboration, and action across governments and regulators in developed, emerging and developing economies, institutional investors, the private sector, international organisations, philanthropies, academia and civil society organisations.”
This kind of hybrid action is not limited to just the OECD and its partners. According to the United Nations’ Agenda for Sustainable Development, the aim is for major multi-nationals to “collaborate with governments, UN bodies, NGOs, industry associations and other businesses to create more effective, enabling environments for achieving the Millennium Development Goals, on both international and national levels.” In addition to an accelerated wealth transfer from the First to the Third World to “bridge the infrastructure gap” and “combat climate change,” so-called “impediments to private investment in infrastructure” will be removed and “blended finance” will allow for public funds to underwrite projects where the profits will naturally accrue to the private sector. In “neo-liberalese”:
Both public and private investment have key roles to play in infrastructure financing, including through development banks, development finance institutions and tools and mechanisms such as public-private partnerships, blended finance, which combines concessional public finance with non-concessional private finance and expertise from the public and private sector, special-purpose vehicles, non-recourse project financing, risk mitigation instruments and pooled funding structures. Blended finance instruments including public-private partnerships serve to lower investment-specific risks and incentivize additional private sector finance across key development sectors led by regional, national and subnational government policies and priorities for sustainable development…We encourage the use of innovative mechanisms and partnerships to encourage greater international private financial participation.
As we’ve explored in other contexts, this vast matrix of organizations work in tandem or at least toward common ends through mutually-ensured profit-maximization schemes and social, political, and demographic transformation in whatever form will be most expedient. It is truly a global phenomenon:
Philanthropic funds often foster healthy information-sharing and cooperation among the organizations they support. They also often work on common problem-solving strategies with other kinds of donors. These include multilaterals such as the World Bank, the Global Fund, or the World Health Organization; bilaterals such as USAID and the UK’s Department for International Development (DFID); and large foundations, corporations, and significant individual donors.
Many of the new philanthropic funds are funded by private equity and venture capitalists. New Profit, as just one example, is housed in the offices of Bain Capital and receives its funding from private equity professionals affiliated with Greylock, JP Morgan, and many other firms in addition to Bain Capital. These groups and individuals apply the private equity model to their philanthropy, which is reflected in a variety of ways (this will be explored more fully in the series’ final installment). In 2017, charitable assets in donor-advised funds reached an all-time high of $110 billion. Donor-advised assets have a growth rate of nearly 20 percent annually. In practical terms, let’s see what the profit-maximizing chain of events looks like with “charitable nonprofits” as the tip of the spear:
Splash, a relatively small nonprofit with revenues of about $3 million in 2017, that in 2018 received a green light for an investment of $20 million from the Children’s Investment Fund Foundation (CIFF), with a match of more than $12 million from city and state governments in Ethiopia and India, to dramatically expand its efforts to bring clean water to millions across the globe. Splash…was tackling an enormous problem (lack of clean water for people around the world); it was approaching that problem innovatively, using off-the-shelf technology employed by the most sophisticated corporations, such as McDonalds. For Splash, the big bet was designed to build something that local actors would then sustain. Eric Stowe, Splash’s founder and director, and his team pivoted to that longer-term vision and developed an investment concept with a clear and compelling goal: to provide clean water, sanitation, and hygiene to all public schools in two of the biggest megacities in the developing world. At the end of five years, Splash’s work in Kolkata, India, and Addis Ababa, Ethiopia, is expected to reach the point where local government and local private-sector actors, already well-established in those places, take it over.
Now what happens when inevitable mismanagement from the local government causes regression to the mean? Well, those private sector actors are there to assume full control, and there are certainly plenty of bottled water companies out there to “supplement” cities suffering clean water crises with their products. We have seen the dire consequences here in the United States as a result of the demographic transformation of cities such as Flint, Michigan and Camden, New Jersey, and the consequent neglect, gross mismanagement, and corruption. These are reflections of a wider trend; since peaking in 1977 inflation-adjusted federal funding for water infrastructure has been cut 74 percent. On a per capita basis, that is an 82 percent drop. In 1977, the federal government spent almost $77 per person (in 2014 dollars) on water infrastructure, but by 2014 that support fell to slightly more than $14 per person. As Alexis Bonogofsky reports:
According to the Environmental Protection Agency, the nation’s drinking water utilities need $384.2 billion in infrastructure investments over the next 20 years for thousands of miles of pipe as well as thousands of treatment plants and storage tanks to ensure the public health. Consequences of this inadequate investment have been seen in recent high-profile public health crises in Flint, Michigan, and the New Jersey public schools. Internationally, the UN finds that investment in public water systems and infrastructure is at an all-time low.
The Trump administration has advanced plans to make it easier for private companies to control public water systems, including further cuts to federal funding for water protection; the administration’s plan “relies on a $100 billion fund incentivizing private sector involvement in public utilities to address aging pipes, aqueducts, and other critical pieces of hardware essential to the provision of drinking water.” We already know what this looks like, and it is not pretty. From a 2018 exposé penned by Sharon Lerner and Leana Hosea:
Flint and Pittsburgh have many unfortunate parallels. Residents of both cities unknowingly drank water with high levels of the potent neurotoxin [lead], which has long-term health consequences…The two lead crises have another important thing in common: a private water company named Veolia. The world’s largest supplier of water services, Veolia had contracts with both Flint and Pittsburgh around the time that lead levels rose in their drinking water. And in both places, Veolia wound up in legal disputes over its role in the crises…The promise of saving money has been central to Veolia’s appeal to cash-strapped cities and towns struggling with water provision. That was certainly the case in Pittsburgh, where the water authority was facing more than $720 million in debt when it decided to contract with Veolia in 2012. The contract was based on Veolia’s “peer performance solutions” model, in which the company is paid based in part on how much it cuts costs.
This has proven very lucrative for Veolia, which now has in excess of $30 billion in revenue and its stock price has more than doubled over the past half-decade. We also learn from Lerner and Hosea’s piece that, “At least some of those profits may be stowed in an offshore company Veolia set up in the Bahamas, according the Paradise Papers database.” Under Veolia’s oversight, residents’ water bills have steadily risen while the water quality has continued to decline. Controversy seems to follow Veolia wherever they’ve been contracted:
The company’s methods have also come under scrutiny outside the U.S., with controversies in Canada, France, and Gabon. In 2015, Romania’s anti-corruption agency launched an investigation into Veolia’s Romanian subsidiary, Apa Nova Bucuresti, and individual executives for allegedly running a multiyear, multimillion-euro bribery scheme in order to dramatically raise water rates.
Though the crises caused by municipal degradation in Flint, Camden, and to a lesser extent Pittsburgh are in no small part the consequence of their demographic transformation, these kinds of systemic failures are not confined to cities and communities hammered by “diversity”—though that is certainly why they receive more media coverage than Martin County, Kentucky, for example. At nearly 94% white and entirely rural, Martin County is indicative of the deep neglect our non-metropolitan and –cosmopolitan communities suffer at the hands of a ruling class that hates them and wants them extinguished. Residents in Martin County have had to grapple with what has been described as “a catastrophically failing water system” compounded by water rates rising close to 50 percent, even though many residents have to purchase bottled water because the tap water is often undrinkable.
The continued failure—by design—at the municipal level both in public and private hands dovetails rather nicely with the privatization schemes of companies such as Nestlé that benefit from public disinvestment in water infrastructure, as the chairman of Nestlé Waters stated in 2009: “We believe tap infrastructure in the U.S. will continue to decline…people will turn to filtration and bottled water for pure water needs.” A recent Michigan State University study predicts over a third of Americans could be priced out of their municipal water supplies within the next half-decade as costs triple while the infrastructure continues to break down. The only alternatives will then be to turn to bottled water or find local natural springs that aren’t owned by these companies or other possible water sources; as 83% of Americans live in metropolitan areas and their suburbs and exurbs, finding clean natural sources of water will not be an easy task, to put it mildly. According to the United Nations, up to two-thirds of the world’s exploding population could be living under “stressed water conditions” by mid-next decade. Returning to Alexis Bonogofsky:
Internationally, bottled water consumption is estimated to have neared 70.4 billion gallons in 2013, according to data from the latest edition of Beverage Marketing’s report “The Global Bottled Water Market.” Consumption increased 6 percent in one year and is projected to grow. In fact, the International Bottled Water Association predicts the largest growth in bottled water to be in poor countries, where access to safe and clean water is not necessarily a given, and public water infrastructure is severely underfunded.
Providing one case-in-point, Caroline Winter reports:
Failing infrastructure has already led to a near-total reliance on bottled water in parts of the world. Nestlé started selling Pure Life in Lahore, Pakistan, in 1998 to “provide a safe, quality water solution,” the company says. But locals wonder if the Swiss multinational is exacerbating the problem. “Twenty years ago, you could go anywhere in Lahore and get a glass of clean tap water for free,” says Ahmad Rafay Alam, an environmental lawyer in the country. “Now, everyone drinks bottled water…What Nestlé did is use a good marketing scheme to make tap water uncool and dangerous. It’s ubiquitous, like Kleenex. People will say, ‘Give me a bottle of Nestlé.’”…He adds that this change has taken the pressure off the government to fix its utilities, degrading the quality of Lahore’s supply.
Nestlé has been anticipating and increasingly exploiting this situation for decades, controlling local springs and aquifers for their exclusive use. Other bottled water companies do the same. While people are literally dying from the water in Flint, a mere two hours down the road, Nestlé pays just $200 a year in municipal extraction fees to pump clean water and sell it at dramatically marked-up prices. Nestlé’s California water use increased by 19 percent during the major drought from 2011 to 2014. The company paid only $524 annually in permit fees to pump water from the San Bernardino National Forest—on a permit that was nearly thirty years expired, no less.
Nestlé generally seeks out areas with weak or antiquated water laws and regulations. In states like Maine and Texas, a law from the 1800s called “absolute capture” is still in effect. Absolute capture allows for landowners to use unlimited amounts of groundwater “captured” from said property. Nestlé will then appeal zoning resolutions and other restrictions to build massive facilities to extract the water, as in Fryeburg, Maine, where Nestlé’s Poland Spring line now has the means and the rights to extract water for the next twenty to forty-five years, perhaps longer.
Nestlé has sought to influence the political process at the state level in Maine as well, donating to such PACs as [Susan] Collins for Senator, Angus King for US Senate, Leading to a Balanced Maine, and the Alfond Business Community and Development. The Alfond Family, you’ll recall, are an extraordinarily wealthy Jewish family working to transform Maine both through their involvement in politics and through their many “philanthropic endeavors.” Nestlé/Poland Springs effectively has carte blanche in the state to buy up as many springs and aquifers as they can, privatizing what was once publically-accessible and what for many Mainers was their primary or secondary water source. Water independence is part of the deeply self-reliant culture found in the state of Maine; 40 percent of Mainers drink private, unregulated well water as opposed to 86 percent of Americans who drink municipal water treated with fluoride, chlorine, and other chemicals. Furthermore, writes Winter:
Despite the Safe Drinking Water Act of 1974, compliance with harmful chemical restrictions isn’t monitored carefully, and most wastewater-treatment systems aren’t designed to remove hormones, antidepressants, and other drugs…77 million Americans are served by water systems that violate testing requirements or rules about contamination in drinking water, according to the Natural Resources Defense Council…[Bottled water] outpaced soda sales for the first time as drinkers continue to seek convenience and healthier options and worry about the safety of tap water after the high-profile contamination in Flint, Mich...Nestlé has come to dominate a controversial industry, spring by spring, often going into economically depressed municipalities with the promise of jobs and new infrastructure in exchange for tax breaks and access to a resource that’s scarce for millions. Where Nestlé encounters grass-roots resistance against its industrial-strength guzzling, it deploys lawyers; where it’s welcome, it can push the limits of that hospitality, sometimes with the acquiescence of state and local governments that are too cash-strapped or inept to say no.
Nestlé will also sometimes buy water straight from a municipality with clean water, such as Fryeburg, and as Katy Kelleher writes, “sell it under its private labels, meaning that the same water flowing through faucets in Fryeburg for free is distributed in convenience and grocery stores throughout the country for around $1.99 a liter. One of those private labels is Poland Spring.” If neither springs nor compliant municipalities with clean water are available, Nestlé is content to use common ground water from populated areas and pass it off as “fresh”; a recent lawsuit alleges Poland Spring bottles much of its water from ground water near petroleum pits, landfills, and densely-populated areas. In fact, per Kelleher, “Multiple lawsuits alleging mislabeling of water have been brought against Poland Spring over the past 20 years. A 2017 class-action lawsuit argued that ‘not one drop of Poland Spring Water emanates from a water source that complies with the FDA’s definition of spring water.’”
Not that any of this comes as a surprise from a Nestlé that in the 1970s and 80s pressed a misinformation campaign on women across the Third World and aggressively marketed their infant formula—to be mixed with local water, which as we know is likely to be impure and/or polluted—as a superior alternative to breastfeeding. Nevertheless, the United Nations High Commissioner for Refugees (UNHCR) saw nothing wrong with entering into a partnership with Nestlé. In fact, in a darkly ironic turn:
In 2003, Nestlé began a partnership with the U.N. High Commissioner for Refugees (UNHCR) to address the water needs of 210,000 Somali refugees and local people in Eastern Ethiopia. The partnership was both financial and practical, including on-going technical assistance in the form of a Nestlé Waters hydrogeologist and water resources manager…During 2005, the process of handing over the long-term operation and maintenance of the system to local water authorities was commenced…In November 2005, Nestlé became a founding member of BAFF, a coalition working to reduce vitamin and mineral deficiencies through food fortification. Nestlé is the world’s largest producer of manufactured foods fortified with micronutrients. Nestlé collaborated with NGOs, ENDA Tiers Monde, and the International Association for Maternal and Neonatal Health in Senegal to establish a number of local centers “to improve nutritional and hygiene status of mothers and their infants under 5 years of age.”
The Nestlé Nutrition Duchess Club markets Nestlé products to children in countries such as Nigeria under the guise of humanitarian outreach in order to, “Meet basic needs such as nutrition, healthcare, water...through affordable products and services. Food and beverage companies can develop new products that combat nutritional deficiencies and are affordable to low-income families.” Nestlé works with NGOs and governmental organizations in countries such as Turkey, Egypt, South Africa, and Malaysia to do something similar. As we might expect, the unethical and probably lethal practices of Nestlé have not disqualified the company from “educating” Senegalese mothers on the very infant formula they’ll be purchasing in bulk—or subsidized to purchase in bulk in any case—for their average close to five children per mother. With its low average IQ, dearth of education, and fecundity, Senegal makes for the perfect market, and these factors, along with what for succinctness’s sake we’ll call the “Jewish Question,” are key to understanding neo-liberalism. Recalling the marketing strategies used in Pakistan discussed earlier and understanding the just-aforementioned factors of the Senegalese and Third World peoples in general, Nestlé has endeavored to position itself as a major beneficiary of America’s continued demographic transformation and municipal services degradation:
According to a 2014 market research report, adults that consume large volumes of bottled water are more likely than average to be African American, and Latinos make up the key customer base for bottled water. Researchers from the Medical College of Wisconsin and the University of Wisconsin found that Latino and African-American parents were more likely to buy bottled water than white parents, and they are dishing out more money on bottled water primarily because of perceived health benefits. The bottled water industry markets to Latino immigrants…in part by exploiting bottled water as part of the immigrant “heritage” of coming from places with less access to clean drinking water. Nestlé Pure Life’s target audience is recent Latin-American immigrants, particularly mothers. In 2014, Nestlé spent over $5 million advertising Pure Life… and three-quarters of this spending ($3.8 million) went to Spanish-language television advertising.
A recent Penn State study found that black and Hispanic adults in the United States are half as likely as whites to drink tap water and more than twice as likely to drink bottled water. Much of this is attributable to the state of municipal tap water in more “diverse” and urban environs, but the ability to market to these population groups more successfully is also a major factor. This may seem harsh, but disparities in intelligence and time preference do make blacks and browns better consumers, and a lower ability to engage in critical thinking makes these populations easier to manipulate and thus control. Despite the fluffy egalitarian propaganda that would force us to think otherwise, the ruling class understands this well—so well they’re party to mass genocide in order to produce a new hyper-consumerist, easily-controlled global serf class. It truly is a numbers game for them, and you can scarcely find anything more dehumanizing than that.
 From the OECD policy paper: “Blended finance is not an asset class, rather it uses a range of instruments to calibrate the risk-return profile of projects and to address other barriers to private investment…Challenges related to blending include the need for a good enabling investment environment, ensuring that development finance does not crowd out private finance and that the desired development outcomes are realised…Investments in water security compete with other sectors for financiers’ attention, driven primarily by the attractiveness of the risk-return profile. This depends on two factors: i) a stable revenue stream; and ii) how the range of risks related to water security investments are shared between public and private actors. Mobilising commercial finance, in particular domestic sources, need to be based on policy reforms of the water sector to promote efficiency gains, cost reduction and cost recovery, as well as improving the balance of tariffs and taxes as sources of finance.” Also from said paper, and of particular note to how the globalist entities view the project to commodify water and ultimately completely privatize it, with the state only useful in an interim stage as facilitator: “[To date] water services are often under-priced, resulting in a poor record of cost recovery for water investments…Valuing water means recognising and considering all the diverse benefits derived from improvements in water management in terms of valued goods and services…It creates opportunities for converting the benefits from investments in water management into revenue streams, potentially improving the financial case for investment…Financial flows may benefit projects which are bankable, but may not maximise benefits for communities and the environment…Mapping the flow of finance to water security investments can identify the ultimate sources of capital…The ‘Infrastructure Data Initiative’ was recently launched to address this need and support efforts to establish infrastructure as an asset class. This is a joint initiative by the OECD, the European Investment Bank, Global Infrastructure Hub, Long-term Infrastructure Investors Association and the Club of Long-Term Investors, which aims to create a centralised repository on historical long-term data on infrastructure (including water) at an asset level…This methodology should also explore the potential benefits from synergies emerging from interrelated projects and their impact on water resources. It would inform project preparation and selection by governments, development finance institutions and other partners.”
 To say nothing of the dramatic environmental impact: “Bottlers’ groundwater pumping operations can harm the local environment as well as natural resources that communities rely on for drinking water, farming, recreation and other uses. Groundwater sources are usually connected to surface waters, and when an aquifer is over-pumped, the water levels…can change. Large-scale groundwater extraction, such as for water bottling plants, could reduce the availability of local groundwater and surface water supplies to the detriment of the natural resources that depend on them. When bottled water companies extract groundwater sources, they not replenish what they take.” https://www.foodandwaterwatch.org/sites/default/files/rpt_1802_tbttbigwaterhustle-web.pdf
 Nestlé, in conjunction with Project Head Start in townships around Pretoria, South Africa, “trains adult caregivers in adequate pre-school education to stimulate children, age 6 and under. Teaching materials as well as health and nutrition education are given to overcome negative effects of poor nutrition. Workshops and weekly training at the University include appropriate handling of HIV/AIDS cases in the pre-school environment (my emphasis) and treating of cuts and wounds”…Nestlé also provides funding for a dietician to give nutrition advice and help to “inner-city” HIV/AIDS patients in France.
 A corporation named Bridge International Academies (BIA) is opening for-profit schools across the Third World, where instructors in the Bridge schools teach a pre-scripted curriculum from a computer. Liberia is considering outsourcing its entire elementary program to BIA, which is funded by Bill Gates, Mark Zuckerberg, and a number of prominent interests from Wall Street.