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Whilst it may be true that their water extraction was legal, the ridiculously one sided arrangements strongly suggests that there would have been large political kickbacks to achieve this end.
The suggestion that Nestlé’s water extraction arrangements involved political kickbacks is a serious claim that requires careful examination. While there is no definitive, publicly available evidence—such as court convictions or whistleblower testimony—directly proving large-scale political kickbacks under Peter Brabeck-Letmathe’s leadership, several factors contribute to the perception of undue influence or favoritism in Nestlé’s water deals. These include suspiciously low permitting fees, lax regulatory oversight, strategic political donations, and the revolving door between Nestlé and government officials. Below, I’ll analyze the available information, drawing on specific cases, web sources, and public sentiment, while critically assessing the likelihood of kickbacks versus other explanations like regulatory failure or corporate lobbying.
Evidence Suggesting Potential Impropriety
Suspiciously Low Permitting Fees:
In multiple regions, Nestlé secured access to public water sources for fees widely criticized as negligible compared to the profits generated. For example:
California (San Bernardino National Forest): Nestlé paid $524 annually for a permit to extract up to 45 million gallons of water yearly from Strawberry Creek, generating an estimated $7.8 billion in global bottled water sales in 2018. The permit, which expired in 1988, was not updated until public outcry in 2015, suggesting a lack of oversight that critics attribute to Nestlé’s influence.
Michigan (Mecosta County): Nestlé paid $200 per year to extract over 130 million gallons annually, equivalent to 4.8 million bottles daily, at a rate of $3.50 per thousand gallons for city-owned wells. Critics, like Jeff Ostahowski of Michigan Citizens for Water Conservation, called this “crazy,” given the environmental and social costs.
Ontario (Canada): Nestlé paid $503.71 per million liters to extract up to 3.6 million liters daily, while Six Nations residents, whose treaty lands were affected, received nothing and lacked clean tap water.
Analysis: These low fees, often set by state or provincial authorities, reflect outdated or poorly structured regulations rather than direct evidence of kickbacks. However, the persistence of such arrangements despite public and environmental concerns raises questions about whether Nestlé leveraged political influence to maintain favorable terms.
Political Donations and Lobbying:
Nestlé’s political contributions, particularly in the U.S., have fueled suspicions of influence peddling:
Maine: Between 2001 and 2012, Nestlé and its lobbyists donated $634,000 to Maine politicians. This coincided with favorable regulatory decisions, such as the Maine Public Utilities Commission’s approval of a water deal in Fryeburg in 2013, despite one commissioner being a former Nestlé lobbyist. Additionally, former Governor Paul LePage appointed a Nestlé manager to the state’s environmental protection board, and a former Nestlé lobbyist, Patricia Aho, previously ran the Department of Environmental Protection.
General U.S. Lobbying: Nestlé’s lobbying efforts are well-documented. In 2014, the company spent $160,000 on lobbying related to the U.S. Special Supplemental Nutrition Program for Women, Infants, and Children, indicating a broader strategy of influencing policy.
X Sentiment: Posts on X amplify these concerns, with users claiming Nestlé paid $750,000 to politicians in two U.S. states to secure a $500 water permit, leading to $7.8 billion in profits. While these figures lack primary sourcing and may be exaggerated, they reflect public belief in corrupt arrangements.
Analysis: Political donations and lobbying are legal and common among corporations, but the scale and timing of Nestlé’s contributions, especially in Maine, suggest an intent to curry favor. The presence of former Nestlé affiliates in regulatory roles further supports perceptions of a “revolving door” that could facilitate preferential treatment. However, without direct evidence of quid pro quo, these actions fall short of proving kickbacks.
Revolving Door and Regulatory Capture:
The involvement of former Nestlé employees or contractors in government roles is particularly notable in Maine, where regulatory bodies were staffed with individuals tied to the company. For instance, the 2013 Fryeburg water deal was overseen by a Public Utilities Commission that included a former Nestlé lobbyist, attorney, and consultant.
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