A Commitment to Communities: Case Study of Nestlé Waters North America’s Water-Siting Plan

Authors

• Julia Nelson

  Former Manager, BSR

• Linda Hwang

  Former Manager, Research, BSR

In a northeastern U.S. town of about 1,000 people, at the first public hearing to discuss Nestlé Waters North America’s (NWNA) interest in bottling water from a local spring, the company listened as citizens outlined their primary concerns about the project: increased costs to the town, negative impacts to residents, and feuds among neighbors.

When it comes to the management of water resources, people are at the center of the debate, both in our capacity to implement strong governance systems and in our ability to ensure that those systems support individuals’ rights to access the resource.

For NWNA, the largest producer of bottled spring water in the United States, these community objectives complicate an already unique set of challenges related to managing a natural resource widely perceived as a public good. At the company’s spring water sites in North America, community members and others have two primary concerns: They want to ensure that NWNA’s water withdrawal does not have negative ecological impacts, and they want the opportunity to participate in decisions about their water resources.

At its existing sites, NWNA currently has progressive water-management techniques, including systems allowing hydrologists and geologists to monitor springs, and processes to encourage regular dialogue with residents and community officials. However, new trends have emerged that are reshaping the context in which companies like NWNA operate. Today, the public is increasingly concerned about water scarcity, and local communities are more vigilant about their water resources. As a result, natural resource and extractive companies struggle with the balance between the use of natural resources and the rights of local communities and healthy ecosystems.

In September 2009, NWNA engaged BSR to help develop an updated siting and community-engagement framework for today’s business context. The eight-month project involves analysis of NWNA’s existing practices, and the design of a framework for engaging communities at future spring water sites. To execute this project, we paired our experience developing community-engagement strategies for the extractives industry with our research on responsible corporate management of natural resources.

Initial Assessment

From October to December 2009, we conducted interviews with internal stakeholders and national experts at several of NWNA’s U.S. sites in the Pacific Northwest and Maine to collect positive and negative feedback about the company’s existing practices related to community engagement and water stewardship.

Through this process, we learned that despite the best intentions, the process of community engagement is much more complicated than participating in community meetings and relaying technical information related to the hydro-geological management of springs. As a NWNA natural resource manager told us, “We want to protect the values in the county, but we could be better about understanding exactly what those are.”

BSR’s analysis revealed four main challenges for NWNA:

1. Community dynamics: Communities are not “blank slates.” Rather, they are complex ecosystems of relationships with their own dynamics and history. NWNA’s presence has amplified existing conflicts and shifted power in ways that have damaged collaboration and trust among community members. To build relationships based on trust and cooperation, NWNA must take these pre-existing community dynamics into account. By doing so, the company can ensure that its presence sustains, rather than undermines, the social fabric of the community.
2. Trust versus data: Ostensibly, the communities’ main concerns with NWNA relate to the company’s sustainable use of water. But our interviews revealed that before the communities can even enter discussions about water management, they want assurance that they will be able to participate in decisions about their water resources—and they want to know that NWNA will be held accountable for its impact. In other words, trust trumps data. While NWNA is committed to transparency regarding its water use and actual or potential impact on aquifers, the company will have more constructive dialogue about monitoring and management if it makes concrete commitments to community participation and accountability.
3. Governance: Few U.S. cities and towns have permitting processes that address the extraction and bottling of water. As a result, when NWNA seeks to establish a new spring site, the company’s efforts test the strength of local regulations and the perceived legitimacy of related public processes. Rigorous, transparent, and participatory permitting processes, and the credibility of local officials who oversee those processes, often play a role in facilitating or inhibiting NWNA’s ability to gain community support through “official” licensing processes.
4. The definition of “responsibility”: Public expectations for responsible corporate use of natural resources are expanding. In the past, it was sufficient for companies to minimize the impact of their operations and make philanthropic donations. Now, more leading companies are seeking to provide a net positive benefit from their activities. Because water is widely perceived as a public good, the public expects even greater net benefits, which means natural resource companies like NWNA must be more creative about the package of benefits they offer to host communities, both in terms of resource stewardship and community development. Leveraging human and technical resources and relationships for the public good can open new opportunities to align corporate activities with community development and enhance the long-term viability of water resources.

Next Steps

These challenges point to more fundamental questions that we will attempt to address with NWNA in the coming months: What expectations must a company meet as a responsible steward of water? If water is a human right, who has rights to access it, and how should access be regulated? How much water is enough for communities, watersheds, and industrial users? How should NWNA respond to these questions vis-à-vis its approach to host communities?

BSR’s findings will serve as the foundation for a two-day design charrette, during which NWNA staff and external stakeholders will co-develop a siting and community-engagement framework based on past experiences and current and future expectations of key external stakeholders and local communities. Following this, NWNA field staff will test and revise the framework through application at potential spring water sites.

In future editions of the BSR Insight, we will provide updates on NWNA's progress, as the company moves toward the development and implementation of a siting framework that incorporates both the fears and hopes of communities located in and around its spring water sites.