Bottled Great Lakes Water: Will That Be Flat or Sparkling?

Carlos Osorios, Toronto Star

Lake Michigan.

The Great Lakes-St. Lawrence River Basin Water Resources Compact is on the verge of passage in the U.S. Last week, it whizzed through House and Senate committees and is expected to pass the full Congress in the fall. It was praised publicly by President George W. Bush. All this has happened in record time in the two weeks since I wrote about the few lonely voices opposing this bill on both sides of the border. While they raise the alarm, the big victory of the bill's proponents is that they have brought most environmentalists on side because it's been sold as a way to stop bulk exports and water diversion.

That it does. Or does it? The devil, so to speak, is in the details. The huge problem at the core of this bill is that it officially turns Great Lakes and St. Lawrence River basin water into a "product," and that is a weighted word in international trade circles. (Ontario and Quebec signed on with the eight U.S. Great Lakes states in a separate agreement that mirrors the U.S. bill.)  Slipping a poison pill into a bill or treaty is an old negotiating tactic. Opponents, including powerful American environmental groups, had been fighting this compact for several years and were so relieved to get an exemption for bulk water exports, they heralded it as a victory. With that as a guarantee, what could go wrong? It was only those few free trade watchdogs, primarily the Council of Canadians, who understood what happens in freetradeland because they monitor trade issues, and have been since the Free Trade Agreement with the United States in 1989. As well, Michigan lawyer James Olson fought the bill based on the constitutional argument of water as a public trust.

Commodities/products can be traded freely and, since there is no special protection for water in NAFTA, opponents fear corporate interests — bottling companies, for instance — will attempt to use Great Lakes water for profit and fight any naysayers on the basis of free trade law. Probably, they have a good case; that's the scary part. It's important to note the 1994 North American Free Trade Agreement did not protect water. Neither did the FTA or anything signed through GATT or the World Trade Organization.

NDP MP Peggy Nash (Parkdale-High Park), her party's water critic, argues "treating water as a product undermines what ought to be held as a public trust." Although Nash says, "I don't know if the U.S. is particularly interested in the opinions of Canadians," it's important for people who oppose water-as-product to make their views known to the U.S. Congress. It's not too late to lobby, she says. "The Americans have got to get this one right." It will be too late once that first court ruling (in either Canada or the U.S.) allows the export of bottled water from the Great Lakes because, to do otherwise, would supposedly harm free trade among nations.

It's also worth noting that free-trade rationale was probably what the Conservatives had in mind when the Canadian delegation derailed a recent resolution of the U.N. Human Rights Council in Geneva to make water a basic human right. Why do that when you can sell it? For  those who argue Canada should be allowed to sell its water and benefit from the sale, be warned, once commercial interests are involved, the coming drought may be playing in a theatre near you.

Comments

[Gary Wilson]

Thanks to the Star and reporter Diebel for your diligence on this issue.

The U.S. press, w/ a few exceptions, has abdicated its responsibility to do balanced reporting. They've recycled press releases from the politicians and enviro groups who are trying
rush this flawed Compact to the finish line.

Keep digging for and reporting on those inconvenient facts.

Gary Wilson
Chicago

[Gary Wilson]

Thanks to the Star and reporter Diebel for your diligence on this issue.

The U.S. press, w/ a few exceptions, has abdicated its responsibility to do balanced reporting. They've recycled press releases from the politicians and enviro groups who are trying
rush this flawed Compact to the finish line.

Keep digging for and reporting on those inconvenient facts.

Gary Wilson
Chicago

[Noah Hall]

While I appreciate your concern for the Great Lakes and your effort to find another story behind the Great Lakes compact, your analysis is based on incorrect facts and is legally flawed. The Great Lakes compact does not turn Great Lakes water into a “product,” either explicitly or implicitly. The compact does recognize that water withdrawn from the Great Lakes and their tributary rivers, inland lakes, and groundwater is often used to create “products” (most items grown, manufactured, or otherwise created in the Great Lakes basin include water). However, the Compact’s definition of “product” (section 1.2) specifically states that “Water in its natural state such as in lakes, rivers, reservoirs, aquifers, or water basins is not a Product.” That’s as clear as can be – while one can use water to make a product, the Great Lakes themselves (and their tributary waterbodies) are explicitly not a product.

Some opponents have also argued that the so-called “bottled water loophole” turns the Great Lakes into a product or commodity. This is a misreading of the actual compact provision and a misunderstanding of trade law. The “bottled water loophole” has nothing to do with the definition of a “product” under the compact, but rather relates to the prohibition on diversions. Section 4.12.10 of the compact provides: “A proposal to Withdraw Water and to remove it from the Basin in any container greater than 5.7 gallons shall be treated under this Compact in the same manner as a Proposal for a Diversion. Each Party shall have the discretion, within its jurisdiction, to determine the treatment of Proposals to Withdraw Water and to remove it from the Basin in any container of 5.7 gallons or less.” Thus, under the Compact, states can either prohibit the transfer of water across the Great Lakes watershed divide in containers of 5.7 gallons (approximately 21 liters) or less, or allow it subject to the other Compact standards of water conservation, environmental protections, etc. Either way, this provision does nothing to turn the Great Lakes into a product or commodity.

I understand the frustrations of some Compact opponents that the Compact does not ban the export of bottled water. I personally have never bought a bottle of water and think that bottled water is wasteful and overpriced. But the unfortunate reality is that bottled water has been around for over a century (it was far more popular before chlorination made public water supplies safer to drink). Bottled water is specifically recognized under the international trade coding system as a product. Great Lakes water has been bottled and exported for sale for decades. If the Compact or any other law in the US or Canada were to ban the export of bottled water, it would almost certainly violate both NAFTA and GATT. So the Compact does the next best thing – it strictly regulates the withdrawal of water for bottling (or any other purpose) and bans the diversion of water in containers over 5.7 gallons.

This is a complex issue, but that does not justify simplistic and misleading arguments. For anyone interested in understanding this issue better, I would suggest reading a recent detailed and comprehensive (66 page) article in the Wayne Law Review, “State Water Resource Administration in the Free Trade Agreement Era: As Strong as Ever” (available at http://www.law.wayne.edu/organization/lawreview/doc/Slater_WL_PDF.pdf).

Thank you,
Professor Noah Hall
Wayne State University Law School (Detroit, Michigan)
Executive Director, Great Lakes Environmental Law Center
www.greatlakeslaw.org

[Jim Olson, Attorney for Michigan Citizens for Water Conservation]

Professor Hall does not go far enough in explaining how the definition of "product" in the Compact plays into the hands of those wanting to hammer Great Lakes water for export elsewhere.

The Compact bans large so-called bulk diversions, but Sec. 1.2 specifically defines "diversion" and excepts water "that is used in the Basin to produce a product that is then transferred out of the Basin." Based on the plain meaning of this exception, water in any size container labelled as a product would not be a divesion, and there is no limit as to quantity or amount or duration." On top of this, while Sec. 1.2 recognizes that water in its natural state is not a "product," it goes on to define water as including "something produced ... and intended for intermediate or end use consumers." That could mean water "produced" - that is removed from groundwater, streams, or the lakes - and intended for sale in a package or container. So if passed, the Compact would be telling the water barons of the world and their lawyers, you can "produce" water -- pump it for example -- and call it a "product" and it is no longer a diversion.

The Statement of Governments (Canada, Mexico, and United States) appended to NAFTA similarly declares that water in its natural state is not subject to international trade laws like NAFTA, but it does not end there. Coincidentally, or perhaps not so, it goes further, qualifying the statement, "... unless water, in any form,is ... produced." In other words, the langauge in the Compact defining and excepting aters "produced" as "product" for sale from the diversion ban appears to fit like a glove with arguments that will be used tp rev up water from the Great Lakes as a product for sale under international trade laws and NAFTA.

Professor Hall notes that the 5.7 gallon limit on the size of containers as "products" means that any container greater than that is treated by the Compact as a diversion. The problems with this simoplistic approach should be quite apparent. First, the 5.7 gallon (20 litres)limit proves the point that water in anythng larger that than is in fact a "product," which by the terms of the Comapact would be exempt from the diversion ban. Second, the 5.7 gallon limit is now a "regulation" of "product" not an outright definition that it is not a product at all. This is an important distinction, because once a "product," the burden and standard of justifying the regulation, in this case the 5.7 gallon limit, is far more difficult -- NAFTA and GATT demand a fairly heavy environmental or health and safety standard and proof. Third, it will be hard to prove that the environmental risks of removing 160 million gallons of water from the Basin a year from a water source will be any different if the containers are 5.7 gallons or 20 litres or 10,000 or even 100,000 gallons. The risks, if any, will be the same, and therefore would likely have to be treated the same -- i.e. a "product" exempt from the diversion ban. Fourth, once this occurs, the diversion ban itself could be undermined, since the next argument would be that the risks are no different if the water is in a 10 gallon or 100,000 gallon container labelled "product" or a 100,000 gallon truck, railroad car, or other shipping method.

Finally, the law review article by Mr. Slater, referenced by Professor Hall, concurs that the straight up meaning of the definition of "diversion" that excepts water "produced" and transfered as a product out of the Basin includes water in any size container, then cautions states to exercise their long recognized sovereign authority to prohibit this if that's what they determine is best for their citizens. In the instance of the Compact, the Great Lakes states and Congress will be doing just the opposite.

None if this is necessary. The Compact and the aproval by Congress can constitutionaly and easily conditioned on provisions that simply delete or do not consent to the "product" exception to the diversion ban where water is the product, and to recognize the public trust in the waters of the Basin to be managed by the states for the benefit of all citizens and not transferred and sold for purely private gain of the few.