Christine LaCouvee

Shifa Rehman
Chelsea McCulley
Colin Soo
Jimwen Zhang

Badm 460 Case Research & Presentation
Water Exploitation Executive Summary

Introduction:
The main issue in our research case is the exploitation and overexploitation of water through
the bottling and sale of water at high prices in underdeveloped areas and all over the world.
The World Health Organization estimates that every person needs 50 to 100 litres of fresh
water per day to ensure that our most basic daily needs are met and few health concerns
arise, but in 2013, around 768 million people remained without access to clean water source.
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Main areas covered:
The three main areas for water exploitation are privatization, heavy industry, and bottled
water. The privatization of water is the transferring of control of water fromthe public sector
to the private sector. Some reasons not to privatize are rate increases, undermines water
quality, companies are accountable to shareholders and not consumers, it fosters corruption,
reduces local control and public rights, private financing costs more than public financing,
leads to job losses, difficult to reverse, can leave the poor with no access to clean water, and it
opens the door for bulk water exports.

The heavy industry includes agriculture and mining (fracking). Farming accounts for around
70% of water used in the world today. 47%of the worlds population could be living under
severe water stress by 2050, according to OECD projections - an increase from 44%in 2005.
Increased pressure from urbanization, industrialization, and climate change will provide
agriculture with more competition for water resources. Climate change could affect water
supply and agriculture through changes in the seasonal timing of rainfall and snowpack melt,
as well as higher incidence and severity of floods and droughts. Fracking is short for hydraulic
fracturing, it is a water-intensive process including millions of gallons of fluid. A mixture of
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Nestle. Nestle in Society: Creating Shared Value and Meeting Our Commitments 2013. (2013). Retrvied from
http://storage.nestle.com/Interactive_CSV_Full_2013/index.html#1/z
water, sand, and chemicals including ones known to cause cancer is used, and this releases
extra oil and gas from the rock so it can flow into the well, even impacts tap water.

The main effects of water exploitation for bottled water by Nestle are poverty, corruption,
and environmental issues. In developing countries, Nestle uses aggressive water grabs,
draining wells dry and forcing the local to buy their water back at a price. In Nigeria, a bottle
of water is more expensive than the daily average income, so people are confronted with
becoming ill fromdrinking bad water but unable to afford Nestles inflated prices . The CEO of
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Nestle declared that access to water should not be a public right. They basically get water
for free, sell it at a huge profit, and communities get nothing in return. Nestles contract
negotiations and profit margins are very unfair. For every 100,000 gallons of water, they pay
only 8.7 cents. In rural communities where Nestle operates, there is increased traffic, wells,
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rivers, lakes, and eco-systems are drained dry, and in result, affecting the environment, and
the wildlife.

Water exploitation affects everyone on this planet because we simply cannot survive without
it. More specifically, people in developing countries are more severely impacted by this issue.
When companies set up their factories in the middle of a poverty-stricken country, charging
locals over a days salary for a bottle of water, there is a definite problemwith their business.
It is a crime to deprive people of a natural resource, and the same time make them pay an
extreme amount for it.

Course content:
To be corporately sustainable, Nestle has a Creating Shared Value Program to monitor and
measure its contribution towards creating value for its shareholders and the society.
Breaking it down, the program is focused on 5 principles: Consumer, human rights and labour,
our people, suppliers and customers, and the environment. However, the company have been
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in many controversial contracts. In Fryeburg USA, Nestle had a relationship with former
2
OldBushelBritches.NestleDrainingWorldsWaterResources.November12,2013.Retrievedfrom
http://oldbushelbritches.wordpress.com/2013/11/12/nestledrainingworldswaterresources/
3
TheOrganicPrepper.NestlesWetDream:TheyMarkUpWater53MillionPercent.June5,2013.
Retrievedfrom:
http://www.theorganicprepper.ca/nestleswetdreamtheymarkupwater53millionpercent06052013
4
Nestle.OurCorporateBusinessPrinciples.Retrievedfrom:
http://www.nestle.com/csv/whatiscsv/businessprinciples
planning board chairman Gene Bergoffen and the town as they had operated in Fryeburg for
the past 16 years. However, Nestle had recently reached an agreement with the Fryeburg
water company to pump water from their spring that would last for 45 years . This led to a
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huge petition in the community of people against the agreement with over 150,000 signatures
on change.org. Other contracts they have entered involved pumping water sources dry in
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countries in poverty such as Pakistan to the point where they cant drink their on water unless
its from dirty wells or if they buy from Nestle.
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Nestle operates in the legal responsibility pyramid of Carrolls pyramid of social
responsibility. These contracts are legal but they are not in best interest of the communities
they operate in. They are an organization with decision makers that have an amoral model
towards ethic leadership. Nestle does try and fosters good corporate citizenship but they are
unintentionally unaware of the impacts some of the decisions they make on the society and the
environment. Nestles stakeholders include the media, consumers, communities, activists, the
general public, NGOs, the government, industry associations, suppliers, distributors,
competitors, employees, customers, and their shareholders.

Recommendations:
The world is in short supply of clean drinkable water . Nestle, as global leader in bottle
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distribution needs to take on the responsibility on making a positive impact and improving
their corporate social responsibility. Nestle needs to address their water exploitation efforts
as well as finding alternatives that are beneficial to the society and the environment. Our
recommendations include: a seawater desalination program, price subsidies, water
purification in developing countries, government and association regulations, codes of ethics
and corporate social responsibility audit programs.
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TheConwayDailySun.FryeburgWaterCompanySeeksLongtermAgreementWithNestleForWater
Extraction.August23,2012.Retrievedfrom
http://www.conwaydailysun.com/index.php/newsx/localnews/92166water082412
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Change.org.PolandSpringandNestle:ItsOurWater!StopBullyingMyCommunity!June2013.Retrieved
from:http://www.change.org/petitions/polandspringandnestleitsourwaterstopbullyingmycommunity
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WorldCrunch.PoisoningTheWell?NestleAccusedofExploitingWaterSuppliesForBottledBrands.
January2012.Retrievedfrom
http://www.worldcrunch.com/poisoningwellnestlaccusedexploitingwatersuppliesbottledbrands/business
finance/poisoningthewellnestlaccusedofexploitingwatersuppliesforbottledbrands/c2s4503/#.U5VI3pS
wKzB
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Water.org.MillionsLackSafeWater.2012.Retrievedfromhttp://water.org/watercrisis/waterfacts/water/