Nestle: California Water Drought (2015)

Nestle logo

Controversy

California is in its fourth year of one of the worst droughts in its history. A little more than half the state has gotten to an "exceptional drought" according to the United States drought monitor. Even with this going on Nestle Waters has continued pumping water from the state. The residents have all had to cut down their water use by 25%, while companies like Nestle Waters have not had to do the same. To make matters worse Nestle Water's contract with the US Forest Service is 27 years past due for a renewal. Yet the US Forest Service has given them the okay to continue pumping water from the drought ridden state. Nestle owns 32% of the US bottled water market, so it is within their power to take water from somewhere other than California.

Stakeholders

The stakeholders here are the CEO Paul Bulcke, Tim Brown CEO of Nestle Waters, the shareholders of Nestle and Nestle Waters, the employees, the customers, government of California and the local residents of California. The key decision makers in this situation are the CEO's of Nestle and Nestle Waters, the Government of California and The US Forest Service. Both CEO's can control the decisions of Nestle and the government of California and the US Forest Service are the ones who are allowing them to continue to use the same amount of the water. The consumer is affected because they have to pay more for water that they would have otherwise been able to get from their own tap, at least the 25% they have been told not to use. The residents are affected because other areas are affected by the drought; the fish supply the farms exc. The shareholders are also affected, if Nestle decided to not use the water they would lose money; or if they continue and are poorly affected by the negative media attention and lose customers they could also lose money.

Paul Bulcke, CEO of Nestle

Individualism
Individualism equates to Egoism (selfishness) plus rights-based constraints. Nestle is acting selfishly by not putting the needs of the community before their own in a moment of crisis. They have made sure that the shareholders will continue to make a profit (as long as bad publicity doesn't hurt sales) and they have made sure that the owner of Nestle Paul Bulcke continues to make a profit from this section of their company. The residents may suffer but according to the Individualism, the residents of California are beyond the scope of Nestle's responsibility. Therefore someone who thinks like an individualist would see what Nestle is doing as ethical and okay.

Utilitarianism

Utilitarianism's primary values believe that the happiness of all conscious beings is extremely important; this is understood as pleasure and absence of pain. The happiness they seek for all conscious beings is also seen as satisfaction of desires. This ideology cares about all stakeholders, from the owner to the worker to the customer. This theory would look at Nestle as unethical, because in the long run they are slowly but surely hurting the natural water supply of California as it is in its delicate state. The residents of the area are not happy about this. This is an emergency situation and instead of Nestle helping they are only focused on continuing to make a profit. Paul Bulcke the CEO of Nestle even wants to make bottled water more expensive. Someone with the Utilitarian mindset would tell them that they should be treating this situation seriously and they should move their water plants out of California as quickly as possible.

Tim Brown, CEO of Nestle Waters

Kantianism

Kantianisms' primary values put an emphasis on the company making rational decisions, allowing all individuals to the right or condition of self-government, honesty and freedom. They believe that rational and informed consent from all parties involved is a must in all decisions and actions. Kantian's' would look at Nestle as unethical; while the company is trying to do the best for themselves they are forcing the residents of California to be more dependent on water bottles that hold their natural resource. This is not Rational, a rational company would understand that water is needed for survival and therefore should not be tempered with while the state is in a drought. They would also understand that it is the residents of the state that have a right to this water and to the safety of their environment.

Nestle USA headquarters
 in Glendale, CA

Virtue Theory

The Virtue Theory's primary values states that the business should have character traits that "promote wellness or thriving of individuals within the society (case Manual, Salazar 17)". The Virtue Theory would see Nestle Waters as being unethical; because they hurting the well-being of the residents. The Virtue Theory says that you should not be dishonest and Nestle has been dishonest with clients in the past about the risks that come with them putting in their water plants. Risks such as pollution, possible drain of most of their water flow and the overwhelming traffic that would come from the plants placement. Nestle is overall not acting as a Virtuous company to be virtuous they would need to show high moral standards. They have only shown that they care more about the profit then the well being of the environment and it's residents.

Justified Ethics Evaluation
Whose rights matter more, the residents or the corporation? The residents matter the most, they are the ones who live there. Nestle Waters own 32% of the bottled water market and have more states that California to take water from. The residents however only have their state to take from. Nestle may say that they aren't taking enough water to make a difference but it the case of a record breaking drought every drop of water makes a difference. Nestle has drained natural resources dry before and I do not think California should have to deal with their unethical ways while in a drought.

Conclusion 
Nestle Waters is a company that says it values the environment. They put it out there that they are trying to reduce their carbon foot print and be a more efficient company. It is time they put this thinking to use in California with their water plants as well. The US Forest Service also needs to do their part here. Their permit with Nestle Waters that has gone 27 years without renewal needs to be dealt with, they themselves could force Nestle out of California because of the drought. Once Nestle and the US Forest Service put their greed and lack of empathy behind them they will be able to move forward in a direction that could help California in it's time of need.


References

Conlin, M. (2008, May 15). A Town Torn Apart by Nestle? Retrieved November 24, 2015, from http://www.bloomberg.com/bw/stories/2008-04-15/a-town-torn-apart-by-nestle

DesJardins, J. (2009). Why study ethics. In An introduction to business ethics (5th ed., pp. 1-84). New York, NY, New York: McGraw-Hill Higher Education.

Katie, L. (2015, May 26). Drought turns Californians against water bottling companies. Retrieved October 14, 2015. http://money.cnn.com/2015/05/26/news/companies/california-bottled-water-drought/

Mohan, G. (2015, October 13). Nestle drawing millions of gallons of California water on expired permit, suit claims. Retrieved November 24, 2015, from http://www.latimes.com/business/la-fi-nestle-water-lawsuit-20151013-story.html

Nestlé and the California drought: Your questions answered. (2015, September 10). Retrieved October 14, 2015. http://www.nestle.com/ask-nestle/environment/answers/is-nestle-contributing-to-water-scarcity-in-california

Peck, E. (2015, October 14). Lawsuit Seeks To Stop Nestlé From Sucking Water Out Of Drought-Plagued California. Retrieved November 24, 2015, from http://www.huffingtonpost.com/entry/lawsuit-nestle-water-california_561ea2a1e4b050c6c4a3e900

The Healthy Hydration Company. (2014, February 13). Retrieved November 24, 2015, from http://www.nestle-waters.com/