Tag Archives: Bloomberg Businessweek

Nestlé Is Sucking the World’s Aquifers Dry

At Bloomberg Businesweek, Caroline Winter visits Nestlé’s bottling plant in Mecosta County, Michigan to analyze how the multinational corporations targets small communities with promises of jobs, and buys up public land to gain control of water resources. Nestle sold $7.7 billion dollars worth of bottled water last year, making it the world’s largest bottled water company. It made that money partly by paying a pittance for its product. Nestlé pays the U.S. Forest Service only $524 a year to draw 30 million gallons of public water in San Bernardino, California, and Nestlé pays the city of Evart, Michigan just $250,000 a year for its water. Consumers drink bottled water because they assume it’s safer than tap, but that makes us complicit in what many analysts and activists warn is the gradual privatization of water. These multinational corporations don’t have the public’s best interests in mind, activists warn. If anybody should own water, it’s the public.

Nestlé has been preparing for shortages for decades. The company’s former chief executive officer, Helmut Maucher, said in a 1994 interview with the New York Times: “Springs are like petroleum. You can always build a chocolate factory. But springs you have or you don’t have.” His successor, Peter Brabeck-Letmathe, who retired recently after 21 years in charge, drew criticism for encouraging the commodification of water in a 2005 documentary, saying: “One perspective held by various NGOs—which I would call extreme—is that water should be declared a human right. … The other view is that water is a grocery product. And just as every other product, it should have a market value.” Public outrage ensued. Brabeck-Letmathe says his comments were taken out of context and that water is a human right. He later proposed that people should have free access to 30 liters per day, paying only for additional use.

Compared with the water needs of agriculture and energy production, the bottled water business is barely responsible for a trickle; in Michigan, it accounts for less than 1 percent of total water usage, according to Michigan’s Department of Environmental Quality (DEQ). But it rankles many because the natural resource gets hauled out of local watersheds for private profit, not used in the service of feeding people or keeping their lights on. There’s also, of course, the issue of plastic pollution.

In the U.S., Nestlé tends to set up shop in areas with weak water regulations or lobbies to enfeeble laws. States such as Maine and Texas operate under a remarkably lax rule from the 1800s called “absolute capture,” which lets landowners take all the groundwater they want. Michigan, New York, and other states have stricter laws, allowing “reasonable use,” which means property owners can extract water as long as it doesn’t unreasonably affect other wells or the aquifer system. Laws vary even within states. New Hampshire is a reasonable-use state, but in 2006, the municipality of Barnstead became the first nationwide to ban the pumping of its water for sale elsewhere.

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The Top 5 Longreads of the Week

This week, we’re sharing stories from Bee Wilson, Seyward Darby, Wil S. Hylton, Greg Milner, and Annie Dillard.

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New York City’s Final Frontier: Underground

Doing construction in New York City is dangerous and expensive. Cut the pavement in the wrong place and crews can rupture gas lines. Hit a water main, short a backup generator. These sorts of mistakes cost the city $300 million each year. Worse yet are natural disasters like Hurricane Sandy — where floods caused a three-day blackout and left two hospitals without power — and threats like buried chemical tanks and national security issues. In Bloomberg Businessweek, Greg Milner follows the people who are creating the city’s first three-dimensional subsurface infrastructure map to create a safer city that can self-regulate and grow more efficiently, and where agencies and private utilities can coordinate. In a very real sense they are pioneers, of a frontier that lays below our feet. Detailing pipes, cables, sewers, wires and electric lines, even soil types, the map will be the first of its kind, and if it works, it could make New York a model for the world’s future smart cities.

Because of data from satellites, we can now map the world down to about 6 inches. We’ve almost reached the point Jorge Luis Borges describes in his short story “On Exactitude in Science,” in which cartographers built “a Map of the Empire whose size was that of the Empire, and which coincided point for point with it.” But the world beneath our feet remains shrouded in darkness. “Light and radio waves don’t go through dirt like they do air,” says George Percivall, chief technical officer for the Open Geospatial Consortium, which is helping to develop global standards for underground mapping. “The next frontier, in both a literal and figurative sense, is underground.”

New York City’s daunting infrastructural labyrinth is like the “Here be dragons” decorating ancient maps. Underneath the 6,000 miles of asphalt and concrete road lie thousands of miles of water, sewer, gas, telecommunications, and electrical infrastructure. And let’s not forget the 500 miles of underground subway tracks or Con Edison’s 100-mile steam delivery system. In its entirety, it’s known to no one. The individual details of the vast underground are hoarded and guarded by the various stakeholders. Con Edison has its electrical map; the Department of Environmental Protection (DEP) keeps track of water and sewer pipes; the Metropolitan Transportation Authority (MTA) could tell you where the transit tunnels are; and so on.

Imagine the city as a living organism, a body consisting of various systems—respiratory, nervous, skeletal—that share the same space and even intertwine. Now imagine surgery performed on that body by a surgeon who knows the location of only one system, who looks at the body and sees only blood vessels or bones. This is the odd condition of New York—a body subject to what, viewed through a wide lens, looks like perpetual triage. Each year, for repairs or to facilitate construction, the streets are sliced open 200,000 times—an average of almost 550 cuts per day, or 30 per street mile every year.

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“Beef and cheese are the most important ingredients… But really, cheese.”

The U.S.’s reputation in the world might be in a state of… flux, let’s say. But there’s one thing we can still boast about: the 1.3 billion pounds of surplus cheese we have in cold storage. In Bloomberg Businessweek, Clint Rainey introduces us to government-sponsored Dairy Management Inc., which is charged with packing as much dairy into food as is possible, sometimes by embedding food scientists like Lisa McClintock into companies like Pizza Hut and Taco Bell to help engineer maximum cheese delivery. You can thank them for Pizza Hut’s cheese-stuffed crust and for Taco Bell’s latest hit, the Quesalupa.

“If you tried using something like cheddar, you’d get too much oiling off,” McClintock says. “It’s a fattier cheese—it’s not going to hold up well in terms of cheese pull.” She also quickly nixed mozzarella. “Great stretch, but you expect something bold from Taco Bell,” she says. “Pepper jack gave us the extra kick from the jalapeños.” Crucially, it’s also a high-moisture cheese, which means fewer casein connections and therefore a more reliable melt. She toyed with the idea of inserting a cheese “puck” into the tortilla pocket to see if that melted more uniformly, but grated cheese proved the most even. McClintock and Gomez recall intense competitions in the lab where they’d fry up a bunch of Quesalupas and tear them apart to see who could get the longest cheese pull. Winners sometimes stretched theirs a full arm span.

(More exciting advances in cheese science are on the horizon, as Taco Bell’s R&D department is hard at work on Quesalupa 2.0 which, rumor has is, will come in “Volcano and Bacon Club” flavors. If you’re wondering where the Doritos Quesalupa Crunch is, don’t worry: they started testing it this spring.)

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The Top 5 Longreads of the Week

This week we’re sharing stories by Jason Fagone, Betty Ann Adam, Christian H. Cooper, Clarissa Wei, and Robert Kolker.

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“It’s like, how much more black could this be? And the answer is none. None more black.”

At Bloomberg Businessweek, Robert Kolker walks us through the confusing, byzantine, and downright shady world of Hollywood profits and payouts, as part of an exploration of the $400 billion lawsuit brought by the creators of the ancestor of all mockumentaries, This Is Spinal Tap. The lawsuit details are interesting enough (according to the film’s current owner Vivendi, the creative partners’ share of worldwide merchandising over a 32 year period was… $81), but Spinal Tap fans will also love the insider tidbits about the creation of the film, which started with a 20-minute demo version.

“I was amazed when I last looked at it,” says Shearer, who plays Derek Smalls, the band’s bare-chested, mutton-chopped, pipe-smoking bassist. “We had this little pittance”—a $60,000 screenplay fee from a company that eventually rejected the idea—“to shoot characters and performances.” He remembers his long black wig costing about $5, and that it took an hour and a half to remove once the shoot was over (the costumer had used super glue). Shearer, Reiner (who plays Marty DiBergi, the fake documentarian), Guest (as lead guitarist Nigel Tufnel), and McKean (as vocalist David St. Hubbins) had been nursing and developing the idea since 1978. They first performed as the band in a 1979 variety show called The T.V. Show. Then they wrote seven new songs, played a few gigs in costume in Los Angeles, and worked out a complete band history to ensure that their improvisations had a narrative spine they all could rely on. “Michael McKean, I believe, still has the napkin on which the possible names and the possible misspellings were outlined,” Shearer recalls, “because I think at one point we thought maybe S-p-y-n-a-l?”

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When Innovation Fails: Doing Hard Time in the Offender-Monitoring Business

In Bloomberg Businessweek, Lauren Etter explores another problem with the privatization of law enforcement: technology. From scrambled signals and dead batteries to false violations, the electronic ankle bracelets 3M created failed to protect wearers’ civil liberties even though the process used to design them reflected the company’s way of thinking about innovation and experimentation. Unfortunately, creating monitors for human beings involves higher stakes than yellow stickies.

The sheer amount of data generated by GPS-tracking devices creates problems across the industry and in every state, but the number of alerts in Massachusetts has far exceeded the norm, experts say. Documents reviewed by Bloomberg show that in the 12 months ended in October 2015, 3M bracelets produced 612,492 violation alerts in Massachusetts—more than 50,000 per month, from about 2,800 individuals wearing the devices. Almost 40 percent of the alerts were due to a device not being able to connect to the network or the GPS not being detected. Roughly 1 percent of alerts resulted in an arrest warrant being issued. Tom Pasquarello, former director of the electronic monitoring program for Massachusetts, estimates that half those warrants were potentially based on faulty or incomplete data. That would be roughly 3,000 warrants. “There were people that were pulled from their house in the middle of the night, that lost their kids, people that lost their job,” he says.

The problem of glitchy ankle monitors became so pronounced that the Massachusetts probation department set up an after-hours office in the lobby of a Boston police station so offenders could bring in their bracelets when problems occurred or batteries died. In August 2015, Massachusetts Superior Court Judge Heidi Brieger became so frustrated with the devices that she vowed to stop sentencing anybody to them. “It is simply administratively improper to run a system in this fashion,” she said, according to a court transcript. “We don’t lose liberty in this country because somebody’s software is not working. It just isn’t right.”

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The Top 5 Longreads of the Week

This week, we’re sharing stories from Peter Waldman, Garrett M. Graff, Rachel Aviv, Catrin Einhorn, Jodi Kantor, andd Eric Boodman.

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Pivoting Away from Lung Cancer

Felix Gillette, Jennifer Kaplan, and Sam Chambers report in Bloomberg Businessweek on Big Tobacco’s adaptation of the Silicon Valley playbook: sleek design, disruption, open-floor plan “innovation zones” with Eero Saarinen chairs, you name it. Welcome to the world of alternative nicotine platforms.

In between heatsticks, you holster the cyberpipe in a mobile charger, a smooth, palm-size contraption that calls to mind a cigarette pack mated with a smartphone and designed by Apple’s Jony Ive. “I was a smoker before,” Calantzopoulos said as he handled a charger. “I switched to this completely, and I cannot smoke cigarettes anymore.” Somewhere in flavor country the Marlboro Man is turning over in his grave.

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He Learned it All on Google and YouTube: How to Become a Gold Smuggler

Before getting nabbed by the Policía de Investigaciones — the Chilean equivalent of the FBI — 23-year-old Harold Vilches acquired and resold over 4,000 lbs. of gold worth $80 million in under two years. It all started with a Google search for gold dealers in Peru and YouTube videos on how to make your own gold ingots. Read the story at Bloomberg Businessweek by Michael Smith and Jonathan Franklin.

As the minutes ticked by on the afternoon of April 28, 2015, Harold Vilches watched stoically while customs officers at Santiago’s international airport scrutinized his carry-on. Inside the roller bag was 44 pounds of solid gold, worth almost $800,000, and all the baby-faced, 21-year-old college student wanted was clearance to get on a red-eye to Miami.

Vilches didn’t need this headache. In just two years he had rapidly risen in the ranks of Latin American gold smugglers. Although he was barely old enough to order a beer in Miami, he’d won a $101 million contract to supply a gold dealer in Dubai. That hadn’t exactly worked out—the Dubai company was after him for $5.2 million it says he misappropriated—but still, in a brief career he’d acquired and then resold more than 4,000 lb. of gold, according to Chilean prosecutors. U.S. investigators and Chilean prosecutors suspect almost all of it was contraband.

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