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Water Scarcity and Its Impact on Water Rights: A Real Concern for Multinational Companies?

August 2003

Citation: ELR 10617

Author: Vail T. Thorne

Water is vital to most things in life. Business operations are no exception to this rule. Companies across all industrial sectors, from consumer products to energy production to agriculture to high technology, use large quantities of water every day for production and other processes, as an ingredient or raw material, and for other purposes. In fact, without access to sufficient quantities of water, most industrial or commercial concerns could not operate and would have to close up shop. Therefore, business leaders and their attorneys should understand existing and potential risks to their water supply, evaluate those risks relative to a company's specific operations and future plans, and take action to mitigate the risks, or, if possible, to ensure that they never materialize.

Today, such risks are looming on the horizon due to the emerging issue of water scarcity. This Article: (1) examines those risks; (2) provides an overview of legal regimes around the world governing access to and use of water; (3) highlights how a company's water rights may be impacted by water scarcity concerns even under current law, or by future changes in the law; and (4) finally discusses practical measures that a company should take to prepare and protect itself.

"When the well is dry, we [will] learn the worth of water."

—Ben Franklin, a U.S. Founding Father n1

1. See GLOBAL ENVIRONMENTAL MANAGEMENT INITIATIVE (GEMI), CONNECTING THE DROPS TOWARD CREATIVE WATER STRATEGIES — A WATER SUSTAINABILITY TOOL i (Preface) (2002) [hereinafter GEMI WATER SUSTAINABILITY TOOL(BRACKET), where the author obtained this quote from Ben Franklin. The quote appears in the 1746 version of POOR RICHARD'S ALMANAC.

Vail Thorne is Chief Environmental, Health, and Safety (EHS) Counsel at the Coca-Cola Company. Prior to joining the company, Mr. Thorne was with the law firm of King & Spalding in the Washington, D.C., office where his practice focused on EHS matters. Prior to that, he served on the staff of Sen. John W. Warner (R-Va.), U.S. Senate, Washington, D.C., and as a law clerk to the Hon. Jesse W. Curtis, U.S. District Court, Los Angeles, California. Mr. Thorne received his J.D. degree from Pepperdine University School of Law where he served on the law review staff and as lead articles editor. He received his B.A. degree from Washington & Lee University.