BajaNomad
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Baja California governor accuses big US companies of water theft
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By WENDY FRY
JULY 4, 2020
BAJA CALIFORNIA — An independent audit of Baja California’s water agency alleges that former employees of the utility colluded with international
corporations to defraud the state out of at least $49.4 million, according to an auditor and the governor of the state.
Local and international corporations — including such well-known U.S. names as Coca-Cola, FedEx and Walmart — for years took water for use in
their Mexican factories, retail stores and distribution centers without fully paying for it, Baja California officials have alleged.
“These businesses have been systematically robbing the people,” said Baja California Governor Jaime Bonilla, who took office in November 2019.
That corruption contributed to chronic under-funding of the state water agency, known as the Comisión Estatal de Servicios Públicos de Tijuana or
CESPT, Bonilla said. To cover up the water theft, the auditor says, some companies also installed their own clandestine drainage systems to illegally
discharge contaminated water into Tijuana’s already strained storm drains and canal.
That water feeds into the Tijuana River, which flows through that Mexican city toward the San Diego coast. There it crosses the border into the United
States, polluting the southernmost communities in San Diego County.
More than 80 former employees of the water agency have been suspended or fired since the audit began, and nearly 450 companies are being investigated
in the ongoing independent audit conducted by FisaMex, a Mexico-based accounting firm.
In a written statement, Coca-Cola said its Baja California bottling plant obtains the water it uses in compliance with Mexico’s federal general
water law, and the factory makes “responsible use of the resource, improving our processes to be more efficient and reduce its consumption.”
Specifically, the Baja California plant said it processes 97 percent of its wastewater at its own wastewater treatment plant, and then returns it to
the environment in compliance with federal law. The remaining 3 percent is discharged into the sewer system for which the company says it has
discharge rights.
None of the other companies responded to questions from the San Diego Union-Tribune.
Some companies have responded to state investigators, saying they did not pay for water because they were not charged under the prior state
administration. Bonilla doesn’t accept that explanation, pointing to measures he says some companies have taken to avoid being billed for their true
water consumption, which were uncovered during the months-long audit.
Bonilla has vowed to make the companies pay what they owe, so he can “clean-up the canal and stop spreading contaminated water to the beaches of
Imperial Beach.”
“That has to stop,” he said.
According to Bonilla, the uncollected state funds could have been used to invest in maintenance and infrastructure to prevent at least some of the
Tijuana sewage spills that have fouled San Diego shorelines and strained international relations.
Tens of millions of gallons of raw sewage and toxic sludge spill every year into the Tijuana River on the Baja California side, and then drain into
Southern California’s lower ground, eventually emptying into the Pacific Ocean.
In 2019, more than 2.3 billion gallons of wastewater and polluted runoff crossed the line, contaminating U.S. properties, beaches and wildlife
habitats. The sewage has most impacted Imperial Beach, a small coastal city within the County of San Diego.
It’s a decades-old problem, recently featured on “60 Minutes.” The United States plans to invest $300 million in infrastructure to stop the
sewage from flowing across the border, according to the legislative act governing the United States-Mexico-Canada Agreement.
Imperial Beach Mayor Serge Dedina, a vocal critic of the cross-border sewage, said he was “shocked but not surprised” about the results of the
Baja California audit.
“We expected something like this was going on — but nothing at that scale,” said Dedina.
“It all makes sense now — why the situation deteriorated so quickly and why they never seemed to be able to fix anything. Some of the most
powerful, wealthy corporations in the world we now know contributed to our sewage crisis,” he added.
Bonilla said he plans to do his part by ensuring companies operating in Baja California pay for the water they use, so the utility can start investing
in maintenance to replace aging city pipes and upgrade Tijuana’s largest sewage treatment plant. Companies will be fined for illegal sewage
discharges, he said.
“These are multi-million dollar, transnational corporations that are listed on the stock exchange,” said Bonilla. “And, in Tijuana, they steal
water?”
Coca-Cola, FedEx, Walmart, Samsung and Hyundai are among the more than 400 companies whose water and sewage use has been audited.
Coca-Cola is accused of contracting with CESPT in 1992 to connect water to a parking lot located 150 meters from its bottling factory in Tijuana.
Manuel Garcia, the Fisamex auditor, said the company then illegally connected the water services from the parking lot to its property across the
street, where he says it employees hundreds of people.
Since 1992, Coca-Cola has only been paying the same minimum monthly bill of five units of water for its entire factory, Garcia said, about the same
amount of water used by one person living conservatively in a small home.
Garcia said the company owes the CESPT about $1.1 million in unpaid water fees for the past five years, the maximum time frame the agency is allowed
to collect.
When he visited Coca-Cola’s property, Garcia said he discovered three hidden drainage pipes — two that were eight inches in diameter and one that
was 12 inches. The professionally installed drainage pipes were never authorized by CESPT, he said, but they eventually connect to the Tijuana canal,
which funnels sewage water toward the U.S. border.
Coca-Cola released a statement in response to the allegations at Corporacion del Fuerte, the system’s bottler in Tijuana:
“For more than 30 years operating in Baja California, hand in hand with Corporacion del Fuerte, we have been characterized by complying with the
laws and obligations applicable to our processes, the satisfaction of our customers and consumers, and by supporting the community,” the statement
read in part. “We reiterate our commitment and willingness to continue collaborating with the authorities in favor of the development of the
area.”
For one of Hyundai’s large auto-assembly factories along the border, auditors could not locate any water or sewer account on file with the Baja
California water agency. Since 2012, the company has not paid the state for a single drop of water, state investigators said.
“How is it a company like Hyundai, a transnational company, listed on the stock exchange, its profits being reviewed by its shareholders … How is
it they come settle in Mexico without ever paying a water bill?” asked Bonilla.
“Nothing is installed. There’s no meter, so they have volumes of water coming in, enjoying the free drainage and there’s absolutely no record of
them at all at the water agency. Let’s see. It means, to do all that, they had to have been cooperating with the CESPT,” he said. Garcia said
Hyundai owed $489,104 in unpaid water fees to the CESPT for the past five years.
Bonilla said the director of a well-known hotel in Tijuana recently asked to meet with the governor to complain about the “injustice of the
CESPT.” The hotelier explained he had already paid CESPT employees directly in April about a quarter of his bill to make his entire outstanding
balance disappear, Bonilla said.
A forensic analysis of the account showed the hotel’s approximately $178,000 debt had been deleted from the agency computers without any record of
the payment to the CESPT employees, according to Bonilla and the auditor.
The secretary of Baja California’s public integrity unit, Vicenta Espinoza Martínez, agreed it would have been difficult for no one at the CESPT to
notice the discrepancies.
“It caught our attention when reviewing the budgets,” said Espinoza Martínez. “When reviewing the accounts of large water consumers we saw we
were actually spending more than we were bringing in — more than our income was ... and some accounts were being charged for very minimum
consumption despite being very large companies ... to the point where it was illogical.”
The new governor has vowed to collect what is owed or to cut off water to big companies, including Grupo Aeroportuario del Pacífico, the Mexican
company that runs the Tijuana International Airport.
In June, state officials cut off water at the airport, causing employees and passengers to complain about the smell of urine and concerns over the
spread of coronavirus. Last Monday, CESTP officials turned the water back on after the company paid $1.5 million in back payments for water. Baja
California state law says the company can only be charged for five years worth of discrepancies in unpaid water bills.
Grupo Aeroportuario del Pacífico’s CEO Raúl Revuelta Musalem said in a statement on June 29 the company is “committed to the economic and social
development of Mexico” and working with Baja California officials to building a “spirit of conciliation to jointly face adverse circumstances
facing the country.”
Bonilla, a former Otay Water District director, is a member of the ruling MORENA political party, a new leftist party founded by Mexico’s current
president. In 2019, MORENA defeated the National Action Party or PAN, the political party that had nearly exclusively governed Baja California for 30
years between 1989 and 2019.
“I’m from Tijuana. I’m from Baja California, and it hurts me a lot that these businesses come here and make a lot of money off the sweat of Baja
Californians, but they don’t comply — at a minimum — with their basic obligations,” Bonilla said.
He said he was equally upset with the water agency.
“They cut off the water very rapidly for the woman who lives on the corner who owes 1,800 pesos ($79.37), but not for the giant corporation that
hasn’t paid for water for 7 years ... " said Bonilla.
Victor Manuel Vegas, 45, lives on the property adjacent to the illegal drainage ditch used by the airport in the Lomas Taurinas neighborhood. He’s
been complaining about the smell since 1993.
“When it is hot, it smells so bad; it’s unbearable. My kids can’t even live here with me because we’re worried about the contamination,”
Vegas said. He’s seen chemicals, gasoline, oil and other hazardous material flowing through the creek.
“My family is afraid to live here with me because of their illegal actions,” he said.
--
https://www.sandiegouniontribune.com/news/border-baja-califo...
When I was young, I admired clever people. Now that I am old, I admire kind people.
– Rabbi Abraham Joshua Heschel
We know we must go back if we live, and we don`t know why.
– John Steinbeck, Log from the Sea of Cortez
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BajaTed
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Water never paid for by corporations in TJ
So typical and expected.
Now what???
https://www.sandiegouniontribune.com/news/border-baja-califo...
Es Todo Bueno
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bajaguy
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Forced closures
How long do you think it would take for Coca Cola to pay their debt if the plant was locked down by the government and everybody was sent home??? Quit
playing games with these corporations and get serious
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BajaNomad
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Threads Merged
7-6-2020 at 02:53 PM |
AKgringo
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Coca Cola was developed in the US, but I doubt that the Tijuana plant is owned by the US corporation. When I was a teen ager, one of my best friends
was from the state of Colima, where his family owned the the Coca Cola plant.
If you are not living on the edge, you are taking up too much space!
"Could do better if he tried!" Report card comments from most of my grade school teachers. Sadly, still true!
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MrBillM
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Ownership ?
One might assume that the plant would not be owned by the parent corporation given that the U.S. domestic bottlers in any given territory are
generally (or completely ?) not.
Years ago, one of my paternal grandfather's sisters owned (as a result of marriage) the Coca-Cola Bottling plant in Chandler, AZ.
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SFandH
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Yeah, that's true, bottlers are independent businesses but they gotta be paying a hefty, continuous fee, probably a percentage, to Coca Cola HQ in
Atlanta for the secret formula and brand name. Formula? In Mexico, it's glucose, not fructose, right? Any way you look at it though, it's flavored,
colored, sugar water.
[Edited on 7-7-2020 by SFandH]
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BajaNomad
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--
Coca-Cola FEMSA, S.A.B. de C.V., known as Coca-Cola FEMSA or KOF, is a Mexican multinational beverage company headquartered in Mexico City, Mexico. It
is a subsidiary of FEMSA which owns 48% of its stock, with 28% held by wholly owned subsidiaries of The Coca-Cola Company and the remaining 24% listed
publicly on the Mexican Stock Exchange (since 1993) and the New York Stock Exchange (since 1998). The largest franchise Coca-Cola bottler in the
world, the company has operations in Latin America, although its largest and most profitable market is in Mexico
--
https://en.wikipedia.org/wiki/Coca-Cola_FEMSA
https://seekingalpha.com/symbol/KOF
When I was young, I admired clever people. Now that I am old, I admire kind people.
– Rabbi Abraham Joshua Heschel
We know we must go back if we live, and we don`t know why.
– John Steinbeck, Log from the Sea of Cortez
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BajaTed
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I have owned Coca Cola & R.J. Reynolds dividend shares for a long time.
Checks come like clock work by investing in the inherent bad habits of others.
Easiest, most reliable play in the NYSE there is.....
C. Darwin is my hero
Es Todo Bueno
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MrBillM
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It might be a Bad Habit, BUT ..................
Iced cold on a hot day, a Coke sure tastes good and does no harm.
That said, I prefer Pepsi ! Usually Diet, but now and then the Real Thing.
Of all the things that one should worry about, Soda Pop should be WAY down the list.
Maybe, not even on that list.
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motoged
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Quote: Originally posted by MrBillM  | Iced cold on a hot day, a Coke sure tastes good and does no harm.
That said, I prefer Pepsi ! Usually Diet, but now and then the Real Thing.
Of all the things that one should worry about, Soda Pop should be WAY down the list.
Maybe, not even on that list. |
Take a minute a google health risks of coca cola.
Don't believe everything you think....
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freediverbrian
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The issue of toxic waste IS a big deal to residents of the near by coastal cities. But what about the raw sewage coming down the Rio ? That falls back
into the lap of TJ officials it looks to me as they say look over there not here it's not our problem. Mean while the US is investigating millons to
treat TJ sewage.
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MrBillM
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Health Risks ?
Shirley, you jest.
Life is a health risk.
Leading to death.
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