Great Lakes – St. Lawrence River Basin Water Resources Compact

October 2008

In September 2008, Congress gave its final approval to the Great Lakes – St. Lawrence River Basin Water Resources Compact (commonly referred to as Annex 2001), and on October 3, 2008, President George W. Bush signed it into law. Annex 2001 is a negotiated interstate Compact between the eight Great Lakes states and the Canadian provinces of Ontario and Quebec in which all 10 jurisdictions agree to work together to maintain the Great Lakes Basin sustainable water resources, while also making those resources available as an economic engine for growth in the region. The Compact is relatively unique among the 42 interstate water resource compacts approved by Congress in that it does not cede jurisdiction over water resources to the federal government. But because of its parochial framework, the Compact requires each Great Lakes state to amend its water resources law to implement Annex 2001. In short, Annex 2001 provides a framework for each Great Lakes state and the two Canadian provinces to enact laws protecting sustainable water resources within the Great Lakes Basin. It bans most new diversions of water from the Basin, requires a consistent standard throughout the Great Lakes Basin to review proposed uses of its water, and requires development of regional, state and province goals and objectives for water conservation and efficiency. Provisions within the Compact include definitions for consumptive use, diversion and product, as well as a provision on “bulk water removal.” These provisions were directly influenced by past controversy surrounding bottled water withdrawals in Michigan, Ontario and Wisconsin, and represents compromises made by stakeholders as they negotiated the final documents. The definition of product in the Compact reads as follows:

“Product means something produced in the Basin by human or mechanical effort or through agricultural processes and used in manufacturing, commercial or other processes or intended for immediate or end use consumers. (i) Water used as packaging of a product shall be considered as part of the product. (ii) Other than water used as packaging of a product, water that is used primarily to transport materials in and out of the Basin is not a product or part of a product. (iii) Except as provided in (i) above, water which is transferred as part of a public or private water supply is not a product or part of a product. (iv) Water in its natural state such as lakes, rivers, reservoirs, aquifers or basins is not a product.”


This definition is particularly important because products are specifically excluded from the definition of diversions, which are banned with few exceptions under the Compact. The “bulk water transfer” provision in the final Compact reads as follows:

“A proposal to withdraw water and to remove it from the Basin in any container greater than 5.7 gallons shall be treated under this Compact in the same manner as a proposal for a diversion. Each party shall have the discretion, within its jurisdiction, to determine the treatment of proposals to withdraw water and remove it from the Basin in any container of 5.7 gallons or less.”


IBWA and its members were engaged throughout the initial negotiation process for Annex 2001, having joined the Council of Great Lakes Industries (CGLI), as well as many of the state Chambers of Commerce within the Basin. IBWA worked closely with these entities to help ensure that bottled water was not singled out, and that water resources would continue to be available for use by the commercial and industrial sectors. These partnerships provided the bottled water industry with another voice in the process, particularly when the states began their consideration of Annex 2001 in 2006.

Bottled water was controversial when the Compact was being debated in the state legislatures and during its consideration in the U.S. Congress. The Compact provides that products containing water – including bottled water – are considered a “consumptive use” and can therefore use water from the Basin. In addition, the measure prohibits the bulk transfer of water from the Basin in containers greater than 5.7 gallons. A few of our critics in the House of Representatives referred to this as the “bottled water loop hole” and wanted bottled water to be classified as a “diversion”, thus banning it from being produced in or shipped out of the Basin. This would have been devastating to the bottled water industry, and IBWA, ABA, and the Grocery Manufacturers Association (GMA) worked together to oppose these efforts and prevent any unfavorable amendments in the final version of the Compact. And we were successful in obtaining committee report language in the House that further protects bottled water production in the Basin. While the Compact only directly affects the eight Great Lakes Basin States, it will be used as a model when other states consider this issue. It was therefore very important that we made sure that bottled was not considered a diversion and ensured its unrestricted sale.