Typhoid, tyranny and tax havens: The truth behind America's trendiest drink

Fiji Water's environmental and ethical credentials have seduced the A-list, from Paris Hilton to the Obamas. But there lie dark secrets behind the shiny veneer – from the Chinese plastics plant in which its bottles are manufactured to the brutal dictatorship under whose auspices it is produced

Open all night long. Dimly lit, with rows of sleek, modern terminals, the internet café in Fiji's capital, Suva, was packed at all hours with teenage boys playing boisterous rounds of videogames. But one day soon after I arrived, the staff told me they now had to shut down by 5pm. Police orders, they shrugged: the country's military junta had declared martial law a few days before, and things were a bit tense.

I sat down and sent out a few emails—filling friends in on my visit to the Fiji Water bottling plant, forwarding a story about foreign journalists being kicked off the island. Then my connection died. "It will just be a few minutes," a clerk said.

Moments later, a pair of police officers walked in. They headed for a woman at another terminal; I turned to my screen to compose a note about how cops were even showing up in the internet cafés. Then I saw them coming toward me. "We're going to take you in for questioning about the emails you've been writing," they said.

What followed, in a windowless room at the police station, felt like a bad cop movie. "Who are you really?" the bespectacled inspector wearing a khaki uniform and smug grin asked me over and over, as if my passport, press credentials and stacks of notes about Fiji Water weren't sufficient clues. (My iPod, he surmised tensely, was "good for transmitting information".) I asked him to call my editors, even a UN official who could vouch for me. "Shut up!" he snapped. "I'd hate to see a young lady like you go into a jail full of men. You know what happened to women during the 2000 coup, don't you?"

Eventually, it dawned on me that his concern wasn't just with my potentially seditious emails; he was worried that my reporting would taint the Fiji Water brand. "Who do you work for – another water company? It would be good to come here and try to take away Fiji Water's business, wouldn't it?" Then he switched tacks and offered to protect me – from other Fijian officials, who he said would be after me – by letting me go so I could leave the country. I walked out into the muggy morning, hid in a stairwell, and called a Fijian friend. Within minutes, a US Embassy van was speeding toward me.

Until that day, I hadn't fully appreciated the paranoia of Fiji's military regime. The junta had been declared unconstitutional the previous week by the country's second-highest court; in response, it had abolished the judiciary, banned unauthorised public gatherings, delayed elections until 2014, and clamped down on the media. (Only the "journalism of hope" is now permitted.) The prime minister, Commodore Frank Bainimarama, promised to root out corruption and bring democracy to a country that has seen four coups in the past 25 years. But in September, after failing to rejoin negotiations with the opposition or commit to democratic elections by 2010, Fiji was fully suspended from the Commonwealth.

The slogan on Fiji Water's website – "And remember this – we saved you a trip to Fiji" – suddenly felt like a dark joke. Every day, more soldiers showed up on the streets. When I called the courthouse, not a single official would give me his name. Even tour guides were running scared – one told me that one of his colleagues had been picked up and beaten for talking politics with tourists. When I later asked Fiji Water spokesman Rob Six what the company thought of all this, he said the policy was not to comment on the government "unless something really affects us". In a later statement, the company added: "We bought Fiji Water in November 2004 when Fiji was governed by a democratically elected government."

Even though it's shipped from the opposite end of the globe, even though it retails for nearly three times as much as your basic supermarket water, Fiji is now America's leading imported water, beating out Evian. It has spent millions pushing not only the seemingly life-changing properties of the product itself, but also the company's green credentials and its charity work. Put all that together in an iconic bottle emblazoned with a cheerful hibiscus, and everybody, from the Obamas to A-list celebrities, is seen sipping Fiji.

That's by design. Ever since a Canadian mining and real-estate mogul named David Gilmour launched Fiji Water in 1996, the company has positioned itself squarely at the nexus of pop-culture glamour and progressive politics. Paris Hilton is known to drink the water with a straw to save her lipstick, while the singer Mary J Blige's pre-show rider has included 10 11/2-litre bottles of the stuff). Other celeb swiggers have included Scarlett Johansson, P Diddy and Nicole Kidman. Fiji Water's chief marketing whiz and co-owner (with her husband, Stewart) is Lynda Resnick, a well-known liberal donor who casually name-drops her friends Arianna Huffington, the influential liberal columnist, and Laurie David, the global-warming activist. "Of course I know everyone in the world," Resnick said in 2005, "every mogul, every movie star."

Even as bottled water has come under attack as the embodiment of waste, Fiji seems immune. Fiji Water took out a full-page ad in US Vanity Fair's 2007 green issue, nestled among stories about the death of the world's water. Two bottles sat on a table between Al Gore and Mos Def during a 2006 MySpace "Artist on Artist" discussion on climate change. Fiji reps were even given credentials at last year's US Democratic Party convention to hand out tens of thousands of bottles.

Nowhere in Fiji Water's glossy marketing materials will you find reference to the typhoid outbreaks that plague Fijians because of the island's faulty water supplies; the corporate entities that Fiji Water has – despite the owners' talk of financial transparency – set up in tax havens such as the Cayman Islands and Luxembourg; or the fact that its signature bottle is made from Chinese plastic in a diesel-fuelled plant and hauled thousands of miles to its eco-conscious consumers. And, of course, you won't find mention of the military junta for which Fiji Water is a major source of global recognition and legitimacy. (Gilmour has described the square bottles as "little ambassadors" for the poverty-stricken nation.) "We are Fiji," declare Fiji Water posters across the island, and the slogan is almost eerily accurate: the reality of Fiji, the country, has been eclipsed by the glistening brand of Fiji, the water.

On the map, Fiji looks as if someone dropped a fistful of confetti on the ocean. The country is made up of more than 300 islands (100 inhabited) that have provided the setting for everything from The Blue Lagoon to Cast Away. Suva is a bustling multicultural hub with a mix of shopping centres, colonial buildings and curry houses; 40 per cent of the population is of Indian ancestry, descendants of indentured sugar-cane workers brought in by the British in the mid-19th century. The primary industries are tourism and sugar. Fiji ' Water says its operations make up about 20 per cent of exports and three per cent of GDP, which stands at £2,380 per capita.

Getting to the Fiji Water factory requires a bone-jarring, four-hour trek into the volcanic foothills of the Yaqara Valley. My bus's speakers blasted an ear-splitting soundtrack of Fijian reggae and Bob Marley as we swerved up unpaved mountain roads linked by rickety wooden bridges. Cow pastures ringed by palm trees gave way to villages of corrugated-metal shacks and wooden homes painted in technicolour hues.

Our last rest stop, half an hour from the bottling plant, was Rakiraki, a small town with a square of dusty shops and a marketplace advertising "Coffin Box for Sale – Cheapest in Town". My Lonely Planet guide warned that Rakiraki water "has been deemed unfit for human consumption", and grocery shops were stocked with Fiji Water going for 90 cents a pint – almost as much as it costs in the US.

Rakiraki has experienced the full range of Fiji's water problems – crumbling pipes, a lack of adequate wells, dysfunctional or flooded water-treatment plants, and droughts that are expected to get worse with climate change. Half the country has at times relied on emergency water supplies, with rations as low as four gallons a week per family; dirty water has led to outbreaks of typhoid and parasitic infections. Patients have reportedly had to cart their own water to hospitals and some Fijians have taken to smashing open fire hydrants and bribing water-truck drivers for a regular supply.

The bus dropped me off at a deserted intersection, where a weather-beaten sign warning off trespassers in English, Fijian, and Hindi rattled in the tropical wind. Once I reached the plant, the bucolic quiet gave way to the hum of machinery spitting out 50,000 square bottles an hour. The production process is spread across two factory floors, blowing, filling, capping, labelling and shrink-wrapping 24 hours a day, five days a week.

From here, the bottles are shipped to the four corners of the globe; the company – which, unlike most of its competitors, offers detailed carbon-footprint estimates on its website – insists they travel on ships that would be making the trip anyway, and that the Fiji payload causes them to use only two per cent more fuel. In 2007, Fiji Water announced that it planned to go carbon-negative by offsetting 120 per cent of emissions via conservation and energy projects starting in 2008. It has also promised to reduce its pre-offset carbon footprint by 25 per cent next year and to use 50 per cent renewable energy, in part by installing a windmill at the plant.

The offsetting effort has been the centrepiece of Fiji Water's £3m "Fiji Green" blitz in the US, which urges consumers to drink imported water to fight climate change. Its former senior VP of sustainable growth, Thomas Mooney, noted in a 2007 Huffington Post blog post that, "We'd be happy if anyone chose to drink nothing but Fiji Water as a means to keep the sea levels down." (Metaphorically speaking, anyway: as the online trade journal ClimateBiz has reported, Fiji is using a "forward-crediting" model under which it takes credit now for carbon reductions that will actually happen over a few decades – though the company itself points out it is independently audited and reports to the Carbon Disclosure Project.)

Selling long-distance water to green consumers may be a contradiction in terms. But that hasn't stopped Fiji from positioning its product not just as an indulgence, but as an outright necessity for an elite that can appreciate its purity. The company has gone aggressively after its main competitor – tap water – by calling it "not a real or viable alternative" that can contain "4,000 contaminants", unlike Fiji's "living water". "You can no longer trust public or private water supplies," Lynda Resnick wrote in her book, Rubies in the Orchard.

One company newsletter featured the findings of a salt-crystal purveyor who claimed that Fiji Water rivals the "known and significant abilities of 'Holy Healing Waters' in Lourdes, France, or Fatima, Portugal". Switching effortlessly from Catholic mysticism to sci-fi, he added that the water's "electromagnetic field frequency enables Fiji Water to stimulate our human self-regulation system".

In keeping with this rarefied vibe, Fiji Water's marketing has focused on product placement more than standard advertising; from appearances on The Sopranos, 24 and Desperate Housewives to sponsorship of events such as the Emmy Awards, the Avon Walk for Breast Cancer, and Justin Timberlake's "Summer Love" tour, it's now "hard to find an event where our target market is present and Fiji isn't", according to Resnick.

In a 2003 interview, Gilmour told The Times that "the world's water is being trashed day by day". He would know: before launching Fiji Water, he co-founded Barrick Gold, now the largest gold-mining enterprise in the world, with operations in hotspots from Tanzania to Pakistan. Its mines, often in parched places such as Nevada and Western Australia, use billions of gallons of water to produce gold via a cyanide-leaching process. After an environmental review of the company, the Norwegian government announced last year that it would divest itself of some £120m in Barrick stock.

Gilmour was a powerful presence in Fiji long before he got into the water business. Back in 1969, he launched what would become – with help from a couple of Saudi princes – the region's biggest hotel chain, the Southern Pacific Hotel Corporation, which built a massive resort complex in Fiji. His investors and advisers have included everyone from arms trader Adnan Khashoggi to George Bush Sr; in 2004, Colin Powell presented him with the Secretary of State's Award for Corporate Excellence for his work in Fiji.

In the early 1990s, Gilmour got wind of a study done by the Fijian government and aid organisations that indicated an enormous aquifer, estimated at more than 17 miles long, near the main island's north coast. He obtained a 99-year lease on land atop the aquifer, brought a former Fijian environment minister on board, and launched an international campaign inviting consumers to sample water preserved since "before the Industrial Revolution". To this day, Fiji Water has near-exclusive access to the aquifer; the notoriously corrupt and chronically broke government has been unable to come up with the money or infrastructure to tap the water for its people.

By the time Gilmour put Fiji Water up for sale in 2004, it was the fourth-most popular imported bottled water in the United States. He found eager buyers in the Resnicks, who made their fortune with the flower-delivery service Teleflora and the collectibles company Franklin Mint. The Beverly Hills-based couple are also agribusiness billionaires, whose holdings include enough almond, pistachio and pomegranate acreage to make them the biggest growers of those crops in the entire western hemisphere; a 2004 report by the Environmental Working Group calculated that in 2002 alone, their agricultural water subsidies totalled more than $1.5m. They own a pesticide company, Suterra, and Lynda Resnick almost single-handedly created the pomegranate fad via the Pom Wonderful brand.

With the profits from their enterprises, the Resnicks have been major players on the political scene, giving more than $300,000 each over the past decade. They've supported mostly marquee Democrats – Barack Obama, John Edwards, Hillary Clinton, Al Franken – though both also donated to John McCain. They give millions to museums, environmental organisations and other charities. One of Britney Spears' meltdowns led to her stay at the Stewart and Lynda Resnick Neuropsychiatric Hospital at UCLA. In June, the California Institute of Technology announced the creation of the Resnick Sustainability Institute after receiving a £12m donation from the couple.

The charitable works Fiji Water talks about most often, however, are its efforts in Fiji itself – from preserving rainforests and helping fund sanitation projects to underwriting kindergartens. This January, after catastrophic floods swept the main island of Viti Levu, the company donated £180,000 to the military regime for flood relief, and gave another £275,000 to various projects last summer. Lynda Resnick further insists that "we only use biofuels", and there is a project to protect 50,000 acres of rainforest.

Yet Fiji Water may be well advised to spread a bit more of its wealth around locally. During the 2000 coup, a small posse of villagers wielding spearguns and dynamite seized on the chaos to take over the bottling plant and threaten to burn it down. "The land is sacred and central to our continued existence and identity," a village spokesman told the Fiji Times. Two years later, the company created the Vatukaloko Trust Fund, a charity targeting several villages surrounding its plant. It won't say how much it has given to the trust, but court proceedings indicate that it has agreed to donate 0.15 per cent of its Fijian operation's net revenues; a company official testified that the total was about £60,000 in 2007. (For perspective, Fiji Water recently spent £150,000 to become a founding partner of the new Salt Lake City football stadium.)

Perhaps mindful of the unpleasantness of 2000, today Fiji Water executives refer constantly to the company's role in Fiji's economic life. "If we did... cease to exist," sustainability VP Mooney told US News & World Report in 2008, "a big chunk of the economy would be gone, the schools that we built would go away, and the water-access projects would go away." The company points out that it has sponsored clean-water projects in 75 villages this year, and suggests that, rather than "somehow legitimising a military dictatorship... the jobs, revenues and community projects supported by Fiji Water are strong contributors to growth".

What Mooney didn't say is that though Fiji Water may fill a void in the impoverished nation, it also reaps a priceless benefit: tax-free status, granted when the company was founded in 1995. The rationale at the time, according to the company: bottled water was a risky business with uncertain chances of success. In 2003, David Gilmour said that his ambition for Fiji Water was "to become the biggest taxpayer in the country". Yet the tax break, originally scheduled to expire in 2008, remains in effect, and neither the company nor the government will say whether or when it might end. Last year, when the government attempted to impose a new tax on water bottlers, Fiji Water called it "draconian" (a term I am not aware it has ever used for the regime's human-rights violations) and temporarily shut down its plant in protest.

At the moment, Fiji's government certainly seems in no mood to confront Fiji Water – quite the contrary. "Learning from the lessons of products, we must brand ourselves," Fiji's ambassador in Washington told a news site for diplomats in 2006, adding that he was working with the Resnicks to try to increase Fiji Water's US sales. A Fiji Water bottle sits at the top of the embassy's home page, and the government has even created a Fiji Water postage-stamp series.

Fiji Water, for its part, has trademarked the word "FIJI" (in capital letters) in numerous countries. (Some rejected the application, but not the United States.) It has also gone after rival Fijian bottlers daring to use their country's name for marketing. "It would have cost too much for us to fight in court," says Mohammed Altaaf, the owner of Aqua Pacific water, which ended up taking the word "Fiji" out of its name.

When such practices are criticised, Fiji Water's response is simple: "They don't have a ton of options for economic development," Mooney told US News & World Report, "but bottled water is one of them. When someone buys a bottle of Fiji, they're buying prosperity for the country." Without Fiji Water, he said, "Fiji is kind of screwed."

A longer version of this article first appeared in the American investigative-journalism magazine 'Mother Jones'

Eau contraire: Water hazards

Perrier

Perrier's skittle-shaped bottles made the "naturally sparkling" French spring water a chic addition to tables the world over. But, in 1990, carcinogenic benzene was detected in bottles, and it surfaced that the chemical came from a problem with the introduction of carbon dioxide to make the water fizz – forcing Perrier to drop the "naturally sparkling" claim.

Dasani

In 2004, it was revealed that Coca-Cola's new bottled water actually came from a tap in Sidcup, Kent. Despite its insistence that a complex filtration process gave Dasani the "perfect mineral balance", the public was unimpressed and the little blue bottles were pulled from British shelves.

Aquafina

In 2007, PepsiCo was taken to task in the US for failing to make it clear that, like Dasani in Britain, its bestselling Aquafina brand came from a tap-water source. Alongside images of a mountain sunrise, the label stated that the water was "bottled at source PWS" – few had realised that stood for "public water source".

Rhiannon Harries