The Worlds Leading Water Companies - Term Paper Example

Business Table of Contents Business Table of Contents 2 Introduction 3 Performance of Veolia Environnement 3 Critique Analysis of Company’s Performance in Fulfilling Social Needs 3 Achievement of Veolia Environnement 4 Impact and Implication of Company’s Actions on Society and Stakeholders 5 Environmental Performance 6 Management Strategy 9 Conclusion 9 References 10 Introduction Veolia Environnement is one of the world’s leading water companies. Previously, it was known as Vivendi Environnement, a subsidiary of Vivendi Universal. In the year 2002, Vivendi Environnement had altered to Veolia Environnement. Over 110 million customers are served by the company across 84 countries (Public Citizen 2005). Performance of Veolia Environnement In the earlier part of this century, Vivendi Universal was a maelstrom of corporate vices such as chaos in organization, taking bribe, raids on other corporate offices through investigators among others. The company’s stock price and credit rating collapsed. The company had undergone heavy debt which resulted in fire-scale of company’s assets, dizzying financial condition and an identity crisis. In the year 2002, the company had declared net loss of €12.3 billion. As a consequence, company’s rate with regards to credit has turned into ‘Junk’ status. Vivendi Universal had sold fraction of its large holdings to pay off the debt of stakeholders. The shareholders of the company sued against the former manager and claimed a price of 54 million USD. In the year 2002, due to bad financial condition, Vivendi Universal was forced to sell partially of their stake in Vivendi Environnement. In order to retain the confidence of shareholders and also to reflect the organization’s greater independence, Vivendi Environnement was named as Veolia Environnement (Public Citizen 2005). Critique Analysis of Company’s Performance in Fulfilling Social Needs Veolia Environnement is water and environmental based services subsidiary company and according to economic theory, providing water service is observed as natural monopoly business, because ‘average cost of water becomes lower as the output increases’. This natural monopoly characteristics of water business helped Veolia Environnement to dominate in this sector. Approximately 70% of international privatized water business is ruled by two companies, i.e. Veolia and Suez. Both the companies have made a joint subsidiary company so that profit can be shared between them in lieu of competing with each other. Both the companies had created uncompetitive business situation through joint ventures (Public Citizen 2005). Veolia Environnement though used illegal methods such as bribery to get water contracts. For example, two senior executives of Veolia Environnement, was convicted for giving bribe to the Mayor of St. Denis for obtaining water contract in the year 1996 (Public Citizen 2005). Besides bribery, there are other critiques of Veolia Environnement, for example, in the year 2003 Veolia Environnement’s waste management was ordered to provide fine of 100,000 Euro for damaging of 3500 hectares scrubland by fire. In 2000, Veolia Environnement misled the investors for purchasing the US Filter plant. The loss of 2.25 billion Euros had been represented to the investor as profit of 625 million Euros (Chandra, Girard, and Puscas 2005). Veolia Environnement has poor record of societal and environmental issues. To counter these bad records Veolia Company made good long term relationship with United Nations and World Water Council in order to build a good image before society. The company has conducted several advertisings for promoting privatization of water. Achievement of Veolia Environnement Veolia Environnement affiliated with various international agencies for searching new market and expanded their business. The International Financial Institution (IFI) provided Veolia Environnement a large amount of money for infrastructure of service and developed many urban renewal projects internationally. In the year 2001, Veolia Environnement made an agreement of 100 million Euros with European Bank for modernization and expansion of ‘Urban Heating Network Project’. In the same year, Vivendi Water was awarded a lease contract which was renewable, of 150 million Euros to provide water service in the country of Niger. In 2003, Veolia Water Company was granted a deal of 50 million Euros in China to manage the ‘Lugouqiao Wastewater Treatment Plant’. In 2004, Veolia Water had signed a deal with a Russian company, St. Petersburg in order to construct a ‘Sludge Treatment Plant’ (Chandra, Girard, and Puscas 2005). Impact and Implication of Company’s Actions on Society and Stakeholders According to Veolia Environnement’s annual report of 2003 almost 72.1% of company’s share capital was held by French investors and the rest 27.1% were foreign investors. The primary stakeholders of Veolia Environnement were the workers of the company, labor unions, clients, vendors, project and community partners, industry bodies and end users or customers. The following table shows the list of major shareholders of Veolia Environnement. Source: (Chandra, Girard, and Puscas 2005). Veolia provides their stakeholders accurate and realistic information in order to make them aware about any proposal and its benefits. The company supports their stakeholders’ feedbacks and tries to work towards clear understanding of various issues or concerns provided by the stakeholders. Veolia coordinates directly with the stakeholders to deal with the issues or concerns (Veolia Environmental Services Australia 2010). Veolia Environnement provides responsible leadership and operational excellence for rendering benefit to the society. The company takes various approaches for better social performance which are safety, variety, staff attraction and maintenance, training and development and community engagement (Veolia Environnement 2009). Veolia Environnement aims to set the standard in social performance. The company implements 200 indicators of measurements for monitoring and manages human resources in almost 74 countries. Veolia Environnement promotes effective labor relations. Regarding compensation agreement and labor relation, the company has made more collective agreements in the year 2009 compared to 2008. The company also provides several training sessions. Approximately 508,600 training sessions had been conducted during 2009 for developing the skill and performance of employees. The company’s policy of human resource focuses on accomplishing employee loyalty. For increasing job mobility, Veolia Environnement had raised the yearly gross pay of each employee in 2009 (Veolia Environnement 2011). Environmental Performance The impact on environmental performance of Veolia Environnement can be seen through the reflection of the services provided by the company. Veolia Environnement puts emphasis on providing good and high standard environmental performance. Waste Management of Veolia Environnement: Veolia Environnement reduces waste in order to mitigate the impact of rising waste. Veolia’s environmental activities include cleaning hazardous and non-hazardous waste, composting, recycling, converting waste to energy and land lifting (Veolia Environnement 2011). In the year 2009, Veolia Environnement managed 48,425 tones of waste. The amount of waste has been increasing since 2006 which accounted about 29,054 tones (Veolia Environnement 2009). Year Total Waste Sorted (ton) 2006 29054 2007 32167 2008 44666 2009 48425 Source: (Veolia Environnement 2009). These wastes contain paper and cardboard, construction material, timber, metals, glass and plastic. According to 2009 report of waste management, out of 100%, 28% of waste components was paper and cardboard, 18% was construction material, 12% was glass, 4% was plastic, 3% was metal and only 1% was wood (Veolia Environnement 2009). Source: (Veolia Environnement 2009). Waste Management of Veolia in Sydney, Australia: Veolia is working with Woodlawn bioreactor and eco-precinct since 2005 in order to create benefits towards environment and society. Woodlawn offers alternative for recovery of resources and disposal of waste through utilizing technologies used by Veolia all over the world. Veolia was looking for increasing the highest assessed input related rate of Woodlawn bioreactor to 1.13 million tones of waste on a yearly basis as compared to 500,000 tones which will help to clean the environment (Veolia Environmental Services Australia 2010). Water Management by Veolia Environnement: Veolia water projects provide water solution for many industrial activities and human requirements. In 2009, Veolia Water simultaneously established many water infrastructure projects such as Sydney Desalination plant which provides 250 mega liters water per day, i.e. 15% of Sydney’s drinking water; The South East Queensland Desalination Plant which provides 125 mega liters of water per day for almost 650,000 people; and The Western Corridor Recycled Water project which is one of the largest modern recycled water systems in whole ‘Southern Hemisphere’ and is capable of providing 232 mega liters water per day. The water is used for industrial purposes (Veolia Environnement 2009). Providing electricity by Veolia Environnement: Veolia Environnement provides appropriate energy through their different range of services. The energy provided by Veolia helps for production, processing operation at plant, maintaining and managing heating and cooling of machineries and saving CO2. The energy saving services division of Veolia Environnement optimizes efficiency of environment and energy. Veolia’s energy is used for many industrial utilities such as controlling climate, installation of power equipment, providing light, controlling air conditioning services and others (Veolia Environnement 2011). Veolia energy provides operating and maintaining services at Medical Area Total Energy Plant (MATEP), which is a central plant in Boston. This plant provides 970,000 pounds/hour of hot water, 41,875 tons of chilled water and 36 MW of power in six hospitals (Veolia Environnement 2010). In Multilayer Coating Technologies (MCT), Veolia Energy provides thermal energy for critical heating and process chilling needs of the plant. Veolia also provides technical services and safety management to the plant (Veolia Environnement 2010). Veolia Energy operates and maintains technical and energy management in Galleria which is the 4th biggest shopping mall in the US. The support from Veolia Energy helps the shopping mall to boost both efficiency and service delivery (Veolia Environnement 2010). Packaging: Packaging includes plastic bags, paper, steel, aluminum cans, biodegradable waste and bulky waste. Too much packaging creates wastes. The average recycling rate of packaging was 53% in European Union in the year 2001. In the year 2009, seven counties had succeeded to increase the recycling rate of packaging. Veolia Environnement operates various plants which generate energy from waste, for example, Onyx Waste Services and Guangzhou Likeng Waste to Energy Plant (Veolia Environnement 2011). Management Strategy Veolia Environnement follows consistent strategy for developing and managing good relationship with their stakeholders. Their consistency strategies are the key factors behind Veolia’s improving profile in business. Veolia Environnement emphasizes on creating long term relationship with its customers, public authorities and other companies. It provides high quality services and expected cash flow in the organization. For example, in China, Veolia Environnement signed a contract to establish Waste Water Treatment System for up to 30 years, and in France it signed a contract for replacing and upgrading equipment are typically about 10 – 20 years. These approaches of Veolia develop strong base of creating repeatable revenue (Veolia Environnement S.A 2007). Conclusion The development of Veolia Environnement is based on the ability to establish relationship with clients and stakeholders. Increasing urbanization, changing standard of living and increasing awareness of environmental issues are increasing the demand of Veolia Environnement’s services. The company is providing water, power, energy, transportation services and also builds infrastructure for operating these services. Veolia Environnement is making an attempt to increase the awareness of sustainable development, alternative power source and provides financial support to local communities. Veolia Environnement provides essential services to support sustainable economic and social development. The company tries to create productive and positive associations with government along with forming partnership with government authorities. The long term contracts strategy has allowed the company to establish and maintain good customer service. Veolia Environnement is successful in managing the objectives and meeting the service needs (Veolia Environnement 2009). References Chandra, Marcia, Richard Girard, and Darren Puscas. 2005. Polaris Institute Researcher’s. http://www.polarisinstitute.org/files/veoliapdf.pdf Public Citizen. 2005. Veolia Environnement: A Corporate Profile. http://documents.foodandwaterwatch.org/Vivendi05.pdf Veolia Environnement. 2009. Public-Private Partnerships. http://www.veolia.com.au/sustainable_development/public_private_partnerships.aspx Veolia Environnement. 2009. Environmental Performance. http://www.veolia.com.au/sustainable_development/environnemental_performance.aspx Veolia Environnement 2009. Social Performance. http://www.veolia.com.au/sustainable_development/social_performance.aspx Veolia Environnement S.A. 2007. Corporate Finance. http://www.finance.veolia.com/docs/pdf/veolia_moodys_OCT_2007.pdf Veolia Environmental Services Australia. 2010. Woodlawn Eco – Precinct. http://www.veoliaes.com.au/community-and-environnement/woodlawn-community Veolia Environnement. 2010. Medical Area Total Area Plant (MATEP). http://www.veolianorthamerica.com/veolia/matep/ Veolia Environnement. 2010. The Galleria Shopping Center, Houston, TX. http://www.veolianorthamerica.com/veolia/the-galleria/ Veolia Environnement. 2010. MultiLayer Coating Technologies. http://www.veolianorthamerica.com/veolia/multiLayer-coating-technologies/ Veolia Environnement. 2011. Energy. http://www.veolia.com/en/group/business-activities/energy-management/#c1cc2ohjk4 Veolia Environnement. 2011. Environmental Services. http://www.veolia.com/en/group/business-activities/waste-management/ Veolia Environnement. 2011. Social Performance. http://www.veolia.com/en/group/performance/social-performance/#top Veolia Environnement 2011. Recycling Between Market Regulations and Environmental Imperatives. http://www.veolia.com/veolia/ressources/documents/1/4397,Galileo5EN.pdf Read More