Veolia ES Technical Solutions: Going Public

Professional Services

Written by John Zorabedian

Friday, 29 February 2008

Veolia ES Technical Solutions: Going Public - American Executive - RedCoat Publishing

Philippe Martin explains how the hazardous waste division of this global environmental services company disarms its critics through transparency.

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Few things are more alarming to the public than the thought of having hazardous waste, toxic chemicals, and radioactive material disposed in their communities. Indeed, it’s a fact of life for companies in many industries such as energy, chemical, and waste that the general public will oppose their facilities and operations wherever they are located.

Philippe Martin, President and CEO

When Veolia ES Technical Solutions (VES-TS) won a $49 million contract in April 2007 from the US Army to dispose of 2 million gallons of the waste byproduct from the destruction of deadly VX, a chemical warfare agent, it presented a public relations challenge.

Two other environmental services companies dropped plans to dispose of the waste, VX hydrolysate, due to strong public opposition, including lawsuits filed by environmental groups to stop transportation of the waste from the Army facility in Terre Haute, Ind. to a treatment facility.

But, even before VES-TS began disposing of the waste at its incineration facility in Port Arthur, Texas, the company began a public information campaign, meeting with many community and political leaders to set the record straight and allay the fears of the local population. Many residents incorrectly assumed that the company would be incinerating VX nerve gas, rather than VX hydrolysate, which is a caustic but non-deadly byproduct of mixing VX with sodium hydroxide and water.

The company also held an open house and invited residents to tour the facility for themselves to see exactly how the company disposed of the waste. “The type of business we are in, people do not want to have it next to their house,” said Philippe Martin, president and CEO of VES-TS. “There is some emotional aspect to that.”

Martin said the company develops good relationships with the communities around its waste facilities because of their record for safety and by engaging with local politicians and community groups.

This strategy, however, is very decentralized and depends on the particular nature and circumstances of the facility and its community, he said. The company discusses each location during quarterly business reviews, assessing how the local site manager has been able to engage the community.

“It’s very local, establishing contact with the local politicians, the mayors and the activists, if any,” he said. “We have an open-door policy, organizing days in which the public can visit the facilities.”

Most importantly, Martin said, is VES-TS’s policy of proactive disclosure of negative events to the communities and government agencies. “If anything goes bad, at least people know what we’re doing,” Martin said. “We are very open about what we are doing. We have a policy of self-reporting.”

Full service
VES-TS is a division of Veolia Environmental Services of North America, itself a subsidiary of the French company Veolia Environnement. The parent company had revenues of $38 billion in 2006 and operates in 65 countries, with services including operating the water utility in Dubai, the subway system in Boston, and waste-to-energy facilities throughout the US.

VES-TS itself had revenues of nearly $400 million in 2006 and intends to grow through strategic acquisitions, such as purchasing the New Jersey industrial waste processing company Marisol, Inc. last May, as well as adding services. “Our strategy is to provide additional services to our existing customers,” Martin said.

The company’s core business is providing waste related services for pharmaceutical, chemical, petroleum, and high-tech companies. VES-TS also provides recycling services and procurement of virgin chemicals for its clients.

For example, VES-TS collects fluorescent light bulbs, which should not be disposed of in landfills due to their mercury content. The company breaks apart the bulbs, separating the mercury from the glass and metal. All of these components can be recycled and reused.

The company also provides updates to regulations and helps clients remain in compliance with environmental laws. “Our business is the environment,” Martin said. “We are serving our customers to help them be compliant and to protect the environment.”

With more than 45 sales, service, treatment, and disposal facilities throughout the US, VES-TS operates in as decentralized a manner as possible. “We are very decentralized as a company because we are a service organization,” Martin said. “Clearly, decisions have to be made in the field by people who know the customer.”

Safety initiatives
VES-TS has a strong safety record within its industry, with an accident and injury rate of well below the industry average. The company’s experience modification rate, the statistical measure by which insurance companies measure worker safety for calculating workers compensation benefits, is less than 0.5, or better than 96% of similar companies.

“From my perspective, safety is extremely important, and employee training is key to maintaining an excellent safety record,” Martin said in a letter to employees. “We thoroughly train new employees. Our attitude is, what does an employee need to know to operate a vehicle, to handle reactive or explosive chemicals or toxic or poisonous chemicals.”

VES-TS’s initial training program provides 40 hours classroom and on-site training, far more than the 25 hours mandated by the government.

“We provide guidelines and policies that allow our employees to make responsible decisions,” Martin said. “Our people know what they can and cannot do. The decisions must be made close to the customer because we are a service company. What’s important is the quality of our service, that we make safe and compliant decisions, and that we run on time.”

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