Veolia Environnement S.A.

Headnote

Exemptive Relief Applications -- Application for relief from the prospectus and the dealer registration requirements in respect of certain trades made in connection with an employee share offering by a foreign issuer - The offering involves the use of collective employee shareholding vehicles, each a fonds communs de placement d'entreprise (FCPE) - The issuer cannot rely on the employee exemption in section 2.24 of National Instrument 45-106 Prospectus and registration Exemptions as the securities are not being offered to Qualifying Employees directly by the issuer, but through the special purpose entities - Number of Canadian employees is de minimis- Qualifying Employees will not be induced to participate in the offering by expectation of employment or continued employment - Qualifying Employees will receive disclosure documents - The special purpose entities are subject to the supervision of the local securities regulator - No market for the securities of the issuer in Canada.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 25, 53, 74(1).

National Instrument- 45-106 Prospectus and Registration Exemptions, ss. 2.24, 2.28.

National Instrument 45-102 Resale of Securities, s.2.14.

June 26, 2009

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

QUÉBEC AND ONTARIO

(the "Jurisdictions")

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

VEOLIA ENVIRONNEMENT S.A.

(the "Filer")

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (the "Decision Maker") has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the "Legislation") for:

1. an exemption from the prospectus requirements of the Legislation (the "Prospectus Relief") so that such requirements do not apply to

(a) trades in units ("Units") of

(i) a permanent FCPE named Sequoia Classique International (the "Principal Classic Fund"), which is a fonds commun de placement d'entreprise or "FCPE", a form of collective shareholding vehicle of a type commonly used in France for the conservation and custodianship of shares held by employee-investors;

(ii) a temporary FCPE named Sequoia Classique International Relais 2009 (the "Temporary Classic Fund") which will merge with the Principal Classic Fund following the completion of the Employee Share Offering (as defined below), such transaction being described as the "Merger" in paragraph 10(d) of the Representations (the term "Classic Fund" used herein means, prior to the Merger, the Temporary Classic Fund, and following the Merger, the Principal Classic Fund);

(iii) a compartment named Sequoia Plus International 2009 (the "Protected Fund" and, together with the Principal Classic Fund and the Temporary Classic Fund, the "Funds" ) of a permanent FCPE named Sequoia Harmonie International,

made in connection with the Employee Share Offering to or with Qualifying Employees (as defined below) of Canadian Affiliates (as defined below) resident in the Jurisdictions and in British Columbia and in Alberta who elect to participate in the Employee Share Offering (collectively, the "Canadian Participants");

(b) trades in ordinary shares of the Filer (the "Shares") by the Funds with Canadian Participants upon the redemption of Units requested by Canadian Participants;

(c) the issuance of Units of the Classic Fund to holders of Protected Fund Units upon a transfer of Canadian Participants' assets in the Protected Fund to the Classic Fund at the end of the Lock-Up Period (as defined below);

2. an exemption from the dealer registration requirements of the Legislation (the "Registration Relief") so that such requirements do not apply to

(a) trades in Units of the Funds made in connection with the Employee Share Offering with Canadian Participants;

(b) trades in Shares by the Funds with Canadian Participants upon the redemption of Units requested by Canadian Participants; and

(c) the issuance of Units of the Classic Fund to holders of Protected Fund Units upon a transfer of Canadian Participants' assets in the Protected Fund to the Classic Fund at the end of the Lock-Up Period ;

3. an exemption from the adviser registration requirements and dealer registration requirements of the Legislation so that such requirements do not apply to the manager of the Funds, Natixis Asset Management (the "Management Company"), to the extent that its activities described in paragraphs 14 and 15 of the Representations require compliance with the adviser registration requirements and dealer registration requirements of the Legislation (collectively with the Prospectus Relief and the Registration Relief, the "Offering Relief"); and

4. an exemption from the dealer registration requirements of the Legislation so that such requirements do not apply to the first trade in any Units or Shares acquired by Canadian Participants pursuant to or in connection with the Employee Share Offering (the "First Trade Relief").

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application),

(a) the Autorité des marchés financiers is the principal regulator for this application,

(b) the Filer has provided notice that section 4.7(1) of Regulation 11-102 respecting Passport System ("Regulation 11-102") is intended to be relied upon in British Columbia and Alberta, and

(c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

Terms defined in Regulation 14-101 respecting Definitions, Regulation 45-102 respecting resale of securities, Regulation 45-106 respecting Prospectus and Registration Exemptions and Regulation 11-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

This decision is based on the following facts represented by the Filer:

1. The Filer is a corporation formed under the laws of France. It is not and has no current intention of becoming a reporting issuer (or equivalent) under the securities legislation of the Jurisdictions or of British Columbia or Alberta. The head office of the Filer is located in France.

2. The Filer carries on business in Canada through the following affiliated companies: Veolia ES Canada Inc, Veolia ES Canada Services Industriels Inc., Veolia ES Canada Industrial Services Inc., Veolia ES Matières Résiduelles Inc., Veolia Transport Québec Inc., Autobus Boulais Ltée, Veolia Water Canada Inc., John Meunier Inc., Montenay Inc. and Veolia Transportation Inc. (collectively, the "Canadian Affiliates" and, together with the Filer and other affiliates of the Filer, the "Veolia Group").

3. Each of the Canadian Affiliates is a direct or indirect controlled subsidiary of the Filer and is not, and has no current intention of becoming, a reporting issuer (or equivalent) under the securities legislation of the Jurisdictions or of British Columbia or Alberta. The head office of the Veolia Group in Canada is located in Québec and the greatest number of employees of Canadian Affiliates is employed in Québec.

4. As of the date hereof and after giving effect to the Employee Share Offering, Canadian residents do not and will not beneficially own (which term, for the purposes of this paragraph, is deemed to include all Shares held by the Funds on behalf of Canadian Participants) more than 10% of the Shares and do not and will not represent in number more than 10% of the total number of holders of Shares as shown on the books of the Filer.

5. The Filer has established a global employee share offering for employees of the Veolia Group (the "Employee Share Offering"). The Employee Share Offering is comprised of two subscription options:

(a) an offering of Shares to be subscribed through the Temporary Classic Fund, which Temporary Classic Fund will be merged with the Principal Classic Fund after completion of the Employee Share Offering (the "Classic Plan"); and

(b) an offering of Shares to be subscribed through the Protected Fund (the "Protected Plan").

6. Only persons who are employees of a member of the Veolia Group during the subscription period of the Employee Share Offering and who meet other employment criteria (the "Qualifying Employees") will be allowed to participate in the Employee Share Offering.

7. The Funds have been established for the purpose of implementing the Employee Share Offering. There is no current intention for any of the Funds to become a reporting issuer under the securities legislation of the Jurisdictions or of British Columbia or Alberta.

8. The Classic Fund is, and the Protected Fund is a compartment of, an FCPE, which is a shareholding vehicle of a type commonly used in France for the conservation and custodianship of shares held by employee investors. The Funds have been registered with, and approved by, the Autorité des marchés financiers in France (the "French AMF"). Only Qualifying Employees will be allowed to hold Units of the Funds.

9. All Units acquired under the Classic Plan or the Protected Plan by Canadian Participants will be subject to a hold period of approximately five years (the "Lock-Up Period"), subject to certain exceptions prescribed by French law (such as a release on death or termination of employment).

10. Under the Classic Plan:

(a) Canadian Participants will subscribe for Units in the Temporary Classic Fund, and the Temporary Classic Fund will then subscribe for Shares at a subscription price that is equal to the price calculated as the average of the opening price of the Shares (expressed in Euros) on Euronex Paris on the 20 trading days preceding the date of fixing of the subscription price by the Filer (the "Subscription Price").

(b) Subject to the limitations on total matching shares described in subparagraph 11(a), for each Share purchased by a Canadian Participant under the Temporary Classic Fund (a "Classic Plan Employee-Purchased Share"), the Canadian Affiliate employing such Canadian Participant will finance, at the Subscription Price, one additional Share under the Classic Fund (a "Classic Plan Matching Share") for the benefit of, and at no cost to, the Canadian Participant up to a maximum of 28 Classic Plan Matching Shares. A Canadian Participant may purchase more than 28 Shares under the Classic Fund; however, the Canadian Affiliate that employs him or her will not match such additional Shares.

(c) The Temporary Classic Fund will apply the cash received in respect of Classic Plan Employee-Purchased Shares and the cash received in respect of Classic Plan Matching Shares to subscribe for Shares of the Filer. Canadian Participants will receive Units in the Temporary Classic Fund representing the subscription of all Shares, including the Classic Plan Matching Shares.

(d) Following the completion of the Employee Share Offering, the Temporary Classic Fund will be merged with the Principal Classic Fund (subject to the French AMF's approval). Units of the Temporary Classic Fund held by Canadian Participants will be replaced with Units of the Principal Classic Fund on a pro rata basis and the Shares subscribed for under the Employee Share Offering will be held in the Principal Classic Fund (such transaction, the "Merger").

(e) Dividends paid on the Shares held in the Classic Fund will be contributed to the Classic Fund and used to purchase additional Shares. No additional Units (or fractions thereof) of the Classic Fund will be issued to Canadian Participants; rather, the net asset value of Units of the Classic Fund will be increased to reflect this dividend reinvestment.

(f) Under the Classic Plan, at the end of the Lock-Up Period or in the event of an early redemption resulting form the Canadian Participant relying on one of the exceptions to the Lock-Up Period prescribed by French law, a Canadian Participant may

(i) have his or her Units in the Classic Fund redeemed in consideration for a cash payment equal to the then market value of the corresponding Shares, or

(ii) continue to hold Units in the Classic Fund and have those Units redeemed at a later date.

11. Under the Protected Plan:

(a) The subscription price for the Shares under the Protected Plan will be the Subscription Price. For each Share purchased by a Canadian Participant by way of the Protected Plan (a "Protected Plan Employee-Purchased Share"), the Canadian Affiliate employing such Canadian Participant will finance, at the Subscription Price, one additional Share under the Protected Fund (a "Protected Plan Matching Share") for the benefit of, and at no cost to, the Canadian Participant up to a maximum of 14 Protected Plan Matching Shares. The maximum number of Shares that a Canadian Participant may purchase under the Protected Plan is 14 Shares and the total number of Classic Plan Matching Shares and Protected Plan Matching Shares cannot exceed 28 Shares with priority given to the Protected Plan Matching Shares.

(b) The money, expressed in Euros, contributed by a Canadian Participant into the Protected Plan is referred to as the "Employee Contribution." The Protected Fund will apply the cash received from the Employee Contributions and the cash received from Canadian Affiliate employers under the matching program described above, to subscribe for Shares from the Filer. Canadian Participants will receive Units in the Protected Fund representing Shares acquired with their Employee Contributions and the corresponding matching contributions from their employer.

(c) The Protected Fund will enter into a swap agreement (the "Swap Agreement") with Calyon (the "Bank").

(d) Under the terms of the Swap Agreement, at the end of the Lock-Up Period, the Protected Fund will owe to the Bank an amount equal to A -- [B+C], where

(I) "A" is the market value of all the Shares at the end of the Lock-Up Period that are held in the Protected Plan (as determined pursuant to the terms of the Swap Agreement),

(II) "B" is the aggregate amount of all Employee Contributions,

(III) "C" is an amount (the "Appreciation Amount") equal to the sum of:

(A) a 2% annual return on the aggregate amount of all Employee Contributions (the "2% Return"); and

(B) the positive difference, if any, between

(I) the average price of the Shares based on the last closing price of the Shares on Euronext Paris on the last trading day of each month over the Lock-Up period (i.e., a total of 60 readings), (in the event that the Share price is lower than the Subscription Price, the Subscription Price will be used instead) and

(II) the Subscription Price,

multiplied by

(III) the number of Protected Plan Employee-Purchased Shares held in the Protected Fund.

(e) In addition to the above, if, at the end of the Lock-Up Period, the market value of the Shares held in the Protected Fund (i.e., item "A" in the above-noted formula) is less than 100% of the Employee Contributions, the Bank will, pursuant to a guarantee arrangement in the Swap Agreement, make a contribution to the Protected Fund to make up any shortfall.

(f) At the end of the Lock-Up Period, a Canadian Participant may elect to have his or her Protected Plan Units redeemed in consideration for cash equivalent to

(i) the Canadian Participant's Employee Contribution, and

(ii) the Canadian Participant's portion of the Appreciation Amount

(the "Redemption Formula").

(g) If a Canadian Participant chooses not to have his or her Units in the Protected Fund redeemed at the end of the Lock-Up Period, his or her investment in the Protected Fund will be transferred to the Classic Fund (subject to the approval of the French AMF). New Units of the Classic Fund will be issued to the applicable Canadian Participants in recognition of the assets transferred to the Classic Fund. Canadian Participants will be entitled to request the redemption of the new Units whenever they wish. However, following a transfer to the Classic Fund, the Employee Contribution and the Appreciation Amount will not be subject to the Swap Agreement (nor to the guarantee arrangement under the Swap Agreement).

(h) Pursuant to the guarantee arrangement under the Swap Agreement, a Canadian Participant in the Protected Plan will be entitled to receive at least 100% of his or her Employee Contribution and the corresponding 2% Return at the end of the Lock-Up Period (or an earlier date to the extent an early redemption event (i.e., death, disability or termination of employment) has occurred).

(i) The Management Company is permitted to cancel the Swap Agreement (which will have the effect of cancelling the guarantee) in certain strictly defined conditions where it is in the best interests of the holders of Units of the Protected Plan. In the event that the Management Company cancels the Swap Agreement and such cancellation is determined not to be in the best interests of the holders of the Units of the Protected Plan, then such holders would have a right of action under French law against the Management Company. Under no circumstances will a Canadian Participant in the Protected Plan be liable to any of the Protected Fund, the Bank or the Filer for any amounts in excess of his or her Employee Contribution under the Protected Plan.

(j) Under the Protected Plan a Canadian Participant obtains a guarantee from the Bank of his or her Employee Contribution and the corresponding 2% Return and also retains the benefit of any dividends earned on Protected Plan Employee-Purchased Shares. With respect to any increase in value on the Protected Plan Employee-Purchased Shares, a Canadian Participant effectively exchanges the value of any such gain at the end of the Lock-Up Period for a portion of the Appreciation Amount applicable to such Canadian Participant. As discussed above, the Appreciation Amount is effectively the sum of (a) a 2% annual return on a Canadian Participant's Employee Contribution and (b) any gain on Protected Plan Employee-Purchased Shares measured on a five-year average basis. The value of any gain with respect to the Protected Plan Matching Shares is effectively transferred to the Bank under the Swap Agreement.

(k) Upon the occurrence of an early redemption event (i.e., death, disability or termination of employment), a Canadian Participant may request the redemption of his or her Units from the Protected Fund using a modified Redemption Formula. In particular, the measurement of the increase in the value of the Protected Plan Employee-Purchased Shares, if any, from the Subscription Price will be based on the value of such Shares at (or around) the time of the early redemption event (and not at the end of the Lock-Up Period).

(l) During the term of the Swap Agreement, an amount equal to the net amounts of any dividends paid on the Protected Plan Matching Shares held in the Protected Fund during the Lock-up Period will be remitted by the Protected Fund to the Bank as partial consideration for the obligations assumed by the Bank under the Swap Agreement. Any dividends paid on the Protected Plan Employee-Purchased Shares held in the Protected Fund will be contributed to the Protected Fund and used to purchase additional Shares for the benefit of Canadian Participants. No additional Units (or fractions thereof) of the Protected Fund will be issued to employees; rather, the net asset value of Units of the Protected Fund will be increased to reflect this dividend reinvestment.

(m) For Canadian federal income tax purposes, a Canadian Participant in the Protected Plan is likely to be deemed to receive all dividends paid on the Protected Plan Employee-Purchased Shares as well as the Protected Plan Matching Shares. Accordingly, Canadian Participants will generally be liable for taxes in connection with the dividends paid on all such Shares, notwithstanding the actual non-receipt of the dividends (by virtue of such dividends being reinvested, in the case of Protected Plan Employee-Purchased Shares, or being paid to the Bank under the terms of the Swap Agreement, in the case of Protected Plan Matching Shares).

(n) The declaration of dividends on the Shares is strictly determined by the board of directors of the Filer and approved by the shareholders of the Filer. The Filer has not made any commitment to the Bank as to any minimum payment of dividends during the term of the Lock-Up Period.

(o) To respond to the fact that, at the time of the initial investment decision relating to participation in the Protected Plan, Canadian Participants will be unable to quantify their potential income tax liability resulting from such participation, the Filer or the Canadian Affiliates will indemnify each Canadian Participant in the Protected Plan for the following costs: all tax costs to the Canadian Participants associated with the payment of dividends on their Protected Plan Matching Shares in excess of a specified amount of euros per Share during the Lock-Up Period; such that, in all cases, a Canadian Participant will, at the time of the original investment decision, be able to determine his or her maximum tax liability in connection with dividends received in respect of such Shares.

(p) At the time the Protected Fund's obligations under the Swap Agreement are settled, the Canadian Participant will realize a capital gain (or capital loss) to the extent that amounts received by the Protected Fund, on behalf of the Canadian Participant, from the Bank exceed (or are less than) amounts paid by the Protected Fund, on behalf of the Canadian Participant, to the Bank. Any dividend amounts paid to the Bank under the Swap Agreement will serve to reduce the amount of the capital gain (or increase the amount of any capital loss) that the Canadian Participant would otherwise have realized. Capital losses (gains) realized by a Canadian Participant may generally be offset against (reduced by) any capital gains (losses) realized by the Canadian Participant on a disposition of the Shares, in accordance with the rules and conditions under the Income Tax Act (Canada) or comparable provincial legislation (as applicable).

12. Each Fund's portfolio will almost exclusively consist of Shares of the Filer, although the Protected Fund's portfolio will also include rights and associated obligations under the Swap Agreement. The Funds may also hold cash or cash equivalents pending investments in Shares and for the purposes of facilitating Unit redemptions.

13. The Management Company is a portfolio management company governed by the laws of France. The Management Company is registered with the French AMF to manage French investment funds and complies with the rules of the French AMF. The Management Company is not, and has no current intention of becoming, a reporting issuer under the securities legislation of the Jurisdictions or of British Columbia or Alberta.

14. The Management Company's activities in connection with the Employee Share Offering and the Funds are limited to subscribing for Shares from the Filer, selling such Shares as necessary in order to fund redemption requests, and such activities as may be necessary to give effect to the Swap Agreement.

15. The Management Company is also responsible for preparing accounting documents and publishing periodic informational documents. The Management Company will not be involved in providing investment advice to any Canadian Participants.

16. None of the Filer, the Management Company, the Canadian Affiliates or any of their employees, agents or representatives will provide investment advice to the Canadian Participants with respect to investments in the Shares or the Units.

17. Shares issued in the Employee Share Offering will be deposited in the respective Fund's accounts with Caesis Bank (the "Depositary"), a large French commercial bank subject to French banking legislation.

18. Under French law, the Depositary must be selected by the Management Company from among a limited number of companies identified on a list maintained by the French Minister of the Economy, Finance and Industry and its appointment must be approved by the French AMF. The Depositary carries out orders to purchase, trade and sell Shares and takes all necessary action to allow the Funds to exercise the rights relating to the Shares held in their respective portfolios.

19. Participation in the Employee Share Offering is voluntary, and the Canadian resident Qualifying Employees will not be induced to participate in the Employee Share Offering by expectation of employment or continued employment.

20. The total amount invested by a Canadian Participant in the Employee Share Offering cannot exceed 25% of his or her estimated gross annual compensation for the 2009 calendar year.

21. The Shares are listed on Euronext Paris and on the New York Stock Exchange. The Shares are not currently listed for trading on any stock exchange in Canada and there is no intention to have the Shares so listed. As there is no market for the Shares in Canada, and as none is expected to develop, any first trades of Shares by Canadian Participants will be effected through the facilities of, and in accordance with, the rules and regulations of Euronext Paris and/or the New York Stock Exchange.

22. The Canadian Participants will receive an information package in the French or English language (according to their preference) which will include a summary of the terms of the Employee Share Offering, a tax notice containing a description of Canadian income tax considerations relating to the subscription to and holding of Units and the redemption thereof at the end of the Lock-Up Period, an information notice approved by the French AMF for each Fund describing its main characteristics and a subscription form. Upon request, Canadian Participants may receive copies of the Filer's annual report on Form 20-F filed with the Securities and Exchange Commission of the Untied States of America and/or the French Document de Référence filed with the French AMF in respect of the Shares as well as a copy of the relevant Fund's rules (which are analogous to company by-laws in the corporate context). The Canadian Participants will also have access to copies of the continuous disclosure materials relating to the Filer that are furnished to its shareholders generally.

23. There are approximately 2,306 Qualifying Employees resident in Canada, with the largest number residing in Québec (approximately 1167) and the second largest number residing in Ontario (588). Qualifying Employees are also located in British Columbia and in Alberta. The Qualifying Employees resident in Canada represent, in the aggregate, less than 2% of the worldwide number of Qualifying Employees of the Veolia Group.

24. The Filer is not, and none of the Canadian Affiliates are, in default of the securities legislation of Canada.

Decision

Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Makers to make the decision.

The decision of the Decision Makers under the Legislation is that the Offering Relief is granted provided that the prospectus requirements of the Legislation will apply to the first trade in any Units or Shares acquired by Canadian Participants pursuant to this Decision unless the following conditions are met:

(a) the issuer of the security

(i) was not a reporting issuer in any jurisdiction of Canada at the distribution date, or

(ii) is not a reporting issuer in any jurisdiction of Canada at the date of the trade;

(b) at the distribution date, after giving effect to the issue of the security and any other securities of the same class or series that were issued at the same time as or as part of the same distribution as the security, residents of Canada

(i) did not own directly or indirectly more than 10% of the outstanding securities of the class or series, and

(ii) did not represent in number more than 10% of the total number of owners directly or indirectly of securities of the class or series; and

(c) the trade is made

(i) through the facilities of an exchange, or a market, outside of Canada, or

(ii) to a person or company outside of Canada.

It is further the decision of the Decision Makers under the Legislation that the First Trade Relief is granted provided that the conditions set out in paragraphs (a), (b) and (c) under this decision granting the Offering Relief are satisfied.