Securities Law & Instruments

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Dual application for Exemptive Relief Applications -- Application for relief from the prospectus and registration requirements for certain trades made in connection with an employee share offering by a French issuer -- 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 Canadian employees directly by the issuer but rather through special purpose entities -- Canadian participants will receive disclosure documents -- The special purpose entities are subject to the supervision of the local securities regulator -- Canadian participants will not be induced to participate in the offering by expectation of employment or continued employment -- There is no market for the securities of the issuer in Canada -- The number of Canadian participants and their share ownership are de minimis -- Relief granted, subject to conditions.

Applicable Legislative Provisions

Securities Act (Ontario), ss. 25, 53, 74.

National Instrument 45-106 Prospectus and Registration Exemptions.

National Instrument 31-103 Registration Requirements and Exemptions.

TRANSLATION

August 28, 2015

IN THE MATTER OF THE SECURITIES LEGISLATION OF QUÉBEC AND ONTARIO (the "Filing 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 Filing Jurisdictions (the "Decision Maker") has received an application from the Filer for a decision under the securities legislation of the Filing 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:

i) units (the "Classic Units") of Sequoia Classique International (the "Classic Fund"), 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) units (the "Guaranteed Units") of an FCPE named Sequoia Plus 2015 (the "Guaranteed Fund"); and

iii) units (the "Temporary Units" and, together with the Classic Units and the Guaranteed Units, the "Units") of a temporary FCPE named Sequoia Relais 2015 (the "Temporary Fund" and, together with the Classic Fund and the Guaranteed Fund, the "Funds");

made pursuant to the Employee Share Offering to or with Qualifying Employees (as defined below) of Canadian Affiliates (as defined below) resident in the Filing Jurisdictions and in British Columbia, Alberta, Manitoba and New Brunswick (the "Other Offering Jurisdictions") that elect to participate in the Employee Share Offering (collectively, the "Canadian Participants");

b) trades in ordinary shares of the Filer (the "Shares") by the Guaranteed Fund to or with Canadian Participants upon the redemption of Guaranteed Units as requested by Canadian Participants; and

c) the issuance of Classic Units to holders of Guaranteed Units upon a transfer of Canadian Participants' assets in the Guaranteed 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 the Veolia Group (as defined below), the Funds and the Management Company (as defined below) in respect of the following:

a) trades in Units of the Funds made pursuant to the Employee Share Offering to or with Canadian Participants;

b) trades in Shares by the Guaranteed Fund to or with Canadian Participants upon the redemption of Guaranteed Units as requested by Canadian Participants; and

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

(the Prospectus Relief and the Registration Relief, collectively, the "Offering Relief").

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

1. the Autorité des marchés financiers is the principal regulator for this application;

2. 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 the Other Offering Jurisdictions (the Other Offering Jurisdictions, together with the Filing Jurisdictions, the "Jurisdictions"); and

3. 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 under the Legislation or under the securities legislation of the Other Offering Jurisdictions. The head office of the Filer is located in France and the Shares are listed on Euronext Paris.

2. The Filer carries on business in Canada through the following affiliated companies: Veolia ES Canada Services Industriels Inc. and Veolia ES Canada Industrial Services Inc., Société en Commandite Dalkia Infrastructure Services, Dalkia Sante Service Montreal LP, Veolia Services Drummondville, Dalkia Projects Inc., Dalkia Canada Inc., Fort St. James Operations Services Limited Partnership, Veolia Water Canada Inc., Veolia Water Technologie Canada Inc. and Pathogen Detection Systems Inc. (collectively, the "Canadian Affiliates" and, together with the Filer and other affiliates of the Filer, the "Veolia Group"). 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 under the Legislation or under the securities legislation of the Other Offering Jurisdictions. The head office of each of the major operating divisions of the Veolia Group in Canada is located in Montréal, Québec, and the greatest number of employees of Canadian Affiliates are employed in Québec.

3. 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.

4. The Filer has established a global employee share offering for employees of the Veolia Group (the "Employee Share Offering"). Only persons who are employees of a member of the Veolia Group during the subscription period for the Employee Share Offering and who meet other employment criteria (the "Qualifying Employees") will be allowed to participate in the Employee Share Offering.

5. A Qualifying Employee's Share investment will initially be held through the Temporary Fund, which Temporary Fund will subsequently be split, subject to the approval of the French Autorité des marchés financiers (the "French AMF") into the Guaranteed Fund and the Classic Fund following completion of the Employee Share Offering (the "Split").

6. 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 Legislation or under the securities legislation of the Other Offering Jurisdictions.

7. Each of the Funds is 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 will be registered with, and approved by, the French AMF prior to the commencement of the subscription period in respect of the Employee Share Offering.

8. All Units 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, disability or termination of employment).

9. Under the Guaranteed Fund:

a) Following completion of the Employee Share Offering, the Temporary Fund will be split into the Guaranteed Fund (subject to the French AMF's approval) for the part of the Canadian Participants' investment up to 300€. The Temporary Units held by Canadian Participants, for the part of the Canadian Participants' investment up to 300€, will be replaced with Guaranteed Units on a pro rata basis and the Shares subscribed for thereunder will be held in the Guaranteed Fund.

b) The Guaranteed Fund will then subscribe for Shares on behalf of the Canadian Participants at a subscription price that is equal to the price calculated as the arithmetical average of the opening Share price on Euronext Paris on the 20 trading days preceding the date of the fixing of the subscription price by the Board of Directors of the Filer (the "Reference Price"), less a 20% discount (the "Subscription Price").

c) Canadian Participants may invest up to the Canadian dollar equivalent of 300€ (the "Guaranteed Fund Employee Contribution"). The Guaranteed Fund will subscribe for Shares on behalf of the Canadian Participants and enter into an agreement (the "Guarantee Agreement") with Crédit Agricole CIB (the "Bank"). Under the terms of the Guarantee Agreement, the Canadian Participants will have a guaranteed return equal to the sum of (i) 100% of their Guaranteed Fund Employee Contribution and (ii) 120% of the amount of any appreciation of the Share price over the five year period as compared to the Reference Price, calculated on the basis of a monthly average.

d) The Canadian Affiliate employing a Canadian Participant will match the Guaranteed Fund Employee Contribution. The Classic Fund (and not the Guaranteed Fund) will apply the cash received from such employer matching contribution and subscribe for additional Shares at the Subscription Price. Such additional Shares shall be for the benefit of, and at no cost to, the Canadian Participant. These additional Shares will be held by the Classic Fund, not the Guaranteed Fund, and the Canadian Participant will receive Classic Units. The maximum employee matching contribution in respect of each Canadian Participant is the Canadian dollar equivalent of 300€.

e) The Guaranteed Fund will apply the cash received from the Guaranteed Fund Employee Contribution to subscribe for Shares from the Filer, and the Canadian Participants will receive Units in the Guaranteed Fund representing the Shares subscribed for with the Guaranteed Fund Employee Contribution.

f) Under the terms of the Guaranteed Agreement, the Guaranteed Fund will remit to the Bank an amount equal to the net amounts of any dividends paid on the Shares held in the Guaranteed Fund.

g) Under the terms of the Guarantee Agreement, at the end of the Lock-Up Period, the Guaranteed 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 by the Guaranteed Fund (as determined pursuant to the terms of the Guarantee Agreement);

ii) "B" is the aggregate amount of all Guaranteed Fund Employee Contributions;

iii) "C" is an amount (the "Appreciation Amount") equal to:

(1) "P" multiplied by the difference (if positive) between the Average Price and the Reference Price, where

(A) "P" is 120%, and

(B) "Average Price" is the average price of the Shares based on the closing price of the Shares on the last trading day of each month over the Lock-Up Period (i.e. a total of 60 share price readings over the Lock-Up Period). In the event a closing price is less than the Reference Price, it will be substituted with the Reference Price for purposes of calculating the Average Price,

multiplied by

(2) the number of Shares subscribed with the Guaranteed Fund Employee Contributions in the Guaranteed Fund.

h) In addition to the above, if, at the end of the Lock-Up Period, the market value of the Shares held in the Guaranteed Fund (i.e., item "A" in the above-noted formula) is less than 100% of the Guaranteed Fund Employee Contributions, the Bank will, pursuant to the terms of the Guarantee Agreement, make a contribution to the Guaranteed Fund to make up any shortfall in order for the Canadian Participants to receive the amount referred to above as item "B".

i) At the end of the Lock-Up Period, the Guarantee Agreement will terminate after the final payments are made and a Canadian Participant may elect to redeem his or her Guaranteed Units in consideration for cash or Shares with a value equivalent to

i) Canadian Participant's Guaranteed Fund Employee Contribution; and

ii) the Canadian Participant's portion of the Appreciation Amount, if any,

(the "Redemption Formula").

j) If a Canadian Participant does not request the redemption of his or her Guaranteed Units at the end of the Lock-Up Period, his or her investment in the Guaranteed Fund will be transferred to the Classic Fund (subject to the decision of the supervisory board of the Guaranteed Fund and the approval of the French AMF). New Classic Units will be issued to the applicable Canadian Participants in recognition of the assets transferred to the Classic Fund. Canadian Participants may request the redemption of the new Classic Units whenever they wish. However, following a transfer to the Classic Fund, the Guaranteed Fund Employee Contribution and the Appreciation Amount will not be covered by the Guarantee Agreement.

k) Pursuant to the terms and conditions of the Guarantee Agreement, a Canadian Participant in the Guaranteed Fund will be entitled to receive 100% of his or her Guaranteed Fund Employee Contribution and the Appreciation Amount (if any) at the end of the Lock-Up Period or in the event of an early unwind resulting from the Canadian Participant exercising one of the exceptions to the Lock-Up Period. The manager of the Funds, Natixis Asset Management (the "Management Company") is permitted to cancel the Guarantee Agreement in certain strictly defined conditions where it is in the best interests of the holders of the Guaranteed Units. The Management Company is required under French law to act in the best interests of the holders of the Guaranteed Units. In the event that the Management Company cancelled the Guarantee Agreement and this was not in the best interests of the holders of the Guaranteed Units, 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 Guaranteed Fund be responsible to contribute an amount greater than his or her Guaranteed Fund Employee Contribution.

l) In the event of an early unwind resulting from the Canadian Participant satisfying one of the exceptions to the Lock-Up Period prescribed by French law and meeting the applicable criteria, a Canadian Participant may request the redemption of Guaranteed Units using the Redemption Formula. The measurement of the increase, if any, from the Reference Price will be carried out in accordance with similar rules to those applied to redemption at the end of the Lock-Up Period, but it will be measured using values of the Shares closer to the time of the unwind instead.

m) Under the terms of the Guarantee Agreement, the Guaranteed Fund will remit to the Bank an amount equal to the net amounts of any dividends paid on the Shares held in the Guaranteed Fund as partial consideration for the obligations assumed by the Bank under the Guarantee Agreement.

n) For Canadian federal income tax purposes, a Canadian Participant in the Guaranteed Fund will be deemed to receive all dividends paid on the Shares financed by his or her proportionate share of the Guaranteed Fund Employee Contribution along with those Shares acquired on their behalf using the employer matching contribution at the time such dividends are paid to the Guaranteed Fund, notwithstanding the actual non-receipt of the dividends by the Canadian Participant.

o) The payment of dividends on the Shares (in the ordinary course or otherwise) 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.

p) At the time the Guaranteed Fund's obligations under the Guarantee Agreement are settled, the Canadian Participant will realize a capital gain (or capital loss) by virtue of having an interest in the Guarantee Agreement to the extent that amounts received by the Guaranteed Fund, on behalf of the Canadian Participant, from the Bank exceed (or are less than) amounts paid by the Guaranteed Fund, on behalf of the Canadian Participant to the Bank. Any dividend amounts paid to the Bank under the Guarantee Agreement will serve to reduce the amount of any capital gain (or increase the amount of any capital loss) that the Canadian Participant would have realized. Capital losses (or gains) realized by a Canadian Participant may generally be offset against (or reduced by) any capital gains (or 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.

10. Under the Classic Fund:

a) The subscription price for the Shares under the Classic Fund is the Subscription Price (i.e. the Reference Price less a 20% discount).

b) After having made an initial investment of 300€ under the Guaranteed Fund, any additional funds that a Canadian Participant invests in (including employer matching contributions) will automatically be paid into the Classic Fund. Canadian Participants will not be allowed to choose between the Guaranteed Fund and the Classic Fund, as their investment will automatically be allocated in accordance with the amount invested. Any Share subscribed for thereunder will not be matched by the Canadian Affiliate that employs the Canadian Participant.

c) The Classic Fund will apply the cash received from Canadian Participants and the cash received in respect of the matching contribution from Canadian Affiliates under the Guaranteed Fund to subscribe for Shares of the Filer. The Shares will be held in the Classic Fund and the Canadian Participants will receive Classic Units representing the subscription of all Shares held under the Classic Fund, including Shares purchased on their behalf using the employer matching contribution.

d) Following the completion of the Employee Share Offering, the Temporary Fund will be split into the Classic Fund (subject to the French AMF's approval) for the part of the Canadian Participants' investment over 300€. Temporary Units held by Canadian Participants, for the part of the Canadian Participants' investment over 300€, will be replaced with Classic Units on a pro rata basis and the Shares subscribed for thereunder will be held in the Classic Fund.

e) Dividends paid on the Shares held in the Classic Fund will be used to purchase additional Shares. To reflect this reinvestment, new Classic Units (or fractions thereof) will be issued to the applicable Canadian Participants.

f) At the end of the Lock-Up Period, a Canadian Participant may (i) request the redemption of his or her Classic Units in consideration of a cash payment corresponding to the then market value of the Shares held by the Classic Fund, or (ii) continue to hold his or her Classic Units and request the redemption of those Classic Units at a later date.

g) In the event of an early unwind resulting from the Canadian Participant exercising one of the exceptions to the Lock-Up Period prescribed by French law and meeting the applicable criteria, a Canadian Participant may request the redemption of Classic Units in consideration of a cash payment corresponding to the then market value of the Shares held by the Classic Fund.

11. Under French law, each of the Funds is an FCPE, which is a limited liability entity. Each Fund's portfolio will almost exclusively consist of Shares, although the Guaranteed Fund's portfolio will also include rights and associated obligations under the Guarantee Agreement. The Funds may also hold cash or cash equivalents pending investments in Shares and for the purposes of facilitating Unit redemptions.

12. 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 Legislation or the securities legislation of any of the Other Offering Jurisdictions.

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

14. The Management Company is also responsible for preparing accounting documents and publishing periodic informational documents. The Management Company's activities will not affect the value of the Shares.

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

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

17. 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 ministry 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.

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

19. The total amount invested by a Canadian Participant in the Employee Share Offering cannot exceed the lesser of 10,000[EURO] and 25% of his or her estimated gross annual compensation for the 2015 calendar year, excluding any Canadian Affiliate's contribution.

20. 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. The Units will not be listed for trading on any stock exchange and there is no intention to have the Units listed.

21. 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. The information package will also include a risk statement which will describe certain risks associated with an investment in the Units.

22. Canadian Participants will also receive annually a statement indicating the number of Units they hold, as well as their value.

23. Canadian Participants may consult the Filer's annual report on Form 20-F filed with the US Securities and Exchange Commission 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 a corporate context). Canadian Participants will also have access to copies of the continuous disclosure materials relating to the Filer that are furnished to its shareholders generally.

24. There are approximately 1,370 Qualifying Employees resident in Canada, with the largest number residing in Québec (approximately 951) and the second largest number residing in Ontario (approximately 350). Qualifying Employees are also located in the Other Offering Jurisdictions. The total number of Qualifying Employees resident in Canada is less than 1% of the total number of Qualifying Employees of the Veolia Group worldwide.

25. The Filer is not, and none of the Canadian Affiliates are, in default under the Legislation or the securities legislation of any Other Offering Jurisdictions. The Management Company is not in default of the Legislation or the securities legislation of any Other Offering Jurisdictions.

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:

1. the issuer of the security:

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

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

2. 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:

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

b) 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

3. the first trade is made

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

b) to a person or company outside of Canada.

"Lucie J. Roy"
Senior Director, Corporate Finance