Environmental Management as Strategy: The Case of Scooters India Ltd. A.

Sahay Abstract The Corporate world is getting littered with corpses of all hues, colours and sizes. Some face sudden death while some others are kept on oxygen for long time before dying. While some die for economic reasons, some others face closure because of environmental mismanagement. Scooters India Ltd. had both the economic and environmental diseases and was declared a mortuary case only to be given ceremonial burial but it staged a smart turnaround because of a nice amalgamation of strategic economic and environmental actions. It innovated products and processes and took to Greening the Management. The present article, after giving briefly the status of Indian Automobile Industry and Environmental issues therein, describes how Environmental Management as a Strategy adopted by the company not only helped its miraculous turnaround but also ensured its sustainability. The case clearly proves that Environmental Management is not only for big companies but can be practiced equally successfully by mid size industries as well. Introduction Indian Industries are relatively young and Environmental Management younger. Countrys industrialization policy looked inward and concentrated on import substitution rather than export led growth. There was centralized planning on the pattern of erstwhile socialistic world. Public sector was assigned greater role and perceived as the engine for growth though mixed economy was the enunciated policy. Private sector units not doing well were nationalized, the main consideration being the protection of jobs. Soon it was apparent that the propounded policy was not working and that public sector was not able to cater to the growth expectations of modern India. In the last decade, the industrial policy took a U turn. Privatization became the new mantra for economic growth and in pursuance thereof many Public sector Units (PSUs) were put on the block (Singh, 1999). Chanting privatization mantra was easier but implementing it was a nightmare because of political and social issues. The fall out of privatization exercise made the mandarins of PSU pull up their socks which resulted in considerable improvement in their performance. Thatcher era debate as to how wise it was to sell the family silver is still going on but the Government has been pursuing the policy of privatization of PSUs, keeping in mind political exigencies, with limited success. Privatization has been further necessitated because of the new WTO regime. Indian Companies first took to quality standards like ISO 9000, QS 9000 etc but with Environmental legislation coming one after another and the Environmentalists getting active; they were obliged to meet all the legislative requirements if they were to continue their operations. There seems to be shift in the policy of privatization with the new government taking oath of office but there has been no relaxation in the pursuit of Environmental objectives and goals. Bhopal disaster (Rahman, 1992) in December 1984 made a paradigm shift in Environmental and safety issues. It exposed the environmental fragility of companies as well as differential Environmental behavior of multinationals. It threw a new challenge to

the country with respect to Environmental legislation, governance and enforcement. Though Environmental laws existed prior to this disaster (legislation began in 1974 itself), Indian Parliament enacted a comprehensive law called Environment (Protection) Act, (1986). Under the Act new rules and regulations are being framed from time to time which business and industry are obliged to meet. Some of the important Environmental rules and regulations framed thereafter are Hazardous Wastes (Management and Handling) Rules (1989), Central Motor Vehicles Rules (1989), Public liability Insurance Act,(1991), Bio-Medical Waste (Management and Handling) Rules,(1998), Manufacture, Storage & Import of hazardous chemical Rules, (1989), Recycled plastics manufacture and usage Rules,(1999), The ozone depleting substances (Regulation and Control) Rules,(2000), Noise Pollution (Regulation and control) Rules,(2000), The Municipal solid wastes (Management and Handling) Rules, (2000), The Batteries(Management and Handling) Rules, (2001),Forest (Conservation) Rules,(2003), etc. Companies, in the new Environmental and Ecological regime, found it meaningful to get ISO 14001 certification which obliges them to at least meet all legislative requirements and install an Environmental Management System (EMS) because of emerging legislation, rules and regulations . Indian industries (more than 800 units have got ISO 14001 certification) are no different in their motivation for formulation, implementation and maintenance of EMS compared to industries in developed countries for whom meeting legal requirements was the first reason for formulation and implementation of EMS. The prevention of prosecution and adhering to the industry/sector norms came next. Customer demand, financial markets and social pressure are still of lower priority. Notwithstanding, there are a few companies which are aiming at Environmental Excellence. The current status of Indian Corporates (Sahay, 2004) shows that the regulatory mechanism has failed to control Industrial and vehicular pollution. This is because the policies and institutions controlling pollution are weak and proper market mechanism has yet to be in place. Pollution is rising rapidly with economic growth and has already reached unbearable proportions as it happened in the industrialised countries in 1950s and 1960s, within a decade or so of the World War. The economic boom was environmental bane . If pollution grows at this rate, there is bound to be public protests, and given the space that Indian democracy provides, either the politicians or the courts will have to respond. Community and civil society protests and judicial activism are already biting the industries. Indian Supreme Court has actively intervened in many environmental issues on pubic complaints (at times sue motto). In such a situation, industries find their investment most threatened. Therefore, for a country like India, it is in the industry's own interest to adopt a proactive role in environmental management. Sustainability: A Strategic Issue Apart from the Annual Report, companies have started publishing Sustainability Report which provides companys environmental policy and its implementation status. Corporate Sustainability is a business approach that creates long-term shareholder value by embracing opportunities and managing risks from economic, environmental and social developments. Corporate sustainability leaders achieve long-term shareholder value by gearing their strategies to harness the markets potential for sustainability products and services while at the same time successfully reducing and

avoiding sustainability costs and risks. Leading sustainability companies display high levels of competence in addressing global and industry challenges in variety of areas. Their strategy is to integrate long-term economic, environmental and social aspects in their business while maintaining global competitiveness and brand reputation. The sustainability reporting varies from organization to organization making it difficult for the stakeholders to evaluate the company for their investment and other decisions. Various reporting methods have been propounded from time to time by different agencies. Important among them are Responsible Care 1988, Coalition for Environmentally Responsible Economies 1989, ICC Business Charter1990, Global Environmental Management Initiative (GEMI) 1990, The CBI Environment Business Forum 1992, Rio Business and Industry Agenda 1992, European Eco-Management and Audit Scheme ( MAS) 1992, ISO 14031, European Chemical Industry Council E (ECIC) 1993, Global Environmental Charter 1993, Public Environmental Reporting Initiative (PERI) 1993, The World Council for Industry and the Environment (WICE), World Business Council for Sustainable Development (WBCSD) 1995, ACBE Guide 1997, Guide to Environmental and Energy Reporting and Accounting I997, Declaration of Intentions and Global Reporting Initiative (GRI) 2002. Global Reporting Initiative (GRI) is a multi-stakeholder process that, of late, is gaining acceptability worldwide. It is an independent institution whose mission is to develop and disseminate globally applicable Sustainability Reporting Guidelines. These Guidelines are voluntary in nature but is getting popular among organizations for reporting on the economic, environmental, and social dimensions of their acti vities, products, and services. The GRI incorporates the active participation of representatives from business, accountancy, investment, environmental, human rights and labour organizations from around the world. Started in 1997 by the Coalition for Environmentally Responsible Economies (CERES), the GRI became independent in 2002. GRI report has now become a strategic tool for communicating companys commitment and performance on Environmental parameters. Indian Automobile Industry & Exhaust Emission Following the economic liberalization in India in 1991, the ownership and utilization of motor vehicles are growing rapidly. The ever-increasing trend in the sales of motor vehicles during different periods would substantiate the above statement. The total number of motor vehicles sold in 1983/84 was 0.99 million, which increased to 2.02 million in 1991/92, and in 1996/97 the number shot up further to 3.97 million indicating a compound average growth rate of 14.4% during 1991/92-1996/97 as compared to 9.4% during 1983/84 -1991/92. In the 1998 to 2000 further 12.24 million vehicles were added (SIAM, 2001). One noticeable feature about the growth in motor vehicle population, however, is that it has not been even across all categories; personalized modes of transport (i.e. two -wheelers and cars/jeeps) have dominated in this growth, For instance in Delhi, two-wheelers and cars/jeep account for more than 90% of registered motor vehicles. On the other hand, the share of registered buses the primary mode of public transport (recently metro has been introduced) in Delhi is an insignificant 1% of the total vehicles in Delhi. Similar is the trend for other metropolitan cities. There are many reasons for the increase in motorization. The most prominent reasons are the growth in income per capita and the growth in urbanization. The easy

availability of loan has made the urban youth spend his future income as well on motorisation. The growing level of motorization in urban areas with poor traffic management strategy and inadequate separation among working, living, and moving space on major corridors have resulted in traffic congestion leading to longer travel time, extra fuel consumption, and associated air pollution problems. The problem is further compounded by the large share of poorly maintained old vehicles, sizeable share of inefficient two -stroke engines, and uncontrolled emissions from diesel-engine buses plying on city corridors using poor quality fuel. According to the air quality monitoring data of the CPCB (Central Pollution Control Board), in at least 48 cities, particulate matter (PM) concentrations exceed the annual residential limit of 140, ug/m3 (CPCB 1995). Six of the ten largest cities in India Mumbai, Calcutta, Delhi, Ahmedabad, Kanpur, and Nagpur have annual average PM levels at least three times higher than the World Health Organization (WHO) standards. While only a few cities have high concentrations of NOx and SO2, this picture is bound to worsen with growing industrialization and motorization. Further, the environmental impact of PM and NOx emissions from current uncontrolled diesel engines is higher compared to that of the emissions from gasoline engines equipped with catalytic converter. Also, it is well known that the most serious health risks arise from exposure to PM. Adverse health effects from inhaling PM depend not only on the mass but also on the size of the particles. Smaller particles penetrate deeper into the respiratory tract and can be more toxic and injurious to heath. In terms of health impacts of air pollution, barring one or two studies, there is very little epidemiological research in India, and one has to rely on back-of-the-envelope estimates. Dose-response functions from developed countries to estimate mortality and morbidity due to ambient air quality exceeding the WHO guidelines in 36 Indian cities was studied earlier in which the pollutants PM, SO2, NOx and lead were considered. The report stated that over 40,000 premature deaths would be avoided if pollutant levels in these cities were reduced to the WHO annual average standard. A more rigorous and comprehensive study by Tata Energy Research Institute (TERI), which considered more sources of pollution and the entire country, including rural areas, estimated that 2.5 million premature deaths takes place in the country as a whole due to air pollution. TERI, later, brought out a nice report Cleaner is Cheaper : Case Studies of Corporate Environmental Excellence in which Corporate Social Responsibility actions highlighting Environmental Management systems of some of the Corporate houses was magnificently dealt with (Narang et al, 2003). 2 and 3 Wheeler segment of Auto Industry in India The Indian economy was closely regulated and controlled till late 1980s. One of the key success factors for an organization in the regulated economy of pre -1990 was to get license from different ministries and obstruct the issuance of license to any of the present or potential competitors. Government tightly controlled capacity expansion and firms truly enjoyed a sellers market. Domestic production capacity in the country was unable to match the demand and imports were extremely difficult. Indian Automobile Industry is divided into Heavy, Medium and Light Commercial Vehicle, Multiutility Vehicle, Car and 2-Wheeler & 3-Wheeler. Soon after independence, Automobile Products of India was granted a license to produce scooters in the country. The

company had technical collaboration with the then Innocenti of Milan, Italy. It was the only manufacturer of two wheelers in India till 1960. Bajaj Auto Ltd.(BAL) was the next to enter two wheelers and three wheelers industry. BAL has been the market leader in the scooter market since then. However, the market leadership position in the two wheeler segment (which also includes motor cycles) went to Hero Honda in 2001. Scooters India Ltd. (SIL) was granted a license in 1973 to manufacture 100,000 scooters per anum. It started production in 1975. Karnataka Scooters Limited and Andhra Pradesh Scooters Limited, who were using SIL manufactured engine, started production in 1976. The competitive environment changed significantly in the mid 80s. Lohia Machines Limited (LML) started production of scooters in 1984 in collaboration with Piaggio of Italy. Kinetic Honda started scooter production in 1986 in technical collaboration with Honda Motors Limited, Japan. Gujarat Narmada Auto Limited, a subsidiary of Gujarat Narmada Fertilizer Corporation, started scooters production in 1987 but could not sustain the activities and was finally liquidated in 1997. From the second half of the 1980s, the market started becoming a buyers market. The market structure changed significantly in the 1990s. The launch of fuel efficient and trendy motorcycles in foreign collaboration by BAL, Hero-Honda, TVS and Escorts changed the market scenario for two wheelers in India resulting in sea change in demand pattern. While the growth rate of the motor cycle has remained in double digits during the last decade, it has shown a declining trend for scooters (SIL, 1992). The concept of a three wheeler vehicle came from Europe. Mediterranean Europe had its maximum use but today Asia is the leader in 3-Wheelers. India is the second largest producer of three wheeler vehicles in the world, behind China (Na thalie Ladler, 1996; Bajaj Auto Limited, HBR case No. 9-593-97). These were earlier mostly three seaters. Three wheeler vehicles is used for multiple purposes. In India, it is commonly used as passenger carriers for short distances. These carriers could be point-to-point taxies with larger space inside to accommodate 6-8 persons comfortably or it could be smaller rickshaws with 3-4 passengers carrying capacity to meet specific travel needs of passengers. While the smaller versions are generally fitted with petrol engines, larger passenger carriers are mostly fitted with diesel engines. Of late, they come with engines capable of running on CNG which causes lesser pollution. Three wheeler operations in India are characterized by the following: 1. Operation of a 3-wheeler taxi within the municipal limits of cities is decided by state government agencies. Traffic movement, public convenience, environmental factors, and political factors influence the local administration. 2. The taxi operators are generally from lowe r income groups who often invest all their savings to buy these taxies which are the medium for earning . 3. Passengers are predominantly from middle income or lower middle income groups. They use the three-wheeler taxies for their convenience, availability and low cost. Hence, low operational cost of the vehicle is important to compete effectively with other modes of public transport such as buses. Subsidized pricing policy of diesel by the government has made the diesel model of three wheeler taxies more popular. 4. Since the late 1990s, there is growing concern for environmental degradation caused by motor vehicles. In some of the cities including Lucknow, the home of SIL, restrictions have been imposed on the movement of diesel taxies.

These characteristics of 3 wheelers and the environmental regulation put twin pressure on three wheeler manufacturers. First, they have to keep price and operating cost of vehicle low. Second, they have to be equipped for growing environmental concerns. Companies are responding to environmental concerns by upgrading the technology and using alternate fuels. Subsidized price of diesel in India provides low operating cost for such vehicles. The competition in 3-Wheeler sector is becoming intense with the entry of Piaggio Greaves Vehicles Ltd (PGVL), Mahindra and Mahindra (M&M) and Bajaj Tempo Ltd (BTL). Besides these 3 major new entrants, some small sector units are also playing in the field. In response to intense competition and new exhaust emissions regulations, SIL developed low-emission CNG version as well as zero-emission battery driven Vikram EV in late 90s. SIL gained from experience in Kathmandu where the company's diesel three wheelers were being converted into battery driven vehicles by some American Consultants. SIL manufactured and marketed world's first zero emission battery driven 3 wheeler. The then President of USA, Mr. Bill Clinton appreciated the zero-emission vehicle when he visited Tajmahal in Agra on the Earth Day, the 22nd March, 2000 from where he had addressed the world. Following on the heels, M&M also developed a battery operated three wheeler and put on trials. BAL, too, has demonstrated an electrically operated 3 seater 3-Wheeler but has been playing on low key. Due to courts intervention, only CNG powered and battery driven electric 3Wheelers are registered in Delhi. With so many constraints and easy product substitution, the growth of three-wheeler market is uncertain, more so because of environmental issues. This has adversely affected the demand, which was earlier increasing continuously at a rate of 30 to 40 percent. None the less the vehicles running on alternate fuels are expected to remain in demand. Scooters India Ltd. (SIL) The then Prime Minister, Mrs. Indira Gandhi had laid the foundation of the plant on April 8, 1973 at Lucknow, the capital of Uttar Pradesh, the largest state of India. Lucknow had little industrialization and inadequate infrastructure of roads, telecommunication and power. The company was created as a joint venture between Govt. of India, Innocenti of Italy and API, a private sector automobile company located in Bombay. API withdrew from the joint venture in July 1973 because of conflicts related to three wheeler project and payment to API for its technical services and Innocenti got liquidated in Italy. The share capital to be provided by them was raised through public subscription a unique experiment by Govt. of India. The operations started with massive recruitment of people meant for full capacity of 100,000 scooters. Selection of employees was unplanned, many persons with similar expertise were selected and skill in many areas was lacking. Casual labour from neighbouring areas was initially called to open cases containing plant and machinery that had arrived from Italy. Subsequently, they became regular employees. Most of them were illiterate having little idea of quality or ecology. SIL planned to manufacture 30,000 scooters in 1974, the first year of operation, 60,000 in 1975 and 100,000 from 1976 onwards. The company entered into agreements with seven manufacturing units in different Indian states during 1973-74 to supply 100,000 power packs (a compact unit consisting of engine and gearbox). The first prototype of the scooter was ready in

November 1974. Testing of the scooter by Vehicle Research and Development Establishment (VRDE) reported technical problems regarding inferior quality of components. SIL had to source these components from distantly located suppliers. Frequently these supplies, whose rejection would adversely affect the production targets, did not meet specifications. Not withstanding, SIL started commercial production in February 1975. It simultaneously started the process to set up ancillaries and in-house production facilities. SIL established a foundry and a forge shop in the factory premises for internal consumption little knowing that these will become both economic and environmental burden in time to come. The initial enthusiasm and challenge of commissioning evaporated fast with the failure of the first product (scooter) - Vijay Deluxe. Products after products were launched with incremental innovation but they failed at the market place. Production declined sharply after 1985-86 when new collaborative products started appearing in Indian market. The tools, dies and fixtures were worn out and the products were substandard both in terms of quality as well as exhaust emissions (this factor became strategic later). Suppliers were hesitant to supply good quality components on normal business terms and conditions. Local media, too, became hostile due to poor performance of the company and its products. Most of the board meetings were rituals. From 1986 onwards, no worthwhile discussion took place in those meetings. They were organized primarily to meet the requirements of the Companies Act and conducted in New Delhi the seat of the Govt. rather than at the place of action. The purpose of these meetings got reduced to the CEO seeking help of the government nominee directors to get fresh loans approved by the government. Slowly rumours of possible closure of the company started spreading . The period from 1987 till 1992 was one of great industrial unrest. There was very little concern for production as sales of the product were extremely difficult (Kumar, 1996). SIL reported a loss of Rs. 404 million on sale of Rs. 103 million in 1989-90. The accumulated loss stood at Rs. 2125 million. The operational loss further went up to Rs. 613 million and accumulated loss to Rs. 3605 million on a sale of 236 million when the company was referred to Bureau of Industrial and Financial Reconstruction (BIFR) in 1992 which provides protection similar to Bankruptcy Court. SIL, having been referred to BIFR and getting protection under Sick Industrial Company Act (SICA 1991), immediately formed a strategic planning and implementation group. The Strategic group started working on full throttle and the first document it produced was the radar map (Fig.1) for automotive engine needed for its product. The document on the course to be followed by the Company for its survival and growth was the next. They presented the future automobile scenario that clearly brought the environmental issues that the companys products and processes were facing. The information was shared with every level of the organisation, right from the workers to the top management. Later the issues were discussed at Board level. The environmental aspects and impacts of the operations in the factory premises came were considered first as they were essential for running of the factory. Equally important was the product strategy especially exhaust emission but it needed change in engine design which called for huge investment. Revival Plan of the Company (1992-96), which centered around products and processes, recommended following strategic actions. respect environmental legislation and enforcement actions

make the products and processes environment friendly develop confidence in employees that the company could be revived improve industrial relations get support of ministry officials, union leaders, and employees improve the finances of the company improve quality and cost efficiency of products bring customer focus in all operations of the company

Though on record, the Group of Ministers in 1992 gave a lease of life to the company, the real cause of turnaround (Fig.2) was on account of the change in mindset of employees that came through rigorous training that was imparted to them in the journey towards ISO 9000 and ISO 14000. During the period under reference to BIFR, the Board of Directors kept a close watch on the performance of SIL. They were more vigilant and inquisitive, especially about quality and environmental aspects of the operations of the factory as well as environmental performance of the products. SIL's R&D team had played a significant role in changing product line from scooter to 3Wheeler and imbibing environmental aspects in the products right at the design stage. The company pushed the production and sale of three-wheelers and its revenue started moving northwards. The strategic group, however, remained busy working out emerging future scenarios and strategic action plan to meet the challenges external environment was bringing . It was obvious that SIL had to develop its environmental policy and take seriously to Environmental Management, which become the key factor in its Turnaround. Though getting ISO 14000 certification took some time, Companys Environmental Policy (Annexure-1) was already in place. All the employees, suppliers and dealers were working to achieve environmental targets along with productivity, quality and sales targets. The Company was rated highly by Center of Science and Environment (2001) for its environmental performance in automobile sector. Later the CEO was declared the Environmental Chief Executive of the year by Wisitex. Environmental Actions taken by SIL The strategic group had identified environmental actions on three fronts: 1. People 2. Product and 3. Process It was observed that not only the employees but all stakeholders were unmindful of the environmental issues that the company was confronting one after another. The CEO of the company had discussed informally the issues with directors, dealers and bankers. No one in the beginning gave any heed to what environmental legislation and enforcement coupled with changed customer preferences was coming. It was evident that our operations will get completely paralysed; leave aside the task of Turnaround. Central Motor Vehicles Rules (CMVR), 1989 had already come in force but the company had to continue selling its products even when they were not meeting exhaust emission norms. The motor vehicle registering authorities, too, were merrily registering these 3-Wheelers. This was because of no dissemination or insufficient dissemination of knowledge about the new rules. The manufacturing process front within the company

was worse as Environmental Pollution Act (1986) was already in force and many of the processes had pollutants beyond permissible limits. The factory was carrying on various processes like melting, shot blasting, welding, spray painting, heat treatment etc. which resulted in air, water and land pollution much beyond the permissible limits provided in the Act. The most sensitive was the salt bath (cyanide) process for heat treatment. The state pollution control board had raised the issue a number of times but it could be persuaded not to take any punitive action. The factorys operations, however, came under close scrutiny by the Pollution Control Board as the courts started hearing public interest litigations and resorted to strong judicial actions . In one of such actions the High Court of Allahabad, Lucknow Bench banned plying of Companys 3-Wheelers in Lucknow. This was a wake up call for the management, employees and all other stakeholders. The Company had to pull up its socks and remedy the poor environmental performance immediately. The strategic group identified people as the first and foremost factor in making the company Environmental friendly and accordingly every one was trained in Environmental aspects and impacts of companys operations , especially those in his area of operation. Many employees were given higher level of training . The CEO had to lead from the front. He underwent Advanced Lead Auditors Course in Environmental Management Systems. There was change of mindset and a fresh breeze was blowing across the company making everyone worry and act to make companys processes and products environment friendly. While taking stock of the situation, it was observed that a number of Acts and Rules (Table 1) were applicable to the company many of which were not being complied. The action started from the scrap yard. Foundry, Die Casting, Forging were on the firing line. Some immediate investment had to be made to comply with the pollution laws. Fume and dust extractors, hoods, dust bags, chimneys etc had to be installed but the savings outstripped the expenditure. Paint shop and Heat Treatment shops called for huge investments as the basic process itself had to be changed. This required introduction of equipments with new technology. Machine Shop, Press Shop, structural Shop and Assembly line, too, required marginal investments. Auxiliaries and utilities required much support but they were brought to the desired level of environmental performance with an in plant effort. With these actions taken, it was observed that the scrap yard started dwindling. As no separate environmental account was kept, it is difficult to say the return on environmental investments. However, the production (Fig.3) went on increasing. The losses started reducing and profits started rising. The highest impact on productivity, cost reduction and consequent profit came from savings in material (Fig.4). The power and fuel consumption reduced (Fig.5) considerably. In fact, the experts, financial institutions and bankers never thought that Energy cost in a unit like ours, which was operating melting furnaces, could ever go below 4%. The manufacturing and operating costs (Fig.6) which includes indirect material and overheads also showed a declining trend. The employee loved the new working environment and showed their enthusiasm through their higher productivity and creativity. Despite their salary and wages going up there was considerable reduction in employee cost (Fig.7). The newly found creativity resulted in ever improving products. Vikram EV (Electric 3-Wheeler) was the result of this innovation and creativity. Even President Clinton (Fig.8) admired this product during his visit to Tajmahal in India. The

pursuit to environmental excellence made the strategic group to generate further ideas and create new businesses out of environmental requirements of future and companys strength developed in the process of turn around. The future strategic opportunities are depicted in Figure 9. Conclusion Scooters India Ltd. used Environmental Management as strategy for Turnaround. It discovered in Environmental Management a strategic tool for its sustenance and growth. The action started for ISO 14000 certification, earlier perceived to be a financial burden, became a virtue as the company marched on its journey for revival. The case of SIL makes it clear that Environmental Management is a strategic tool for Business sustenance and growth. The general belief that environmentalists are only a pain in the neck and add no value to the business is far from truth. Companies world over have realized that good environmental management makes good economic sense. In fact for a start up and growth company, it is more va luable. Leave aside the regulators, there are customers who are green and are prepared to pay more for green products as well as for products which are manufactured through green processes. The myth that Environmental Management is applicable only to big companies and that small and medium company can not afford this luxury is completely broken from the case of SIL. People are getting green and forcing the governments to get green. The later have no option but to introduce green business laws and rules for the future of earth as well as for their own survival and coming to power again. Green people will always demand green products manufactured through green processes and in this lies the profitability as well as sustainability of the business. References : Centre for Science and Environment (CSE),2001,Green rating project : Environmental Rating of Indian Automobile Sector, New Delhi. Central Motor Vehicles Rules, 1989 Dasgupta N, 1997, Environmental Accounting, Wheeler, New Delhi. Ghobadian A, Viney H, Liu L and James P,1998,Extending Linear Approaches to Mapping Corporate Environmental Behaviour, Business Strategy and the Environment 7:13-23 Jain A.K, 2001, Descriptive Law on Pollution and Environment, Akalank New Delhi. KPMG, 2002, International sur vey of corporate sustainability reporting, University of Amsterdam. Narang R. K et al, 2003, Cleaner is Cheaper : Case Studies of Corporate Environmental Excellence, TERI, New Delhi.

Rehman, S 1992, Lessons production managers can learn, Management Review 21(2):58-67. Sahay A, 2003, Environmental risks and relevance of insurance products, World congress on environmental management, Palampur. Sahay A, 2004, Environmental reporting by indian corporations, Corporate Social Responsibility and Environmental Management,11,12-22. Scooters India Limited, 1992, Revival Plan. Sick Industrial Company (Amendment) Act, 1992 Singh P, 1999, Privatising Sick Public Undertaking, Mittal publications,New Delhi. Society of Indian Automobile Manufacturers,2001 Inspection and Maintainance for in - use Vehicles in India, GTTE Regional Workshop on Inspection and Maintenance Policy in Asia, Bangkok, Thailand. Table 1 :Summary of Obligation & Responsibilities for Applicable Legislation Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 YEAR 1974 1975 1977 1978 1981 1982/1983 1986 1986/2002 1989/2000 ENVIRONMENTAL LEGISLATION

The Water (Prevention and Control of Pollution) Act The Water (Prevention and Control of Pollution) Rules The Water (Prevention and Control of Pollution) Cess Act The Water (Prevention and Control of Pollution) Cess Rules The Air (Prevention and Control of Pollution) Act The Air (Prevention and Control of Pollution) Rules The Environment (Protection) Act The Environment (Protection) Rules Amended up to 2002 The Hazardous Wastes (Management and Handling) Rules/ Amendment Rules 1989/1994 Manufacture, Storage and Import of Hazardous Chemical Rules/ /2000 Amendment Rules 1991 The Public Liability Insurance Act 1991 The Public Liability Insurance Rules 1993/1996 The Environmental (Protection) Rules- Environmental Statement /1998 1993 The Environmental (Protection) Rules- Environmental Standards 1994 The Environmental (Protection) Rules- Environmental Clearance 1995 The National Environmental Tribunal Act 1997 Amendments in the Environment Protection Rules, 1994 Public Hearing

18 19 20 21 22 23 24 25 26 27 28

1997 1948 1950 1996/2000

National Environmental Appellate Authority Act Factories Act U.P. Factory Rules The Chemical Accidents (Emergency Pla nning, Preparedness and Response) Rules 1934 The Petroleum Act 1981 The Gas Cylinder Rules 1976 The Petroleum Act (Amendment) Rules 2000 Noise Pollution (Regulation and Control) Rules 2000 Ozone Depleting Substances (Regulation) Rules 2001 Batteries (Management and Handling) Rules 1980/2001 The Central Motor Vehicles Rules (CMVR) /2004

AUTOMOBIULE ENGINE - RADAR MAPPING STRATEGIC VISION

ELECTRIC/BATTERY CNG/PROPANE

SOLAR

FUEL CELLS

STROKE 4-STROKE

LEV ZEV

Figure 1

OPERATING PROFIT / LOSS (Rs. in Million)

200
113.6 130.7 80.1 79.0

100 0
-20.2

100 200 300 400

-426.9

-67.3

500 93- 94 94- 95 95- 96 96- 97 97- 98 98- 99 99- 00

Figure 2

1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0

Rs. IN BILLION

SALES TURN OVER

Rs. IN BILLION

1.38 1.20 1.31 1.33

0.86

0.50 0.29

93-94 94-95 95-96 96-97 97-98 98-99 99-00

29.74 50.8 86.6 120.68 131.28 133.86 138.54

Figure 3

% OF MATERIAL COST OF VALUE OF PRODUCTION

80 70 60 50 40 30 20 10 0

65.02
%

55.97

54.01

52.01

51.73

50.53

49.69

93-94

94-95

95-96

96-97

97-98

98-99

99-00

Figure 4

% OF POWER & FUEL COST TO VALUE OF PRODUCTION

7 6.1 6 5 4 3 2 1 0 93-94 94-95 95-96 96-97 97-98 98-99 99-00 4.02 3.23 2.91 2.57 3.25 2.8 %

Figure 5

% OF MANF.& OPERATING COST TO VALUE OF PRODUCTION 5 4 3 2 1 0 93-94 94-95 95-96 96-97 97-98 98-99 99-00

4.37 3.66

2.78 2.28 2.25

2.79 2.51

Figure 6

% OF EMPLOYEE COST TO VALUE OF PRODUCTION 50 42.99 40 % 26.7 24.02 20.82 20 14.71 10 16.85 23.68

30

0 93-94 94-95 95-96 96-97 97-98 98-99 99-00

Figure 7

Figure 8 : President Clinton Inspecting Vikram EV on Earth day - 22nd March, 2000, outside Tajmahal, Agra

SILS SURVIVAL/COMPETITION MODEL

FRAME

DEALERSHIP BATTERY LEASING FUEL CELL

CNG
SCOOTER MAGNETO COMPONENTS 3 WHEELER EXHAUST (POLLUTION)

EV

ENVIRONMENT

LPG
FOUNDRY

BATTERY CHARGING

SOLAR POWER

ENGINE SERVICE FORGING

Figure 9