Compliance

A Unique Co-Relation: Pollution, Outsourcing and Risks

Avatar Written by Ashish Kumar

What ties the following headlines together?

“Odd-Even Policy” to control pollution in Delhi,

Ban on registration of diesel vehicles in Delhi and Kerala,

Similar rules that prohibit the use of vehicles on certain days to control pollution in Mexico City and Beijing,

Creation of a low emission zone around Antwerp

No, it’s not just the root cause “Pollution”; rather the impact of these policies on business operations and a need for long term solution.

Caught off-guard?

The beginning of 2016 saw “Odd-Even policy” being implemented in Delhi: a unique concept in India to control the alarmingly high pollution levels in the capital city. The success of the scheme prompted the government to implement a phase-2 of this policy in April. In the meantime, the Supreme Court extended a ban in Delhi-NCR on registration of diesel vehicles with engine capacity more than 2,000cc as well as methodical step-wise ban to phase out polluting diesel taxis. Kerala, a state in southern part of India, has followed suit with a similar ban along with one on diesel vehicles more than 10 years old.

In another part of the world, Mexico City, which has seen a steady increase in pollution levels, also announced its first pollution alert in 11 years in early 2016. This ban forces a certain percentage of vehicles off the road in a bid to control the pollution level. Since March, this ban has been extended several times. Recently, Antwerp, a port city in Belgium, declared a low emission zone within the city center, limiting the use of polluting vehicles within city.

A similar move was implemented in Beijing last year when air pollution reached a “Red Alert” threshold in December. A color-coded odd-even policy, similar to the one seen in Delhi was implemented. Additionally, industrial and construction projects faced temporary closure.

But what does all this have to do with Outsourcing World?

The Odd-Even policy implemented in Delhi, although a noble initiative, underlines the need for a major overhaul of public transport infrastructure, not just in the capital but also in other major outsourcing cities, such as Bangalore and Mexico City. Such bans put increasing pressure on public transport facilities and the sudden surge in demand for alternate modes of transportation can impact business operations of firms in the form of increased commute time, lack of travel options, etc.

For example, the ban on diesel taxis in Delhi resulted in a logistical nightmare for BPO firms, which primarily rely on diesel cabs/MUVs for company transportation facilities, especially for employees working in night-shifts. With this ban and the absence of alternate travel arrangements for the BPO employees, India’s BPO sector faced a potential loss of US$ 1 B, a figure that represents the scale and impact of these policies.

While this ban has been in effect, companies have been looking at innovative ways to best cope with the current situation by setting up and promoting carpooling among employees and hiring CNG buses/cabs. However, the only long term and sustainable solution to this issue would be a well-developed public transportation infrastructure. Implementing similar pollution control measures in phases would also allow companies to come up with alternative arrangements for employee transportation.

Financial burden & a need for flexible policies:

In light of the diesel-vehicle ban, hiring the services of CNG-converted bus/taxi operators can give rise to additional costs, another burden in the long list of headaches resulting from these bans. Also, the lack of alternate transportation options during such disruptions highlights the need for flexible work policies for employees, such as work-from-home and remote access capabilities, etc. Several such policies have seen an increasing adoption in recent months and the productivity benefits from the same are likely to drive these initiatives further. Understanding the real short-term as well as long-term challenges to minimize disruption to business continuity is the need of the hour, and a well-planned approach, involving all the stakeholders will help mitigate the risk.

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