page 76 Bombardier Inc. Annual Report 2003-04 Environment The Corporation’s manufacturing and service activities are subject to environmental regula- tion by federal, provincial and local authorities in Canada, as well as local regulatory authorities having jurisdiction over the Corporation’s foreign operations. As a result, the Corporation has established, and periodically updates, a health, safety and environment policy that defines the Corporation’s vision for its worldwide opera- tions. Consistent with this policy, approximately 90% of the Corporation’s manufacturing loca- tions have been accredited according to  the ISO 14001 Standard for Environmental Management by outside auditors. Consistent with the Corporation’s policy stressing environmental responsibility and its desire to maintain legal compliance, the Corporation routinely procures, installs and operates pollution control devices, such as wastewater treatment plants, groundwater monitoring devices, air strippers or separators, and incinerators at new and existing facilities constructed or upgraded in the normal course of business. Future capital expenditures for pollution control systems are not expected  to have a material effect on the Corporation’s  consolidated financial position. With respect to environmental matters related to site contamination (historical  contamination of soil and groundwater), the Corporation periodically conducts studies, indi- vidually at sites owned by the Corporation, and jointly as members of industry groups at sites not owned by the Corporation, to determine the feasibility of various remedial techniques, and to define the Corporation’s share of liabil- ity. The Corporation is currently proceeding with decontamination at a small number of sites both in North America and in Europe. The historical costs for soil and/or groundwater decontamination have not been significant.  Estimating future environmental clean-up lia- bilities is dependent on the nature and the extent of historical information and physical data about the contaminated site, the com- plexity of the contamination, the uncertainty of which remedy to apply, the timing of the reme- dial action and the outcome of the discussions with regulatory authorities.  The Corporation expects to increase its costs for remediation activities in future years. This increased cost is based on the probable closure of certain existing facilities and on ever- increasing legal requirements. Although it appears likely that annual costs for soil and groundwater decontamination may increase over time, these costs are not expected to be material to the Corporation. The Corporation operates in industry segments that have a variety of risk factors and uncer- tainties. The risks and uncertainties described below are not the only ones facing the Corporation. Additional risks and uncertainties not presently known to the Corporation or that the Corporation currently believes to be imma- terial may also adversely affect its business. Due to any of the risks and uncertainties described below, the Corporation’s business, financial condition and results of operations could be materially adversely affected. The activities conducted by the Corporation’s segments are subject to operational risks, including competition from other businesses, performance of key suppliers, product perform- ance warranty, regulatory risks, successful integration of new acquisitions, dependence on key personnel and reliance on information systems, all of which could affect the ability of the Corporation to meet its obligations. The principal markets in which the Corporation’s businesses operate experience changes due to the introduction of new technologies. To meet its customers’ needs in these businesses, the Corporation must continuously design new, and update existing products and services  and invest in and develop new technologies. Introducing new products requires a significant commitment to research and development, which may not be successful. The Corporation’s sales may suffer if it invests in products that are not accepted in the marketplace, are not approved by regulatory authorities, or if the products are not brought to market in a timely manner or become obsolete. The Corporation is subject to environmental laws and regulations in each of the jurisdic- tions in which it operates, governing, among other things, air and water pollution, hazardous substance discharges and the remediation of soil and/or groundwater contamination caused by past operations. There is a risk that these governmental environmental requirements,  or enforcements thereof, may become more stringent in the future and that additional costs may be incurred by the Corporation to be compliant with such future requirements  or enforcements. Although the Corporation believes that it is in substantial compliance with current applicable requirements of  environmental laws, there can be no assur- ance that limitations imposed by, or costs  of compliance with, current or future envi- ronmental laws, or liabilities arising from environmental problems will not have a mate- rial effect on the Corporation’s Consolidated Financial Statements. Environmental risk Risks and uncertainties Operational risk Developing new products and services