Norwegian Transparency Act
Governmental Agency: Norwegian Government
Jurisdiction: Norway
Ref no: Lovvedtak 176 (2020–2021)
Status: ADOPTED
In June 2021, Norway adopted the Act on Business Transparency and Work with Basic Human Rights and Decent Working Conditions, also known as the "Transparency Act". The key aim of the Act is to ensure basic human rights and decent working conditions in connection with businesses producing goods or providing services. This is delivered by requiring obligated companies to carry out due diligence assessments on a regular basis and report on the results publicly.
The law includes requirements to:
- Survey and assess actual and potential negative consequences for basic human rights and decent working conditions which the business has either caused or contributed to or which are directly linked to the business activities
- Implement suitable measures to stop, prevent or limit negative consequences based on the company's priorities and assessments
- Monitor the implemented measures
- Communicate with affected stakeholders and rights holders about how negative consequences have been handled
- Ensure recovery and compensation where this is required
- Ensure the public has access to information on how businesses deal with negative consequences for basic human rights and decent working conditions.
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The Act relates to businesses registered to operate in Norway, that offer goods and services in or outside Norway. The Act also applies to foreign businesses that offer goods and services in Norway, and which are liable to tax in Norway according to Norwegian internal legislation.
Specifically, the bill obligates businesses that meet two of the following criteria:
1. sales revenue: 70 million Norwegian Kroner
2. Balance sheet: 35 million Norwegian Kroner
3. Average number of employees in the financial year: 50
For those obligated businesses, the implementation and operation of all necessary systems to monitor, address & report on corporate responsibility are likely to result in increased costs. Those that do not comply with the legislative requirements may result in penalties such as requirements to cease relationships with non-compliant suppliers, penalty fees etc. For those who, through these measures, are found to have issues with regard to their corporate social responsibility, there may be additional reputational issues.
There will also be knock-on impacts for those smaller businesses that work with obligated entities, who will be required to meet the obligated businesses due diligence requirements.
