The Transparency Act was enforced 1th of July 2022.
The Transparency Act is the umbrella term for “Law of business transparency and work with basic human rights and decent working conditions”.
The Transparency Act was adopted by Stortinget 1th of June and was enforced 1th July, 2022.
Free courseThe proposal of the Transparency Act was approved by the Cabinet (Solberg Government) following advice from the Ministry of Children and Families on 9 April 2021. Already on 1 July this year (2022), the law entered into force and businesses are now working hard to accommodate the new law.
Excerpt from statutory data:
” The Transparency Act shall promote businesses’ respect for basic human rights and decent working conditions in connection with the production of goods and the provision of services, and ensure the public has access to information about how businesses deal with negative consequences for basic human rights and decent working conditions. « Section 1 of the Transparency Act
The main means of promoting the scope of the Act is to ensure that the general public has access to information about how businesses deal with negative consequences for basic human rights and decent working conditions. The purpose of the Transparency Act and the main instrument is to understand and determine the obligations that businesses have in relation to the Act.
You can read the entire legislative decree on the government’s website.
This article mainly deals with the Transparency Act, but we will go into a number of relevant and important digressions. One of them is “Diligence assessment”, which is described in the OECD’s guidelines for multinational companies .
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The Transparency Act applies to most larger businesses, but also affects smaller businesses through business relationships. To be a business with obligations to the Transparency Act, the business must be based in Norway. This applies to foundations, associations, cooperatives, limited liability companies, limited liability companies and joint-stock companies.
Foreign businesses are also covered by this act as long as they are liable to tax in Norway.
If the business offers goods and services, in or outside Norway, and can be classified as a “larger business”, all public limited companies and companies listed on a stock exchange or a regulated market place are included. Other businesses will be considered “larger” if on the balance sheet date they exceed two of the following three criteria.
It is essentially the same thresholds that apply to the obligation to prepare an annual report under The Accounting Act. The Act also covers the parent company and subsidiaries if they exceed the above criteria in total. The law is a long way off for all companies in a group when the companies in total exceed the criteria. Many businesses want to be in the driver’s seat when meeting new legislation, especially when it comes to social responsibility, human rights and decent working conditions. Incidentally, a parent company can also be a foundation or association that has accounting obligations.
The Norwegian Consumer Protection Authority enforces the Transparency Act in Norway. They have published some guidelines for the Transparency Act on their websites , which will guide companies in their work to ensure human rights and decent working conditions, as well as give the general public access to information about this.
The Act gives businesses orders about the obligation to provide information and the implementation of due diligence assessments. These must be explained in a report and can be made available to the public on request. The Norwegian Consumer Protection Agency informs that there are currently no regulations linked to the law.
In order to give you the best possible information about how your business can comply with the transparency legislation, we share the guidelines of the Norwegian Consumer Protection Authority with explanations.
The first step on the way to dealing with the Transparency Act in organizations is to officially anchor accountability in the board. The board must adopt a plan for how the business, including suppliers and business associates, will carry out the due diligence assessments. It must also be decided in the board that a report must be made public in accordance with the Transparency Act and guidelines. Finally, but not least, the business must comply with the obligation to provide information. Responsibility for carrying out the plans must be clearly placed in the business.
Guidelines should be drawn up for how the organization should process human rights and decent working conditions. All existing guidelines, including requirements for suppliers and business relationships, must be updated in line with the Transparency Act.
Organizations must acquire a system for handling inquiries about information from anyone who requests it. Transparency Gate provides such a system, which incidentally also covers all the other needs for achieving compliance with transparency legislation.
In order to fulfill all requirements for safety assessments according to the Transparency Act, the organization must have an overview of both internal and external assessments. This is best processed with a digital system for transparency in organisations.
When supply chain is fully mapped out, this overall picture will be the basis for risk analysis. The aim of a risk analysis over due diligence in supply chains is to find out whether there are violations of basic human rights and decent working conditions in the various parts of the business. It is also important to calculate where in the supply chain there is a probability of a breach / deviation, and what type it is. The organization can then implement specific measures and control of these measures.
Read more here!Do you want a comprehensive management system that makes it easy to meet the requirements of the Transparency Act and international guidelines?
An information requirement gives everyone the right to demand information from the businesses about how they handle actual and potential negative consequences that have been assessed in the due diligence assessments.
Click here to see our complete guide on how to prepare for the annual report and public statement.
The information requirement is based on the public’s right to demand information about how businesses handle compliance with the Transparency Act, the UN’s World Declaration, OECD and ILO guidelines.
All businesses covered by the Transparency Act have a duty to carry out due diligence assessments according to the OECD’s guidelines for multinational companies. The Act requires the businesses to publish a statement with the due diligence assessments by 30 June each year.
The first deadline for the due diligence report is next 30th of. June 2023.
Businesses must set up information channels where the public can make contact in writing to request information about how the business handles actual and potential negative consequences that have been reviewed in the due diligence assessments. The right to information includes both general information about how the business handles negative consequences, and specific information relating to goods and services.
Pursuant to Section 7 of the Transparency Act , businesses must respond to such inquiries or requests for information in writing within three weeks of receiving the request. The deadline can exceptionally be extended by up to two months if the amount or type of information makes it disproportionately burdensome to respond within 3 weeks. You can read more about the exceptions in Section 6 of the Transparency Act .
Businesses covered by the Transparency Act must map their supply chains. This means that all their customers must account for their due diligence assessments regarding human rights and decent working conditions, even if the law is not necessarily aimed at them directly.
Many businesses wish to be in the driver’s seat with all new legislation, especially when it comes to social responsibility, human rights and decent working conditions.
The UN’s Universal Declaration of Human Rights was adopted in 1948. It establishes, among other things, the prohibition of slavery and the slave trade, the right to work and to fair and good working conditions, non-discrimination and equal pay for equal work, the right to rest and leisure, reasonable limitation of working hours and regular holidays with pay.
The UN Convention on Civil, Political, Economic, Social and Cultural Rights expands the rights in the Universal Declaration of Human Rights and makes it legally binding for states that have ratified them.
Transparency Gate, also referred to as; the “Transparency Portal” and the “Due Diligence Portal” follows all guiding principles for business and human rights (UNGP) and refer to the UN Universal Declaration, OECD guidelines, the Transparency Act and the core conventions of the International Labor Organization, ILO. Processing of WCAG 2.1 is also well under way so that the digital portal will also follow best practice for universal design.
OECD stands for Organization for Economic Co-operation and Development and was founded in 1961 to regulate economic development and global trade. This is an international organization with 38 member countries that are committed to cooperation for democracy and the market economy. Sustainable economic growth, working conditions, living standards, stability and human rights are some of the pillar issues for which the organization works.
The OECD has a number of guidelines for transparency and integrity. Market-leading multinational companies that want to be in the driver’s seat with this development naturally follow these. These guidelines state the activities that a business must carry out in order to map, prevent and limit negative consequences for human rights and decent working conditions, listed as “Due Diligence”, or due diligence assessment in Norwegian.
Many businesses want to be in the driver’s seat when meeting new legislation, especially when it comes to social responsibility, human rights and decent working conditions. Therefore, several of the largest companies are turning to digital systems that have been developed to be a tool to make the due diligence assessments available to both the general public and associated businesses.
Due diligence assessments must show that the business is aware of social responsibility, how the business affects human rights and decent working conditions, as well as how the business implements control measures to reduce or limit negative impact. It is also absolutely essential to follow the process further to see what effect the measures have had over time.
The due diligence process does not only apply to the business itself, but matters to which it contributes or contributes, and matters to which it is connected through suppliers and subcontractors.
All businesses must comply with Norwegian legislation and in countries in which they operate. A large part of the companies that are covered by the Transparency Act are already covered by the Accounting Act § 3-3c on reporting on social responsibility, including human rights. The requirements for this statement were tightened from the 1th. July 2021.
Many businesses want to be in the driver’s seat when meeting new legislation, especially when it comes to social responsibility, human rights and decent working conditions. To help fill the gap, we developed the Transparency Gate. A digital transparency portal that makes it easier for businesses to map risks linked to, among other things, human rights and decent working conditions.
Transparency Gate has been developed by Digitaliq AS with the aim of helping organizations comply with the new Transparency Act.
This is a cloud-based portal for due diligence assessment and risk mapping in the supply chain, and a tool for following up on the Transparency Act.
The portal makes it easy and safe for businesses to map due diligence across the supply chain and meet the information requirement. The public can request access by submitting information requests either by name or anonymously.
Do you want to be in the driver’s seat for compliance with the new transparency act?
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