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The first report on due diligence under the Transparency Act, for the second half of 2022, was due for submission 30 June 2023. During the autumn of 2023, the Consumer Authority checked 500 randomly selected enterprises' compliance with the Act, and found that 1 in 5 controlled enterprises have omitted required disclosure and that the published reports are of varying quality[1].
The Transparency Act, which came into force on 1 July 2022, aims to promote businesses' respect for fundamental human rights and decent working conditions. Enterprises that are comprised by the act mainly have the following duties:
In order for a Norwegian enterprise to be comprised by the Act, it must be a larger enterprise domiciled in Norway and offer goods and services in or outside Norway. Large enterprises are defined as larger enterprises pursuant to Section 1-5 of the Norwegian Accounting Act, including public limited companies and companies listed on the Oslo Stock Exchange, and other enterprises that exceed two of the following three criteria on the balance sheet date:
Parent companies are considered larger enterprises if the conditions on a consolidated basis are met for the parent and subsidiaries. If one or more subsidiaries alone fulfil the conditions, a separate report must be provided for each individual company covered by the Act.
In the event of a breach of the Act, the Consumer Authority may impose sanctions in the form of prohibitions, injunctions, penalties or violation fines at the highest of up to four per cent of annual turnover or up to NOK 25 million.
Businesses that have not started the work of implementing and complying with the Transparency Act should therefore start the following as soon as possible:
a) Allocate responsibilities and plan for compliance
b) Establish policies and procedures
c) Establish a system for handling the duty to inform
d) Identify actual and potential violations of human rights and workers' rights in own operations, suppliers and business partners
e) Assess the risks and make a plan for follow-up of any breaches
f) Take measures to limit and prevent negative impacts on human rights and workers' rights
g) Report on due diligence assessments and publish the report on the company's website
Businesses that do not have control over whether their compliance with the Transparency Act is satisfactory should review their duties and documentation.
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AGP assists businesses in implementing the Transparency Act. Please contact us if you want guidance or have any questions.
[1] https://www.forbrukertilsynet.no/apenhetsloven-en-av-fem-mangler-redegjorelse-pa-nettsidene
