Norwegian government proposes pioneer human rights law for businesses

The proposal represents an important breakthrough and may bring Norway in front internationally.

The purpose of the proposed “Transparency Act” (Åpenhetsloven) – is to promote corporate respect for basic human rights and decent working conditions in connection with the production of goods and services. It will ensure public access to information on how companies deal with negative impacts on human rights. It builds on the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises.

“While states are responsible for safeguarding human rights, business companies have an independent duty to respect them”, says Geir Hønneland, Secretary General of the Norwegian Helsinki Committee. “Voluntary arrangements are not enough to ensure that businesses respect human rights. There is a great need for this law – both in Norway and internationally.”

The Act obliges companies to carry out due diligence to be able to stop, prevent or limit negative consequences on human rights and working conditions that the companies have either caused, contributed to or that are directly related to the companies’ business activities, products or services through supply chains or business partners.

The Act also includes an obligation for companies to publish statements of their due diligence assessments. At the request of the public, they have to provide information on how they deal with any negative consequences of their operations on human rights. It will cover larger Norwegian companies that offer goods and services in Norway and abroad, as well as larger foreign companies that offer goods and services in Norway and who are taxable here.

The Norwegian Consumer Agency will be given responsibility for supervising compliance with the Act and providing guidance to businesses. The Act prescribes procedures for redress, and companies must provide or cooperate on providing restoration and compensation where this is required. The Act also contains provisions on sanctions for non-compliance.

“The proposal is largely in line with the demands of the Coalition for Responsible Business, of which the Norwegian Helsinki Committee is a member”, says Gunnar M. Ekelove-Slydal, Deputy Secretary General. “It is not perfect. It does i.a. only cover larger companies and does not include a duty to inform about where a product is produced. Nevertheless, it represents a big step in the right direction. And as the proposal enters Parliament, it could be further improved by adding that information about where a product is produced is an important part of transparency.”

The government says that the law will be evaluated and that amendments of it or other measures will be considered in the future to ensure that businesses respect human rights.

The Coalition for Responsible Business comprises business companies, trade unions, and civil society organizations. The broad-based coalition has played an important role in promoting the Act. Another important input came from a committee appointed by the government to propose an Act on business transparency on supply chains, duty of knowledge and due diligence assessments.

According to a study of the consequences of the Act, while there are more than 540 000 companies in Norway, the combined number of big and middle-size companies (with at least 50 staff and 70 million NOK in sales revenue) is only 8 830. They constitute the so-called “larger” companies covered by the Act.

According to the government minister in charge of the proposal, Kjell Inge Ropstad, he thinks there will be a majority in the Parliament for the main provisions of the draft. But even if Norway – and several other European countries – end up having legislation imposing extensive human rights requirements on businesses, it is paramount that we get stronger international regulation. “We do not want to see companies moving to countries with weak legislation”, he says.

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