The Transparency Act

The Norwegian Transparency Act (Åpenhetsloven), effective from 1 July 2022, mandates that certain enterprises conduct due diligence to identify and mitigate adverse impacts on fundamental human rights and decent working conditions within their operations and supply chains. This legislation aims to enhance corporate accountability and provide the public with access to information regarding how companies address such impacts.

Applicability

The Act applies to:

Enterprises resident in Norway offering goods or services domestically or internationally.
Foreign enterprises offering goods or services in Norway and liable to taxation under Norwegian legislation.

An enterprise is considered "larger" and thus subject to the Act if it meets at least two of the following criteria:

Annual turnover of NOK 70 million or more.
Balance sheet total of NOK 35 million or more.
Average of 50 full-time employees or more during the financial year.

For foreign enterprises, these thresholds are assessed based on their activities within Norway

Core Obligations

Due Diligence: Enterprises must conduct regular due diligence in line with the OECD Guidelines for Multinational Enterprises. This process involves:

Embedding responsible business conduct into policies.
Identifying and assessing actual and potential adverse impacts.
Implementing measures to cease, prevent, or mitigate such impacts.Tracking the effectiveness of these measures.
Communicating with stakeholders about how impacts are addressed.
Providing for or cooperating in remediation where necessary.

Annual Reporting: By 30 June each year, enterprises must publish a report detailing:

The company's structure, operations, and procedures for handling adverse impacts.
Identified actual adverse impacts and significant risks.
Measures implemented or planned to address these impacts, along with their outcomes or expected results.

This report should be easily accessible on the enterprise's website and signed in accordance with the Norwegian Accounting Act .

Right to Information:

Any individual may request information on how an enterprise addresses actual and potential adverse impacts. Enterprises are obligated to respond in writing within three weeks, unless the request is unreasonable or pertains to confidential information .

Enforcement

The Norwegian Consumer Authority oversees compliance with the Act. It provides guidance, conducts inspections, and can impose sanctions, including fines or injunctions, for non-compliance .

Implications for Enterprises

Enterprises subject to the Transparency Act should:

Integrate human rights considerations into their corporate policies and risk management frameworks.
Establish procedures for conducting thorough due diligence across their supply chains.
Develop transparent reporting mechanisms to disclose due diligence activities and findings.
Prepare to handle information requests from the public in a timely and comprehensive manner.