The Norwegian transparency act – new regulations on responsible business in Norway

The Transparency Act a glance

• The Norwegian Transparency Act will enter into force on July 1st 2022, and impose adjustments on all enterprises affected by it 
• The main purpose of the act is to ensure that larger enterprises comply with fundamental human rights and decent working conditions in their supply chain
• Enterprises will be required to continuously carry out due diligence and publish the evaluations in a way that is easily available for the general public

Further on the new regulations

On July 1^st 2022 the Norwegian Transparency Act (hereof “the Act”) will enter into force. As one of very few countries in the world, enterprises operating in Norway will have to prove that their supply chain is in compliance with fundamental human rights and decent working conditions. A lack of observation of the Act will be pursued by sanctions such as enforcement penalties and infringement penalties. 

The Transparency Act signifies the entry of human rights in the business industry and will have far reaching consequences for all enterprises affected by it. The Act demands that enterprises familiarize themselves with an area that up until now has been foreign to them. 

To begin with, the Act will apply to larger enterprises resident in Norway and to foreign enterprises that offer goods and services in Norway. The total number of enterprises that are liable under the Act is estimated to be just under 8000. The purpose of the Act is to promote enterprises’ respect for fundamental human rights and decent working conditions, and to grant the general public access to information on how the enterprises address adverse impacts on fundamental human rights and decent working conditions.

The main prerogative for enterprises in pursuing the purpose of the Act, will be to carry out due diligence regularly. The due diligence must be carried out for the entire supply chain of the enterprise, and the enterprises will be held accountable for all breaches of fundamental human rights and decent working conditions within their supply chain. 

Furthermore, the enterprises may be required to carry out due diligence upon inquiries from consumers, the inquiries may apply to both general assessments or relate to a specific product or service. Consequently, the enterprises will be imposed to carry out due diligences continuously and the assessments may extend beyond what is required of them on a general basis. The enterprises shall publish the assessments in a way that makes the information easily available for the public, typically on their website.