Time to get serious - New regulations ensure compliance with the Norwegian Transparency Act
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A new regulation has been introduced to ensure compliance with the Transparency Act. This new regulation states that fines for violations can amount to up to 4% of a company's annual turnover or up to NOK 25 million, whichever is higher.
"This move underlines the importance of the law. If companies are not vigilant in preventing human and social rights violations in their supply chain, there will be major consequences. Not just because of the violation itself. A fine of this magnitude can turn a good financial result into a bad one, it will result in negative media exposure, and in the worst case scenario, it can lead to customer flight", says Iris Frøybu, Senior Advisor at Factlines.
Companies that have not started their due diligence and active supplier monitoring must start immediately. By following these simple steps, companies can ensure compliance with the Transparency Act:
The Norwegian Transparency Act came into force on July 1, 2022. It requires both private and public companies to respect fundamental human rights and decent working conditions in connection with the production of goods and provision of services. The Act requires companies to conduct due diligence to evaluate the risk of human rights and labour violations within their organization, supply chains and business partnerships. If negative impacts are identified, companies must take action to stop, mitigate or prevent such violations. In addition, companies are required to publish an annual report describing their organization, area of operation and policies for managing adverse impacts. These reports must be readily available on the company's website by June 30 each year.
In addition, the law requires companies to respond to requests for information related to human rights and labor conditions within three weeks, in a comprehensive and understandable written manner. The provision applies to everyone, including private individuals, journalists and other businesses.
Companies should prioritize transparency and accountability to ensure compliance with the law and promote responsible business practices. By doing so, companies can build a positive reputation, foster trust with stakeholders and contribute to sustainable economic growth.
