Understanding the impact of the Norwegian Transparency Act
The Norwegian Transparency Act came sailing in across the country on July 1, 2022 and probably knocked the wind out of many responsible business owners out there. And it's perhaps not surprising, because it can seem overwhelming to have control over how everyone who in some way delivers to you and your business is doing at work!
Fortunately, your responsibilities are not that extensive. Janne Jacobsen, Delivery Manager at Factlines can both reassure and, not least, simplify your mission; "You're not going to save the whole world, but you should know a little more - and try to influence where you can!"
Get an overview
What we advise our customers is to first get a good overview of all the suppliers you use. You need to be able to answer:
Once this overview is in place, you have a very good start on the risk analysis that the Transparency Act requires you to perform," Janne continues.
However, she is clear that the whole law can seem both confusing and a little confusing to many. "This may be perceived as an intangible law, but human rights and decent working conditions are challenging. It's simply a difficult topic that we must approach with wisdom!"
You are not going to save the whole world, but you should know and try to influence!
The Norwegian Transparency Act - briefly explained
So what exactly is the Transparency Act? And who is actually required to comply with it?
Janne Jacobsen explains: "There are quite clear criteria for who is covered by the law, but virtually all companies are part of a supply chain and must therefore respond to this in one way or another. This is because if a smaller company, which is not directly subject to the law, delivers to a company that has to report on this, then you have to be able to present documentation to them. In practice, this means that all companies that supply to a business market should carry out a due diligence assessment."
The purpose of the law is not to terminate supplier relationships if it is discovered that not everything is as it should be, but rather to work to influence change. In this way, companies in Norway can achieve better conditions elsewhere, but if gross violations are discovered and the supplier is not open to change, then you must consider terminating the relationship.
"If these were simple questions, the world would be pretty good," says Janne. "We wouldn't have child labor, slave wages, slaves or fast fashion. It's that simple - and that hard!"
Sustainable procurement
The Norwegian Transparency Act is linked to SDG goal number eight on decent working conditions. A human being cannot endure everything, and exploiting a human being is not sustainable, nor does it produce good products. "A sustainable product is not just about how long it lasts or what materials it is made of - it is also about the ethics of production and the working conditions of the people who produce them," says Jacobsen.
Supply chain
A chain is only as strong as its weakest link - including your supply chain. If you lack information from one link, you are not responding to the law.
Janne Jacobsen explains: "We see that many people are unsure of what to report on and how to find out! It's easy to get overwhelmed by the task, but then it's important to remind yourself that due diligence is a process and it's quite clear in the law that it should be carried out in relation to the size of the company, the industry you work in, the likelihood of human rights violations and good working conditions."
In other words, it's not that you have to travel to all suppliers and see with your own eyes how all employees are doing, but if you work in high-risk industries with suppliers in countries where there is a greater chance of breaches occurring, then you need to investigate a little more closely.
And if you are in doubt about the risk for you and your company, you can find information at procurements.no - or we at Factlines can of course help you.
The Norwegian Transparency Act is here to make working life good for everyone - no matter where they live!
