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Norway: Introduction of due diligence assessments
Further to the enactment of the Norwegian Transparency Act 2022 (“The Act”), “larger enterprises” are now required to carry out due diligence assessments on fundamental human rights and decent working conditions.
“Larger enterprises” refers to businesses that are covered by Section 1-5 of the Accounting Act, or that on the date of financial statements exceed the threshold for two of the following three conditions:
- sales revenues: NOK 70 million;
- balance sheet total: NOK 35 million;
- average number of employees in the financial year: 50 full-time equivalent
It is necessary for these businesses to carry out assessments of due diligence in accordance with the OECD Guidelines for Multinational Enterprises and to produce a due diligence report on an annual businesses.
Businesses must respond to written requests for information about how it manages both actual and prospective negative effects. The processing of information requests and the provision of information must be done in writing and within a reasonable time frame (no later than three weeks).
The risk of non-compliance
The Norwegian Consumer Authority monitors compliance with the provisions of the Act.
If the Consumer Authority discovers that a business is in violation of the Act, it will either require written confirmation that the illegal behavior will cease or make a ruling. The Market Council hears appeals from Consumer Authority judgments.
There is an obligation to supply the Consumer Authority and the Market Council with the relevant information needed to carry out their responsibilities under this Act. The information may need to be submitted in writing, or orally, by a specific deadline.
Decisions can be issued in the following areas:
- Prohibition or an order under Section 12;
- Enforcement penalty under Section 13; and
- Infringement penalty under Section 14.