14 June 2021

Thursday, 10th of June, Norway passed a historic law that will require companies to perform due diligence assessments of their value chains. The law is a massive win for Norwegian civil society organizations, which have campaigned for this law for several years...

History

The political process started in 2017, when Parliament asked the government to explore the possibilities of introducing legislation... In 2019, the Ethics Information Committee published their report... The government has spent the last year processing the recommendations, before they finally presented their proposal in April this year. The law that was passed last week was largely the same as the government's proposal...

For enquiries on the law and ForUMs reaction, please contact [ForUM's] advisor on responsible business, Diego Foss on [email protected]

Scope

The law covers all larger companies domiciled in Norway, as well as foreign companies selling products and services in Norway... Companies meeting at least two out of the following three criteria are covered by the act: 1. At least 50 man-years; 2. Turnover of at least 70 million NOK; 3. Balance of at least 35 million NOK

Calculations provided by the Ministry show that the law would cover approximately 8800 companies. Importantly, the law enforces due diligence assessments of the entire supply chain as well as with business partners.

Due Diligence

The law requires companies to perform due diligence assessments, and to document how they work to prevent or limit these risks. Furthermore, the law requires companies to provide or cooperate to ensure remedy where this is due. Companies must also report on all of these... In addition to reporting to authorities, the information must be made... available... on the company’s website.

The right to information

The law provides anyone who so pleases the right to request information from a company on how they manage their due diligence... They must also report on potential negative consequences of their operations. [O]verall, ForUM consider the law to be strong on this point...

Enforcement

The responsibility for upholding and enforcement of the law will be placed under the Norwegian consumer authority. Companies violating the law face risk of injunction or fines should they fail to comply...

Room for improvement

...One of the major issues is that the law lacks the duty to inform on production sites... The parliamentary process did however point to the proposed evaluation as an appropriate time to reassess the issue. Another topic where there is room for improvement is climate and environmental damage. These are not independent criteria in the recently passed law...

...Civil society organizations have argued that the risk of becoming involved in human rights violations is not related to the size of companies, and this is another issue that must be evaluated as soon as possible.

Finally, [c]ivil liability is lacking and the discussion on this topic has been limited. With consumer rights covered, a natural next step for the development of legislation could be the right for victims of corporate abuse to present their case before court.