{"id":10716,"date":"2023-11-08T12:09:45","date_gmt":"2023-11-08T12:09:45","guid":{"rendered":"https:\/\/sharecontrol.io\/uncategorized\/due-diligence-assessments-according-to-the-transparency-act\/"},"modified":"2024-09-20T05:49:50","modified_gmt":"2024-09-20T05:49:50","slug":"due-diligence-assessments-according-to-the-transparency-act","status":"publish","type":"post","link":"https:\/\/sharecontrol.io\/en\/transparency-act\/due-diligence-assessments-according-to-the-transparency-act\/","title":{"rendered":"Due diligence assessment according to the Transparency Act – guidance"},"content":{"rendered":"\n

There is still uncertainty around the Transparency Act, how to carry out a due diligence assessment according to the Transparency Act and what is the duty of businesses<\/strong>. In this article, we want to illustrate how you can easily carry out, process and process due diligence assessments of your suppliers.<\/p>\n\n

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What is a due diligence assessment?<\/h2>\n

A due diligence assessment is a working method for mapping, preventing, accounting for and following up businesses in accordance with the <\/strong>the Transparency Act<\/strong><\/a>.<\/strong> The main purpose is to account for and follow up actual and potential negative consequences<\/a> on human rights and decent working conditions. Due diligence must be carried out on both suppliers and subcontractors<\/strong>. It is important to remember that the due diligence assessments must focus on breaches both in your own business, with your suppliers and externally (environment, local community, etc.).<\/p>\n\n

Before starting the work with due diligence assessments, it is important to have a good understanding of the principles in the Transparency Act and in the due diligence assessments. We therefore recommend that you also read our article on templates in the Transparency Act<\/a> to gain a basic understanding of the most important steps in the legislation.<\/p>\n\n

Pursuant to Section 4 of the Transparency Act<\/a>, businesses must carry out due diligence assessments in line with the OECD’s guidelines for multinational companies.<\/p>\n\n

You can read the OECD guidelines here.<\/em><\/strong><\/a><\/p>\n\n

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OECD guidelines for multinational companies<\/h2>\n

Due diligence assessments under the Transparency Act are based on OECD guidelines for multinational companies. These guidelines are very comprehensive, but cover the most important points to ensure a responsible business life. <\/p>\n\n

One of the guidelines that has come through the OECD is the OECD’s guidelines for multinational companies.<\/p>\n\n

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“The guidelines aim to ensure that the activities of these companies are in accordance with public policy, to strengthen the basis for mutual trust between the companies and the society in which they operate, to seek to improve the climate for foreign investment and to strengthen the contribution of the multinational companies to sustainable development.”<\/p>\nOECD guidelines for multinational companies<\/a><\/cite><\/blockquote>\n\n

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\"Wheel<\/figure>\n\n

The OECD’s guidelines for multinational companies are based on the fact that due diligence assessments should minimize potential negative consequences for human rights, society and the environment linked to companies’ business activities. The points have clear expectations for the diligence of business in several areas such as: human rights, employee rights, the environment, anti-corruption and transparency. The guidelines also expect due diligence assessments to be carried out to avoid these negative consequences.<\/p>\n\n

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The steps in a due diligence assessment<\/h2>\n

Due diligence assessments can be divided according to 6 points<\/strong>, where the purpose is to map, prevent, account for and follow up businesses for negative consequences for violations of basic human rights and decent working conditions. It is the Norwegian Consumer Protection Authority that supervises and guides businesses in accordance with the Transparency Act, so we have taken their approach<\/a> as a starting point:<\/p>\n\n

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1. Anchor accountability<\/h3>\n

The first step in due diligence assessments starts with the business setting internal guidelines. This means that you set overall goals for how negative consequences are to be avoided and how you are to prevent any damage.<\/p>\n\n

It is important that the goals are detailed, so that it is easy to follow up on your own guidelines. Concrete actions the business undertakes to take in the event of various findings should also be included in the document.<\/p>\n\n

The company’s guidelines must be in line with the Transparency Act and OECD guidelines. This means that you can update your existing guidelines, or develop new ones with regard to the Transparency Act. The guidelines must cover the entire business, suppliers and other business partners. The guidelines must contain at least:<\/p>\n\n