{"id":15410,"date":"2024-09-18T09:12:54","date_gmt":"2024-09-18T09:12:54","guid":{"rendered":"https:\/\/sharecontrol.io\/uncategorized\/negative-consequences-in-the-transparency-act\/"},"modified":"2024-09-20T05:59:30","modified_gmt":"2024-09-20T05:59:30","slug":"negative-consequences-in-the-transparency-act","status":"publish","type":"post","link":"https:\/\/sharecontrol.io\/en\/transparency-act\/negative-consequences-in-the-transparency-act\/","title":{"rendered":"Negative consequences in the Transparency Act"},"content":{"rendered":"\n

Norwegian companies published a report<\/a> for the second time in accordance with the Transparency Act in June 2024. We see an improvement in the businesses, but there is still potential for improvement in connection with the discovery of actual and potential negative consequences and the implementation of measures. What does the business do if negative consequences in accordance with the Transparency Act are revealed? This article deals with the negative consequences and how the businesses must report for this and how measures must be implemented. <\/strong><\/p>\n\n

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Negative consequences in the Transparency Act<\/strong><\/h2>\n

The Transparency Act<\/a> requires businesses to carry out due diligence assessments to map actual and potential negative consequences for basic human rights and decent working conditions<\/a>. This means that companies must evaluate the risk in their entire value chain, both locally and globally. <\/p>\n

What are negative consequences?<\/strong><\/h3>\n

Negative consequences according to the Transparency Act can be defined as activities or events that can or have led to negative consequences for human rights and working conditions. Negative consequences can therefore be violations of employee rights, discrimination, slave labour, child labour, violation of indigenous people, poor health and safety, or other dangerous and unfair working conditions. When this is identified, the business must immediately take the necessary measures<\/a> to manage and reduce these consequences. Regular reporting on how these risk assessments<\/a> are followed up is an important part of compliance with the law. <\/p>\n\n

Furthermore, the law will require businesses to openly report on what measures have been put in place to improve the situation and possibly what results have been achieved through this work. If the business has just started a measure when the report is published, the expected outcome of the measure must be presented. This contributes to increased transparency and accountability from companies, both nationally and internationally. <\/p>\n\n

If negative consequences should occur, companies will also have to communicate how these are handled, to ensure that human rights are safeguarded and improvements achieved where necessary.<\/p>\n\n

Read also<\/strong>: Anchoring accountability in the Transparency Act<\/a><\/p>\n

Examples of negative consequences on basic human rights and working conditions<\/strong><\/h3>\n

Negative consequences for violations of human rights and working conditions are not always easy to detect in the supply chain. Good knowledge and thorough due diligence assessments are therefore essential to ensure compliance with the legislation. <\/p>\n\n

Examples of negative consequences in the supply chain could be that the business unwittingly benefits from workers who are exposed to human trafficking or forced labour, for example from computer components in Asia. If we look, for example, at the high-risk list of DF\u00d8 (norwegian)<\/a>, we see that there is a high risk of negative consequences in the assembly of computer screens in China, with child labour, forced labor and bonded labor as the biggest risks. Good routines and processes in the due diligence assessments<\/a> are therefore essential to uncover subcontractors with a risk of negative consequences for violations of human rights and working conditions. <\/p>\n\n

Read more about examples of negative consequences for human rights here<\/strong><\/a>.<\/p>\n\n

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This is how you report negative consequences in accordance with the Transparency Act<\/strong><\/h2>\n

The purpose of the Transparency Act is to promote respect for human rights and decent working conditions in Norwegian businesses and in their supply chain. The law obliges medium-sized and larger businesses to map the risk of human rights violations throughout their supply chain.<\/p>\n\n

In line with increased consumer awareness and demands, several Norwegian organisations, including Future in our hands<\/a>, and the authorities have jointly created the Norwegian Transparency Act. Today, this ensures that Norwegian businesses involve millions of people in and outside Norway, to ensure that human rights and working conditions are good in the supply chain.<\/p>\n

Who is covered?<\/strong><\/span><\/h3>\n

The Transparency Act obliges medium-sized and larger businesses domiciled in Norway to comply with the requirements of the legislation. Foreign businesses<\/a> that offer goods and services in Norway and that are liable to tax in Norway according to Norwegian internal legislation are also liable. <\/p>\n\n

Businesses that are covered by Section 1-5 of the Accounting Act, or exceed the limits for two of the following three conditions, are covered by the Transparency Act:<\/strong>\u202f <\/strong> <\/p>\n\n