Answering the European directive 2014/95/EU, regarding the obligation of due diligence reporting and following the OECD Guidelines for Multinational Enterprises, Norway voted its own “Transparency act” (“Åpenhetsloven“) in 2021, which came into effect on July 1st, 2022. The new Norwegian initiative is one of the most stringent laws thus far and targets medium and big-size companies.
What does the Norwegian Transparency Act (Åpenhetsloven) require?
Voted on June 10th, 2021, the Norwegian Transparency Act – Åpenhetsloven – states that Norwegian companies as well as international companies selling in the Norwegian market, are now asked to report their due diligence on Human Rights and decent working conditions along the entire value chain, from the raw material stage to a finished product. As a brand within the textile, apparel, or footwear industries, the news does not come as a surprise as such initiatives have been on the rise and encouraged by the EU Commission and legislation.
Thanks to the Norwegian Transparency Act – Åpenhetsloven – companies must adopt measures to identify human rights violations or decent working conditions in their supply chain and implement an action plan to stop or prevent such infringements.
- As a textile, apparel, or footwear brand, you are required to:
- Yearly issue a report that describes your due diligence process, findings, and action plan. You must publish the report on/before June 30th of the coming year.
- The report should be publicly available on your website
- Any person or entity has the freedom to ask for further information regarding general details or information related to a specific infringement or product produced by your brand, and they are entitled to receive an answer within three weeks.
Who does the Norwegian Transparency Act (Åpenhetsloven) concern?
Companies with an office in Norway, including brands within the textile, apparel, and footwear industries, falling into the following criteria are concerned (takes into account its subsidiaries):
- 50+ full-time employees during the fiscal year;
- A balance sheet total NOK 35+ million at fiscal year-end (approximately US $4 million); and
- Sales revenue of NOK 70+ million (approximately US $8+ million).
Companies selling to Norway products that are taxable and for which the above criteria are valid must also comply.
Next deadline and consequences for non-compliance
As a brand, you need to submit your first report by June 30th, 2023, and should represent an accurate description of the year 2022.
The Consumer Authority monitors compliance with the provisions of the Norwegian Transparency Act (Åpenhetsloven) and it has been communicated that “enforcement penalties may be established which must be paid in case of non-compliance with the confirmation or decision”. The nature of the penalty will be defined by the severeness of the infringement, and in the case of repeated infringements, a four-week period payment due will be allowed, after an analysis and decision has been made.
Where to start?
Starting with the approach OECD illustrates in their overview, as a textile, apparel or footwear brand, you should be able to:
- MAP OUT AND CONDUCT DUE DILIGENCE ACROSS SUPPLY CHAIN BASED ON SOCIAL STANDARDS – whether you are aware or not of your current supply chain social compliance to the regulation, Trimco’s Product DNA® solution allows you to map it out. The Certificate Manager module can help you onboard and gather the necessary certifications on social standards and their relevant indicators across the supply chain from T1 to T3, step by step. The dashboard module provides you with an overview of your supply chain, monitoring human rights violations or decent working conditions status across.
- IDENTIFY ANOMALIES AND AMEND NEGATIVE INPUT WHERE NEEDED – thanks to the reporting possibilities available in Product DNA®, you are able to work closely with your suppliers on non-conformities and prepare a report on your social compliance worldwide, recognizing abnormalities and giving the possibility for improvement and reassessment planning.
- GET READY TO ANSWER INFORMATION REQUESTS – every person or regulatory body has the freedom to ask for documentation and ask for information about your social compliance. Product DNA® has been designed to provide information about compliance at different levels in the supply chain, making it easier to map out, report and manage supply chain at a glance.
Increasing transparency across your supply chain according to the Norwegian Transparency Act – Åpenhetsloven – is surely not an easy task, but it is important you are taking action and you are using the right tool to make your task easy. If you want to learn more about how Product DNA® can help you, get in touch with our team of experts.