The Transparency Act
Contents on this page
Who does the Transparency Act apply to?
– Foreign enterprises
Duty to carry out due diligence
– Foreign enterprises’ due diligence duties
– OECD Guidelines and further due diligence guidance
Duty to account for due diligence
– Describing findings, measures and results
– Formal requirements
– Accounting for due diligence in a group of enterprises
Duty to provide information
– Requesting information
The role of the Norwegian Consumer Authority
– How to contact us
“The Act shall promote enterprises’ respect for fundamental human rights and decent working conditions in connection with the production of goods and the provision of services and ensure the general public access to information regarding how enterprises address adverse impacts on fundamental human rights and decent working conditions.” Source: The Transparency Act, section 1 (Lovdata)
The Act relating to enterprises’ transparency and work on fundamental human rights and decent working conditions (Transparency Act) is a Norwegian law that requires a range of larger enterprises to work to avoid and address adverse impacts on people and society. In addition, enterprises must be transparent about their work with the general public, and provide information to anyone who requests it.
The Transparency Act (the “Act”) came into force in July 2022. The Act is meant to aid in meeting challenges of human rights abuses and indecent working conditions in connection with the production of goods and provision of services in Norway and supply chains across the world.
Note: This page does not provide a full English translation of our guidance concerning the Transparency Act. For more detailed information about each of the duties, please see our full Norwegian guidance pages.
Who does the Transparency Act apply to?
The Act applies to:
- Larger enterprises that are resident in Norway and that offer goods or services in or outside Norway
- Larger foreign enterprises that offer goods and services in Norway, and that are liable to tax to Norway pursuant to internal Norwegian legislation
The basis for assessing whether an enterprise is covered by the Transparency Act, is whether the enterprise is liable to account pursuant to the Norwegian Accounting Act, Section 1-2 (Lovdata) (the “Accounting Act”). Consequently, many public sector institutions will not be covered by the Transparency Act as they are not generally liable to account pursuant to the Accounting Act. The Transparency Act is not limited to commercial enterprises or activities. Non-profit organisations, foundations or other types of enterprise may also be covered, provided they meet the conditions of the Act.
For more general and comprehensive information about which enterprises the Act applies to, please see our Norwegian guidance.
Foreign enterprises
While most enterprises that are covered by the Transparency Act are Norwegian, the Act can also apply to a foreign enterprise.
Remember that all enterprises, including foreign enterprises, must fall within the scope of section 1-2 of the Accounting Act (Lovdata) in order to be subject to the Act. The Accounting Act section 1-2 no. 13 applies to foreign enterprises that have operations in or participate in activities in Norway or on the Norwegian continental shelf, and that are liable to tax to Norway pursuant to internal Norwegian legislation. These are predominantly “Norskregistrert utenlandsk foretak” (NUF).
The foreign enterprise is covered by the Act if all three of these conditions are met:
- The enterprise is liable to tax to Norway
In order for a foreign enterprise to be subject to the Act, it must be liable to tax to Norway pursuant to internal Norwegian legislation.
The term “internal Norwegian legislation” indicates that the tax liability must be assessed according to Norwegian rules, not other tax agreements. The enterprise may therefore meet the condition of tax liability even if it is exempt from taxation through a tax agreement with one or more other countries.
Foreign enterprises’ tax liability is regulated by Norwegian tax legislation, not the Transparency Act. - The enterprise offers goods or services in Norway
In order for an enterprise to be considered to offer goods or services, it must have some form of activity. Enterprises who are exclusively passive will not meet this condition. The terms “goods” and “services” are interpreted broadly, and will encompass any activity offered to another legal subject. Legal subject includes, but is not limited to, another enterprise or consumer. There is no requirement that the goods or services are offered for a fee or remuneration.
The goods or services must be offered in Norway. This condition is not met if the foreign enterprise solely offers goods or services abroad. A foreign enterprise will meet this condition e.g. if it has a branch (NUF) in Norway that offers goods or services in Norway. - The enterprise is a “large enterprise”
For the purposes of the Act, “large enterprise” means enterprises that are covered by section 1-6 of the Norwegian Accounting Act (Lovdata), or that on the date of financial statements exceed the threshold for two of the following three conditions:
– Sales revenue: NOK 70 million
– Balance sheet total: NOK 35 million
– Average number of employees in the financial year: 50 full-time equivalent
Section 3 of the Act (Lovdata) stipulates that parent enterprises are to be considered a large enterprise if the conditions are met for the parent enterprise and subsidiaries viewed as a whole. This provision does not apply to foreign enterprises.
Only the foreign enterprise’s activity in Norway should be included in the assessment of whether the enterprise exceeds two of the three tresholds. For instance, if a foreign enterprise has a branch (NUF) in Norway, only this branch’s sales revenue, balance sheet total, and average number of employees should be taken into account.
Three main duties of the Transparency Act
Enterprises must:
- Carry out due diligence
- Publish an account of due diligence
- Provide information upon request
Enterprises that are not covered by the Act have no such duties, but they may still be affected indirectly. Enterprises who are covered by the Act may place demands or expectations on their suppliers or business partners in their due diligence processes.
Duty to carry out due diligence
Enterprises shall carry out due diligence in accordance with the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct. Note, however, that the guidelines cover more than Act does. The Act is limited to assessing how enterprises may negatively affect fundamental human rights and decent working conditions, whereas the OECD guidelines cover additional topics such as corruption, competition and taxation.
Explained in simple terms, due diligence is a method used to investigate whether there are any actual or potential adverse impacts on human rights and decent working condition that the enterprise has caused or controbuted toward, or that are directly linked with the enterprise’s operations, products or services via the supply chain or business partners. The enterprise must then address these adverse impacts and track the results of implemented measures. Due diligence should be carried out regularly, and is an ongoing and iterative process that must be constantly evaluated.
Due diligence is proportional, meaning it must be adapted to the individual enterprise’s circumstances. What is expected of an enterprise therefore depends on, amongst other things, the enterprise’s size, nature and context of operation. Due diligence is also risk-based, meaning the enterprise’s work should correspond to the severity and probability of adverse impacts on human rights and decent working conditions.
Foreign enterprises’ due diligence duties
According to the Act, the operations of foreign enterprises are limited to the activities of the part of the enterprise that is domiciled in Norway.
Consequently, foreign enterprises that are covered by the Act are only obligated to conduct due diligence of the activities of the part of the enterprise that is domiciled in Norway. If the activities of the foreign enterprise and the Norwegian-registered part of the foreign enterprise are intertwined, the enterprise’s due diligence obligations must be assessed on an individual basis.
OECD Guidelines and further due diligence guidance
As due diligence is to be carried out in accordance with the OECD Guidelines, the OECD’s due diligence guidance (which is defined in the Act as being a part of the OECD Guidelines) is central to the Act. This guidance assists enterprises in understanding and carrying out due diligence. You can find the OECD Due Diligence Guidance for Responsible Business Conduct, as well as sector-specific due diligence guidance, on the OECD’s website. The Norwegian Consumer Authority has also developed guidance about due diligence in Norwegian. This includes information about the important principles of due diligence, how enterprises can assess their connection to and responsibility for adverse impacts, and each step of the due diligence process.
Duty to account for due diligence
All enterprises that are covered by the Act must publish an account of their due diligence annually. The purpose of this account is to give the general public insight into the enterprise’s key findings and measures implemented to address adverse impacts.
The Norwegian Consumer Authority has detailed guidance about writing the due diligence account here, which includes videos with English subtitles. The following section is just a summary. Please see the full Norwegian guidance for more detail.
The account must include:
- a general description of the enterprise’s structure, area of operations, guidelines and procedures for handling actual and potential adverse impacts on fundamental human rights and decent working conditions
- information regarding actual adverse impacts and significant risks of adverse impacts that the enterprise has identified through its due diligence
- information regarding measures the enterprise has implemented or plans to implement to cease actual adverse impacts or mitigate significant risks of adverse impacts, and the results or expected results of these measures
Describing findings, measures and results
When writing about adverse impacts, significant risks, and measures, it is important that enterprises describe the actual findings, measures and results. Some enterprises do not wish to be transparent about the results of their due diligence due to concerns about reputational loss. It is nevertheless a duty under the Act to disclose the information described in 2 and 3 above. Additionally, by being open about how the enterprise addresses adverse impacts, they can explain what they are doing to improve conditions.
The Norwegian Consumer Authority has reviewed accounts where enterprises write that they have not identified any negative impacts. It would be rare for an enterprise not to have any form of harm or significant risk associated with its own operations, supply chains or business partners. If this appears to be the case, that is a good reason to carry out more thorough due diligence.
Formal requirements
The published account must be signed in accordance with section 3-5 of the Accounting Act (Lovdata). If they wish, an enterprise can choose to include the account as part of another report, for instance a sustainability report. If they choose to do so, it must be clear which parts of the report relate to the Act, and the report as a whole must still meet the formal requirements of the Act.
With regards to language, the general rule is that the account must be written in Norwegian, but this does not prevent enterprises from additionally publishing the account in another language. Certain exemptions to this rule apply and are based on exemptions in the Accounting Act: see section 3-4 third paragraph of the Accounting Act (Lovdata), and section 8-2 second paragraph of the Accounting Act (Lovdata) for more detail. It is not the Consumer Authority who assesses whether exceptions can be granted according to the Accounting Act.
The account must be made easily accessible on the enterprise’s website by June 30th of each year, and otherwise updated in case of significant changes to the enterprise’s risk assessments. Additionally, the enterprise’s annual report shall state where the due diligence account is publicly available.
Accounting for due diligence in a group of enterprises
Several enterprises who form a group, i.e. a parent company with one or more subsidiaries, may each be subject to the Act at the same time.
Each and every enterprise in a group that is subject to the Act must publish an account of due diligence annually. This means that if a parent enterprise and one of their subsidiaries are both subject to the act, both enterprises must publish an account of due diligence on their website even though they are part of the same group.
Each enterprise that is subject to the Act must ordinarily report on the due diligence assessments that have been conducted of that enterprise’s activities. Note, however, that Norwegian parent enterprises must account for due diligence assessments of the activities of the parent enterprise and all the subsidiaries, regardless of where the subsidiaries are located. The reason for this is that Norwegian parent companies have an obligation to carry out due diligence assessments of both their own and their subsidiaries’ activities.
If more than one enterprise within a group is subject to the Act, they can publish a joint account if they wish. All requirements for the account must still be met for each individual enterprise in the group that is subject to the Act, including formal requirements and information about findings and measures. For more information about writing a joint account for enterprises in a group, please see the main Norwegian guidance.
Duty to provide information
Upon written request, any person has the right to information from an enterprise regarding how the enterprise addresses actual and potential adverse impacts on fundamental human rights and decent working conditions.
The Norwegian Consumer Authority has developed English guidance on how enterprises should process information requests:
Requesting information
The Act is meant to make it easier for the general public to access information about how enterprises address adverse impacts on people. This right to information through information requests is connected to the enterprises’ duties to carry out due diligence.
Examples of adverse impacts
- Poor working conditions
- Social dumping (e.g. when foreign workers in Norway have poorer wages and working conditions than Norwegian workers)
- Child labour
- Forced labour and modern slavery
- Discrimination and harassment
- Breaching indigenous peoples’ rights
- Wages that are not sufficient for workers to provide for themselves and their families
- Occupational health and safety hazards
- Lack of freedom of association and collective bargaining
In order to request information, all you need to do is to send a written question or inquiry to the enterprise. We recommend that you specify that you are requesting information pursuant to the Transparency Act.
It is not a requirement that information seekers are Norwegian or have an affiliation to Norway, and you can be anonymous if you wish. If you are uncertain about whether an enterprise is covered by the Act, we recommend that you ask the enterprise directly.
You can request information regarding how the enterprise addresses actual and potential adverse impacts. You can request both general information, and information regarding a specific product or service. The enterprise’s response must be in writing, adequate and comprehensible.
Example questions to enterprises
What ethical guidelines do you have in place?
What actual harm or risks have you identified through due diligence?
How do you work to identify risk to vulnerable groups, such as women, migrant workers or indigenous peoples?
Can employees freely join a union?
Do workers earn a living wage?
What measures have you implemented to prevent or mitigate identified risks?
What are you doing to safeguard working conditions at the production site?
How do you work to avoid child labour in production processes?
What effects have your measures to reduce harm had?
Enterprises must respond to the request within a reasonable time and no later than three weeks after the request is received. A longer deadline of up to two months is allowed if the amount or type of information requested makes it disproportionately burdensome for the enterprise to respond within three weeks.
There are some exceptions to what enterprises must provide information about, i.e. grounds for denial. This applies, for instance, to trade secrets or information relating to an individual’s personal affairs.
The enterprise must provide information about any postponement, and in the event of a refusal of a request for information.
If you have sent an information request and enterprise does not respond within the deadline, or if you believe that the response is not adequate or comprehensible, you can send us a tip. See contact information below for more information on how to get in touch with us.
The role of the Norwegian Consumer Authority
The Consumer Authority is a public enforcement authority and the supervisory body for the Transparency Act.
Our primary working method is guidance and dialogue, and we work towards achieving the purpose of the Act. We provide general information about the Act through our website and other channels (e.g. courses and conferences) and more specific information through contact with consumers and enterprises.
The Consumer Authority also processes individual cases, including ones based on tips received from the general public. We are not obligated to process all tips we receive and we must prioritise which tips we proceed with. However, all tips are registered and considered when we assess which cases we should focus on in the future.
We also carry out controls and checks on compliance with the Act, for instance whether enterprises carry out due diligence assessments, whether they have published the due diligence account, or whether they respond to information requests.
Pursuant to section 10 of the Act (Lovdata), everyone is obligated to provide the Consumer Authority and the Market Council with the information these authorities require in order to carry out their duties pursuant to the Act.
To ensure compliance, the Consumer Authority can issue binding decisions. We can issue decisions in the form of prohibitions and orders to ensure that enterprises comply with the Act. We can also impose enforcement penalties which must be paid if the decision is not adhered to.
In the event of repeated breaches of the duty to provide information through the due diligence account and information requests, we can impose infringement penalties. Infringement penalties are sanctions used to respond to severe breaches that have occurred, and to signal that such breaches of the Act are not acceptable. See the Act sections 11-14 (Lovdata) for more information about decisions and sanctions.
How to contact us
Send us a tip
Anyone can send a tip to the Consumer Authority if they believe an enterprise is not fulfilling its obligations pursuant to the Transparency Act. This could, for instance, be:
- If you believe the enterprise’s response to your information request was not adequate or comprehensible
- If an enterprise did not respond to your information request within the deadline
- If your request for information was denied
- If you cannot find the due diligence account of an enterprise you believe is covered by the Act
- If you believe that an enterprise’s due diligence account does not fulfil the requirements of the Act
If you have Norwegian electronic ID, you must use our portal (Min side) to send us a tip. If you do not have electronic ID, you can contact us via e-mail or telephone. See contact information below.
Request guidance
If you have questions about the Transparency Act that our website does not answer, you can contact us to request guidance.
If you represent an enterprise, and have Norwegian electronic ID, you must use our portal (Min side) to request guidance. If you do not have electronic ID, you can contact us via e-mail or telephone.
If you do not represent an enterprise and wish to receive guidance, you can contact us via e-mail or telephone.
We respond to all inquiries within three weeks. Many of the questions we receive are complex and require thorough consideration and, therefore, it may take up to three weeks before you receive a final answer.
Contact information
Our portal (Min side) (requires log-in with Norwegian electronic ID)
E-mail: apenhetsloven@forbrukertilsynet.no
Telephone: +47 23 400 600 (Monday to Friday 10.00 – 14.00)
Click here for other contact information
Please be aware that all correspondence may be kept on file in accordance with archiving laws (arkivloven) and may also form part of documentation that may be made public in accordance with laws governing freedom of information (offentlighetsloven).