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Annual Report 2023

Preface

Updated OECD Guidelines for Responsible Business Conduct

Norway’s NCP continues its enthusiastic efforts with the help of stronger, updated Guidelines.

The year 2023 was a milestone for the OECD Guidelines for Responsible Business Conduct. Following an extensive process, the updated version of the Guidelines was adopted at the OECD Ministerial Council in June 2023. Norway, with the support of the NCP, was actively involved in the updates.

The Guidelines were published almost 50 years ago and have been revised and updated several times. During the last revision in 2011, the chapter on human rights was incorporated and aligned with the UN Guiding Principles on Business and Human Rights (UNGP).

This time around, the chapter on the environment was subject to a comprehensive and much needed update and revision. The Guidelines now provide clear recommendations for conducting business in line with internationally agreed climate and biodiversity goals. Among other things, businesses must perform due diligence with respect to climate change; loss of biodiversity; degradation of land, marine and freshwater ecosystems; deforestation; air, water and soil pollution; and waste management. These are important updates that make it clear that businesses are expected to align with the adhering states’ international environment, climate and biodiversity commitments. This establishes that the private sector must pull its weight to achieve common goals in this area and take an active role in addressing the great challenge of our time.

Other important changes were also made, including strengthening the protection of at-risk groups, including indigenous peoples. Human rights defenders who voice concerns regarding harmful business conduct are one of the groups that now receive greater attention. Another part of the Guidelines introduces due diligence expectations in connection with the development, financing, sale, licensing, trade and use of technology, including gathering and using data. Recommendations have also been included on how businesses are expected to carry out due diligence with respect to consequences and business relationships associated with the use of their products and services.

The examples show that the Guidelines have now been modernised to ensure that they are ‘fit for purpose’ for the years to come. The OECD Guidelines will thus remain the main guidelines for businesses that want to demonstrate responsible business conduct.

The Guidelines’ procedures for the National Contact Point system were also updated. The framework for the NCPs was bolstered, although the Guidelines still give states considerable flexibility with respect to how they are organised. Unfortunately, there is still some way to go to ensure that they all work equally well. It is therefore encouraging that the Ministerial Council also decided that all the adhering states must ‘make available human and financial resources to their NCPs so that they can effectively fulfil their responsibilities in a way that fully meets the effectiveness criteria described in the Procedures attached to this Decision, taking into account internal budget capacity and practices’. This bodes well for the future and must be followed up.

For the Norwegian NCP, the updated Guidelines are a source of great inspiration for continuing its work to contribute to responsible business conduct, and for cooperating with governments, the business sector, trade unions and civil society to raise the level of knowledge and implementation. The updated Guidelines provide a much better basis for addressing the business sector’s responsibility to safeguard the environment and biodiversity, and, not least, businesses’ responsibility to contribute to achieving the climate goals for the benefit of the planet and future generations.

Frode Elgesem

Chair of the Norwegian NCP

The OECD’s unique guidelines

A main goal of the OECD Guidelines is that enterprises should contribute to sustainable development, regardless of where they operate. By carrying out due diligence in line with the Guidelines, companies can prevent and address adverse impacts on people, society and the environment. In this way, they can also contribute to meeting several of the UN Sustainable Development Goals (SDGs).

The Guidelines are recommendations to enterprises, and there is a clear expectation on the part of the governments that have endorsed them that they are implemented. The OECD Guidelines cover all the areas that a responsible and sustainable business should address:

Transparency and reporting

Respect for human rights

Labour rights

The environment and climate

Anti-corruption

Consumer interests

Taxation

Competition

Science, technology and innovation

A core element of the OECD Guidelines is the expectation that companies carry out due diligence. Due diligence is about identifying, preventing, mitigating and accounting for how businesses address actual and potential adverse impacts associated with their operations, supply chains and business relationships.

The OECD Due Diligence Guidance for Responsible Business Conduct (2018) provides practical guidance to companies on due diligence in line with the OECD Guidelines.

51 National Contact Points

The OECD Guidelines for Responsible Business Conduct are supported by a unique mechanism: National Contact Points (NCPs). The governments of all countries that adhere to the OECD Guidelines are obliged to establish an NCP. Their task is to promote the OECD Guidelines, handle complaints and cooperate internationally. 51 countries are adherents to the Guidelines. The composition of the NCPs varies from country to country.

The NCPs handle complaints concerning companies operating in or from their territories. The purpose is to find solutions between the parties through dialogue and mediation.

OECD countries with National Contact Points:

Australia

Austria

Belgium

Bulgaria

Canada

Chile

Colombia

Czech Republic

Denmark

Estonia

Finland

France

Germany

Greece

Hungary

Iceland

Ireland

Israel

Italy

Japan

Latvia

Lithuania

Luxembourg

Mexico

Netherlands

New Zealand

Norway

Poland

Portugal

Slovakia

Slovenia

South Korea

Spain

Sweden

Switzerland

Turkey

United Kingdom

USA

Adhering countries with National Contact Points:

Argentina

Brazil

Costa Rica

Croatia

Egypt

Jordan

Kazakhstan

Morocco

Peru

Romania

Tunisia

Ukraine

Uruguay

The map is for illustration purposes only and does not express any position on territorial status or sovereignty. A total of 51 countries adhere to the OECD Guidelines and are therefore obliged to establish a National Contact Point.

The Norwegian National Contact Point

The Norwegian National Contact Point for Responsible Business Conduct comprises four members. The members are appointed by the Ministry of Foreign Affairs and the Ministry of Trade, Industry and Fisheries, in cooperation with the Ministry of Labour and Social Inclusion, and the Ministry of Finance. They are appointed on the basis of their professional expertise and based on proposals from the social partners (the Confederation of Norwegian Enterprise (NHO) and the Norwegian Confederation of Trade Unions (LO)) and civil society, represented by the Forum for Development and Environment (ForUM).

The Secretariat engages in efforts to promote the OECD Guidelines and due diligence, prepares the handling of specific instances for the NCP and facilitates mediation.

Members

Frode Elgesem, Chair, Judge at Borgarting Court of Appeal

Cathrine Dehli, Head of Product and Sustainability, Celsia

Gro Granden, Special Adviser, LO

Beate Ekeløve-Slydal, Political Adviser, Amnesty International Norway

Secretariat

Kristel Tonstad, Head of Secretariat and Policy Director

Åse Sand, Senior Adviser

Elisabeth Andvig, Senior Adviser

Elisabeth Andvig worked in the Secretariat until 19 February 2024.

Handling of specific instances – temporary staff

If members are deemed to have a conflict of interest in specific instances, stand-ins are appointed. Ola Mestad, Professor dr. juris at the University of Oslo, led the handling of a specific instance as stand-in for Frode Elgesem. Per Bondevik, Senior Adviser at FOKUS, was a stand-in for Beate Ekeløve-Slydal in the handling of two specific instances. Katarina Sætersdal, Senior Advisor at NHO, was a stand-in for Cathrine Dehli in one specific instance.

New members

The term of office of two of the NCP members, Cathrine Dehli and Gro Granden, was completed in 2024. New members proposed by NHO and LO, Anita Househam and Liv Tørres, were appointed on 1 March 2024.

Anita Househam is Senior Adviser for Social Sustainability at Statnett. She has previously served as Director of Human Rights at Telenor ASA and Senior Manager at UN Global Compact’s headquarters in New York. She has been a board member of the Global Network Initiative and also a member of the Steering Committee that led the development of the Children’s Rights and Business Principles.

Liv Tørres is International Secretary at LO. Before joining LO at the end of 2021, she was Director of Pathfinders for Peaceful, Just and Inclusive Societies in New York. Liv has previously served as Director of the Nobel Peace Center, Secretary General of Norwegian People’s Aid, Director of Research at Fafo and Political Adviser to the Minister of Labour and Social Inclusion.

1 Promoting the OECD Guidelines and providing guidance to businesses

One of the NCP’s most important responsibilities is to promote the OECD Guidelines for Responsible Business Conduct. The objective of the Guidelines is to promote positive contributions from businesses to economic, environmental and social progress all over the world.

The NCP carries out extensive promotional efforts and provides guidance to Norwegian businesses on how they can meet the expectations of the OECD Guidelines, including through courses and seminars.

During 2023, the NCP held 12 events of its own and participated in 31 other events reaching a total of 4,300 people.

Norway’s first conference on the OECD Guidelines

How can businesses operate responsibly in view of climate change, environmental challenges and a turbulent world? This was the main topic of the conference on responsible business conduct held on 14 December at the Munch Museum.

The conference was the first of its kind in Norway and focused on the OECD Guidelines and important updates. The conference particularly addressed climate change, the environment and conflict, and how the updated Guidelines can provide direction to address these challenges. A total of 170 people attended this new, important meeting place to connect and refresh their expertise.

Anne Marit Bjørnflaten, State Secretary at the Ministry of Trade, Industry and Fisheries, and Allan Jørgensen of the OECD Centre for Responsible Business Conduct, gave the opening speeches about global challenges and important updates to the Guidelines. They both praised the NCP for its work on promoting the Guidelines and handling specific instances.

The first panel discussed how businesses can operate responsibly in a world impacted by crises, conflicts and changing operating conditions. The second panel discussion focused on climate change and the environment – and how businesses can observe the updated Guidelines in practice. The last panel closed with the question: How can we ensure respect for human rights and decent work in the green transition?

The conference was organised by the Norwegian National Contact Point for Responsible Business Conduct and the Ministry of Trade, Industry and Fisheries in cooperation with NHO and LO.

Reaching a broader audience through courses and seminars

In 2023, the NCP aimed to reach beyond the Oslo region through regional courses and webinars.

Across the country

The NCP held breakfast meetings in Førde and Sogndal in cooperation with Norec, Sunnfjord Utvikling, Sparebanken Sogn og Fjordane and Sogn Næring on the Transparency Act and the OECD Guidelines.

The good cooperation with the Norwegian Consumer Authority continues, and in 2023, it collaborated with the NCP on organising courses in Tromsø and Stavanger. The courses provided an introduction to the Transparency Act, the OECD Guidelines and due diligence, and were aimed particularly at companies covered by the Act.

Companies from the respective regions shared their experiences of their efforts to comply with the Transparency Act, which provided many good questions and exchanges. The courses also included dilemma training where the participants were given specific cases for discussion.

Webinars and other events

The NCP has contributed to several webinars on due diligence under the Transparency Act, in preparation for the reporting deadline, which is on 30 June 2023. The webinars were arranged by the Norwegian Consumer Authority, Virke and Spekter, and reached a total of 950 participants. The NCP has also held presentations about the OECD Guidelines at courses organised by Future Proof/the Rafto Foundation and the Juristenes Utdanningssenter as well as at the Norwegian Institute of Public Accountants’ sustainability academy.

The NCP as an expert body

Input – new regulations

In 2023, the NCP provided input on the implementation of the Corporate Sustainability Reporting Directive (CSRD) in Norwegian law and the European Commission’s proposal for banning products produced using forced labour. A key element in the input is the need for consistent requirements for the business sector, with the OECD Guidelines for Responsible Business Conduct serving as an important and shared starting point.

Business and human rights

Human rights are a key element in the NCP’s work. Together with the Norwegian Human Rights Institution, the NCP has prepared a table of examples of how business activities can have adverse impacts on human rights. The NCP also gave presentations on human rights and decent work at the Ministry of Trade, Industry and Fisheries’ competence forum for state-owned enterprises.

The NCP contributed to a master’s course in business and human rights at the University of Bergen and a lecture on the OECD Guidelines at the University of Oslo, with discussions based on actual specific instances.

Arendalsuka – an important meeting place

The NCP was present during Arendalsuka, where the Transparency Act and the OECD Guidelines were important topics. The NCP contributed to debates and organised a panel discussion on the updated OECD Guidelines to a packed venue.

Survey of businesses: Boards more involved in responsible business conduct

The NCP’s 2023 survey of businesses shows positive developments in several areas since the previous survey in 2019.

The survey maps knowledge of and work on the OECD Guidelines for Responsible Business Conduct among Norwegian business leaders. It was launched at the House of Literature in Oslo in June 2023, where a panel of representatives from NHO, the Norwegian Consumer Authority, Virke and the NG Group discussed the results.

The most important positive changes since the previous survey are increasing involvement and work in corporate boards on responsible business conduct and sustainability, a higher proportion of companies addressing risks with respect to human rights, the environment and climate, and increased knowledge of the ILO Core Conventions. The survey also shows a clear link between the size of the company and familiarity with, and knowledge of, responsible business conduct.

Bente Øverli of the Norwegian Consumer Authority stressed that many companies are doing a lot of good work on due diligence and often possess a lot of ‘in-house’ knowledge. ‘However, I also talk to many senior executives, and it unfortunately appears that some of them have an inadequate emphasis on responsible business conduct and due diligence,’ she pointed out.

Runa Opdal Kerr of the NG Group believes that a risk-based, systematic approach is essential. ‘You can’t check everything. We have moved on from the past where we focused too much on details instead of systemic challenges.’

One important conclusion is that information and guidance are still needed in relation to the OECD Guidelines and responsible business conduct among Norwegian companies, also after the Transparency Act entered into force.

The survey was conducted by Sentio Research Norway.

56 % are covered by the Transparency Act

52 % are familiar with the Transparency Act

49 % of companies covered by the Transparency Act have mapped the risk of adverse impacts on human rights and decent work

67 % of those who have mapped the risk have implemented measures to cease, prevent or mitigate such impacts

BI Norwegian Business School – one year of the Transparency Act

The venue was packed, and the debate heated when BI Norwegian Business School and the NCP organised a breakfast seminar on the Transparency Act in October 2023.

Companies’ experiences

Three companies shared their experience with the Transparency Act: Posten Bring, Skogstad Sport and Wilh. Wilhelmsen Holding ASA. They stressed that the act has increased companies’ knowledge of human rights.

Companies initially focused on complying with the requirements, but they also see opportunities for rationalisation and improvements that are not just about reducing risk. Updating and raising awareness of internal guidelines and procedures across different departments has been just one of the positive outcomes.

There has also been a strong increase in management involvement. However, there are also challenges relating to the implementation of the act, such as questions around prioritisation and to what degree companies are responsible for remediating adverse impacts that have occurred.

Does the right to information work?

Tord Dale, Head of Sustainability/Policy at Virke (the Federation of Norwegian Enterprise), Ina Lindahl Nyrud, lawyer at the Norwegian Union of Journalists, and Anja Bakken Riise, Executive Director of The Future in Our Hands contributed to the lively panel discussion facilitated by the NCP.

‘The Transparency Act is a potential scoop for journalists’ access to information,’ Nyrud stated. Bakken Riise still calls for a right to information about production sites and believes this must be incorporated after an evaluation of the act, among other things, to strengthen verifiability. One concern expressed by Dale was that it was not easy to get civil society and journalists, who demand immediate answers, to understand that due diligence is a long-term process.

One positive effect of the act, according to the debaters, is that challenges related to human rights and the environment, and ultimately, sustainability, are now discussed more holistically in Norway, and that we are more aware of our responsibility for a green and just transition.

2 Handling specific instances

The OECD National Contact Point system gives organisations and individuals a grievance mechanism when they believe that enterprises have failed to observe the guidelines for responsible business conduct. The mechanism is non-judicial. The NCP offers dialogue and mediation between the parties, and the goal of the process is to arrive at a joint solution.

The NCP handles complaints against companies that operate in or from Norway. The handling of specific instances is to be impartial, predictable, equitable and compatible with the OECD Guidelines. The specific instances are handled in accordance with the procedures set out in the OECD Guidelines and the NCP’s procedural guidelines.

Complaint against Aker BP ASA and Aker ASA

In 2023, the NCP accepted two complaints against Aker BP ASA and Aker ASA, respectively, for further consideration and offered the parties dialogue and mediation.

The specific instances concern Aker BP ASA’s acquisition of Lundin Energy AB’s oil and gas business in Norway (Lundin Energy Norway AS).

The complainants claim that Lundin Energy AB (formerly Lundin Oil AB, now Orrön Energy AB) contributed to serious and systematic human rights violations in Sudan during the period 1997 to 2003 in connection with the company’s activities in the country. Chair and former CEO of Lundin Energy AB is accused of complicity in violations of international law in Sweden.

The complainants believe that a result of Aker BP ASA’s acquisition is that Orrön Energy AB will not be able to financially compensate victims of human rights violations in Sudan in the future. They claim that Aker BP ASA and Aker ASA have failed to observe the OECD Guidelines concerning due diligence with respect to human rights in connection with the acquisition, stakeholder dialogue and addressing ongoing, un-remediated adverse impacts. Aker BP ASA and Aker ASA have disputed the complainants’ claims.

Three South Sudanese and five European organisations filed the complaints in May 2022 on behalf of some 200,000 South Sudanese victims of human rights violations. The organisations are Civil Society Coalition on Natural Resources, Liech Victims Voices, South Sudan Council of Churches, Global Idé, Norwegian Church Aid, Norwegian People’s Aid, PAX and Swedwatch.

The NCP’s initial assessment was published on 27 February 2023. The NCP decided to accept parts of the complaints for further consideration, limited to questions concerning the Aker companies’ due diligence with respect to human rights in connection with the acquisition.

The parties accepted the offer of dialogue and mediation. Three days were set aside for mediation in August with experienced, external mediators, who were approved by both parties. The mediators were the former chair of the Dutch NCP, Maartje van Putten, and Supreme Court Judge in Norway Ingvald Falch. The parties failed to reach agreement and the case is now under consideration by the NCP.

3 International cooperation

The third main task of the NCP is to cooperate and share good practices with the OECD and the National Contact Points in other countries. The NCP and the Secretariat participate in network meetings in the OECD and the Secretariat participates as an observer in the OECD Working Party on Responsible Business Conduct.

The OECD invited ministers and high-level representatives from OECD countries and other countries to a Ministerial Meeting on responsible business conduct in Paris on 14-15 February 2023. The main topics were how to promote and facilitate responsible business operations in a global economy and accountability as a cornerstone of the international rules-based trade and investment system. The Norwegian delegation was led by Anne Marit Bjørnflaten of the Ministry of Trade, Industry and Fisheries. The NCP Secretariat was part of the delegation.

The OECD’s updated guidelines

The NCP’s most important task in 2023 was the work on updating the OECD Guidelines for Responsible Business Conduct.

The NCP provided input to the updates and the Secretariat was in close contact with the Ministry of Trade, Industry and Fisheries, which represents Norway in the OECD Working Party on Responsible Business Conduct.

The NCP also attended network meetings for the National Contact Points and shared experiences from its efforts to promote the OECD Guidelines, provide guidance to the business community and handle complaints.

Nordic-Baltic network

Since 2018, the Nordic-Baltic NCPs have held annual network meetings to share information and experience and to learn from each other. In 2023, the network met in Reykjavik.

The Norwegian NCP shared its experience with handling complaints, presented findings from the survey of businesses and talked about how it works to reach companies through courses, its own events and events organised by others, and by developing tools for responsible business conduct and due diligence. The NCP shared its latest annual report in English at the meeting.

The NCP also participated in an external seminar, ‘Sustainable Value Chains – from voluntary measures to legislation’, organised by the Embassy of Sweden and the EU Delegation to Iceland, on laws and regulations concerning sustainability and responsible business conduct. The NCP presented the Transparency Act.

Educational trip to Bangladesh

Garment production has been vital to reducing poverty and securing economic growth in Bangladesh, but workers have yet to receive a living wage.

In 2023, the NCP participated in a project trip to Bangladesh, the world’s second largest garment producer after China. The trip was organised by Ethical Trade Norway and Ethical Trading Initiative Bangladesh. It provided useful insight into what has been achieved, but also the challenges that remain in the sector.

Breakthrough safety agreement

The garment sector accounts for 84 per cent of the country’s export and has enabled millions of women to participate in working life. However, the sector has also been plagued by accidents due to inadequate safety, which did not lead to any changes at the factories.

A catastrophic accident in 2013 changed that when the Rana Plaza factory building collapsed. 1,133 people were killed, and thousands were injured. This accident bolstered the demand from the trade union movement and civil society for the business sector to be held accountable for health and safety in the supply chain.

The result was a groundbreaking legally binding agreement between trade unions and international companies producing garments in Bangladesh – today known as the International Accord. In 2022, the agreement was extended with a separate Pakistan Accord.

The agreement has contributed to major improvements in terms of safety in factories in Bangladesh. The Rana Plaza accident was an important catalyst for regulatory developments in the EU and Norway in recent years, including the Transparency Act.

Minimum wage far from a living wage

However, workers’ rights have not been strengthened adequately, even though freedom of association is enshrined in the Constitution. Trade union work is disrupted by union busting, violence against workers and complicated processing requirements, according to the International Trade Union Confederation (ITUC).

This was evident in the autumn of 2023, when the minimum wage for workers in garment factories was negotiated for the first time in five years. Four worker representatives have been killed and many workers were arrested for participating in demonstrations.

Trade unions submitted a demand for an increase from the current minimum wage of 8,000 taka (NOK 910) to 23,000 taka (NOK 2,620), calculated as the minimum amount needed to meet the basic needs of a family in Dhaka. The authorities did not agree to the demand and set a new minimum wage of 12,500 taka in November. This may be a wage increase of some 56 per cent, but in real terms, as IndustriALL points out, it will primarily go to covering a sharp rise in prices and inflation.

Welcome legislation

The OECD Forum for Due Diligence in the Garment and Footwear Sector in February 2024 highlighted the importance of binding agreements, legislation and collective bargaining. These measures are important for the implementation of agreements, holding businesses accountable and for giving workers a seat at the negotiating table.

In a meeting with the group, IndustriALL Bangladesh Council stressed that they welcome legislation that enables buyers to put pressure on suppliers and authorities in Bangladesh. At the same time, it is important that buyers take their share of the burden and do not push costs and accountability down the supply chain.

Accounts 2023

The NCP’s budget in 2023 was NOK 5.5 million. The funds have mainly gone to the salaries in the Secretariat as well as remuneration of the NCP members. Other funds have mainly gone to promotional efforts and mediation in specific instances.

All figures in NOK.

Expenditure 2023

Secretariat staff (salary, incl. overtime and travel time)

3,020,751

NCP members, temporary staff, mediator fees, incl. employer’s national insurance contributions

737,351

Purchase of services (survey of businesses, conference on responsible business conduct, mediation etc.)

833,079

Information and promotion (annual report, etc.), meetings in connection with specific instances, courses, other events

478,117

Travel and subsistence

289,292

Publications and office equipment

46,500

Other

17,972

Total

5,423,062