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Business and human rights

State Secretary Marianne Hagen's address at a seminar on business and human rights specially for leaders in the financial sector.

Thank you for inviting me to this mini-seminar for leaders in the financial sector in Norway.

You have asked me to emphasize the Government’s expectations to Norwegian companies operating abroad in terms of demonstrating Responsible Business Conduct.

The private sector is the key to sustainable economic growth – both in our part of the world, and in the rest of the world. In developing countries, doing business has a far greater impact than traditional development assistance.

In the future nine out of ten jobs in the developing world will be created in the private sector. That is why job creation is top priority in our development policy. The private sector finances the public sector in developing countries as it does in Norway.

However, investing in developing countries has a number of challenges. This is particularly the case in countries with weak institutions, safeguards and regulations that protect local communities and the environment from adverse effects of business activities.

Since the endorsement of the UN Guiding Principles by the Human Rights Council in 2011, corporate human rights due diligence has become the norm of expected conduct. I am sure that you are all fully aware of the fact that the guiding principles are integrated into the OECD Guidelines for Multinational Enterprises. Recently OECD Due Diligence Guidance for Responsible Business Conduct was endorsed by all 48 adhering Governments.

This norm is now reflected in 20 National Action Plans. Norway was among the first countries to adopt a National Action Plan, which I think reflects the recognition among Norwegian companies that good business conduct is a good business model.

Several countries have developed general human rights due diligence legislation, like France and Switzerland, as well as requirements for mandatory disclosure of risks of modern slavery in supply chains, as seen in U.K. and Australia, as well as the state of California. EU has included a provision for creating incentives to exercise human rights due diligence. Such national legal instruments seem to mark the beginning of a paradigm shift, and Norway is following this process closely.

We still have to work with translating the norm into practice. One of the challenges is that data remains scares on how the majority of the world’s business enterprises understand and manage their potential adverse impacts on human rights.

What we do know though, is that respect for human rights are essential for achieving the Sustainable Development Goals (SDGs).

UN Guiding Principles on Business and Human Rights

We believe that the UN Guiding Principles on Business and Human Rights provides the gold standard for responsible business conduct, expressed through the three pillars of the Guiding Principles: “Protect, Respect and Remedy”.

This means:

  • States have a duty to protect human rights against abuse by businesses;
  • businesses have a responsibility to respect human rights throughout their activities and business relationships; and that
  • victims of business-related human rights impacts must have access to remedy.

The corporate responsibility to respect human rights applies to all businesses regardless of their size, sector, operational context, ownership and structure.

The Guidelines recommend enterprises to carry out risk-based due diligence to identify, prevent and mitigate actual and potential adverse impacts, both in their own operations and in the supply chain.

The Government is an important partner in this endeavour and we want to see our businesses adhere to, and respect their obligations at home and abroad.

We take for granted that companies contribute to protecting the environment, respecting human rights, ensuring labour rights, and avoiding corruption and bribery.

National Contact Point

With regards to remedy I would like to emphasize the valuable work carried out by the National Contact Point for Responsible Business Conduct. The Contact Point carries out training and seminars for the private sector and other actors on relevant topics related to risk-based due diligence and responsible business conduct. I highly recommend their course and there is still an opportunity to enroll. Please check their website.

The National Contact Point is also handling specific complaints against Norwegian multinational enterprises in cases of lack of compliance with the OECD Guidelines. The objective is to facilitate dialogue and mediation between the parties, the complainant and the enterprise, with an aim to reach an agreement on how an enterprise should apply the OECD Guidelines.

If the parties involved do not reach agreement on the issues raised, the National Contact Point will issue a statement and make recommendations on how the enterprise should behave to observe the OECD guidelines.

A Responsible Financial Sector – investor leverage

The Ministry of Foreign Affairs wants to be an active partner with a responsible financial sector. In 2017, OECD launched the Guidance on Responsible business conduct for institutional investors. This helps investors to implement the due diligence recommendations.

In case anyone might be thinking that the OECD Guidelines only apply within OECD countries, it is worth pointing out that 90% of world trade has to be in compliance with the Guidelines.

Norwegian companies have a good reputation internationally. Your event here today confirms the impression I have that investors are increasingly concerned about sustainable development and human rights.

The Norwegian Government expects Norwegian companies operating abroad to respect local laws and regulations, and to be familiar with and apply the OECD Guidelines and the UN Guiding Principles on Business and Human Rights.

Promoting human rights is a matter of understanding and overcoming very practical challenges.

Some of the challenges that need to be overcome are broad in nature.

For example,

  • ensuring decent pay for decent work
  • preventing corruption and theft
  • gender equality and welfare of families and societies
  • exploitation of children
  • remedy for victims of human rights abuses, and
  • building an open and transparent business environment.

Other challenges are more specific – for example

  • ensuring that human rights defenders are not silenced or prevented from engaging in lawful activities
  • making sure that indigenous peoples are heard in business processes that concern them, and
  • taking care that companies do not discriminate, or
  • condone intolerance against LGBTI representatives or other vulnerable groups.

No state can say that the job is done, and many states are failing badly in many of these areas.

The most powerful contribution to sustainable development is for business to embed respect for human rights in their activities and across their value chains. In other words, businesses need to realize and accept that not having negative impacts is a minimum expectation and a positive contribution to the SDGs.

It seems clear that business leaders and investors as yourselves are recognizing this, and I think we have a lot to learn from you.

Promoting Policy coherence

The Norwegian Government has recently taken additional steps to ensure that Norwegian policies and practices are coherent.

Respect for human rights and development is not the responsibility of business alone – we must do our utmost to ensure that we understand the dilemmas that arise from conflicting interests. Improved understanding of policy coherence will enable us to make better decisions – both in the private sector and in the public sector.

I want to quote Idar Kreutzer in Finans Norge who stated that UN Guiding Principles on human rights due diligence are equally important for private sector and investors as accepting climate demands.

As I mentioned at the outset, I hope the new OECD Guidance will be a useful tool for all business actors in all markets, so that due diligence is carried out across the board, for the benefit of people and planet, as well as for profit.

We agree with the Working Group on Human Rights and Business that the main challenge moving forward is to scale up the good practices that are emerging by early adopters. This will require a concerted effort by all actors.

In closing, the Government will strengthen the implementation of the National Action Plan for Business and Human Rights.

Given the complexity of the principles we need increased capacity and competence to follow up the implementation in Norwegian development cooperation involving business.

We welcome a partnership with the financial sector in scaling up this important work.

Thank you for the attention and I hope you’ll have an interesting seminar.

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