English version Business and Human Rights National Action Plan for the implementation of the UN Guiding Principles Business and Human Rights National Action Plan for the implementation of the UN Guiding Principles This is a translation from Norwegian. The original Norwegian text is the formally approved version in the event of any divergence between the two. 4 Foreword Norwegian business enterprises play a part in creating tion with business enterprises. UN Global Compact and thousands of jobs worldwide, and the internationalisation the OECD Guidelines for Multinational Enterprises are of the Norwegian business sector is crucial to Norway’s good examples of such initiatives. Since 2011, the UN competitiveness. In our foreign policy we are therefore Guiding Principles on Business and Human Rights have strengthening economic diplomacy. The Government been the prevailing international standard, and served as wishes to support Norwegian business internationally as a frame of reference for both the Global Compact and the much as possible, on the basis of Norwegian values and OECD Guidelines. A common feature of these initiatives is recognised international standards, and is stepping up that they strive to ensure a more level playing field for a the efforts to promote business participation in new and sustainable business sector with global operations. demanding markets. The present national action plan is intended to enable In the last 10 years, the world economy has been marked the business sector to follow the UN Guiding Principles, by rapid economic integration. Globalisation has raised and the plan outlines specific measures to achieve the standard of living in both developed and devel- this aim. The measures have been developed through oping countries, and has helped to lift several hundred broad-based cross-sectoral cooperation in the public million people out of poverty. However, globalisation administration. has also resulted in reciprocal vulnerability. Crises and events often have worldwide repercussions, and the Special thanks go to the business sector and civil global threats we are facing, such as poverty, climate society for their input to the work on the plan. change, population growth and the increasing pressure on resources, must be resolved through a common effort and by cooperation at both government and pri- vate-sector levels. A sustainable, well-functioning business sector is a key element in the efforts to create the 600 million new jobs that according to the World Bank’s 2013 estimates are needed over the next 15 years. A number of leading global business enterprises, including Norwegian companies, have long since become involved in long-term development. There is a growing trend for international organisations, individual countries Børge Brende and civil society to establish partnerships and coopera- Minister of Foreign Affairs 5 6 Contents Foreword 5 Summary 8 The Government’s expectations of business enterprises 9 1 Global developments and CSR 10 1.1 Developing an international framework for CSR 12 1.2 Human rights and states’ obligations 13 1.3 CSR in the Norwegian business sector 13 1.4 Purpose of the action plan 14 2 The State duty to protect human rights 16 2.1 The state as legislator 18 2.2 The state as adviser 20 2.3 State ownership and practice for supporting the business sector 21 2.4 Competitive tendering for public services 25 2.5 Public procurement 25 2.6 Human rights in conflict areas 25 2.7 Policy coherence in the central government administration 26 2.8 Free-trade agreements and investment contracts 26 2.9 International cooperation on CSR 27 3 The Corporate responsibility to respect human rights 28 3.1 Responsibility to respect human rights 30 3.2 Responsible business conduct 31 3.3 External communication and reporting 34 3.4 Grievance mechanisms for human rights violations 35 3.5 Compliance with legislation 36 4 Access to remedy 38 4.1 State-based grievance mechanisms 40 4.2 Non-state-based grievance mechanisms 41 4.3 Criteria for ensuring effective non-judicial grievance mechanisms 42 7 Summary The action plan is based on the white paper Oppor- The measures the Norwegian Government intends tunities for All: Human Rights in Norway’s Foreign to implement are presented in chapters 2 and 4. The Policy and Development Cooperation (Meld. St. 10 Government’s expectations of business enterprises (2014–2015)).1 with regard to CSR are set out in chapter 3. The plan begins by describing developments in the Norway already has sound legislation for safe- field of corporate social responsibility (CSR) and why guarding human rights. In many fields processes have the Government considers this important. The plan already been started and changes made that are rel- has the same three-part structure as the UN Guiding evant to UN and OECD instruments, for example the Principles on Business and Human Rights: Government’s state ownership policy, corporate gov- ernance of the Government Pension Fund Global and • states’ duty to protect against human rights abuse a number of measures implemented by diplomatic (chapter 2, principles 1–10); and consular missions. The action plan describes what has been done in relevant areas as well as new • the responsibility of business enterprises to measures. respect human rights (chapter 3, principles 11–24); The UN Guiding Principles emphasise that states • the responsibility of states and business enter- have an obligation under international law to pro- prises to ensure effective remedy (chapter 4, tect against human rights abuses by third parties, principles 25–31). including business enterprises. The Government attaches importance to the state’s role as legislator, adviser and facilitator. This action plan is intended to ensure coherent practice throughout the public administration. 1 https://www.regjeringen.no/en/dokumenter/meld.- st.-10-2014-2015/id2345623/ 8 The Government’s expectations of business enterprises Business enterprises have an independent respon- In brief, the Government expects business enterprises sibility under the UN Guiding Principles to respect to: human rights by developing a public strategy or policy, exercising due diligence and helping to ensure • comply with the legislation in the country where it a consultation and remediation process for individ- operates; uals and communities affected by their activities. • familiarise themselves with the UN Guiding Prin- The responsibility to respect human rights applies ciples and the OECD Guidelines for Multinational independently of where the enterprise operates, but Enterprises; is particularly important if it operates in states that do not themselves ensure respect for human rights. • follow the Guiding Principles or the OECD guide- The Guiding Principles are norms and do not have the lines, where applicable, when developing strate- force of law. It is the duty of the enterprises them- gies for responsible business conduct; selves to decide how and to what extent the Guiding Principles apply to their operations. Such decisions • exercise due diligence and assess the human must be based on risk assessments in which respect rights-related risks in the context of their opera- for human rights is evaluated in the context of the tions. This applies particularly to enterprises that individual enterprise’s activities and resources and the operate in demanding markets; challenges in the place where the enterprise oper- ates. Two principles are relevant here: the “comply or • follow the “comply or explain” principle and the explain” principle and the materiality principle.2 The materiality principle. Government’s expectations of business enterprises are discussed in more detail in chapter 3. 2 The principles are discussed in the white paper Diverse and value-creating ownership (Meld. St. 27 (2013–2014)). https:// www.regjeringen.no/en/dokumenter/meld.-st.-27-2013-2014/ id763968/ 9 1 Global developments and CSR 10 11 In the last few decades the global economy has been 2050, without exceeding the planetary boundaries. A marked by rapidly increasing economic integration. sustainable, well-functioning business sector is crucial Globalisation has resulted in a higher standard of if we are to achieve this goal. living in both developed and developing countries, and helped to lift several hundred million people out of This is the reason why a number of leading multina- poverty. A number of developing countries, especially tional enterprises, including Norwegian enterprises, in Asia, have experienced unprecedented economic have long since become involved in long-term devel- development, whereas others, especially in Africa, have opments, and there is an increasing trend for inter- lagged behind. In spite of this, several of the world’s national organisations, individual countries and civil fastest growing economies are found in Africa. society to establish partnerships and cooperation with companies. Globalisation is therefore a basically positive process, and over the last 20 years Norway has benefited from The UN Global Compact is one such initiative. This global trade. Norwegian companies’ success abroad is a network-based organisation that works with and growing foreign ownership in Norway indicate business enterprises. The enterprises are committed that we have a globally competitive business sector. to aligning their strategies and operations with 10 We must also expect a major restructuring of the principles in the areas of human rights, labour, envi- Norwegian economy in the time ahead. Although ronment and anti-corruption. The idea behind this is Europe and the Nordic countries are our most that business is a driving force for globalisation that important trading partners, trade with and investment can help ensure that trade, markets and technology in Asia, South America and Africa are growing. The are developed in ways that benefit economies and Government is therefore stepping up economic societies throughout the world. Support for this initia- diplomacy. Priority is given to supporting the private tive, which now has over 12 000 members,3 is a good sector in weak states and in new and demanding example of the fact that global challenges can be met markets. This includes stronger support for guidance, by common efforts. dialogue and cooperation on challenges relating to CSR, including human rights. The UN Human Rights Council expressed its unan- imous support for the UN Guiding Principles on Business and Human Rights in resolution 17/4 of 16 June 2011. The OECD updated its Guidelines for 1.1 Developing an international Multinational Enterprises in May of the same year, framework for CSR and incorporated the UN Guiding Principles in a separate chapter on human rights,4 although the Economic integration has consequences for the Guidelines cover far more topics. All OECD countries international division of labour and for national and must establish National Contact Points to ensure business development strategies. Economic consid- implementation. erations are bringing about a shift in political focus, from West and North to East and South. The fastest The Guiding Principles have rapidly developed into growth is not confined to stable, well-regulated states. the prevailing international standard, and are being integrated into many other guidelines and frame- Globalisation has resulted in reciprocal vulnerability. works. In addition to the OECD Guidelines, these Crises and events often have worldwide repercus- include UN Global Compact, ISO 26000, the Equator sions, and the global threats we all face, such as Principles and the International Finance Corpora- poverty, climate change, population growth and the tion Performance Standards. The Guiding Principles increasing pressure on resources, must be resolved are also incorporated in national action plans and through a common effort and by cooperation at both government and private-sector levels. What is needed 3 More that 8000 of these are companies. is economic development that can ensure enough 4 http://www.oecd.org/daf/inv/mne/oecdguidelinesformultina- food, water and energy for over nine billion people in tionalenterprises.htm 12 guidelines for particular industries. Many enterprises obligations under international law that commit are now aligning their CSR strategies with these states to protecting individuals from abuse by third principles. parties, in this case by business enterprises. Any lack respect for human rights shown by a company cannot The UN Guiding Principles are intended to promote in itself be considered a human rights violation of, more sustainable, socially beneficial economic devel- since a business enterprise does not have obligations opment. Promoting human rights is directly and indi- towards human rights under the provisions of a rectly linked with environmental protection, climate convention. Thus when the present action plan refers and anti-corruption efforts. For example, the right to human rights violation by business enterprises, this to health can be affected by hazardous substances does not refer to a violation of international law but to and air, soil and water pollution. Measures to prevent a lack of respect for human rights that should not be deforestation and forest degradation can safeguard understood in the legal sense of the term. the climate and at the same time promote the rights of indigenous peoples and local communities. The UN Guiding Principles refer to the Universal Declaration of Human Rights and the 1966 Many multinational enterprises are actively engaged International Covenants on Economic, Social in solutions to global issues: from poverty to climate and Cultural Rights, and on Civil and Political change, to population growth and increased pres- Rights, together with the ILO core conventions on sure on resources. This is where respect for human fundamental rights and principles at work.6 The rights becomes important. Studies have shown that a Guiding Principles state that other standards dealing growing number of business enterprises have recog- with specific individual or collective rights may also nised the implications of respect for human rights for apply to business enterprises, depending on the sustainable development, and have integrated this context. into their operations.5 1.3 CSR in the Norwegian business 1.2 Human rights and states’ obligations sector Human rights are the fundamental rights of the In recent years, Norwegian business organisations such individual that apply irrespective of race, colour, as the Confederation of Norwegian Enterprise (NHO), sex, language, religion, political or other belief, the Enterprise Federation of Norway (Virke), Finance property, birth and other factors. It is the state’s duty Norway, the Norwegian Shipowners’ Association and to protect human rights, both by avoiding human the Norwegian Institute of Public Accountants have rights abuses themselves and ensuring that human given high priority to CSR. Most major Norwegian rights are respected by private parties under their companies have incorporated CSR into their business jurisdiction. Protection of human rights is laid down in strategies. The Norwegian Corporate Governance international agreements and customary international Board (NUES) has published recommendations7 that law, which is binding on states. Any violation of these have to be followed by all companies listed on the rights by a state is considered to be a violation of Oslo Stock Exchange. Another initiative is the Business international law. Normally, international agreements regulate states’ 5 https://agenda.weforum.org/2015/05/what-is-the-business- obligations and not those of individuals, organisations view-on-human-rights/?utm_content=buffere9ec2&utm_medi­ um=social&utm_source=twitter.com&utm_campaign=buffer or companies. Some conventions have established https://www.unglobalcompact.org/library/1151 complaints mechanisms for violations of the 6 http://www.ilo.org/declaration/principles/freedomofassocia- convention provisions. However, these mechanisms tion/lang--en/index.htm 7 http://www.oslobors.no/ob_eng/Oslo-Boers/Listing/Shares-eq- only apply to states. The UN Guiding Principles are uity-certificates-and-rights-to-shares/Oslo-Boers-and-Oslo-Ax- not a new convention but are based on existing ess/Corporate-governance-CG 13 for Peace Foundation, which promotes business The Government wishes to provide strong support, practices that contribute to sustainable development. based on Norwegian values, to Norwegian companies The social partners have played an active role in the abroad, and is stepping up the efforts to assist development of decent working conditions, and NGOs companies in new and demanding markets. As part of have mobilised both business and the public sector to our support, we are strengthening guidance, dialogue give priority to CSR. There are an increasing number and practical cooperation on CSR. of partnerships between civil society and business, such as the Ethical Trading Initiative Norway (ETI- In this context, ‘corporate social responsibility’ refers Norway), which was set up in 2000 by the Norwegian to the responsibility companies are expected to Confederation of Trade Unions (LO), Virke, COOP and assume for people, society and the environment that Norwegian Church Aid. are affected by their activities. The Government’s expectations are confined to companies’ business operations. The measures will make it easier for companies to avoid the risk of contributing to 1.4 Purpose of the action plan human rights violations and to follow the UN Guiding Principles. Norwegian foreign and development policy is based on promoting democracy, human rights, growth The extensive international engagement in CSR at economies that create jobs, a proactive trade policy, many different levels and in a wide range of forums sustainable development and an international makes it difficult for the individual company to keep legal order. We are also intensifying our economic track of what is relevant and useful for its operations. diplomacy efforts by focusing more strongly on This action plan aims to provide a clearer picture trade, energy and climate, and, in our development of the situation and help Norwegian business policy, on private sector development. The enterprises find their way around in this landscape. internationalisaton of Norwegian business makes a crucial contribution to Norway’s competitiveness, and Norwegian companies are creating thousands of jobs worldwide. 14 15 2 The State duty to protect human rights This chapter reviews principles 1–11 of the UN Guiding Principles, which deal with the duties of states in the field of human rights. The chapter contains most of the measures the government will take to enable business enterprises to fulfil their social responsibility. 16 17 The first two principles define the state’s overall other legislative provisions that are in conflict with obligation:8 them. In 2014, a number of human rights were also enshrined in the Norwegian Constitution. The duty 1. States must protect against human rights abuse of business enterprises to respect human rights is within their territory and/or jurisdiction by third set out in Norwegian legislation, for example in the parties, including business enterprises. This requires Working Environment Act, the Gender Equality Act taking appropriate steps to prevent, investigate, and the Environmental Information Act. In addition punish and redress such abuse through effective poli- there are acts regulating other areas that may cies, legislation, regulations and adjudication. have consequences for human rights, such as the Nature Diversity Act, the Pollution Control Act and 2. States should set out clearly the expectation that all the Greenhouse Gas Emission Trading Act. These business enterprises domiciled in their territory and/ are intended to contribute to a stable climate and a or jurisdiction respect human rights throughout their healthy environment, and to help safeguard the right operations. to health. Generally speaking, Norwegian legislation safeguards human rights in Norway, so that The next eight principles describe what the state companies that operate only in Norway are in little should do to fulfil these obligations. The third danger of violating these rights as long as they comply principle concerns the state’s role as legislator and with the legislation. adviser. However, although Norway already has in place 3. In meeting their duty to protect, States should: sound legislation that applies to business, it may be necessary to consider amending certain acts in the (a) Enforce laws that are aimed at, or have light of the Guiding Principles and other international the effect of, requiring business enterprises to developments. It is often relevant to follow EU action respect human rights, and periodically to assess in this field. The action plan therefore provides for the adequacy of such laws and address any review at regular intervals to ensure that legislation gaps; keeps pace with international decisions affecting human rights and CSR. Coherent follow-up of (b) Ensure that other laws and policies governing principle 8 (see section 2.7 below) should also be the creation and ongoing operation of busi- ensured. The Government will therefore appoint an ness enterprises, such as corporate law, do not interministerial working group headed by the Ministry constrain but enable business respect for human of Foreign Affairs to ensure that such reviews are rights; conducted. The aim of the working group is described in section 2.7. (c) Provide effective guidance to business enterprises on how to respect human rights The following are examples of relevant legislation. throughout their operations; (d) Encourage, and where appropriate require, business enterprises to communicate how they address their human rights impacts. 8 The official translations of the UN Guiding Principles are avail- able in Arabic, Chinese, English, French, Russian and Spanish: http://www.ohchr.org/EN/PublicationsResources/Pages/Refer- enceMaterial.aspx 9 http://app.uio.no/ub/ujur/oversatte-lover/cgi-bin/sok.cgi?da- 2.1 The state as legislator to=&nummer=&tittel=human+rights&type=LOV&S%F8k=S%F8k.tr 10 The 1950 European Convention for the Protection of Human Rights and Fundamental Freedoms, the two 1966 International The Norwegian Human Rights Act9 states that certain Covenants on Economic, Social and Cultural Rights, and on Civil key human rights conventions have the force of and Political Rights, the 1989 Convention on the Rights of the Child, and the 1979 Convention on the Elimination of All Forms Norwegian law10 and take precedence over any of Discrimination against Women. 18 The Accounting Act the area of mineral resources. In the Official Norwegian Under the Accounting Act, large enterprises have Report 2007:13 on legislation pertaining to the Sami, been required to submit reports on CSR since 2013. the Sami Rights Commission reviewed measures The provision stipulating that enterprises must take relating to mineral resources and in legislation that account of human rights is considered to be in line with regulates mineral extraction. Some of the commission’s the Guiding Principles concerning the independent proposals were evaluated in connection with the responsibility of enterprises to ensure that they respect preparatory work on the Minerals Act. The Act, which human rights. replaced five existing acts, entered into force on 1 January 2010. As part of the Government’s follow-up of the report from the Sami Rights Commission,13 the Amendments to EEA legislation Ministry of Trade, Industry and Fisheries will evaluate Small amendments to Norwegian legislation may be proposals for amendments to the Minerals Act. necessary in order to implement the expected new EEA rules corresponding to the new EU Directive (2014/95/EU) on disclosure of non-financial and Legislation governing the export of arms, diversity information by certain large companies ammunition and other military equipment and groups, which includes CSR. In this context it Norwegian legislation governing the export of arms, will be appropriate to look to other international ammunition and other military equipment, associated developments, such the new UN Guiding Principles technology and services for military purposes is strict Reporting Framework.11 and comprehensive. It is based on the principle that Norway does not permit such exports to areas where there is war, a threat of war, or countries where there is Regulations on country-by-country reporting civil war. The Foreign Ministry’s guidelines recommend Under the country-by-country reporting regulations, that such applications should be rejected in cases large enterprises that are required to submit accounts, where, for example, there is considered to be an and issuers of financial instruments listed on the stock unacceptable risk that the equipment to be exported exchange, in the extractive industry and/or forestry is intended to be used for internal oppression or and logging, are required to prepare and publish serious human rights violations. The Arms Trade Treaty an annual report on their activities by country and (ATT), signed in April 2013, provides guidelines for the by project. The regulations entered into force on 1 regulation of export control by states. The guidelines January 2014, and will be reviewed after three years.12 provide for the possibility that states may have more restrictive practices than those that follow from the ATT, and Norway will continue with its restrictive legislation. The Minerals Act At the same time, the Government wishes to continue In Norway as in other countries, conflicts may arise to provide Norwegian business enterprises with clear, between commercial activity and indigenous peoples’ predictable framework conditions for their export rights. Protection of Sami rights is laid down in the operations, for example by providing unambiguous, Constitution and other legislation, and obligations long-term guidelines for the Foreign Ministry’s towards the Sami people follow from international processing of applications to export defence materiel. conventions, particularly Article 27 of the International An annual report is submitted to the Storting on the Covenant on Civil and Political Rights and ILO Ministry’s implementation of legislation and guidelines, Convention 169 concerning Indigenous and Tribal and on the scale of Norwegian exports of goods and Peoples in Independent Countries. In Norway, Sami related technology controlled by the EU Munition List. rights are also enshrined in special legislation and through consultation procedures between the public 11 http://www.ungpreporting.org/consult-the-reporting-frame- authorities and Sámediggi (the Sami Parliament). As work/download-the-reporting-framework/ part of its follow-up of ILO Convention 169, Norway is 12 https://www.regjeringen.no/no/aktuelt/for- conducting a dialogue with ILO on how the convention skrift-om-land-for-land-rapportering/id748537/ (In Norwegian). 13 https://www.Regjeringen.no/nb/dokumenter/nou-2007-13/ is being implemented in Norwegian law, including in id491883/ (In Norwegian). 19 Measures: 2.2 The state as adviser • appoint an interministerial working group to A large number of public or officially supported assess the need for follow-up of international institutions that work with business internationalisation decisions and to ensure coordinated imple- provide guidance on CSR and human rights. Among mentation of this action plan (see section 2.7 them are the Foreign Service, Norad, the Ministry of for a more detailed description of the group’s Trade, Industry and Fisheries, and Innovation Norway. objective and tasks). Each relevant ministry will Norway’s OECD National Contact Point also provides continue to be responsible for assessing the information and guidance. need for legislative amendments and other measures in its area of expertise; Although the advice given by these bodies often needs to be adapted to the context and situation • review the country-by-country reporting regula- of the individual company, the question of whether tions for the extractive industry and forestry in the various bodies’ advice is consistent should be 2016–17; examined. The Government’s goal is that Norwegian enterprises should encounter the same expectations • evaluate the amendments to the Minerals Act regardless of which public authority they come in con- proposed by the Sami Rights Commission in tact with, and the business sector expressed a desire their report; for coherence in this respect in its input to the action plan. Such a review would also satisfy the terms of • continue to practise a strict and predictable the white paper Human Rights in Opportunities for All: control regime for arms exports. Human Rights in Norway’s Foreign Policy and Develop- ment Cooperation (Meld. St. 10 (2014–2015)). The Government will therefore consider establishing a centre where the resources of several advisory NORWAY’S OECD NATIONAL CONTACT POINT bodies would be co-located. Such a centre would help to ensure coherence and best practice, and serve as a direct resource for companies. The secretariat of As a member of the OECD, Norway is committed Norway’s OECD Contact Point, which is an important to promoting the OECD Guidelines for Multina- tional Enterprises. The Guidelines were updated source of information, would be co-located in this and adopted at the OECD Ministerial Council centre. Meeting in May 2011. All OECD countries must appoint a National Contact Point that in addition There is also a need to raise the level of competence to promoting the Guidelines provides on request on international decisions in the public administration, assistance in specific instances of alleged non-ob- and especially in public bodies that offer courses and servance of the Guidelines. The Contact Point is training in business internationalisation. not a supervisory or control body, but provides advice and facilitates access to conciliation and mediation procedures. National Contact Points Many Norwegian enterprises operate in new markets are also mandated to cooperate with each other in weak states with poorly developed legislation or a on promoting the Guidelines. Norway’s Con- poor capacity to enforce human rights legislation. Such tact Point is appointed by the Ministry of For- companies are requesting advice and cooperation on eign Affairs in consultation with the Ministry of CSR and related subjects such as security, risks and Trade, Industry and Fisheries and the Ministry of corruption. The diplomatic and consular missions and Finance, from candidates proposed by the social Innovation Norway in particular will be strengthening partners (the Confederation of Norwegian Enter- prise (NHO) and the Norwegian Confederation of their capacity for advice and dialogue on such subjects. Trade Unions (LO) and civil society (the Norwegian Forum for Environment and Development). In order to ensure that advice and guidance on CSR and human rights are relevant and up to date, the 20 Government will continue the dialogue with the social Direct state ownership in multinational enterprises partners and civil society, especially in KOMpakt, the is relatively extensive in Norway. We also have Government’s Consultative body on matters relating ro the world’s largest sovereign wealth fund, the CSR. Government Pension Fund Global, which is invested in around 9000 enterprises worldwide. Under the UN Guiding Principles, the state has a particular responsibility for advising business enterprises in conflict-affected areas. This is described State ownership in more detail in section 2.6. In 2014, the Government presented a white paper on the importance of ownership for diversity and value creation (Meld. St. 27 (2013–2014)), which discusses the state’s expectations of enterprises in which it has Measures: a direct ownership interest, including expectations based on the UN Guiding Principles. The expectation • consider establishing a centre for co-locating that state-owned enterprises will exercise CSR is the resources of a number of public bodies that based on the belief that this is desirable in itself provide advice on CSR;14 and that it helps to maintain the state’s shareholder value. Enterprises are exposed to different levels of • improve the level of competence on the UN risk and face different challenges. This means that Guiding Principles and the OECD Guidelines they can adapt the “comply or explain” principle and among the public bodies that offer guidance on the materiality principle to their own operations. CSR; The “comply or explain” principle applies to cases where a company’s practice deviates from the state’s • strengthen guidance and dialogue with compa- expectations. There may be good reasons for this, nies on human rights, business ethics, security and the board of directors must provide a public and corruption in especially demanding mar- explanation of the reasons for the lack of compliance. kets; The materiality principle implies that companies work with and report on factors that are of major • continue the work on CSR by KOMpakt, the importance to the way its operations affect people, ­Government’s Consultative body on matters communities, climate and the environment. relating ro CSR. The Government has noted that there is a need to focus more strongly on the responsibility of the boards also of enterprises in which the state has 2.3 State ownership and practice for an ownership interest and their approach to CSR, supporting the business sector including human rights. We believe that greater involvement by company boards will improve Principle 4 concerns the business activities of state- risk management and thereby help to maintain owned enterprises and enterprises that receive shareholder value. The follow-up of CSR and human economic support or other services from state rights performance is conducted through the owner agencies: dialogue in quarterly and/or annual meetings on CSR. In special cases it may be necessary to follow 4. States should take additional steps to protect against the company’s activities more closely. The work of human rights abuses by business enterprises that companies and boards on CSR, including human are owned or controlled by the State, or that receive rights, is taken into account in the election of board substantial support and services from State agencies members. such as export credit agencies and official investment insurance or guarantee agencies, including, where 14 This will be financed within the Ministry’s existing budgetary appropriate, by requiring human rights due diligence. framework, and will not require additional allocations. 21 Responsible management of Finance. The Ministry reports to the Storting on Through the Government Pension Fund Global (GPFG) the management and on planned changes in the and the Government Pension Fund Norway (GPFN), framework in an annual white paper (see e.g. The Norway has financial investments both in Norway Management of the Government Pension Fund in 2014 and the world at large. The role of the Fund is that of (Meld. St. 21 (2014–2015)). a financial investor, and the overriding objective is to achieve the highest possible return at moderate risk. In the management mandate set by the Ministry it is stated that a good long-term return is considered Under the GPFG investment strategy, 60 % of the dependent on sustainable development in economic, capital is invested in equities, 35 % in bonds and up environmental and social terms, as well as well- to 5 % in real estate. The GPFG may not own more functioning, legitimate and efficient markets. The than 10 % of any single company in its portfolio. The mandates laid down by the Ministry of Finance to investment strategy for the GPFG has been expressed, Norges Bank and Folketrygdfondet require that these inter alia, through benchmark indices. Its benchmark considerations are integrated into the operational indices for equities and bonds are based on broad and management strategies. Within the framework decided easily available indices from leading index providers. by the Ministry, Norges Bank and Folketrygdfondet Norges Bank may only deviate to a small extent from make investment decisions and exercise their the benchmarks (1% expected tracking error). The ownership rights independently of the Ministry. management of the GPFG thus follows closely the broad market indicies as set by the Ministry. This also The work on responsible management is an means that the fund is invested widely and with small integrated part of the investment process and holdings in the global markets. At the end of 2014, Norges Bank uses a variety of tools in its responsible the fund’s average holding in the global equity market management. They can be divided into three was 1.3 %. This means that the fund is a minority main groups: standard setting, ownership and risk shareholder in a large number of companies. management. Norges Bank’s responsible investment management is, as a starting point, based on The Government attaches importance to transparency international principles and standards, such as those and ethics in the management of the Government set by the UN in the Guiding Principles on Business Pension Fund. In the management of the fund, and Human Rights and the OECD in the Guidelines emphasis is also given to respecting values shared by for Multinational Enterprises. When the UN Guiding the beneficial owners of the Fund. Guidelines have Principles were adopted, Norges Bank endorsed a been drawn up for observation and exclusion from campaign by investors in support of the principles. the GPFG portfolio of companies that contribute to or are responsible for certain gross violations of norms, When Norges Bank assesses markets and country including human rights violations. Expectations from risks, it includes violent conflicts, human rights different perspectives are being expressed on the best violations and political terror in its analyses. Human way to fulfil the funds` ownership role. However, it is rights may also be a part of the risk monitoring at important that the fund keeps to its role as financial sector and company level. investor: there is broad political consensus that the fund is not a foreign or environmental policy tool. The state In its capacity as owner and minority shareholder has other and more effective instruments in these fields. in over 9000 companies worldwide (by the end of 2014), Norges Bank has chosen to focus on certain The Ministry of Finance is responsible for the areas in order to achieve the best and most effective management of the Government Pension Fund, risk management and exercise of ownership rights. including the framework of responsible management. At present the bank has three focus areas that The operational responsibility for management of are directly linked with environmental and social the GPFG and the GPFN lies with Norges Bank and conditions: children’s rights, climate change and water Folketrygdfondet respectively, which operate in management. It has set out expectations in each of accordance with mandates decided by the Ministry these areas for how companies can manage risks and 22 report on their activities. The expectation documents observations in cases where there is an unacceptable are publicly available. risk that a company contributes to or is responsible for serious or systematic violations of human rights. In its 2014–2016 strategy document, Norges Bank The companies are identified by means of, among stated that it may add additional focus areas towards other things, systematic reviews of sectors or issues, the end of the period. The Ministry of Finance will approaches from interest groups and reports in the follow up the Storting’s recommendation to verify media. Another criterion concerns serious violations with Norges Bank whether an expectation document of individual rights in war or other conflict situations. on human rights can be drawn up, including which In 2014, the council reviewed a number of cases of areas of human rights can be expected to be included. human rights violations in connection with extraction The Ministry of Finance has asked Norges Bank to of natural resources, agriculture, food production and respond by 1 February 2016, and will report on the textile manufacturing. subject in its spring white paper to the Storting on the management of the Government Pension Fund. It follows from the mandate from the Ministry of Finance to Norges Bank that in certain cases the GPFG However, it should be emphasized that Norges Bank’s is prevented from investing in government bonds. work on responsible management is not confined The GPFG is not a foreign policy instrument, and to these areas. In its annual report on responsible only in special cases of comprehensive international management for 2014 the bank has elaborated sanctions or measures that Norway has endorsed, on how it deals with a number of other issues and has such restrictions been imposed on investing in areas as well, including social conditions such as government bonds.15 human rights and workers’ rights. In recent years the bank has also made risk-based divestments based on an overall financial assessment of companies Measure: that includes environmental and social issues. Such divestments are made within the limits set out in the • The Ministry of Finance has asked Norges mandate from the Ministry of Finance. Bank to consider whether it can draw up an expectations document for human rights, and To further strengthen its work on responsible which areas of human rights it would consider management, in February 2015 Norges Bank presented including, by 1 February 2016. The Ministry will for the first time a separate report on its activities in report on this subject in its spring white paper this area. The aim of the report is to provide a broad to the Storting on the management of the Gov- and coherent overview of the bank’s work on assuring ernment Pension Fund. responsible management and in this way increasing the transparency of the management of the GPFG. The report is published on http://www.nbim.no/en/. Conditions for government support for A system has also been established for observation business promotion and private sector and exclusion of companies. The system is intended development to ensure that the GPFG is not invested in companies The state is responsible for exercising due diligence that produce certain products or contribute to or are when it provides significant economic support or responsible for grossly unethical conduct. The Ministry other types of benefits to the business sector. This of Finance has appointed a Council on Ethics to advise particularly affects the Norwegian Export Credit Norges Bank on exclusion or observation of companies in the fund’s portfolio on the basis of the criteria in the 15 Section 2, first paragraph (c) of the Government Pension Fund guidelines for observation and exclusion. The criteria Global Guidelines for observation and exclusion state that ‘The are laid down by the political authorities. Fund shall not be invested in companies that… sell weapons or military materiel to states that are subject to investment restric- tions on government bonds as described in the management The Council on Ethics can recommend exclusions or mandate for the Fund section 3-1(2)(c).’ 23 DUE DILIGENCE BY GIEK, EXPORT CREDIT NORWAY AND INNOVATION NORWAY GIEK and Export Credit Norway often provide financ- Innovation Norway practises environmental and ing for the same projects, and have established for- social due diligence when dealing with all financing mal cooperation on CSR. The cooperation includes applications from business enterprises. The infor- human rights due diligence based on the expecta- mation on the company and the project for which tions of export credit institutions set by the UN Guid- support has been requested is assessed on the basis ing Principles, and is an integrated part of GIEK’s and of a red flag checklist and a checklist based on the Export Credit Norway’s loan and guarantee activities. 10 principles of the UN Global Compact and adapted All projects for which financing is being considered to Innovation Norway’s mandate and target groups. are submitted to an internal risk classification, The red flags are: risk of corruption, the nature even projects where this is not required16 by the of the company’s activities in low-cost countries, OECD Recommendation of the Council on Common ethical dilemmas and environmental pressure from Approaches for Officially Supported Export Credits commercial activities. CSR scores reflect the level and Environmental and Social Due Diligence.17 On of CSR-related risk connected with the project or the basis of the risk classification and considerations whether CSR may be a reason for giving the case relating to opportunities for exerting influence, priority. One of the conditions laid down in the appropriate measures are taken to avoid, reduce contract with the client is that the enterprise must and/or remedy potentially negative outcomes. In have high ethical standards and avoid contributing markets where there is a high risk that human rights to corruption, human rights violations, poor working will not be safeguarded in connection with business conditions or adverse impacts on local communities operations, it may be logical for example to require or the environment. business enterprises to have adequate systems and strategies for risk assessment and follow-up. Guarantee Agency (GIEK), Export Credit Norway, Measures: Innovation Norway, Norad and the Foreign Service. The expectation that companies will observe a high • give companies with international operations standard of CSR reduces the risk that those that that apply for public funding or services18 ade- receive credit, loans or other financial support fail to quate and coherent information and guidance respond correctly in difficult situations, which would on the Government’s expectations concerning affect Norway’s credibility and reputation as well as respect for human rights; that of the company concerned. Responsible business conduct also constitutes a competitive advantage. • expect companies that are to receive financial support or servicesto respect human rights; The Government wishes to expand its cooperation with the business sector in private sector • continue to classify all export transactions19 for development policy. The cooperation would include which public funding is sought according to the financial support for projects with a development risk of human rights violations. effect in particular developing countries, and strategic cooperation between the Norwegian authorities, Norwegian companies and third parties such as 16 Recommendation of the Council on Common Approaches for the recipient country, multinational institutions Officially Supported Export Credits and Environmental and or NGOs. In such cases expectations and in some Social Due Diligence. See also section 2.9 on international coop- eration on CSR. cases requirements will be set for business conduct 17 For example mobile units such as vessels and cases of less compatible with the practices of other public than 10 million SDRs (Special Drawing Rights). 10 million SDRs corresponds to about NOK 100 million. institutions. 18 Financial support and services may be provided by for example GIEK, Innovation Norway, Norad or the Ministry of Foreign Affairs. Examples of services would be advice or participation in business delegations or state visits. 19 For example for applications for export credits, guarantees, etc. 24 2.4 Competitive tendering for public ment Act to include a provision stating that con- services tracting authorities should have adequate procedures for ensuring social responsibility in connection with The fifth principle states that: public procurement. The Agency for Public Manage- ment and eGovernment (DIFI) provides guidance on 5. States should exercise adequate oversight in order such matters. to meet their international human rights obligations when they contract with, or legislate for, business enterprises to provide services that may impact upon the enjoyment of human rights. Measure: Examples of public services subject to competitive • continue the efforts to develop measures to tendering that may have consequences for human promote respect for international human rights rights are the operation of asylum reception centres, in public contracts. hospitals and schools. The state may also be held responsible for human rights violations if these result from inadequate management or control of private service providers within the state’s sphere 2.6 Human rights in conflict areas of responsibility. The Government considers that Norwegian law and supervisory authorities are The seventh principle emphasises that the state has adequate for this purpose, and that there is no need a special role to play in facilitating companies’ respect for special measures at present. for human rights in conflict areas: 7. Because the risk of gross human rights abuses is heightened in conflict-affected areas, States should 2.5 Public procurement help ensure that business enterprises operating in those contexts are not involved with such abuses, The sixth principle deals with public procurement: including by: 6. States should promote respect for human rights (a) Engaging at the earliest stage possible with by business enterprises with which they conduct business enterprises to help them identify, pre- commercial transactions. vent and mitigate the human rights-related risks of their activities and business relationships; Since the UN Guiding Principles and the OECD Guide- lines do not distinguish between public-sector and (b) Providing adequate assistance to business private-sector business conduct, it is important that enterprises to assess and address the heightened the state should have high standards. It is not logical risks of abuses, paying special attention to both to have high expectations of private companies if the gender-based and sexual violence; state does not set the same expectations for itself. The state is also Norway’s largest purchaser, a fact (c) Denying access to public support and services that was emphasised by companies and organisa- for a business enterprise that is involved with tions in their input t o the action plan. For example, gross human rights abuses and refuses to coop- in 2013 the public sector purchased goods and ser- erate in addressing the situation; vices worth NOK 432 billion. The state’s procurement practices should therefore reflect the UN Guiding (d) Ensuring that their current policies, legisla- Principles. tion, regulations and enforcement measures are effective in addressing the risk of business The Government has held a public consultation on involvement in gross human rights abuses. a proposed amendment to section 6 of the Procure- 25 Companies themselves have a responsibility to 2.7 Policy coherence in the central identify serious risks connected with areas that have government administration been or are affected by conflict. There is an increasing demand from the business sector for dialogue and The eighth principle deals with the state’s cooperation with the public authorities on security, responsibility for ensuring coherence in the central risk assessment and corruption in conflict areas and government administration: demanding markets in these areas. 8. States should ensure that governmental departments, The Ministry of Foreign Affairs is the contact point agencies and other State-based institutions that for companies in matters of security abroad. The shape business practices are aware of and observe dialogue on the risk of gender-based and sexual the State’s human rights obligations when fulfilling abuses will be intensified where appropriate. No their respective mandates, including by providing assistance will be given to companies that are them with relevant information, training and support. involved in gross human rights violations unless they show a willingness to cooperate on addressing the To strengthen coordination, the Government will situation. establish an interministerial working group headed by the Ministry of Foreign Affairs to ensure that Norway’s Security personnel hired to protect Norwegian CSR-related positions in international forums are interests, whether private or public, pose a potential coherent, and that the relevant ministries are notified problem. States that hire private security guards must of international decisions. See also section 2.1, The ensure that these comply with the state’s obligation to state as legislator. protect against human rights violations. The Voluntary Principles on Security and Human Rights and the The Government’s consultative body on matters International Code of Conduct for Private Security relating to CSR, KOMpakt, will continue to serve as Service Providers are useful guidelines for private a forum for regular dialogue at top level between business enterprises on how best to ensure their the authorities, the private sector, trade unions, security. academics and civil society. Measures: 2.8 Free-trade agreements and investment contracts • strengthen the dialogue with the business sector through the missions abroad on the risks The ninth principle concerns the framework associated with human rights violations, secu- conditions established through trade policy: rity concerns and corruption in conflict areas; 9. States should maintain adequate domestic policy • strengthen project cooperation with the busi- space to meet their human rights obligations when ness sector on ethics, security and corruption. pursuing business-related policy objectives with other States or business enterprises, for instance through investment treaties or contracts. Norway is bound by reciprocal obligations through its membership of international trade organisations such as EFTA and WTO. The Ministry of Trade, Industry and Fisheries has the overall responsibility for bilateral free trade agreements (EFTA) and investment contracts, while the Ministry of Foreign Affairs is responsible for WTO negotiations. 26 Measure: Measures: • seek to ensure that provisions on respect for • emphasise the importance of business and human rights, including fundamental workers’ human rights in the Human Rights Council; rights, and the environment are included in bilateral free trade and investment agreements. • work for the global implementation of the UN Guiding Principles and the OECD Guidelines; • recognising the crucial contribution of business 2.9 International cooperation on CSR to development, economic growth and job creation, and the fact that states have a duty The 10th guiding principle concerns how states to protect against human rights abuse, seek to should act when they cooperate in international ensure that Norway’s positions in the relevant organisations and forums: forums are coherent; 10. States, when acting as members of multilateral insti- • give priority to institution-building, ensuring tutions that deal with business-related issues, should: favourable framework conditions and devel- oping appropriate legislation for protection (a) Seek to ensure that those institutions neither against human rights abuses in developing restrain the ability of their member States to countries where Norway is involved in private meet their duty to protect nor hinder business sector development; enterprises from respecting human rights; • seek to ensure that the reporting framework set (b) Encourage those institutions, within their out in the UN Guiding Principles is incorporated respective mandates and capacities, to promote into the United Nations Global Compact and the business respect for human rights and, where Global Reporting Initiative. requested, to help States meet their duty to protect against human rights abuse by business enterprises, including through technical assis- tance, capacity-building and awareness-raising; (c) Draw on these Guiding Principles to promote shared understanding and advance international cooperation in the management of business and human rights challenges. Implementation of the UN Guiding Principles will help to ensure a more level playing field and greater transparency and predictability for enterprises with international investments. States should harmonise their expectations in international forums that support, enter into partnerships with and provide guidance to enterprises. Norway is therefore working for the integration of the OECD Guidelines for Multinational Enterprises into the OECD framework for export financing.20 We also play an active role in the UN, the OECD, the multilateral financial 20 Recommendation of the Council on Common Approaches for Officially Supported Export Credits and Environmental and institutions and the regional development banks. Social Due Diligence. http://www.oecd.org/tad/xcred/environ- mentalandsocialduediligence.htm 27 3 The Corporate responsibility to respect human rights This chapter deals with principles 11–24 of the UN Guiding Principles, which concern the practical implementation of CSR by business enterprises. 28 29 The UN Guiding Principles are recommendations, for enterprises in which the state has an ownership and are not legally binding. They advise enterprises interest recommend that these enterprises should on what they should do in order to avoid causing or publish, in accordance with the “comply or explain” contributing to human rights abuses, a consequence principle, a report stating why the Guiding Principles that most companies consider undesirable. The are not relevant to its activities. Private companies voluntary involvement of business in the development should do the same. of the Guiding Principles and in other areas is evidence that the business community itself realises the value of a common global approach. The Government expects all As described in chapter 2, the Norwegian Government companies to: has set out clear expectations and in some cases requirements for the business sector in connection • follow the rules and regulations of the country with all forms of state support or ownership. The where the company operates; Guiding Principles set out here in chapter 3 deal with how business enterprises should comply in practice • acquaint themselves with the UN Guiding Princi- with the expectations on respecting human rights. ples and the OECD Guidelines for Multinational Enterprises; Due to their advisory nature, the Guiding Principles have not set any standards that would define • make use where appropriate of the UN Guiding which companies or countries they apply to, or Principles or the OECD Guidelines in the devel- how companies should apply them. The individual opment of their strategies for responsible company itself must decide how to integrate business conduct; CSR into its activities. It is natural that the largest international companies with the most resources • exercise due diligence and assess the risks of and operating in demanding markets should actively human rights abuses in their area of operation. follow international guidelines with regard to both This applies particularly to companies that the amount of resources they devote to CSR and the operate in demanding markets; formalisation of their strategies. A small technology company that exports to Denmark or Sweden is • apply the “comply or explain” principle and the unlikely to risk becoming implicated in human rights materiality principle. abuses to any great extent. However, under the Guiding Principles all companies are expected to be responsible for considering who they are dealing with, what their commercial partners do to ensure respect 3.1 Responsibility to respect for human rights and how, as customer or contracting human rights party, they can use their influence to address or prevent any adverse impacts on human rights. Under the UN Guiding Principles and the OECD Guidelines, business enterprises have an independent The most important factor that a company should responsibility to respect human rights. This is not consider is whether there is a risk of its becoming a legal requirement. However, most countries implicated in situations where human rights are have legislation that directly or indirectly protects being violated as a result of its operations. Even small individuals and vulnerable groups from human rights companies may find themselves in such a situation, abuses in connection with business operations. There depending on the nature of their operations. Thus all is thus a global standard for what can be expected of business enterprises should familiarise themselves a business enterprise regardless of whether or not with the Guiding Principles and assess the extent the local legislation affords adequate protection for to which they are applicable. In cases where the human rights. principles do not apply, the government guidelines 30 THE ILO CORE CONVENTIONS Many Norwegian companies make systematic efforts to include human rights in for example their work on The eight ILO core conventions provide a global- HSE, the working environment and negotiations with ly recognised framework for what constitutes a trade unions. Much of this work is regulated by law. decent working life. The conventions are of key im- In a number of countries, however, the situation is portance for the UN Guiding Principles on Business quite different. There legislation is inadequate or only and Human Rights, the UN Global Compact and weakly enforced. Often there is no dialogue between the OECD Guidelines for Multinational Enterprises. employer, employees or any other stakeholders. The They include the following areas: expectation that business enterprises are responsible The abolition of child labour (Convention No. 138 for respecting human rights applies regardless of on the Minimum Age for Admission to Employment whether the local legislation is adequate or properly and Work, and Convention No.182 on the Worst enforced. Forms of Child Labour). Freedom of association (Convention No. 87 on Freedom of Association and Protection of the Right to Companies’ responsibility to respect human Organise, and Convention No. 98 on the Application of rights the Principles of the Right to Organise and to Bargain The 11th principle sets out what it means to respect Collectively). human rights: The elimination of discrimination (Convention No. 100 on Equal Remuneration for Men and Women 11. Business enterprises should respect human rights. Workers for Work of Equal Value, and Convention No. This means that they should avoid infringing on the 111 on Discrimination in Respect of Employment and human rights of others and should address adverse Occupation). human rights impacts with which they are involved. The elimination of forced or compulsory labour (Convention No. 29 on Forced Labour, and Convention No. 105 on the Abolition of Forced Labour). The 12th principle clarifies which human rights should be respected: 12. The responsibility of business enterprises to respect 3.2 Responsible business conduct human rights refers to internationally recognized human rights – understood, at a minimum, as those The 13th principle clarifies what companies’ expressed in the International Bill of Human Rights responsibility to respect human rights involves: and the principles concerning fundamental rights set out in the International Labour Organization’s Decla- 13. The responsibility to respect human rights requires ration on Fundamental Principles and Rights at Work. that business enterprises: ‘Internationally recognised human rights’ are those (a) Avoid causing or contributing to adverse set out in the Universal Declaration of Human Rights human rights impacts through their own activi- of 1948, the two 1966 International Covenants, on ties, and address such impacts when they occur; Economic, Social and Cultural Rights and on Political and Civil Rights, and the ILO core conventions. In (b) Seek to prevent or mitigate adverse human some cases other standards may also be applicable, rights impacts that are directly linked to their such as the rights of women, indigenous peoples, operations, products or services by their business national, ethnic or linguistic minorities, children, relationships, even if they have not contributed people with disabilities, or foreign workers and their to those impacts. families. In cases of armed conflict companies should respect the standards laid down in international An enterprise may cause or contribute to adverse humanitarian law. human rights impacts if for example its employees are working under disgraceful conditions or if the 31 living conditions of the local community that are of their size, sector, operational context, ownership directly affected by the company’s operations decline and structure. Nevertheless, the scale and complexity without prior explanation from or dialogue with of the means through which enterprises meet that the relevant parties, including the local authorities. responsibility may vary according to these factors and Impacts on the climate and the environment with the severity of the enterprise’s adverse human resulting from the enterprise’s activities, for example rights impacts. through land use, exploitation of natural resources, greenhouse gas emissions or releases of hazardous A company’s capacity to act often depends on its size substances, may also have adverse impacts on a and whether or not it is one of a group of companies. broader range of human rights, such as minority and The Guiding Principles assume that not all companies indigenous people’s rights or the right to life, health, can be expected to have equally broad strategies and food, water or adequate housing. If a company is that each company must assess its own capacity. responsible for such impacts, it is also responsible for addressing them. What should a company do? Norwegian companies should be aware that the UN The 15th principle specifies ways in which companies Guiding Principles also include a responsibility to can ensure responsible business conduct: seek to prevent or reduce activities by their business relationships that have adverse human rights 15. In order to meet their responsibility to respect human impacts. Examples of business relationships are rights, business enterprises should have in place subcontractors, enterprises the company has invested policies and processes appropriate to their size and in, and business partners. However, the principles circumstances, including: also emphasise that this does not mean that the company is complicit in the detrimental activities of its (a) policy commitment to meet their responsi- business relationships. They encourage companies to bility to respect human rights; use their influence to mitigate the adverse impacts of such activities. (b) A human rights due diligence process to iden- tify, prevent, mitigate and account for how they Political unrest and conflict entail a particularly address their impacts on human rights; high risk of human rights abuses. Companies that operate in such areas should therefore exercise (c) Processes to enable the remediation of any particular due diligence if they are to avoid becoming adverse human rights impacts they cause or to involved in such abuses. A typical example is abuses which they contribute. perpetrated by security personnel hired to protect the company. There is also a higher risk of corruption, Thus companies must know and show that they illegal transactions, sexual abuse and other forms of respect human rights. This means having sound violence against civilians. strategies and management systems. Principles 16–24 describe in more detail points (a), (b) and (c) of the Which companies are the Guiding Principles 15th principle. targeting? The 14th principle states that the recommendations How should a company fulfil its apply to all companies. However, it is clear that more responsibility? is expected of companies with substantial resources. The 16th principle specifies the ways in which Relevance and context must also be taken into companies can embed respect for human rights in all account: their activities and publicly express their commitment: 14. The responsibility of business enterprises to respect 16. As the basis for embedding their responsibility to human rights applies to all enterprises regardless respect human rights, business enterprises should 32 express their commitment to meet this responsibility enterprise may cause or contribute to through through a statement of policy that: its own activities, or which may be directly linked to its operations, products or services by its busi- (a) Is approved at the most senior level of the ness relationships; business enterprise; (b) Will vary in complexity with the size of the (b) Is informed by relevant internal and/or business enterprise, the risk of severe human external expertise; rights impacts, and the nature and context of its operations; (c) Stipulates the enterprise’s human rights expectations of personnel, business partners and (c) Should be ongoing, recognizing that the other parties directly linked to its operations, human rights risks may change over time as the products or services; business enterprise’s operations and operating context evolve. (d) Is publicly available and communicated inter- nally and externally to all personnel, business partners and other relevant parties; Acquiring expertise for risk identification and assessment (e) Is reflected in operational policies and pro- The 18th principle outlines procedures for risk cedures necessary to embed it throughout the management based on internal or external expertise business enterprise and dialogue with stakeholders: Policy statements and operational guidelines provide 18. In order to gauge human rights risks, business a practical framework for the company’s activities. enterprises should identify and assess any actual or The Guiding Principles strongly emphasise that potential adverse human rights impacts with which a company’s strategy should be adopted at the they may be involved either through their own activi- most senior level. The Government stressed the ties or as a result of their business relationships. This responsibility of management in this respect in its process should: white paper on state ownership. (a) Draw on internal and/or independent external human rights expertise; Due diligence The 17th principle explains what is meant by due (b) Involve meaningful consultation with diligence: potentially affected groups and other relevant stakeholders, as appropriate to the size of the 17. In order to identify, prevent, mitigate and account business enterprise and the nature and context for how they address their adverse human rights of the operation. impacts, business enterprises should carry out human rights due diligence. The process should Companies in high-risk industries and companies include assessing actual and potential human rights that operate in vulnerable areas should identify and impacts, integrating and acting upon the findings, gauge the risks they run of having adverse human tracking responses, and communicating how impacts rights impacts. The first step is to identify actual and are addressed. potential risks. Which specific human rights and individuals do they risk abusing in certain situations? Human rights due diligence: Risk identification and assessment should be conducted and repeated for each new decision and (a) Should cover adverse human rights impacts each new direction, such as entry into a new market. that the business 33 THE RIGHTS OF INDIGENOUS PEOPLES It may be necessary to conduct a dialogue on due diligence with stakeholders. This will give the Indigenous peoples have a right to be consulted company a better picture of which rights may be on projects that will have an impact on land where under pressure and what can be done to prevent they live and earn their livelihoods (for example potential misunderstandings or conflicts. Dialogue reindeer husbandry). The most important interna- can help to clarify expectations and reduce conflict. tional standards concerning indigenous rights and the right to be consulted are the United Nations Declaration on the Rights of Indigenous Peoples and ILO Convention No. 169 on Indigenous and Integrating and managing the findings from Tribal Peoples in Independent Countries. In many due diligence processes and risk analyses countries, indigenous peoples are largely exclud- The 19th principle concerns how companies should ed from political, economic and cultural life, and follow up the findings of the impact assessments: indigenous groups have a lower score than other population groups on many standard-of-living 19. In order to prevent and mitigate adverse human indicators, for example health and education. In- digenous peoples are also particularly vulnerable rights impacts, business enterprises should integrate to the impacts of climate change. the findings from their impact assessments across relevant internal functions and processes, and take appropriate action. should track the effectiveness of their response. (a) Effective integration requires that: Tracking should: (i) Responsibility for addressing such impacts (a) Be based on appropriate qualitative and is assigned to the appropriate level and func- quantitative indicators; tion within the business enterprise; (b) Draw on feedback from both internal and (ii) Internal decision-making, budget alloca- external sources, including affected stakeholders. tions and oversight processes enable effective responses to such impacts. Companies should verify whether the action taken to address human rights impacts has had the intended (b) Appropriate action will vary according to: result. Many companies have reported that they find it difficult to identify appropriate indicators. (i) Whether the business enterprise causes or A number of initiatives in this respect are being contributes to an adverse impact, or whether taken internationally. Norway has supported the it is involved solely because the impact is development of a reporting framework for the Guiding directly linked to its operations, products or Principles to help companies assess the effectiveness services by of their measures and report on them. This is a business relationship; described in more detail in the following section. (ii) The extent of its leverage in addressing the adverse impact. 3.3 External communication and reporting Measuring the effectiveness of the company’s response The 21st principle deals with internal and external The 20th principle concerns follow-up of the action communication: taken: 21. In order to account for how they address their 20. In order to verify whether adverse human rights human rights impacts, business enterprises should impacts are being addressed, business enterprises be prepared to communicate this externally, par- 34 INTERNATIONAL REPORTING STANDARDS ticularly when concerns are raised by or on behalf of affected stakeholders. Business enterprises whose The UN Guiding Principles (UNGP) Reporting operations or operating contexts pose risks of severe Framework was launched in February 2015. It human rights impacts should report formally on how evolved from the Human Rights Reporting and As- they address them. In all instances, communications surance Frameworks (RAFI) and is co-facilitated by should: Shift and Mazars. Business was actively involved in the development of the reporting framework, and many companies began using it during the (a) Be of a form and frequency that reflect an development process. The High Commissioner for enterprise’s human rights impacts and that are Human Rights (OHCHR), and the Working Group accessible to its intended audiences; on the issue of human rights and transnational corporations and other business enterprises, (b) Provide information that is sufficient to eval- have expressed their support for the project but uate the adequacy of an enterprise’s response to are not involved in it. Norway has supported the the particular human rights impact involved; project. www.ungpreporting.org (c) In turn not pose risks to affected stakeholders, United Nations Global Compact requires its mem- personnel or to legitimate requirements of com- bers to report on their efforts to implement its mercial confidentiality. 10 principles in four areas: human rights, labour, environment and anti-corruption. Enterprises’ reports are graded as GC Advanced, GC Active The Guiding Principles also provide further details or GC Learner (minimum requirement). Norway on how companies should address the human rights supports Global Compact. impacts of their operations. It is the company itself that www.gcnordic.net/ decides how to communicate and report on this in the www.unglobalcompact.org light of its situation and target groups. We recommend companies to use international reporting frameworks, Global Reporting Initiative (GRI) is the most widely used standard for reporting on CSR, and includes and to have their reports verified by an independent human rights indicators. There are three levels of auditor or other expert. It is also important to publish reporting, from A, the most advanced, to C, the the reports in the language of the country where least advanced. Independent auditing/verification the company operates. The company itself chooses of the report earns a plus, making A+ the highest the most appropriate reporting framework, and the level. Norway supports GRI. CSR Norge maintains Norwegian authorities can advise on this. an overview of Norwegian companies that follow GRI, and regularly holds GRI Certified Training courses. www.globalreporting.org www.csrnorge.no 3.4 Grievance mechanisms for human rights violations The 22nd principle concerns remediation: 22. Where business enterprises identify that they have caused or contributed to adverse impacts, they should provide for or cooperate in their remediation through legitimate processes. Grievance mechanisms are described in chapter 4. It is important to distinguish between judicial and non-judicial mechanisms. Cases involving violations of national legislation are dealt with by the judicial system or the appropriate appeals body. 35 3.5 Compliance with legislation 2015, also applies to certain punishable offences committed on behalf of an enterprise registered in The 23rd principle concerns compliance with Norway when the offence is also punishable under legislation: the law of the country where it has been committed.22 23. In all contexts, business enterprises should: Norwegian companies that are faced with demands from the authorities in the host country that appear (a) Comply with all applicable laws and respect to be in conflict with international guidelines are internationally recognized human rights, wher- encouraged to contact either the nearest Norwegian ever they operate; mission or the Ministry of Foreign Affairs. Examples of such situations are a demand for a bribe or a request (b) Seek ways to honour the principles of inter- to keep certain information secret. nationally recognized human rights when faced with conflicting requirements; Giving priority to monitoring of risk and (c) Treat the risk of causing or contributing to actual adverse human rights impacts gross human rights abuses as a legal compliance The 24th principle gives advice on priorities: issue wherever they operate. 24. Where it is necessary to prioritize actions to address In some geographical areas, such as conflict-affected actual and potential adverse human rights impacts, areas, a company may unintentionally enter into a business enterprises should first seek to prevent and business relationship with an enterprise, such as mitigate those that are most severe or where delayed a security company, that is guilty of gross human response would make them irremediable. rights abuses. In such a situation the Norwegian company should be aware that this may have legal The most important principle here is that the consequences such as liability.21 The Norwegian Penal company should explain the reasons for its priorities. Code of 2005, which entered into force on 1 October 21 The provisions of the Rome Statute of the International Crim- inal Court that concern rights violations in war and conflict do not apply to enterprises. Under Article 25 (1) of the Rome Statute, the Court only has jurisdiction over natural persons. However, the provisions may become applicable to enterpris- es if they are incorporated into national law that provides for corporate penalties. 22 See Section 5, first paragraph, (c) (2) and (3) of the 2005 Penal Code. It follows from section 5 that the criminal legislation applies to acts committed on behalf of an enterprise registered in Norway when the acts are punishable under the law of the country in which they are committed. The criminal legislation also applies to contravention of the punishable offences set out in section 5, first paragraph, even if the acts are not punishable in the country where they are committed. Under section 6, the criminal legislation also applies to acts committed abroad that are outside the scope and extent of section 5 if Norway has a right or an obligation to prosecute such acts under internation- al law. 36 37 4 Access to remedy This chapter deals with principles 25–31, on the responsibility of states and enterprises to ensure access to effective judicial and non-judicial remedy. 38 39 4.1 State-based grievance mechanisms It is important to ensure that individuals who feel that their rights have been violated have access to The 25th principle concerns the state’s overall effective remedy. The Government will actively follow responsibility to ensure a well-functioning the international efforts to strengthen access to remediation system: judicial grievance mechanisms at the national level. 25. As part of their duty to protect against business-re- lated human rights abuse, States must take appro- priate steps to ensure, through judicial, adminis- Measures: trative, legislative or other appropriate means, that when such abuses occur within their territory and/ • participate in international cooperation to or jurisdiction those affected have access to effective ensure that victims of grave and systematic remedy. human rights violations as a result of business activities have access to effective remedy; Principles 26–31 deal with what steps states and enterprises can take to ensure remediation. • support the work headed by OHCHR to strengthen national judicial systems to protect the rights of the victims of grave and systematic Judicial grievance mechanisms human rights violations; The 26th principle concerns judicial mechanisms for addressing human rights abuses: • participate in the process in the Council of Europe on following up the recommendations 26. States should take appropriate steps to ensure the of the UN Guiding Principles on access to effec- effectiveness of domestic judicial mechanisms when tive remedies at national level. addressing business-related human rights abuses, including considering ways to reduce legal, practical and other relevant barriers that could lead to a denial State-based non-judicial grievance of access to remedy. mechanisms The 27th principle concerns public non-judicial Norway has comprehensive human rights legislation grievance mechanisms: and legislation in other areas that is also applicable to CSR. We also have an effective judicial system, and 27. States should provide effective and appropriate the Norwegian law of damages provides for financial non-judicial grievance mechanisms, alongside judicial compensation or redress under certain conditions. mechanisms, as part of a comprehensive State-based system for the remedy of business-related human Norwegian companies may become involved in rights abuse. legal cases dealing with human rights abuses in the host country. If the case is to be brought before a Norwegian court, it must satisfy the requirement in the Dispute Act that the facts of the case ‘have a 23 Section 4-3, first paragraph, see Rt. 2010–1197, paragraph 41. There are a number of exceptions to this provision. Excep- sufficiently strong connection to Norway’.23 In order tions may be made under special legislation, or there may be to determine whether the connection is sufficiently limitations that follow from international law, cf. section 1-2 strong, an overall evaluation must be made of all of the Dispute Act. Of practical importance is the fact that the provisions of the Lugano Convention concerning local jurisdic- the circumstances in the case that includes both tion take precedence in cases that come within the scope of the judicial and other relevant circumstances.24 There convention, cf. Rt. 2012–57, paragraph 18. (In Norwegian). 24 See for example Rt. 2010–1197, paragraph 41. (In Norwegian). are also other conditions for bringing a case before a 25 Section 1-3 of the Dispute Act sets out the requirements Norwegian court.25 relating to the subject matter in dispute, the parties’ connection to the dispute and the dispute situation. It also sets out the re- quirements relating to the parties’ capacity to sue and be sued and their procedural capacity. 40 Norway has a number of well-functioning companies find practical solutions. At present the institutions such as the Labour Inspection Authority, network is supported by institutions in the following the Ombudsman for Children, the Consumer countries: Argentina, Bolivia, Brazil, Chile, the Ombudsman, the Equality and Anti-discrimination Philippines, India, Kenya, Nigeria, Peru, South Africa, Ombudsman, the Norwegian Environment Agency Thailand, Uganda and the US. Norway is supporting and the Parliamentary Ombudsman for the the training of facilitators in 2015. Public Administration. There are also complaints mechanisms in connection with the rights of employees, children, women and men. For example, Grievance mechanisms at company level on the basis of the Environmental Information Act, The 29th principle concerns what companies the Appeals Board for Environmental Information themselves should do to ensure access to grievance handles appeals concerning rejected requests mechanisms: from private and public agencies for access to environmental information. The National Contact 29. To make it possible for grievances to be addressed Point provides information on the OECD Guidelines early and remediated directly, business enterprises for Multinational Enterprises and the UN Guiding should establish or participate in effective operation- Principles. The Contact Point also deals with individual al-level grievance mechanisms for individuals and cases independently of the government. In line with communities who may be adversely impacted. the Guidelines, the parties to cases that come before the Contact Point are expected to participate in good Companies that discover or are made aware that they faith during the procedure. may cause or help to cause a violation of individuals’ rights should establish or participate in effective grievance mechanisms and engage in a dialogue with the interested parties. In this way the company may 4.2 Non-state-based grievance succeed in addressing potential problems before mechanisms they can escalate into conflict. Norwegian companies are encouraged to actively share their experience of Principles 28–30 deal with non-state-based grievance grievance mechanisms and dialogue with interested mechanisms, such as those established by the parties. The National Contact Point, in cooperation business sector itself. These may be linked with with enterprises that have made considerable an individual enterprise such as a factory, or take progress in this area, can provide practical advice the form of schemes aimed at a particular local on the establishment of consultation and grievance community. Other types of grievance mechanisms mechanisms. are available to companies through industry organisations or tripartite cooperation. The 28th principle concerns the state’s responsibility to Cooperation on grievance mechanisms facilitate the establishment of non-state-based The 30th principle concerns cooperation on ensuring grievance mechanisms: access to grievance mechanisms: 28. States should consider ways to facilitate access to 30. Industry, multi-stakeholder and other collabora- effective non-State-based grievance mechanisms tive initiatives that are based on respect for human dealing with business-related human rights harms. rights-related standards should ensure that effective grievance mechanisms are available. Norway supports the organisation Access Facility. Access promotes effective problem solving for Norwegian companies should take steps, either alone company–community conflicts by providing a safe or in cooperation with others, to ensure that their space for dialogue between companies, communities cooperation partners and suppliers provide access to and governments. It has a global network of effective grievance mechanisms where appropriate. professional facilitators who help communities and 41 4.3 Criteria for ensuring effective non- Operational-level mechanisms should also be: judicial grievance mechanisms (h) Based on engagement and dialogue: con- The 31st principle sets out criteria for ensuring the sulting the stakeholder groups for whose use effectiveness of non-judicial grievance mechanism: they are intended on their design and perfor- mance, and focusing on dialogue as the means 31. In order to ensure their effectiveness, non-judicial to address and resolve grievances. grievance mechanisms, both State-based and non- State-based, should be: The criteria are designed to ensure that those for whom the mechanism is intended are aware of it, (a) Legitimate: enabling trust from the stake- have confidence in it and are in a position to use it. holder groups for whose use they are intended, Companies that establish grievance mechanisms and being accountable for the fair conduct of should familiarise themselves with the criteria and grievance processes; seek to satisfy them. The OECD National Contact Point Norway follows these criteria. (b) Accessible: being known to all stakeholder groups for whose use they are intended, and providing adequate assistance for those who may face particular barriers to access; (c) Predictable: providing a clear and known procedure with an indicative time frame for each stage, and clarity on the types of process and outcome available and means of monitoring implementation; (d) Equitable: seeking to ensure that aggrieved parties have reasonable access to sources of information, advice and expertise necessary to engage in a grievance process on fair, informed and respectful terms; (e) Transparent: keeping parties to a grievance informed about its progress, and providing sufficient information about the mechanism’s performance to build confidence in its effective- ness and meet any public interest at stake; (f) Rights-compatible: ensuring that outcomes and remedies accord with internationally recog- nized human rights; (g) A source of continuous learning: drawing on relevant measures to identify lessons for improving the mechanism and preventing future grievances and harms; 42 Published by: The Ministry of Foreign Affairs Additional copies may be ordered from: The Government Administration Services www.publikasjoner.dep.no Email: publikasjonsbestilling@dss.dep.no Tel: +47 22 24 00 00 Publication code: E-951 E Design and illustrations: Kord AS Printed by: the Government Administration Services 11/2015 – no. of copies 100