{"id":384829,"date":"2020-05-19T14:35:24","date_gmt":"2020-05-19T12:35:24","guid":{"rendered":"https:\/\/nettsteder.regjeringen.no\/ansvarlignaringsliv2\/?page_id=384829"},"modified":"2021-04-15T10:58:11","modified_gmt":"2021-04-15T08:58:11","slug":"promoting-and-providing-guidance-about-the-oecd-guidelines","status":"publish","type":"page","link":"https:\/\/teststeder.regjeringen.no\/ansvarlignaringsliv2\/annual-report-2019\/promoting-and-providing-guidance-about-the-oecd-guidelines\/","title":{"rendered":"Promoting and providing guidance about the OECD Guidelines"},"content":{"rendered":"
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MAIN TASK 1<\/div>

Promoting and providing guidance about the OECD Guidelines<\/h2>\t\t\t<\/div>\n\t\t<\/div>\n\t<\/div>\n<\/div><\/div>

One of the NCP\u2019s most important tasks is to promote the OECD\u2019s Guidelines for Multinational Enterprises as an effective tool for preventing violations.<\/span><\/strong><\/p>\n

The Guidelines are more than just words. They are a practical tool that can prevent Norwegian companies from making the wrong decisions in meetings
\nwith people, society and the environment in other countries.<\/strong><\/span><\/span><\/p>\n

Norway\u2019s NCP carries out extensive information work and provides guidance to Norwegian businesses and other stakeholders on how they can meet the requirements of the OECD Guidelines, including through due diligence courses and sectorspecific guidance.<\/span><\/strong><\/p><\/div><\/div>

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A prerequisite for profitability<\/div>\t\t\t<\/span>\n\t\t<\/a>\n\t\t
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In all new projects, Scatec Solar has a dedicated budget line for due diligence. This is no different from having a\u00a0 budget line for the purchase of cables or hiring workers.<\/h3>\n

TEXT: Marianne Alfsen, Felix Media.<\/em><\/p>\n

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\u2018It\u2019s not about appearances. A structured approach to risk-based due diligence is crucial for profitability.\u2019
Roar Haugland, Executive Vice President of Scatec Solar<\/em><\/figcaption><\/figure>\n

Scatec Solar builds and operates solar parks in emerging markets; countries where the economy is growing rapidly and the demand for clean energy is high. The downside is that the political and social framework in these countries can be challenging.<\/p>\n

\u2018It\u2019s not about appearances. A structured approach to risk-based due diligence is crucial for profitability,\u2019 says Roar Haugland, Executive Vice President for Sustainable Business & HSSE in Scatec Solar. The Norwegian entrepreneurial venture has delivered 20 projects in nine countries across four continents.<\/p>\n

Ten years ago, work on the first solar park began in South Africa. Everything seemed to be in place. The planned solar park affected neither the environment nor the water supply. Political and economic conditions were stable. They were all set to get started.<\/p>\n

However, they had not taken into account the rampant social challenges and high unemployment rates in the local community from where they had recruited almost 1,000 workers. Lacking a systematic approach to due diligence, the challenges came as a surprise and the handling was ad-hoc. That has now changed.<\/p>\n

\u2018This was our first, large solar project on a new continent and in a new culture. We were not properly prepared for the task. The learning curve was steep, but we landed on our feet. We had excellent local partners and learned a lot,\u2019 Haugland says.<\/p>\n

The good cynicism<\/h3>\n

Even to a company with a vision to improve the future, there is an element of cynicism to due diligence efforts.<\/p>\n

\u2018It all comes down to profitability and minimising risk,\u2019 according to Haugland.<\/p>\n

What has changed since it all began in South Africa in 2010 is that the list of risks being considered is longer. Previously, political and economic conditions dominated. Now, the environment, human rights and a broad spectrum of social conditions are equally important. And there is a system in place to handle them all.<\/p>\n

The company\u2019s projects are funded by, among others, Norfund and international investment banks. They all have strict due diligence demands, in line with the standards of the World Bank\u2019s investment branch, the IFC. Although Scatec Solar has built a robust system, it does not mean unforeseen challenges never occur.<\/p>\n

\u2018The difference is that we now have a follow-up method,\u2019 says Haugland. Such as in Honduras.<\/p>\n

Violent demonstrations<\/h3>\n

In 2018, Scatec Solar took over a project from a Spanish developer in Honduras \u2013 a country marred by violence and corruption. As construction was about to begin, the widespread unease among the local population became apparent, especially in areas Scatec Solar did not consider to be part of the solar park\u2019s immediate surroundings.<\/p>\n

The initial peaceful protests soon turned confrontational and even violent. The protesters demanded answers. There were stories of how the solar plant could cause cancer and that the local temperature would increase by ten degrees Celsius. Others felt left out, because the social outreach programmes did not include their village. \u2018We were not up to speed and should have dug deeper before taking over the project,\u2019 admits Haugland.<\/p>\n

No shame in turning back<\/h3>\n

He emphasises that sometimes you need to pull the emergency brake, even if it will be costly.<\/p>\n

\u2018In Honduras, we could not continue unless we picked up the dialogue and mapped the situation once again,\u2019 says Haugland.<\/p>\n

First, the company employed more community liaison officers on the ground and contacted local leaders. They set up neutral meeting places and invited people from the local communities to dialogue. For the perpetrators of\u00a0 violence, where the company had no choice but to initiate legal proceedings, they also found solutions. They offered reconciliation agreements and waived all charges against those who signed.<\/p>\n

\u2018We even offered some of them a job, and many still work at the plant. Nine cases remain, but we are in dialogue to resolve them,\u2019 says Haugland.<\/p>\n

Never-ending work<\/h3>\n

\u2018Due diligence is not a one-time affair, and then you are done with it,\u2019 Haugland points out. When the Honduras situation was at its worst, Scatec Solar did not know that the Norway\u2019s National Contact Point offers advice and facilitates mediation, even if there is no official complaint. \u2018It would have been useful to have someone to bounce ideas off,\u2019 says Haugland.<\/p>\n

To those who believe small and medium sized businesses do not have the financial muscle to conduct due diligence to the same extent as larger businesses, Haugland has one message: \u2018Size is not an issue. We all benefit from reducing the risks<\/p>\n\t\t<\/div>\n\t<\/div>\n\t

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The Norwegian Government: Companies shall lead the field in the work on responsible business conduct.<\/div>\t\t\t<\/span>\n\t\t<\/a>\n\t\t
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\"\"<\/a> On 22 November 2019, the Government presented Report No 8 to the Storting (2019-2020) The state\u2019s direct ownership of companies \u2013 Sustainable value creation. The new white paper on state ownership policy states that the goal of the highest possible return over time requires companies to demonstrate sustainability and responsible business conduct. We asked the Minster of Trade and Industry what the expectations in the new white paper entail.<\/strong><\/p>\n

The state has high ambitions for companies\u2019 work on responsible business conduct. The companies are expected to be at the forefront of this work. What does that entail?<\/em><\/strong><\/p>\n

\u2018The expectations set out in the white paper on state ownership policy are principles intended to support companies in creating long-term value in a responsible way. It is only natural that state-owned companies are subject to high expectations in terms of their work on responsible business conduct. There are several reasons for this, including that it helps to boost confidence in and the legitimacy of state-owned companies, and that it is a prerequisite for long-term value creation. We believe that the companies leading the field are characterised by being able to identify and deal with material risk areas for those affected by their activities, including in the supply chain. The leading companies have the support of the board of directors in this work and integrate it in the company\u2019s goals, strategies and guidelines. The OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights form the basis for this work.<\/p>\n

\u2018Companies are expected to perform due diligence. Why is this important and how can the companies use the OECD guidance documents to this end?\u2019<\/em><\/strong><\/p>\n

\u2018Due diligence is the method that both the OECD and the UN endorse for companies to identify, deal with, reduce and report risks that the company’s activities may represent for people, society and the environment. These are the same circumstances that the state as owner is concerned with and that Norway has undertaken to promote. The OECD has also done a thorough job of preparing a guidance document on how companies can conduct due diligence. The method takes a risk-based approach that means it can be used by all companies regardless or their size and the risks they represent. This is important to the state as owner since it has many different kinds of companies in its portfolio.\u2019<\/p>\n

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\u2018Well-functioning and responsible businesses are an essential part of achieving the Sustainable Development Goals. The Government expects Norwegian companies to be familiar with and comply with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights. It is important that the companies perform due diligence and can demonstrate how they work to avoid causing harm to people, society and the environment. I encourage Norwegian businesses to use Norway\u2019s NCP in this work.\u2019 Ine Eriksen S\u00f8reide, Minister of Foreign Affairs<\/figcaption>
Foto: Foto: Asgeir Spange Brekke, FD\/UD<\/div><\/div>