Denmark

By Daniel Morris | 27. November 2017

2. State Duty to Protect Human Rights

2.2 Recommendations from the Council for CSR on the state duty to protect: [page 10]

Among other initiatives, the Council for CSR recommended that the Danish Government:

Expands the existing Danish corporate non-financial reporting requirement to include mandatory reporting on human rights;
Encourages responsible public procurement by requiring government contractors to perform due diligence on human rights in relation to the products or services covered by the contract, including regularly supervising the contractual requirements
Requires state-owned companies and governments agencies which distribute significant government funds to incorporate due diligence in their business activities;
Advocates joint solutions at international level, e.g. through the UN or the EU, in the areas of human rights, labour rights and the environment, to enable home countries to prosecute companies involved in particularly gross violations outside the home country’s borders; and also to
Considers the possibility of relevant national measures that meet the need for prosecuting particularly gross violations. The recommendations from the Council on how the Danish Government can fulfill the UNGPs on the state duty to protect can be found here: http://www.raadetforsamfundsansvar.dk/dokumenter/0/16 (in Danish only)

2.3 Actions Take

Danish Government Expectations to companies [pages 11-13]

As part of the promotional activities among Danish companies the government has committed to providing courses and guidance on responsible business conduct. The Government has launched an information campaign specifically aimed at companies and NGOs on compliance with the Guiding Principles in connection with the establishment of the mediation and grievance mechanism (for more information see section 4.3).

The Trade Council under the Ministry of Foreign Affairs advises Danish companies and their local partners on how they should handle their social responsibility in a number of export markets. The advisory services include human rights due diligence. The advisory services are demand-driven and offered to companies on the same terms as the other business services of the Trade Council, i.e. chargeable by the hour in accordance with Danish legislation (UNGPs 3c).

In addition, at Danish embassies in emerging markets, the Trade Council in co-operation with the Danish Business Authority holds workshops in responsible supply chain management, especially focusing on small and mediumsized companies and their local business partners (GP 3c). The courses are held on an annual basis. They include practical guidance on how to demonstrate due diligence in business operations in regard to adverse impacts on human rights. To further assist Danish companies in emerging markets, the embassies are also conducting CSR reviews of local business partners. The reviews include a due diligence component (UNGPs 3c)

The Guiding Principles have proved to be an excellent instrument in rallying stakeholders for joint action. Using the Guiding Principles as the basis for a new Partnership for Responsible Garments Production in Bangladesh, the Danish government, business associations and enterprises have agreed on a number of detailed commitments to improve conditions within their sphere of influence. The partnership, which was agreed within the framework of the Danish Ethical Trading Initiative (DIEH), will be implemented in close co-ordination with international partners as well and stakeholders in Bangladesh.”

Protection of human rights through state regulation and policy

“In Denmark all new legislation is systematically evaluated in terms of human rights consequences by the Ministry of Justice. Denmark actively takes part in the Universal Period Review process of the United Nations as well as review by the UN Treaty Body Monitoring mechanisms with regard to obligations arising under the United Nations core human rights conventions, and by relevant ILO and Council of Europe bodies. These processes provide a platform for systematic consideration of the compliance of Danish law, policies and administration with international human rights law. Denmark duly takes account of findings and recommendations issued by such bodies.

Denmark is fully committed to human rights obligations – both nationally and internationally – and has signed and ratified many legal instruments, which belong to various organs, especially the United Nations, the European Union and the Council of Europe. (…) Denmark is one of the only countries in the world which has established the OECD National Contact Point by Danish law. The purpose is to ensure that the Danish NCP has a maximum of legitimacy and authority.

As stated in the strategy for Danish development cooperation: “The Right to a Better Life”, Denmark applies a rights-based approach to development. The human rights based approach entails that the goal of development cooperation should seek to realise human rights as well as poverty alleviation. Furthermore, political dialogue with partners and concrete development interventions should be guided by human rights standards and principles, focusing in particular on rights-holders and duty–bearers and their capacities to claim and fulfill obligations related to human rights. The “Protect, respect and remedy framework” also provides the basis for Danida’s institutional private sector programmes aimed at enhancing the capacity and institutional environment for private sector development. One prime example of this approach is the new “Program for Responsible Business in Myanmar”, using both the state duty to protect and the company duty to protect as the key parameters in its programme design.

Denmark works to ensure that companies involved in Danish development cooperation respect human rights and act responsibly within the areas of worker’s rights, human rights, environment and anti-corruption within the framework of ILO conventions, UN Global Compact, the OECD guidelines for multinational enterprises and work towards implementation of the UN Guiding Principles on Business and Human Rights.

Companies involved in Danida Business Partnerships – an instrument that facilitates and provides economic support to develop commercial partnerships between Danish companies and partners from developing countries – are now required to integrate CSR strategically in their business operations and to demonstrate due diligence, including human rights, in order to mitigate adverse impact. The Danida Business Finance instrument engages both local buyers and Danish companies in the promotion of human rights and CSR activities through due diligence analysis and requirements to comply with fundamental principles of ILO when providing interest-free loans to public infrastructure projects in developing countries.”

Protection of human rights in the business sphere in Danish legislation

General Danish law contributes to fulfilling Denmark’s duty under human rights treaties to which it is a party against human rights abuses by private actors, including businesses. For example, the Danish parliamentary act prohibits differential treatment in the labour market

from 1996 protecting against discrimination based on race, gender, skin colour, religion, political opinion, sexual orientation or national, social or ethnic origin. It is also an offense to refuse to serve a person on the same terms as others involved in commercial or non-profit company

because of his/hers race, colour, national or ethnic origin, religion or sexual orientation. The Working Environment Act of 2005 and the Act on the Work of Young Persons from 2005 implement the EU Directive 94/33/EC from 1994 on the protection of young workers, and the 1956

Constitutional Act of Denmark covers freedom of association and assembly.

Similarly, the Danish Data Protection Act helps to uphold the right to respect for private life; the Working Environment Act contributes to protecting the right to a safe and healthy working environment, the act protects, among other things, individuals against adverse impacts on

health due to environmental pollution from business sources and contributes to protecting the right to the highest attainable standard of health through regulating access to health services. Denmark’s Criminal Code protects the right to life and human rights against torture, slavery, while proscribing a range of activities connected with human trafficking, for example. The Criminal Code further provides that companies and company representatives can be punished under the Act while other criminal laws contain provisions in similar terms”.

Guidance to business is very strongly highlighted in the Danish NAP, with whole sub-sections in the narrative part describing actions already taken in this respect (e.g. Section 2.3).

Providing effective guidance on how to respect human rights

Since 2005, the Danish Government has worked directly with promoting CSR among Danish companies. The efforts have focused on providing companies with tools and guidance to implement CSR policies in a manner which is both strategic and manageable (GP 3c).

Examples of relevant tools include:

– The CSR Compass – which is a free online tool that helps companies implement responsible supply chain management. http://www.csrcompass.com/

– The Global Compact Self-Assessment Tool – which helps companies to test their performance on all ten UN Global Compact principles, and how well these issues are managed: http://www.globalcompactselfassessment.

org/. The tools have been developed in collaboration with the UN Global Compact and other partners from Danish civil society and industry organisations.

The Danish Government is committed to continuously improving and promoting guidance provided to companies on how to work with CSR in general and human rights in particular. To ensure that companies have the right tools and the necessary guidance to handle the new due diligence requirements, the Government has updated the existing web tool, the CSR Compass and the Global Compact Self-Assessment Tool in accordance with the due diligence requirements of the UNGPs. The revised Compass includes a guide for small and medium-sized companies on how to exercise due diligence (GP 17) and also gives guidance on ways to solve company conflicts by actively engaging in a dialogue with the company’s stakeholders (GP 29). The revised Global Compact Self-Assessment Tool works as a self-Assessment guide to a CSR due diligence going through a questionnaire covering aspects of human rights, worker’s rights, environment and anti-corruption and including a template for a follow up action plan.

Reporting requirement on human rights impact

Another priority for the Danish Government has been to strengthen the existing legal reporting requirement for the largest Danish companies and all state-owned companies (GP 3d).

Since 2009, large companies including all state-owned companies and institutional investors in Denmark have been required to report on their work on corporate social responsibility. This means that while Danish businesses are free to choose whether or not they wish to have a CSR policy there is a statutory requirement that they must take a position on CSR in their annual reports.

If the company has a CSR policy, the company must account for this policy in their annual reports, including any CSR standards, guidelines or principles the company employs. Secondly, the company must report how these policies are translated into action, including any systems or procedures used. Thirdly, the company must evaluate what has been achieved through the CSR initiatives during the financial year, and any expectations it has regarding future initiatives. If the company does not have any social responsibility policies, this must be reported.

In June 2012, this reporting requirement was expanded so that the largest Danish companies from 2013 expressly must state in their reports what measures they are taking to respect human rights and to reduce their impact on the climate. This means that if a company has a policy on human rights or climate issues, it must report according to the existing structure; what is the policy, how has the policy been translated into action and what has been achieved through the initiatives. If the company does not have policies for human rights or climate issues, this must also be disclosed. The purpose is to further strengthen Danish companies’ activities in relation to human rights and climate change which will be beneficial to society overall, but also to the individual company.

Three years after the reporting requirement was introduced, analyses show that companies generally appear to have been encouraged to report on CSR. In the course of the first three years of the legal requirement’s existence, nearly 50% of the companies reported on CSR for the first time. Secondly, there have been significant improvements in reporting practices in a number of areas. There is, nevertheless, still room for improvement as regards reporting consistency and reporting on the results of the CSR work.

2.4 Planned Actions

Extraterritorial legislation [page 16]

To further engage in the issue of extraterritorial legislation, the Danish Government has planned the following initiative:

– At national level the Government will put together an inter-ministerial working group which will discuss the need for and feasibility of legislation with extraterritorial effect in areas of particular relevance. The group will look at what other countries have done and are doing in this area with the purpose of learning what works and what does not work. Finally, the group will examine the need for judicial prosecution of severe human rights impacts as recommended by the Danish Council for CSR.

Promoting CSR in the Public Sector

The Government wishes to establish good framework conditions for social responsibility as the public sector’s contribution to the promotion of responsible growth. This is the reason why the new mediation and complaints handling institution can handle complaints about human rights impacts and other adverse impacts on international guidelines by public authorities, as is the case with private companies (see section 4.3 for more information). The public authorities should assume social responsibility relating to environmental, social and economic conditions as well as human rights in connection with their activities. To obtain this objective, the Government will invite municipalities and regions to jointly prepare guidelines for how public authorities can avoid having an adverse impact on international guidelines. The guidelines should be used to manage the challenges the public authorities are facing today when acting as a private company.

3. The corporate responsibility to respect human rights

3.2 Recommendations from the Council for CSR on the corporate responsibility to respect [page 17]

In June 2010, the Council published a set of guidelines for responsible supply chain management based on the Protect,

Respect, Remedy Framework. The Council also made sure that the guidelines were aligned with recognised international principles like the UN Global Compact, ISO 26000 etc. The guidelines were meant as a supplement to the Protect, Respect, Remedy-Framework, intended to provide greater clarity about responsible supply chain management by offering a practical, easy-to-read guide and online tool. The guidelines are supplemented by a checklist of self-help questions intended to help the individual company find the solutions that address their specific challenges. For the guidelines in its entirety, see: www.csrcouncil.dk/guidelines.

While the guidelines are focused on assisting companies with the implementation of the UNGPs with regard to supply chain management, implementation of the corporate responsibility to respect continues to be a very important part of the council’s agenda.

3.3. Actions Taken

Expectations to companies and other stakeholders to respect human rights [page 18]

“In order to fulfill their requirements companies need to be able to know and show that they respect human rights. The Government therefore wants to create more transparency about the CSR efforts of both private companies and public authorities. It is only through increased transparency that CSR can become a key parameter for consumer choices. Danish legislation thus requires major Danish companies to report on social responsibility in their annual reports including what specific measures they have taking to respect human rights and reduce their adverse impact on the climate (GP 3d). For more information on the legal reporting requirement on human rights see section 2.3.

Evaluating of CSR reporting in large and listed Danish companies

In 2008, Danish Government introduced a legal requirement for large companies in the Danish Financial Statements Act (see section 2.3 page 6 for more on the reporting requirement). Since the statutory CSR reporting was introduced a survey on the effects of the legal requirement has been conducted in three consecutive years. The surveys were based on a rolling group of participants, meaning that the same group of companies has been surveyed the previous years. Since the group has been subject to the reporting requirement for three years it includes – in the last survey – very few companies reporting for the first time. As expected, there have also been few changes in the choice of topics and content in the reports. In the financial year9 2010, a significant increase in the number of companies reporting actions relating to human rights (38% compared to 16% in 2009) and labour rights (35% compared to 16% in 2009) was noted. In the 2011 financial year, these reporting topics were as common as in 2010. Due to recent developments in international CSR principles (in particular the development of the UN Guiding Principles on Business and Human Rights), an increased focus on human rights, in particular, can be expected in the future. Following the latest amendment of Section 99a of the Danish Financial Statements Act, companies thus have to report on the topics of human rights and climate with effect from the 2013 financial year.

Appendix 1. Overview of the implementation of the state duty to protect

GP 3a [page 26]

Status in Denmark (initiatives implemented before the UN ratification of the Guiding Principles)

In Denmark all new legislation is systematically evaluated in terms of human rights consequences by the Ministry of Justice.
Denmark actively takes part in the Universal Period Review process of the United Nations. Denmark also takes part in the review by the UN Treaty Body Monitoring mechanisms with regard to obligations arising under the United Nations core human rights conventions, and by relevant ILO and Council of Europe bodies. These processes provide a platform for systematic consideration of the compliance of Danish law, policies and administration with international human rights law. Denmark duly takes account of findings and recommendations issued by such bodies.

GP 3b

Status in Denmark (initiatives implemented before the UN ratification of the Guiding Principles)

The Government’s 2007 Action Plan was prepared by an inter-ministerial working group with representatives from a variety of departments and agencies. The working group still coordinates the Danish government’s initiatives in the area of social responsibility.
As mentioned in GP 3a, all new legislation is evaluated in terms of human rights consequences.
Large parts of Danish national law support compliance with the UNGPs such as legislation on labour issues, the environment, child labour etc. This type of protective legislative framework of Denmark enables business respect for human rights.

GP 3c

Status in Denmark (initiatives implemented before the UN ratification of the Guiding Principles)

The Danish Government’s CSR policy is especially focused on developing knowledge and tools that are directly applicable to businesses. Whenever possible these tools are developed in cooperation with relevant stakeholders. Tools with a direct focus on human rights include the CSR Compass and the Global Compact Self-Assessment tool, developed by the Ministry of Business and Growth, the Confederation of Danish Industry, the Danish Institute of Human Rights and the Danish Investment Fund for Developing Countries.
Danida has provided financial support to the UN Global Compact for a number of years and also provided support to John Ruggie’s work on developing the UNGPs as well as support to the UN Working Group’s work in promoting the implementation of the principles in practice.

Initiatives taken or planned as a dedicated measure to implement the UNGPs (after the UN ratification of the Guiding Principles)

To make sure companies have the right tools and the necessary guidance to handle the new reporting requirements, the Government will continue to improve and promote the guidance provided to companies via a revision of an existing web-based tool.
To promote responsible business conduct among Danish businesses, the government has also committed to providing courses and guidance on responsible business conduct.
In connection with the establishment of the Mediation and Complaints-Handling Institution for Responsible Business Conduct the Government has therefore launched an information campaign on compliance with the UN Guiding Principles.
The Danish Government is highly committed to the UN Global Combat and the UN Guiding Principles on Business and Human Rights and works for even closer cooperation between the two sets of principles.
The Trade Council under the Ministry of Foreign Affairs advises Danish companies and their local partners on how they should handle their social responsibility in a number of export markets. The advisory services include human rights due diligence. The advisory services are demand-driven and offered to companies on the same terms as the other business services of the Trade Council, i.e. chargeable by the hour in accordance with Danish legislation.
The Trade Council in co-operation with the Danish Business Authority holds workshops in Responsible Supply Chain management, especially focusing on small and medium-sized enterprises and their local business partners (GP 3c). The courses are held on an annual basis. They will include practical guidance on how to demonstrate due diligence in business operations in regard to adverse impacts on human rights. To further assist the Danish companies in emerging markets, the embassies are also conducting free CSR reviews of local business partners. The reviews include a due diligence component.
Whenever necessary, the government also initiates and drives multi-stakeholder partnerships based on the Guiding Principles. This year the government established the partnership for Responsible Garments Production in Bangladesh, gathering all the major Danish stakeholders within
the industry and linking the partnership up with international public and private partners to achieve joint action.
Companies involved under Danida Business Partnerships are required and guided to undertake a CSR due diligence covering human rights, workers’ rights, environment and anti-corruption and to follow-up with an action plan in order to mitigate adverse impacts of business activities on employees and society at large.
The ministry of Foreign Affairs is also working on competence development courses within UNGPs and CSR for embassy staff, including e-bites, guidance on how to perform CSR due diligence and workshops for Danish companies operating abroad and local companies in new growth markets.
In 2013, a number of Danish organisations have been granted support by Danida for initiatives focusing on the promotion of ethical trading initiatives and supply chain management, CSR and Fair Trade.

GP 3d [page 27]

Status in Denmark (initiatives implemented before the UN ratification of the Guiding Principles)

Mandatory CSR reporting.

As part of the first national action plan for CSR, the Danish Government introduced a reporting requirement to ensure that major businesses, institutional investors and unit trusts report on their CSR work in the management review of the annual reports. The duty to report for major businesses, institutional investors and unit trusts has entailed an obligation to report on their CSR policies and how they implement the policies in practice. Businesses and investors must also report if they have yet to set up policies for the area. This fact must appear from the management review of the businesses’ annual reports.

Initiatives taken or planned as a dedicated measure to implement the UNGPs (after the UN ratification of the Guiding Principles)

Reporting on human rights and climate
From 2013 the 1,100 largest Danish companies and all state-owned limited liability companies must report on CSR in their annual reports. The Government will introduce a bill proposing that the largest Danish companies and state-owned limited liability companies in future must expressly state in their reports what measures they are taking to respect human rights and reduce their impact on the climate.