Finland

Government covering note on the UN Guiding Principles on Business and Human Rights National Action Plan

Ownership policy and social responsibility [page 5]

In State ownership steering, companies are required to observe human rights responsibly and transparently both within their own organisations and in subcontractor chains, in full accordance with the UN Principles. The State uses a separate accountability mechanism for dealing with human rights violations committed by State-owned companies. Companies with a controlling interest held by the State assess the human rights risks of their own operations and those of their subcontractor chains, reporting on them and their own tax procedures. In doing follow-up work on the operating principles of social responsibility, consideration should be given together with companies and other stakeholders on how models developed in ownership steering could also be applied in other company functions.

2.The State and Companies

2.1. The state as an economic operator [pages 19-23]

Public Financial Institutions and Financial Instruments Related To Development Cooperation

“The publication of the UN principles and the update of the OECD Guidelines for Multinational Enterprises in 2011 have had the effect in public export credits of increasing the amount of attention being paid to the impact on human rights in the projects guaranteed. Finland’s official export guarantee company, Finnvera, uses policies updated on 1 January 2013 for evaluating the environmental and social effects of projects. When granting export credit guarantees and confirming export credit guarantee conditions, the environmental and social impacts of the project in question are taken into consideration as part of the project’s total risk assessment. The development of Finnvera’s environmental and social impact assessment is continuing in accordance with the OECD Common Approaches agreement As with other public export credit companies, Finnvera also reports on its progress at the expert meetings related to the OECD agreement.

In autumn 2011, Finnfund and twenty-four other providers of development funds signed the principles of good governance and guidelines on how the providers of development funds attempt to promote good governance in the companies funded and thereby support the sustainable economic development of developing countries. In addition, the activities of Finnfund itself and of the companies it funds should be both environmentally and socially sustainable. The same principles of responsibility apply to the activities of both Finnfund and Finnpartnership alike.

In its final report in February 2014, a development group established by the Ministry for Foreign Affairs and the Ministry of Employment and the Economy suggested that a development innovation programme be established alongside the current financial instruments and support services. The programme is intended to compile the monitoring services for know-how and markets both in Finland and in developing countries; to produce support and development services for operators; and to enable a programme of flexible funding through the programme’s own fund. The programme will be launched in 2014.

As a follow-up measure, the working group proposes that:

• a regular dialogue be maintained with public financial institutions on the UN principles, the OECD Guidelines and other Principal responsible parties: Ministry for Foreign Affairs and Ministry of Employment and the Economy, continuous activities.
• in conjunction with companies and non-governmental organisations, the potential for new cooperation initiatives in the field of development cooperation funding be The work carried out in the framework of the development group is used and human rights are emphasised in the new programme for business activities in developing countries that is currently being prepared, and similarly, in the Finnpartnership programme.

Principal responsible party: Ministry for Foreign Affairs, schedule 2014 to 2016.

Corporate Governance

The Ownership Steering Department in the Prime Minister’s Office has set a CSR reporting requirement for unlisted companies that are either majority-owned by the state or entirely state-owned. This also includes human rights. The obligation requires that companies submit reports in accordance with the best practices in the branch of activity concerned and, at minimum, adopting the standards corresponding to those of their central competitors.

As an owner, the state expects that the administration and management of state-owned companies take human rights into consideration in a responsible and transparent manner, both in their own organisation and in their subcontracting chains.

As a follow-up measure, the working group proposes that:

• the importance of human rights to the state when serving as a company owner will continue to be emphasised in preparing the next decision in principle on ownership policy.

When the amended OECD Guidelines on Corporate Governance of State-Owned Enterprises enter into force around the end of 2015, the new definitions of policy will be included in the ownership guidance practices of the Finnish state. Principal responsible party: Prime Minister’s Office, schedule before the end of 2016.