Norway's Transparency Act - without full transparency?

image An important step is achieved in the fight for transparency as the Norwegian government has decided to introduce extended country-by-country reporting from 1.1.2014. Yet the failure to link the reporting to the consolidated financial accounts of companies means we are only halfway to securing a strong standard for the benefit of the general public, says PWYP Norway.

The Norwegian government has decided to introduce extended country-by-country reporting from 1.1.2014. The draft proposal will be put forward in the national assembly in October.

-It’s an important step that the government has decided to introduce extended country-by-country reporting from 1.1.2014. This is necessary to make the reporting meaningful. However, it is highly concerning that the law will not link the reporting to the consolidated financial accounts of companies. This opens up for evasions, says gen. secr. in PWYP Norway, Mona Thowsen.

PWYP Norway has repeatedly underlined that the general public should get access to the real accounting figures requested, and not to an alternative set of figures of unknown provenance. The latter will make it difficult to have confidence in the information and the implementation of disclosure will be more expensive than necessary.

PWYP Norway underlines that two criteria need to be met in order for country-by-country reporting to be one of the best and cheapest policy measures:

1. Contents: The reporting must be meaningful. Tax payments need to be presented in context.
2. Form: The reporting must be linked to the consolidated financial accounts of companies and take the form of notes to the consolidated financial accounts.

Any country-by-country reporting that fails to meet these two core requirements will automatically entail less confidence in the reporting or higher costs associated with such reporting.

The law proposal concluded by the Government includes the first requirement, but not the second.

-This means we are still just halfway to ensure a good Transparency Act for the benefit of the general public. PWYP Norway will work to make sure the law is taken even further when it is proposed for the national assembly in October, says Thowsen.

Update: Norway elected a new Government 9. september. The winning coalition consist of four centre-right parties. The law proposal will still be presented for the parliament 13 October.