Ruter and the Transparency Act

Ruter itself owns no buses, trams, ferries or Metros. The transport itself is performed by various operator companies that have a contract with Ruter. The Metro and the Oslo tram are permanent contract partners, whereas buses and boats are awarded contracts after competitive tendering.

Invitations to tender in EU-Supply

Operators

• Metro: Sporveien T-banen
• Tram: Sporveien Trikken
• Bus: Nobina AS, Connect Bus AS, Vy Buss AS and Unibuss AS
• Ferry: Boreal and Norled AS

In the long term, Ruter aims to reward bidders who can demonstrate good systems and measures for due diligence assessments for products and services that are part of the tender competition. How such evaluation requirements can be formulated and used in a way that complies with the statutory requirements for how public procurers are to carry out procurements needs to be investigated further.

Until this is clarified, Ruter asks suppliers participating in tender competitions where a risk of human rights violations may exist to submit an initial due diligence assessment as part of the tender bid. The purpose of this is to ensure that bidders conduct investigations before selecting equipment suppliers, so that the contractual terms are complied with in the best possible way during the contract period, and the obligations in the Transparency Act are fulfilled.

In the tender documentation for the competition on transport services for Oslo East 2023, the requirement for preliminary due diligence is formulated as follows:

"Act of 2021-06-18-99: The Transparency Act takes effect on 1 July 2022. In order for the Contracting Authority to fulfil its duties under the Transparency Act, the bidder is asked to describe its supply chains that are relevant to the bid in the bidding letter. See Section 4(b) of the Transparency Act. This includes a description of the supply chains for batteries and buses."

The Code of Conduct for Ruter's Suppliers and its appendix the Terms and Conditions of Contract for Safeguarding Basic Human Rights in the Supply Chain applies throughout the contract period. Ruter requires suppliers to know their supply chain, be willing to share supply chain information with Ruter, and conduct due diligence as described in the Norwegian Transparency Act. The contractual terms are based on the UN Guiding Principles on Business and Human Rights using due diligence assessments as a method. Due diligence assessments is an internationally recognised method for mapping, preventing, limiting and explaining how businesses deal with any negative impact on employee rights and human rights in their own operations and in the supply chain.

Ruter asks suppliers to respect international conventions and the working environment legislation in the production countries

Products and services delivered during the contract period must be produced under conditions that are in accordance with internationally recognised human rights conventions and the working environment legislation in the country of production. The requirements apply to the supplier's own operations and in the supply chain. The requirements include:

• ILO's core conventions on forced labour, child labour, discrimination, trade union rights and the right to collective bargaining.
• United Nations Convention on the Rights of the Child, Article 32.
• Working environment legislation in the country of production, with emphasis on 1) wage and working hour provisions, 2) environment health and safety, 3) regular employment conditions and employment contracts, and 4) statutory insurance and social schemes.

Brief description of Ruter's due diligence policy for suppliers

The supplier must establish a due diligence policy for its company prior to the start of the contract period. The supplier's due diligence shall include:

• Publicly available policies adopted by the board that commit the company to respect international human rights and the labor laws of the producing country, both in the company's operations and in the supply chain.
• One or more employees at senior management level are responsible for ensuring that this work is conducted and reported on.
• Procedures for communicating and following up these commitments both in own operations and in the supply chain. 

Brief description of the requirements Ruter sets for the supplier's due diligence routines

Suppliers shall have routines in place for conducting regular risk analyses, both in their own operations and in the supply chain. This entails identifying and prioritising the risk that the products or services are manufactured under conditions that violate internationally recognised human rights conventions and working environment legislation in the country of production. The routine(s) shall also describe what measures the supplier intends to implement to prevent, stop and/or reduce the consequences of breaches of the requirements. In line with due diligence methodology, the most serious risk, regardless of where in the supply chain the risk is, should be prioritised first. 

If requested by Ruter, the supplier shall provide an overview of production units in the supply chain, including contact details, for risk products and/or components and/or raw materials determined by Ruter.

If the supplier uses subcontractors to fulfil a contract, the supplier is obligated to continue to strive for compliance with the requirements for the supply chain.

This is a brief description of how Ruter can follow up on the requirements:

• Ask the supplier to document that policies and procedures have been adopted.
• Ask the supplier for an overview of selected manufacturing companies, products, components and/or raw materials, determined by Ruter.
• Ask the supplier to complete a self-report form with questions about the supply chain and the supplier's due diligence efforts.
• Ask the supplier to present its risk analysis and describe its follow-up measures.
• Ask the supplier to participate in follow-up conversations.
• Present report(s) relevant to the requirements in items 1 and 2.
• Facilitate Ruter's control checks and audits of conditions at the supplier's company itself.
• Facilitate Ruter's control checks and audits of conditions in the supply chain.

This is a brief description of Ruter's options for sanctions if the requirements are not complied with:

• Ruter may require correction: The supplier shall present an action plan for when and how the breaches are to be corrected. The measures shall be reasonable in relation to the nature and scope of the breaches. Ruter shall approve the action plan and documentation of corrections.
• Ruter may temporarily suspend all or part of the delivery if the supplier does not meet the requirement to submit an action plan or if the action plan is not complied with.
• Ruter may require the supplier to change subcontractors if the breaches of contract are serious and significant.
• Ruter may terminate the contract in the event of significant breaches of contract, repeated serious breaches or if the action plan is not complied with.

Ruter's contractual requirements shall ensure that Ruter receives information about a material's supply chain. In line with the Transparency Act, Ruter therefore requires suppliers to carry out risk analyses for the procurement, both in their own operations and in the supply chain, where they identify, prioritise and implement necessary improvement measures. Ruter's suppliers of transport services are covered by the Transparency Act's requirements for due diligence and duty of disclosure.

In 2019, Ruter conducted a survey of the value chain for buses and boats, including lithium-ion batteries. The value chain analyses painted an overall picture of the environmental impact and risk of poor working conditions and human rights violations in different parts of the life cycle of buses and boats. The analysis was based on information from reputable open sources, such as reports from the ILO and Amnesty International. Ruter has used the value chain analyses both to understand how we can contribute to positive change, to prioritise and to implement concrete measures. Although some years have passed since 2019, the risk picture has not changed significantly.

The value chain analyses identified the extraction of raw materials used in lithium-ion battery production as the part of Ruter's value chain with the highest risk of violations of human rights and labour rights, where hazardous labour, forced labour, child labour, human rights violations and environmental degradation are likely. The best known are human rights violations, child labour and hazardous work in connection with the extraction of cobalt in DR Congo. But the extraction of other battery raw materials, such as lithium, is also associated with risks. At the same time, this is a topic that is very difficult for Ruter and Ruter's operators to do anything about. The battery cells are mainly manufactured in China and South Korea, and the world market is dominated by a few very large battery cell manufacturers such as CATL, LG Energy, Samsung, Panasonic and BYD.

Environmental degradation and human rights violations related to the extraction of battery raw materials worry battery users in many parts of the world, and many organizations and associations are working from different sides to improve conditions. Business organizations have been established where manufacturers in the battery value chain can collaborate on and commit to improvement measures. Several of the major battery cell manufacturers participate in such voluntary collaborations.

The EU is currently working on new legislation for rechargeable batteries, which when it comes into force will also apply to batteries to be used in Norway. One of the goals of the new battery regulations is to ensure decent conditions related to the extraction of battery raw materials such as cobalt and lithium.

More information about battery regulation is available online at regjeringen.no (in Norwegian)

Other parts of the value chain of buses and boats produced to operate for Ruter are also associated with risk. Production countries and production processes have different probabilities of indecent working conditions and human rights violations. There are a number of sources of information available on this topic. One important source is the International Labour Organization (ILO), the UN agency working to secure workers' rights worldwide. Industry reports and country reports provide a general picture. It is by visiting the actual production site that you can establish what the working conditions actually are like and can identify any need for improvement.

Such visits are resource-intensive, and a company will typically visit its main suppliers' production sites. Complicated value chains for the thousands of components of which a bus or boat is composed make it very demanding, if not impossible, to form a complete picture.

It is the operator who wins the competition that is responsible for the procurement of necessary materials, and who must carry out investigations based on industry knowledge, general knowledge of risk factors in production countries and visits to production sites.

The bus facilities are workplaces that are not covered by Ruter's employer responsibility. Because they are such an important part of Ruter's supply chain, Ruter nevertheless takes responsibility for ensuring decent working conditions for drivers and others who have the facilities as their workplace. This applies to both structural conditions, including access to toilets and break rooms, as well as compliance with the provisions of the Norwegian Working Environment Act in general. Working conditions at bus facilities are a key topic in Ruter's Bus Facilities Strategy, which was drawn up in 2021.

Ruter has over time experienced that working conditions at the bus facilities can too quickly become a low priority budget item in the tripartite cooperation between Ruter, the operator and facility owner. It is the operators who have personnel responsibility, but improvements to facilities often involve Ruter and the facility owner. Many bus facilities need upgrading. Here there are often discussions between the operator, Ruter and owner about cost allocation. The washing halls at the bus facilities stand out particularly with high wear and tear and lack of facilitation for the employees. As of 2021, Ruter will therefore require the submission of a binding action plan for the operation of the facility, including working conditions, as part of the bid in competitions for bus services contracts.

Decent working conditions involve access to adequate toilets and break rooms. Toilet and break facilities for bus drivers at end stops have long been a challenge and have been given low priority.

In Oslo, toilets and break rooms have been made available to bus operators through old Sporveien agreements, while in Akershus it has been up to the individual bus operator to provide sufficient facilities.

Since 2016, Ruter has taken overall responsibility and helped to ensure that the facilities are upgraded, washed and maintained. In addition, several new toilets and break rooms are now being built. Contracts regulating the establishment, operation and maintenance of new driver facilities shall be drawn up in cooperation with the County Municipality of Viken and Bussanlegg AS.

For procurement of goods and services, Ruter has carried out a risk categorisation of its portfolio based on DFØ's high-risk list and other sources of information on the risk of human rights violations and the likelihood of poor working conditions, such as Ethical Trade Norway. Apart from purely consultancy contracts, Ruter considers that all procurements carry a certain risk of violating standards for decent working conditions and respect for human rights. When these contracts are to be announced, Ruter requires the supplier to conduct preliminary due diligence assessments.

DFØ's high-risk list is available online at anskaffelser.no (in Norwegian)

Ruter considers IT equipment to be products with a high risk of violations of decent working conditions and human rights. This applies both to the extraction of raw materials for rechargeable batteries, but also to the production of other components. In Ruter's recently announced tender competition for IT services, Ruter therefore required equipment to be TCO Certified if such certification is available for the product. This is in addition to Ruter's Rules Of Conduct for Suppliers and its appendix Terms and Conditions of Contract for Safeguarding Basic Human Rights in the Supply Chain. The Transparency Act also gives Ruter's suppliers an independent responsibility for conducting due diligence assessments.

TCO Certified's websites