Norway’s experience with regulating subcontracting chains is increasingly attracting attention across Europe. One of the most well-known approaches is the “Oslo model”, introduced more than a decade ago in public procurement to tackle abuse, improve working conditions and ensure fair competition in the construction sector.

According to LO Norway’s Robert Renè Hansen, these limits have helped address some of the key problems linked to long subcontracting chains, including responsibility shifting and worker exploitation in Norway. Hansen is the Head of LO Norway’s Brussels Office and has a good insight into these problematic phenomena on both a national level and in the EU.

“Most procurement models in Norway limit subcontracting to two levels, while the Oslo model originally limited it to one,” Hansen explains.

“The aim is simple: when chains become too long, it becomes impossible to control working conditions and responsibility.”

Despite initial concerns from the EFTA Surveillance Authority, which questioned whether such limits restricted the freedom to provide services, the case was eventually closed after several years of negotiations. Norway’s approach was accepted, establishing what Hansen describes as “a legal consensus from a European perspective that this can function as a workable model.”

Health and safety ID cards as a means of identification

Beyond limiting subcontracting levels, the Oslo model also includes other tools designed to improve oversight and labour standards. One of them is the use of mandatory health and safety ID cards on construction sites, ensuring that workers and their employers can be clearly identified. The measure was introduced after a fatal accident in the early 2000s, when problems with identifying workers in complex subcontracting chains arise.

“Another element of the Oslo model is a requirement for companies to employ apprentices, typically around 10% of their workforce in publicly procured projects. This has helped increase the attractiveness of vocational training and strengthen the supply of skilled workers in the construction sector”, Hansen says.

“The model has been in place for more than ten years, and it works”, he adds.

Large Norwegian companies support it because they see it as necessary to ensure fair competition in the labour market and in public procurement.

“Some of the largest companies in the building and construction sector use only one level of subcontracting in their own projects, regardless of the requirements in public and private contracts. They see that the measure helps them to have control of their projects”, Hansen points out.

A model for the European Union?

Interest in the Norwegian experience is now growing at the EU level. Discussions on subcontracting chains have recently gained visibility in the European Parliament, while the European Commission has highlighted Norwegian procurement practices as examples of best practice.

However, Hansen notes that there seems to be a political majority that only emphasizes the right to free movement within the European union. These decision-makers are not concerned about the development in the labour market.

“Our trade union members and shop stewards are daily facing increased criminal activity in the labour market, and this needs to stop. People who don’t want stricter regulations are pointing to the need for more inspections and enforcement.”

Hansen emphasizes that the best way to stop criminal activity and make enforcement and inspections less costly and burdensome, is to introduce restrictions on subcontracting.

Some elements of the Oslo model could realistically be applied at the European level.

“Health and safety ID cards for workers and stronger transparency in subcontracting chains are measures that could clearly work across Europe,” he says.

As the EU prepares to revise the Public Procurement Directives, trade unions and policymakers are increasingly looking at Norway’s experience as a potential blueprint for tackling abuses linked to long subcontracting chains. There can be an opening to require contractors and subcontractors to take measures to improve workers’ conditions in the supply chain and tackle potential or identified human rights violations in the production process. The European trade union movement has encouraged strict supplier codes of conduct for social responsibility among other measures.

Read more on the Oslo model in a report published by the Institute of Labour and Social Research in Norway here.

Read the full article in Finnish here.