Proposed changes to the Privacy Act 1988 (Cth) (Privacy Act) will significantly increase the obligations on organisations that collect or deal with personal information in Australia or from Australian residents. When the reforms are passed, many of the current practices of organisations carrying on business in Australia will not be compliant and will need to be changed.
Once passed, the reforms to the Privacy Act will:
- Amend the current credit reporting provisions
- Significantly enhance the functions and powers of the Privacy Commissioner
- Replace the existing National Privacy Principles (NPPs), applicable to private sector organisations, and the Information Privacy Principles (IPPs), applicable to the federal public sector, with a single set of principles (the Australian Privacy Principles or APPs) applicable to both the public and private sectors
- For the first time, introduce significant monetary penalties for certain breaches of the Privacy Act.
These reforms (including the new APPs) are expected to be passed by Parliament this year.
What are the main changes you need to prepare your business for?
While the APPs in many ways mirror the current NPPs, there will be some significant changes introduced by the APPs, including:
New rules relating to 'direct marketing' (more consent required)
Under the APPs businesses are prohibited from using personal information for direct marketing and disclosing personal information to another organisation for use in direct marketing unless:
- The business collected the information from the individual
- The individual would reasonably expect the business to use or disclose the information for that purpose
- The business provides a simple means by which the individual may easily request to not receive direct marketing, such as an "opt-out" mechanism
- The individual has not requested to 'opt-out'.
This principle is additional to (and will not alter) the law applicable to situations that are currently covered by the Do Not Call Act 2006 (Cth) and the Spam Act 2003 (Cth). In effect, the APPs will apply similar rules (to those that currently apply to electronic direct marketing) to direct marketing by traditional means.
The APPs also provide that individuals have the right to require an organisation that directly markets to them to tell them the source from which it obtained their personal information (ie their name and address).
Cross-border data transfers (liable for offshore incidents)
In a change from the current NPPs, the APPs permit cross-border disclosure of personal information. However, if a business discloses personal information to an overseas recipient it will remain liable for any breaches of the APPs by the overseas recipient of that information (as if the sending organisation itself had committed those breaches).
Organisations can minimise this continuing liability for personal information sent out of Australia by obtaining the individual's 'informed consent' to disclose his/her personal information to an overseas recipient. However, the current wording that most organisations use to allow cross-border transfers will not comply with the new requirements of the APPs.
- The kinds of personal information the business collects and the purpose(s) for which it collects the information (and how it collects and holds that information)
- How an individual can access his/her personal information held by the business (and how they can have the information corrected, if necessary)
- Whether the business is likely to disclose personal information to overseas recipients and, if so, the countries in which such recipients are likely to be located (and whether such countries have appropriate privacy protections)
- How the individual may complain about a breach of the APPs (and what the business will do to address such complaints).
Organisations also need to take reasonable steps to implement practices, procedures and systems that will ensure its compliance with the APPs.
Significant new teeth: new penalties and increased powers of the Privacy Commissioner
If the APPs come into effect as currently drafted, significant new civil penalty provisions will be introduced into the Privacy Act. The APPs also give the Privacy Commissioner significantly increased powers that enable the Privacy Commissioner to, among other things:
- Seek civil penalties (up to $220,000 for individuals and $1.1 million for a company) in cases where there is either a serious or repeated interference with an individual's privacy
- Audit the handling of personal information by private sector organisations
- Make determinations following all investigations (ie even if the investigation is an 'own motion' investigation) and apply to the Federal Court or Federal Magistrates Court to enforce such determinations.
How to prepare for the reforms
The main steps you can take now to prepare your organisation include examining and determining:
- What personal information your business collects and the purpose(s) it collects the information for
- What your practices and processes are with respect to direct marketing
- Whether your internal practices with respect to handling personal information (including security measures) are compliant with the APPs.
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