Australia: 5 key actions your business can take to manage data breach risk

Data breach incidents are an unfortunate reality of 21st century life. A recent study of data breach incidents in Australia found that, on average, a cyber breach costs business $2.82 million to rectify1.

Apart from the financial costs, there are other compelling reasons why businesses should take data breach management seriously. Not to mention that the Federal Government has just released a draft bill that would require businesses to notify the Federal Privacy Commissioner and affected individuals of serious data breaches involving personal information. Read more here.

You can take steps to protect your business from data breaches and reduce their impact if they occur.

In this article we outline five actions to better data breach management. Following these steps will also help your business comply with the Privacy Commissioner's voluntary guidelines on data breach notification, and prepare for the potential introduction of mandatory notification requirements in Australia.

ACTION 1: TAKE STOCK OF WHAT DATA YOUR BUSINESS HOLDS

It is essential the decision makers in your business understand (and monitor) the types and amount of personal information that the business holds, and how/where that information is stored.

Under the Privacy Act, entities are responsible for the security of any records containing personal information (whether physical or electronic) that are in the entity's possession or control. This can include information that is processed or stored by external service providers (including cloud storage providers). Particular care should also be taken to identify and manage archived and backup copies of data.

Your business' risk and compliance governance procedures should incorporate regular reporting on information security and data storage issues so that management has appropriate visibility of any risks and can take a co-ordinated approach to manage them. These matters should be reported on at the most senior levels of governance in an organisation.

ACTION 2: REVIEW YOUR CONTRACT TERMS WITH SERVICE PROVIDERS

Your business should have appropriate operational procedures (and contractual rights) in place so that you can promptly and accurately identify and assess any security breaches affecting your data, regardless of whether the breach is suffered by you or your service provider.

Ideally, contracts should include a clause requiring the service provider to immediately notify the customer of any security breaches affecting the customer's data, and to co-operate with the customer in connection with the management of the breach.

You should also seek to ensure that the contractual trigger for notification operates on an objective basis, and is not subject to an assessment of severity by the service provider.

The cost of managing data breaches should also be addressed in the contract. The contract should include appropriate liability positions, indemnity obligations and insurance requirements.

ACTION 3: ENCRYPT YOUR DATA AND REVIEW YOUR INFORMATION SECURITY PRACTICES

The Privacy Commissioner recognises that it is not possible (nor required under the Privacy Act) for businesses to design completely impenetrable security systems. Rather, organisations are required to implement information security measures that are "reasonable" in the circumstances (based on factors such as the nature of the business and the amount and sensitivity the personal information held).

The Privacy Commissioner says that determining whether a reasonable security measure has been put in place should not be judged solely by reference to the expense of the implementation.

A good information security program should incorporate both proactive and reactive risk management – it should:

  • help you to prevent unauthorised access/disclosure or loss of data (e.g. firewalls, network security, malware detection and prevention software); and
  • reduce the risk posed to affected individuals when breaches do occur (e.g. passwords, data encryption and database segregation techniques, which make it more difficult for hackers to use data extracted from your systems).

Implementing sufficiently strong reactive security measures (such as an adequate level of data encryption) could potentially save you from having to notify, as the proposed Australian data breach notification regime would allow businesses to consider factors such as "whether the information is in a form that is intelligible to an ordinary person" and "whether the information is protected by security measures" when determining whether a data breach is "serious" (thereby triggering the notification requirement).

ACTION 4: IMPROVE YOUR BREACH DETECTION PROCESSES

It's critical to identify data breach incidents quickly so that remedial steps and notifications can be performed in a timely manner. The notification requirements under the proposed mandatory data breach notification regime will apply to any serious data breaches that the organisation "ought reasonably to be aware of".

Businesses can consider breach detection measures such as:

  • network security tools, which act as a "security alarm" for your IT systems (e.g. intrusion detection software to monitor unauthorised access, and data loss prevention software to scan outbound e-mails sent by staff);
  • regular security testing to identify potential weak spots – this could include technical testing (such as network penetration testing) and operational readiness testing (such as training exercises for staff that simulate phishing attacks); and
  • training for staff to identify and report errors in handling personal information.

ACTION 5: HAVE A DATA BREACH MANAGEMENT RESPONSE PLAN IN PLACE

Your business should have a clear data breach plan in place that sets out a strategy for identifying and remedying the source of a data breach. The plan should also identify key responsible personnel, and set out the procedures for determining whether notice should be given of the breach.

A good starting point in designing the plan would be to refer to the Government's draft bill on the proposed mandatory data breach notification regime. The Privacy Commissioner has also published a range of guidance materials on data breach management, and is currently in the process of public consultation on a draft Guide to Developing a Data Breach Response Plan (although it should be noted that the consultation draft of the Guide was released prior to the draft bill, and so does not currently reflect the proposed mandatory data breach notification regime).

Businesses should also consider having a list of "go-to" subject matter experts that can be engaged at short notice to assess the severity of the breach, advise on steps on containment and risk mitigation and determine whether notification is required.

You may also like to read our related articles:

Mandatory data breach notification is coming to Australia

General Counsels' top priority for 2016: Managing cyber security

Footnote

1 public.dhe.ibm.com/common/ssi/ecm/se/en/sew03057auen/SEW03057AUEN.PDF

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Most awarded firm and Australian deal of the year
Australasian Legal Business Awards
Employer of Choice for Women
Equal Opportunity for Women
in the Workplace (EOWA)

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.