Australia: Major Overhaul For Privacy Act

Last Updated: 20 August 2008
Article by Steven Klimt

The Government has announced its intention to undertake major reform of Australian privacy laws in line with the recommendations set out in the Australian Law Reform Commission's final report on its review of the Privacy Act.

In launching the ALRC's comprehensive 2700 page, three volume report, "For your information: Australian Privacy Law and Practice" which contain 295 recommendations, Senator Faulkner indicated that the size and complexity of the report required some "thinking time" from the Government. Senator Faulkner indicated that the Government would consider the ALRC report in two stages to target specific priority areas, with legislation being introduced into Parliament in relation to the first reform stage within 12 -18 months.

We looked at the ALRC's Discussion Paper and preliminary proposals in Information Insights in December last year. In this Alert we will give a snapshot of the main changes proposed in the ALRC's final report and the Government's initial response to the ALRC recommendations set out in the final report. We'll examine the proposals in more depth in future editions of Information Insights.

1. One set of privacy principles to rule them all

Currently public and private sector privacy rules, as set out in the Information Privacy Principles and National Privacy Principles respectively, differ. Australian States and Territories also have their own separate privacy regimes which applies to their public sector.

ALRC final recommendation:

The ALRC has recommended that the Information Privacy Principles and the National Privacy Principles be unified into a single set of privacy principles, to be known as the model Unified Privacy Principles, which will cover information handling in both the public and private sectors. Amendments to both the Privacy Act and state and territory laws are recommended, to make it clear that the Privacy Act applies to private sector organisations to the exclusion of state and territory laws.

In relation to the differing state and territory legislation, the ALRC has recommended that the Commonwealth, State and Territory governments should establish an intergovernmental co-operative scheme, pursuant to which the various States and Territories can agree to enact legislation to regulate the handling of personal information in each state and territory public sector by adopting the key elements of the Privacy Act. A review of national consistency after five years is recommended. If consistency has not been achieved, the review is to consider whether it would be more effective for the Commonwealth parliament to exercise its power to "cover the field" for information privacy, including for the state and territory public sectors.

2. A statutory cause of action for invasion of privacy

While the Privacy Act contains a provision which allows a person to complain to the Privacy Commissioner about a practice that may be an interference with privacy, there is no specific statutory cause of action in Australia for invasion of privacy, albeit that some common law developments have left open the possibility of the evolution of the tort of invasion of privacy.

ALRC final recommendation:

Following considerable debate covering the issues of freedom of speech and the merits of privacy protection, the ALRC has recommended that Commonwealth legislation provide for a statutory cause of action for a serious breach of privacy where an individual can show that:

  • they had a reasonable expectation of privacy in the circumstances; and
  • the act or conduct complained of is highly offensive to a reasonable person of ordinary sensibilities.

In determining whether an individual's privacy has been interfered with, it is recommended that the court consider whether the public interest in maintaining privacy outweighs a greater public interest in publication.

Circumstances in which the duty would be breached may include where there has been an interference with an individual's home or family life, an individual has been subjected to unauthorised surveillance, sensitive facts about an individual's private life has been disclosed or an individual's correspondence or private communication has been interfered with.

Defences would apply if the act or conduct was required or authorised by law or privileged under the laws of defamation. Remedies that could be awarded include damages, an account of profits, court ordered apologies, correction orders and orders for the delivery up and destruction of the relevant material.

3. Data breach notification

Neither the private nor public sector are currently obliged to notify individuals if their personal information has been compromised.

ALRC final recommendation:

The ALRC has recommended that the Privacy Act be amended to require an agency or organisation to notify the Privacy Commissioner and affected individuals of a data breach that has occurred and which may give rise to a real risk of serious harm to an affected individual. Notification to an affected individual may not be required if the privacy commissioner considers that it would not be in the public interest or the interests of the affected individual. Failure to notify the privacy commissioner may attract a civil penalty.

4. Regulatory framework for health information

Health information is currently regulated under different regimes by the Commonwealth and a number of states and territories. At the Commonwealth level, health information is generally treated as a sub-set of 'sensitive information' under the Privacy Act. There has also been a move, by the Australian Health Ministers' Advisory Council (AHMAC) National Health Privacy Working Group, to regulate the handling of health information under a separate and distinct set of principles in the draft National Health Privacy Code.

ALRC final recommendation:

The ALRC has recommended that health information be regulated under one regime throughout Australia, facilitated by the proposed intergovernmental agreement referred to above.

The ALRC also recommended that health information should be regulated under the general provisions of the Privacy Act, the model Unified Privacy Principles and regulations under the Privacy Act—the new Privacy (Health Information) Regulations.

5. Employee records exemption

Private sector employers currently enjoy an exemption from the Act when dealing with "employee records" for purposes directly connected with the employment relationship.

ALRC final recommendation:

The ALRC has recommended that this exemption be removed from the Act, thereby creating consistent rules for personal information about employees, regardless of whether they are employed in the public or private sector.

6. Small business exemption

Small businesses with an annual turnover of less than $3M are currently exempted from the Privacy Act (except in certain circumstances, for example if the business provides a health service).

ALRC final recommendation:

The ALRC has recommended that this exemption should also be removed from the Act, noting that small businesses make up almost 94% of Australian businesses and look after large amounts of personal information. It also recommends that, before the exclusion is removed, the privacy commissioner should provide support to small businesses, to help them in understanding and fulfilling their obligations under the Act.

7. Specific direct marketing privacy principle

Direct marketing is currently regulated generally under the "use and disclosure" privacy principle.

ALRC final recommendation:

The ALRC has recommended the inclusion of a specific direct marketing privacy principle, which would apply regardless of whether an organisation collected personal information for the purpose of direct marketing. The principle would distinguish between direct marketing to existing customers and individuals who are not existing customers. In all cases, organisations will be required to provide a simple and functional method for individuals to opt out of receiving direct marketing communications.

8. Sending personal information overseas

While the Privacy Act provides for some protection for personal information which is transferred to another country by an organisation, it does not apply to information sent overseas by government agencies.

ALRC final recommendation:

The ALRC has recommended that the model Uniform Privacy Principles include a "Cross-Border Data Flows" principle under which an agency or organisation that transfers personal information about an individual in Australia would remain accountable for that information unless:

  • the agency or organisation reasonably believes that the overseas recipient of the information is subject to a law, binding scheme or contract that effectively protects the personal information in a manner substantially similar to the model Uniform Privacy Principles;
  • the affected individual consents to the transfer, after being advised that the agency or organisation will no longer be accountable for personal information transferred if consent is provided; or
  • the agency or organisation is required or authorised by or under law to transfer the personal information.

9. Credit reporting

A specific part of the Privacy Act, Part IIIA, currently regulates the system of credit reporting. The regime in Part IIIA is considerably more restrictive than in most comparable countries in relation to the types of information that may be collected and disclosed, with the collection of information being limited to information that might detract from an individual's credit worthiness, so called "negative information".

ALRC final recommendation:

The ALRC has recommended that the credit reporting provisions in Part IIIA of the Privacy Act be repealed and that credit reporting be regulated under the general provisions of the Act.

The ALRC has also recommended that the categories of personal information that can be included in credit reporting information held by credit reporting agencies should be expanded to include the type of current credit account opened; the date on which each current credit account was opened; the credit limit of each current account; and the date on which each credit account was closed.

10. Other recommendations

Some of the other key recommendations of the ALRC report include a simplification and streamlining of the Privacy Act, rationalisation of exemptions and exceptions contained in the Privacy Act, streamlining of the Privacy Commissioner's complaint handling procedures and empowering the Federal Court to impose significant civil penalties for serious or repeated breaches of the Privacy Act. The ALRC also recommends the creation of powers allowing the privacy commissioner to conduct audits of private sector organisations to ensure compliance.

Australian Government response

At the launch of the ALRC Report, Senator Faulkner indicated that the Australian Government shares the concerns of many Australians that advances in information technology can erode privacy and the belief that information privacy laws should operate consistently and effectively throughout Australia.

Senator Faulkner stated that given the large number of recommendations, the Government will consider the ALRC report in two stages as follows:

  • the first stage of the Government response will focus on the recommendations relating to the Unified Privacy Principles, health and credit reporting regulations and improving education about the impact on privacy by new technologies;
  • the second stage of the Government response will consider the recommendations relating to the removal of exemptions, data breach notices and the new cause of action for breach of privacy.

Senator Faulkner has also indicated that he will be consulting with relevant portfolios Ministers about recommendations which fall outside his portfolio, as well as the States and Territories about proposals to harmonise Commonwealth, State and Territory privacy regulation.

Senator Faulkner has indicated that legislation in relation to the matters covered by the first reform stage will be introduced into Parliament within 12 -18 months.

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.

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