Australia: Introduction of the Notifiable Data Breaches Scheme

Last Updated: 19 April 2018
Article by Charles Harrison and Patricia Monemvasitis

The much anticipated Notifiable Data Breaches Scheme ("the Scheme") is now in effect across Australia having commenced on 22 February 2018. The providing legislation for the Scheme is the Privacy Amendment (Notifiable Data Breaches) Act 2017 (Cth) which amends the Privacy Act 1988 (Cth). The Scheme is implemented by the Office of the Australian Information Commission ("OAIC").

Who does the scheme apply to?

The Scheme applies to all agencies and organisations ("relevant entities") with existing personal information security obligations under the Privacy Act. These entities include business and not-for-profit organisations with a yearly turnover of $3 million or more, health care and health service providers, Australian Government bodies, credit reporting bodies, and TFN recipients. We recommend all organisations should review their privacy policies to cover the scheme obligations.

What breaches must be reported

Under the Scheme, only an "eligible data breach" must be notified to the OAIC and to the persons whose personal information has been disclosed or lost. An assessment by the relevant entity of a data breach must take place within 30 days. A notifiable eligible data breach must satisfy the following three criteria:

  1. there has been unauthorised access to, unauthorised disclosure of or a loss of personal information that an entity holds (including a data breach which may occur in respect of personal information the entity has entrusted with a third party e.g. Australia Post);
  2. the data breach is likely to result in serious harm to one or more individuals. The test for whether there is likely to be resulting serious harm, is whether, from the perspective of a reasonable person, the data breach is likely to result in serious harm to an individual whose personal information has been disclosed or lost. Serious harm may include serious physical, emotional, financial or reputational harm; and
  3. the relevant entity has not been able to prevent the likely risk of serious harm with remedial action.

There are certain exceptions in which data breaches are not required to be notified. In particular, data breaches that are notified under the My Health Records Act do not need to be notified under the new scheme.

Who needs to be notified and how is this done?

Both the affected individual and the OAIC must be notified once a relevant entity is aware of reasonable grounds to believe a breach has occurred. This notification must include identification of and contact details for the relevant notifying entity and a description of the data breach and information disclosed. The OAIC provides, for completion by notifying entities, a prescriptive form on its website.

An entity must assess a suspected data breach within 30 calendar days after the day the entity becomes aware of the fact of a suspected data breach. This is a maximum time period. Where an assessment can be completed in a shorter time period the Commissioner expects that the assessment will be completed in the shorter period.

What happens next?

Once an entity is satisfied that there are reasonable grounds to believe that there has been an eligible data breach the entity must promptly notify the OAIC and the persons affected.

What happens if you breach the NDB Scheme

The OAIC Commissioner receives notifications of data breaches, promotes adherence with the scheme, can take regulatory action in response to instances of non-compliance, and offer advice and guidance to relevant entities and individuals. Importantly, the OAIC has the power to impose civil penalties for non-compliance with the scheme, and relevant entities may be subject to claims for damages.

What should relevant entities do?

Like any significant new reporting obligation, relevant entities must be:

  1. Proactive – engage and train staff in all aspects of the entity's obligations under the Privacy Act including the new scheme and give staff practical examples.
  2. Proactive – review current systems to ensure they follow best practice to avoid data breaches and ensure current systems can identify and respond to data breaches: this may require assessment by IT advisers.
  3. Proactive – amend or create new policies/procedures if gaps are identified, for example, concerning document and information retention and transmission and policies in place when negotiating supply contracts.
  4. Proactive – prepare a Data Breach Response Plan which is bespoke to your entity, engage with staff on the operational procedures to be included in the Plan, and continuously review the Plan in practice and update where necessary.
  5. Proactive – consider a possible accounting contingency to cover any damages which may be claimed, including effecting cyber risk/data breach insurance cover and seeking indemnities from suppliers who handle personal information on behalf of your entity.
  6. Reactive – responding immediately if a breach is identified following the Data Breach Response Plan including keeping adequate records of all actions and steps taken.
  7. Reactive – where possible contain any data breach identified.
  8. Reactive – regularly review and update internal practises concerning data security as necessary with a view to removing gaps and preventing future breaches.

Carroll & O'Dea Lawyers can assist you with risk analysis, creating a Data Breach Response Plan, updating privacy policies and document retention policies, creating notice protocols or generally reviewing your existing contracts, practices, documentation and relevant insurance cover.

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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Charles Harrison
Patricia Monemvasitis
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