New privacy laws come into effect on 12 March 2014. The changes are important to understand because the powers of the Privacy Commissioner have been ramped up and businesses that fail to comply with the laws may be liable for fines of up to $1.7 million.
The new laws may be relevant to you and you should read this article if any of the following could apply to your business:
- It provides health services or holds health information – for example if you are a doctor, dentist, naturopath, chiropractor, pharmacy, gym or weight loss clinic;
- It makes money or gets any other benefit from disclosing personal information – for example if you sell or trade your database of personal information with other businesses or if you provide recruitment or head hunting services;
- It has contracts with any government departments (including government panel contracts);
- It has an annual turnover of above $3 million; or
- It has related entities that are located overseas.
Firstly, there has been a change in terminology. The 10 “National Privacy Principles” or “NPPs” (which currently apply to the certain private organisations) and the 11 “Information Privacy Principles” or “IPPs” (which currently apply to government agencies) will be replaced by a unified set of 13 “Australian Privacy Principles” or “APPs”.
Who must comply?
The APPs apply to agencies and to organisations whose annual turnover is more than $3 million. The APPs also apply to businesses that provide health services and which hold health information (other than employee records), and to businesses that disclose personal information for a benefit, service or advantage, or provide a benefit, service or advantage to collect personal information. The laws refer to these organisations and businesses as “APP entities”.
✓ Aspect Tip: If your organisation’s turnover is the proximity of this $3 million cap, speak to one of our lawyers, who can give you more detailed guidance on how to calculate the annual turnover for the purposes of these laws
Special provisions apply to contracted service providers and subcontractors that handle personal information under a Commonwealth contract. The definition of “Commonwealth contract” is broad.
✓ Aspect Tip: If you have any contracts with government departments – including government panel contracts – speak with one of our lawyers to determine whether and how you must comply with the APPs and other privacy obligations under the contract
Note that the laws extend to acts and practices that occur outside Australia. If your organisation is part of a larger group (including group companies that are located overseas), in certain circumstances, the acts and practices (and breaches) by your related group entities, will be deemed to be your acts and practices (and breaches).
✓ Aspect Tip: Review your group-wide information handling practices to ensure group-wide compliance with the laws because a breach by a related group entity could come back to bite you in Australia
Online businesses with no physical presence in Australia, but that collect personal information from individuals who are physically in Australia, must also comply with the laws.
The Australian Privacy Principles – New Issues to Take Note Of
The most significant of the new APPs for businesses are set out below:
- APP 1 and 5 Open and Transparent Management and Notification of the Collection of Personal Information
- APP 2 Anonymity and Pseudonymity
You must give individuals the option when dealing with you, to not identify themselves, or to use a pseudonym – unless otherwise required by law, or if it is impracticable to deal with an individual who has not identified themselves or used a pseudonym.
- App 4 Unsolicited personal information
APP 4 gives unsolicited personal information the same sort of protection as solicited information. If you receive unsolicited personal information, you must, within a reasonable period, determine whether you could have collected it under APP 3. If you could not have collected that information under APP 3, and the information is not contained in a Commonwealth record, then you must destroy or de-identify the information as soon as practicable.
✓ Aspect Tip: Have a system in place for identifying and handling unsolicited personal information in accordance with the new laws
- APP 6 – Use Or Disclosure Of Personal Information
You must not use or disclose personal information for a “secondary purpose” unless the individual has consented. If no consent has been given, you may use or disclose the personal information for a secondary purpose in certain circumstances such as if the individual would reasonably expect that you use or disclose their information for a secondary purpose and the secondary purpose is related to the primary purpose (or directly related, in the case of sensitive information); the use or disclosure is required or authorised by law; a permitted general situation exists, or a permitted health situation exists.
If you collect the information from a related body corporate, then your related body corporate’s primary purpose will be treated as your primary purpose for collection.
- APP 7 Direct marketing
Direct marketing is prohibited unless an exception applies and certain rules are followed. For example, you must not use personal information for direct marketing purposes unless that information was collected from the individual, and they would expect it to be used for direct marketing, it is easy for the individual to opt out of the direct marketing and they have not opted out. There are different rules for when the information isn’t collected from the individual, or when the individual wouldn’t expect their personal information to be used for direct marketing. There are also specific requirements for contracted services providers for a Commonwealth contract.
You can only use or disclose sensitive information for direct marketing purposes if the individual has consented.
This APP does not apply to the Do Not Call Register and Spam Acts.
✓ Aspect Tip: Review your marketing system to ensure that personal information falls within the exceptions that permit direct marketing
- APP 8 Disclosing information offshore
Before you disclose personal information to an overseas recipient, you must take reasonable steps to ensure the recipient does not breach the APPs in relation to the information. Certain exceptions apply. In certain circumstances you may be liable for a breach by the overseas recipient.
✓ Aspect Tip: Consider whether you disclose personal information outside of Australia, for example by outsourcing, off-shoring or cloud computing.
Also, contracts with overseas entities that have access to personal information should reflect an agreement by that entity to comply with the APPs.
✓ Aspect Tip: Check whether your agreements with any overseas organisations that may have access to personal information you store (e.g. hosting companies) include an obligation for them to comply with the APPs and consider obtaining an indemnity from them should they breach the APPs.
Information Handling Tips for Businesses
Below are some other personal information handling tips for your business:
- Start preparing for the changes to privacy laws now
- Make sure your IT systems are secure
- Don’t collect personal information that is unnecessary for your business or “just in case” it becomes necessary
- If you do need to collect personal information, tell them why you are doing this, what the information will be used for and how long it will be kept
- Make it clear who will have access to that personal information, including any third parties
- Take steps to destroy or de-identify personal information that is no longer required, subject to other record keeping requirements
In the meantime, if you’d like to know more information about the APPs, including comparison guides, checklists, and presentations for staff training, you can find them here.
Disclaimer: The material contained on this website is provided for general information purposes only and does not constitute legal advice. You should not depend upon any information appearing on this website without seeking legal advice. We do not guarantee that the contents of this website will be accurate, complete or up-to-date.