On 12 March 2014, amendments to the Privacy Act 1988 (Cth) (Act) will come into force.

The Privacy Amendment (Enhance Privacy Protection) Bill 2012 (Reform Bill) amended sections of the Act and included a set of new, harmonised, privacy principles that will regulate the collection, use, storage and disclosure of personal information by Australian government agencies and some businesses.

These new principles are called the Australian Privacy Principles (APPs). The APPs apply to the collection and use of personal information.

Is your business covered by the APPs?

If your business or Commonwealth government agency was covered by the Privacy Act before 12 March 2014, it will continue to be covered, and you should prepare for the changes.

The Privacy Act covers:

  • Any private sector business (including a sole proprietor) that:

o has an annual turnover of more than $3million OR o collects or discloses personal information for a benefit, service or advantage (irrespective of turnover); OR o handles health information (irrespective of turnover) (s6D); and   

  • all credit providers and credit reporting agencies
  • most Commonwealth, ACT and Norfolk Island government departments and agencies
  • service providers under Commonwealth government contracts where the contract obliges compliance with the Act
  • foreign businesses with an ‘Australian Link’ under some circumstances

What has changed?

In some ways, not a lot has changed. The APPs replace the Information Privacy Principles (IPPs), which previously applied to Commonwealth departments and agencies, and the National Privacy Principles (NPPs), which applied to certain private sector organisations.

Many of the amendments are routine and simply allow for consistent terminology in the Act, with the removal of the IPPs/NPPs and the inclusion of the new APPs.

However, some changes are significant.

It is not practical to set out all the changes here, and businesses should seek advice where necessary. We include some of the major changes below.

Privacy Policy

APP1 introduces a prescriptive regime for a business’ Privacy Policy in terms of content and availability. All Privacy Policies must comply with the new requirements for notification of certain matters about the personal information which is collected (APP 5).

This notification must occur at the time of the collection (either directly from the individual or from a third party) or as soon as reasonably practical after the collection. Agencies and businesses must take reasonable steps to implement processes that will ensure that they comply with the APPs.

Pseudonym

APP2 introduces a new requirement that a business must allow a person to use a pseudonym when dealing with the business (subject to limitations and practicality).

De-identifying information

APP4 creates new obligations on organisations to de-identify unsolicited information under some circumstances. Unsolicited information is personal information which a business has taken no active step to collect.

For the first time agencies and businesses will have to determine whether, if they had collected the information, they would have been permitted to do so under the Act, and whether APPs 5 to 13 apply to the information. If so, the information must be dealt with in accordance with the APPs and their Privacy Policy. If not, provided it is not a Commonwealth record and it would be lawful to do so, the agency or business must destroy or de-identify the information.

Notifying about off-shore disclosure

APP5 introduces the matters that must be notified to a person when personal information is collected. Amongst others, there is a new requirement for an agency or business to notify a person whether it is likely to disclose that person’s personal information overseas, and if so, to which countries the disclosure will be likely to be made.

Direct Marketing

The use and disclosure of personal information for direct marketing is now addressed in a discrete privacy principle (rather than as an exception in NPP 2 as a secondary purpose). This is in recognition of the concern of the public for their privacy to be protected.

APP 7 prohibits direct marketing by businesses unless one of the exceptions apply (exceptions are set out in APP 7.2 to 7.5). The APPs do not apply to the extent the Do Not Call Register Act 2006 or Spam Act 2003 applies. Government agencies will generally be exempt from the prohibition against direct marketing unless it is in relation to an agency’s commercial activities (s7A Act).

Cross-Border Disclosures

APP8 introduce a new accountability approach to cross-border disclosure of personal information (previously covered under NPP9).

Under APP8 and s16C of the Act, a business (including a small business operator that is governed by the Act) or agency that discloses personal information to an overseas recipient, including over the internet, may now be accountable for an act or practice of the overseas recipient that would breach the APPs (s16C Act), subject to some exceptions.

That is, if the overseas recipient is not otherwise subject to the APPs, and handles the personal information it receives from the business in a manner that breaches the APPs, the Australian business supplying the information will be taken to have breached the APPs unless an exception applies. An overseas recipient does not include an overseas office of the entity, but it does include a related company or entity in a corporate group.

While there are a number of exceptions to, and ways to indemnify the business against liability, the most practical way to avoid breaching APP8 is to notify the individual that their information will be disclosed overseas (APP 5), and obtain the consent of the individual to the overseas transfer of the information, and to the consequences of such consent.

Security

APP11 provides that agencies and businesses must take reasonable step to protect the information they hold from misuse, interference and loss, unauthorised access, modification and disclosure. This includes a new obligation to ensure that personal information cannot be ‘interfered with’.

Extra Territorial application (s5 and 6)

The Privacy Act has always applied extraterritorially to an act or practice engaged in outside Australia by a business or small business operator to which the Act applies (not government agencies) with an ‘organisational link’ to Australia. This principal has not changed, although the government has amended the extraterritorial provisions of the Act (ss5 and 6) by introducing the new term: ‘Australian Link’.

Foreign Websites

A business that has an online presence in Australia, and collects personal information from individuals located in Australia, carries on a business in Australia (has an Australian Link) for the purpose of s5B(3)(b)(c) of the Act. It does not matter if the website is owned by a business that is located outside Australia or if the business is not incorporated in Australia.

The Act and the APPs will apply to collection, use and disclosure of the information (unless the act or practice is required by an applicable foreign law (see ss 6A and 6B Act)).

Credit Reporting

Part IIIA of the Privacy Act (Credit Reporting) has been completely revised. Some of the changes include:

  • New types of credit-related personal information that can be collected and held in the credit reporting system, including repayment history
  • Greater protection for consumers to access and correct credit-related personal information held by credit reporting bodies and credit providers
  • New requirements relating to charging, notification and timeframes for providing individual’s with access or correcting information
  • Positive obligation on credit reporting agencies and credit providers to substantiate the correctness of the personal information held
  • The provisions in Part II make it clear whether the obligations in Part IIIA replace relevant APPs or apply in addition to APPS.

Enhanced Powers

The Australian Information Commissioner will have enhanced powers to investigate an interference with an individual’s privacy and will now have the ability to:

  • accept enforceable undertakings
  • seek civil penalties in the case of serious or repeated breaches of an individual’s privacy
  • conduct an audit/ assessment of the performance for both Commonwealth government agencies and businesses.

A serious or repeated breach of the Act will allow the Commissioner to make a determination and apply to the Federal Court to enforce the determination. Civil penalties of up to $1.7million for a corporation, $340,000 for an individual (2000 penalty units) may be sought.

Next Steps

It is unlikely that a Privacy Policy drafted under the NPPs or IPPs will comply with the APPs after 12 March, given the many changes.

The Office of the Australian Information Commissioner (OAIC) has published a fact sheet which summarise the APPs, to apply from 12 March 2014. Please click here to read the fact sheet.

We recommend that you:

  • Familiarise yourself with the APPS (see Fact Sheet).
  • Update your Privacy Policy to comply with the APPs.
  • Review your direct marketing procedures for compliance with APP7. If your business is permitted to direct market, make sure it provides people with a simple means to ‘opt out’, and comply with the request.
  • If you disclose personal information to recipients off shore (including through the use of cookies), review your contract to ensure there is an obligation on the recipient to handle personal information in accordance with the APPs. If possible, seek an indemnity from the overseas recipient in the case of mishandling (or insure against the risk).
  • Review your security measures. Are they reasonable in the circumstances?
  • Are you a software application developer? Have you considered the APPs, and how to build in strong privacy protections, or alternatively, transparent disclosures, into the application you develop – particularly if the application can be used for direct marketing.
  • Consider whether your staff is adequately trained in the collection, security and disclosure of personal information.