Federal Parliament passes the Privacy Amendment (Enhancing Privacy Protection) Act 2012 (Cth) (Amending Act)

Yesterday, the Federal Parliament passed legislation, the Privacy Amendment (Enhancing Privacy Protection) Act 2012 (Cth) (Amending Act) which significantly reforms the Privacy Act 1988 (Cth) (Privacy Act).

These reforms will have a considerable impact on most public and private sector organisations.  Although the changes will not commence until March 2014, it is important for businesses to use the 15 month lead-in time to understand the new privacy laws and prepare for their impact on their current privacy policies and processes.

What are the major privacy reforms?

The most significant reforms introduced by the Amending Act are summarised below.

Creation of the Australian Privacy Principles (APPs)

The APPs are a set of 13 privacy principles that will apply to both Commonwealth agencies and private sector organisations (APP entities), replacing the 11 Information Privacy Principles currently applying to the public sector and 10 National Privacy Principles currently applying to the private sector.

The APPs are presented within five groups of principles:

  1. Principles that require APP entities to consider how they manage and handle personal information.
  2. Principles regulating the collection of personal information, including unsolicited personal information.
  3. Principles regulating the use and disclosure of personal information, including cross-border disclosures and use of government related identifiers.
  4. Principles that deal with the integrity, quality and security of personal information.
  5. Principles setting out the rights of individuals to access and correct personal information.

For business, the most significant changes introduced by the new APPs include:

  • greater obligations to ensure comprehensive privacy policies and processes are in place;
  • new obligations to assess whether the collection of unsolicited personal information is reasonably necessary and if not, destroy or de-identify it;
  • more restrictive rules about how organisations can use personal information for direct marketing purposes;
    • requiring an APP entity, which discloses personal information to an overseas entity, to take reasonable steps to ensure the overseas recipient does not breach the APPs; and
    • rendering the APP entity, that discloses the personal information, liable for any act or omission by the overseas entity that is not in accordance with the APPs.more onerous responsibilities when disclosing personal information to overseas entities (including a cloud service provider) by:

Introduction of a comprehensive credit reporting system

Currently, the credit reporting system established under the Privacy Act is a ‘negative’ reporting system, set up to assist credit providers assess an individual’s credit worthiness through access to information that reflects predominantly negative credit behaviour, while also having mechanisms in place to protect the individual’s personal information.

Under the new comprehensive credit reporting system, in addition to information about an individual’s current credit providers, credit defaults or serious credit infringements, a limited number of additional kinds of personal information about individuals will be permitted, being:

  • the date a credit account was opened by an individual;
  • the type of credit account opened;
  • the date the credit account was closed;
  • the current limit of each open credit account; and
  • repayment performance history (available to certain credit providers).

The purpose behind a more comprehensive credit reporting system is to allow credit providers to make a more robust assessment of whether an individual is a credit risk.  It is expected this will in turn lead to decreased levels of over-indebtedness and lower credit default rates, while at the same time improving competition in the credit market.

However, while the new system will give credit providers greater access to an individual’s personal information, it also enhances obligations on credit providers with regard to notification, data quality, access and correction, and complaints.

Introduction of provisions under which the Australian Information Commissioner can develop binding codes of conduct, such as APP Codes and a Credit Reporting Code

Pursuant to the Amending Act, some APP entities will be bound by APP Codes, whether at their own initiative or following a request or requirement of the Australian Information Commissioner (AIC).  An APP Code will not replace the APPs but operate in addition to the requirements of the APPs and must be registered with the AIC.

The Amending Act also contains provisions for the development of a code of practice about credit reporting.

Strengthening the powers of the Australian Information Commissioner

The Amending Act strengthens the AIC’s ability to enforce the Privacy Act by giving it the power to:

  • accept enforceable undertakings from APP entities to take, or refrain from taking, specified actions to ensure compliance with their privacy obligations, and prosecute such entities who breach their undertakings;
  • monitor APP entities with regard to their performance in meeting their privacy obligations by initiating and undertaking assessments or investigations; and
  • seek civil penalties against APP entities, in circumstances of serious or repeated interferences with an individual’s privacy, of up to $1.1million for corporations and $220,000 for non-corporate entities.

What should businesses do to prepare for the privacy reforms?

To ensure compliance with the new privacy obligations, businesses should take the following steps:

  • consider their current privacy policies and processes to determine gaps with compliance;
  • review and update current privacy policies to ensure they comply with the APPs;
  • educate and train staff on the new privacy obligations; and
  • put in place all business processes and practices needed to ensure compliance.

The Hall & Wilcox Privacy team is well placed to assist businesses with meeting their compliance obligations.

The team will be offering briefing sessions early next year to take you through in detail:

  • the APPs and their practical impact on your business;
  • the new credit reporting provisions, including the expanded rights and responsibilities of credit providers; and
  • the consequences of non-compliance with your privacy obligations.

For general privacy queries, please contact Alison Baker, Partner and Rhiannon Nixon, Lawyer.

For technology-specific privacy queries, please contact Ben Hamilton, Partner and James Deady, Special Counsel.
This article was prepared by Rhiannon Nixon, Lawyer and Alison Baker, Partner.​


Ben Hamilton

Partner & Technology and Digital Economy Co-Lead

James Deady

Partner & Technology and Digital Economy Co-Lead

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