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Brief Counsel

Dentures for the toothless tiger: a stronger Privacy Act?

11 August 2011

The Law Commission’s proposals, released last week, to update and strengthen the Privacy Act 1993 contemplate both detailed technical changes and major departures from how data privacy is regulated.

This Brief Counsel summarises the key recommendations in the final report of the Commission’s vast four-part review.

Who and what is regulated by the Privacy Act?

Personal information is defined in the Act as information about identifiable individuals.  While there is some debate as to whether this captures non-identifying personal information which may become identifiable personal information when aggregated with other non-identifying personal information, the definition is relatively clear cut when applied in context. 

The “agency” to which the Act refers covers individuals, corporate and unincorporated entities although, for the most part, personal information collected and held by individual people is not at issue.  Certain government entities, such as Parliament, the Governor-General, commissions of enquiry and the courts, are excluded from the scope of the Act.  News media are also excluded from the operation of the Act with respect to “news activities”.  The scope of this exception is one of the issues considered by the Review.

The Privacy Commissioner as enforcer

The most significant change recommended by the Law Commission is to grant the Privacy Commissioner enforcement powers.  Currently the Privacy Commissioner has a facilitative role only in a complaints-driven process.  Should the Privacy Commissioner fail to achieve a settlement between the parties, the Commissioner is limited to referring the complaint to the Director of Human Rights Proceedings, who decides whether proceedings should be issued in the Human Rights Review Tribunal.  The process is confusing and not particularly intuitive.

The Law Commission recommends the Privacy Commissioner be empowered to:

  • determine access complaints
  • issue compliance notices, and
  • require agencies to undergo audits of their information privacy procedures in certain circumstances.

Access determinations and compliance notices would be subject to challenge in the Human Rights Review Tribunal and non-compliance with a compliance notice would be an offence under the Privacy Act. 

The Privacy Commissioner would have the power to require an agency to be audited where there is good reason to do so: where, for example, the Privacy Commissioner has reasonable grounds to believe the agency’s systems are not adequately protecting privacy, where agencies handle particularly sensitive information or where agencies are engaging in a new and relatively untested practice. 

The Review recommends the Privacy Commissioner be charged with developing protocols for auditing requirements and situations.

Expanding the Privacy Commissioner’s functions to include enforcement is consistent with the powers granted to equivalent regulatory bodies in other jurisdictions and will create a more robust data protection regime.  But care must be taken in implementing this recommendation to ensure that any new enforcement powers do not distract from the Commissioner’s primary functions to promote understanding of and compliance with the Act. 

Mandatory breach notification

USB sticks left in taxis, Playstation database breaches, mobile phone hacking; the news headlines reflect the endless ways your personal information may become public.  Yet there is nothing in the Act to require agencies to inform individuals when their data have been inadvertently disclosed.

The Review proposes a threshold for mandatory notification, to the individual concerned and to the Privacy Commissioner, where the breach is serious.  Responsibility for determining whether a breach is “serious” would lie with the agency.  Criteria for making this decision would include:

  • whether or not the information disclosed is particularly sensitive
  • who may have access to the information, and
  • whether it is reasonably foreseeable that significant harm may result from the breach and the scale of the breach.

Requiring notification of data breaches in particular circumstances is required in the US (at state but not at federal level), in certain Canadian provinces and by the EU’s e-data Directive.  The UK and Australia both have voluntary notification regimes. 

Sharing personal information

Personal information may be shared between agencies where such sharing has been identified to the person at the time of disclosure or if the sharing falls under one of the exceptions set out in principle 11 of the Act (the non-disclosure principle). 

Given the principles-based drafting of the legislation, the exceptions are open to interpretation and a risk averse approach is often taken by agencies. The Review notes the acronym “BOTPA” (because of the Privacy Act) has been coined to describe the common but often misguided reply to requests for disclosure. 

A person’s right to data privacy is not a right that trumps all others.  Data privacy must be balanced against a number of competing factors.  Consideration must also be given to issues such as the maintenance of the law, danger to a person’s health or welfare and where information sharing between government agencies will facilitate better and more efficient outcomes. 

To this end the Review recommends a number of changes, including:

  • removing the need for a threat to health and safety to be “imminent” in order to allow disclosure of personal information
  • creating a new exception to principle 11 to expressly permit an agency to report to a public sector law enforcement agency any reasonably held suspicion or belief than an offence has or may be committed
  • requiring the Privacy Commissioner, the Ministry of Justice and the Ombudsman work together to develop guidance or commentary on the maintenance of the law as a ground to refuse or withhold the provision of information, and
  • implementing a new information sharing framework for the sharing of personal information between government agencies.

To ensure that inaccurate information is not perpetuated, and to guard against the threat of misuse and a loss of trust in the government, the Law Commission has prepared a ministerial briefing (reproduced as Appendix 1 of the Review) outlining a suggested information sharing framework.

The framework would require agencies to prepare an information sharing protocol which would, following approval by Order in Council and public notification, be included as a schedule to the Privacy Act. 

This approach appears to strike the right balance, although it is a question for the Government as to the types of agencies which will be encouraged or permitted to enter into such arrangements.

News media exception

Broadly defined by the Act, “news activity” means the gathering and dissemination of news and current affairs.  But blogs, twitter feeds, wall postings and other user-generated content compete with traditional news outlets to provide real time coverage, confusing the concept of a defined “news media”. 

While traditional news media may be exempted from the Act’s requirements, they are subject to oversight by the Broadcasting Standards Authority and the Press Council, which may hear and act on complaints relating to a breach of data privacy.  New media, by contrast, is primarily internet based and has no such administrative body, no overarching ethical framework and no formal channels for complaint.

The Review, recognising this deficiency and also wary of creating unnecessary anomalies and distinctions in the law, recommends the exception for news media be retained but apply only to media subject to a code of ethics dealing with privacy and to a complaints procedure administered by an appropriate body.  This body need not be an independent regulatory body, but may be industry based (such as the Press Council).  In addition, TVNZ and Radio New Zealand will no longer be obliged to comply with access and correction requests under principles 6 and 7 of the Act.

... and the rest

With over 120 recommendations, the Commission has plenty more to say than the provisions highlighted above.  Other key recommendations include:

  • express provisions clarifying that agencies sending personal information offshore remain fully responsible for that information and must take reasonable steps to ensure that the information will be subject to acceptable privacy standards where the information will not be held or processed on the agency’s behalf
  • removing the exemption from the Act for information collected or held in connection with a person’s personal or domestic affairs, where the use or disclosure would be “highly offensive” (the “no posting compromising photos of your ex” prohibition), and
  • asking appropriate industry bodies to consider implementing a legally enforceable Do Not Call register, through the mechanism of the Fair Trading Act or other market regulation (supplementing the commercial electronic message unsubscribe regimes provided for under the Unsolicited Electronic Messages Act).

The Review also considers a number of other issues such as: whether the Act should make specific provision for children and young people and particular cultures or communities; whether technology changes should be considered expressly; whether the Act should be less “technology neutral” in its approach, and whether identity crime is adequately addressed. 

Broadly speaking, the Review recommends better and further education as a response to a number of these issues rather than further legislation. 

What next?

The Review is now in the Government’s hands and no timeframe has been set for its response.  Should the Government wish to proceed with any of the Law Commission’s recommendations, legislation amending or replacing the Privacy Act will be introduced.

Chapman Tripp has also produced a commentary on the implications of the Review for cloud computing.

For further information, please contact the lawyers featured.

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