By Tarryn Ryan and Veronica Scott

In March, Australia will be overhauling its privacy laws. One of the key features of the new regime means Australia will become one of the first jurisdictions to effectively legislate for the concept of Privacy by Design.

Australia's system of privacy regulation is a principles-based regime. The new Australian Privacy Principles (APPs) are structured to reflect the information lifecycle—from privacy planning to collection of personal information, use and disclosure, quality and security and access and correction. 

For the first time there will be a stand-alone provision that requires organisations to manage personal information in an open and transparent way. Organisations will also be required to take reasonable steps to implement practices, procedures and systems relating to their functions or activities that will ensure that they comply with the APPs and are able to deal with any privacy inquiries or complaints. A failure to meet either of these obligations will mean that the organisation has breached the Privacy Act and could be liable for penalties.

The draft APP Guidelines issued by Australia's privacy regulator, which will underpin the APPs, explain that organisations will be better placed to meet their privacy obligations if they embed privacy protections in the design of their information-handling practices. While there is no doubt about the truth of this statement, legislating for it is a big leap from the current position where, in reality, many organisations' approach to privacy is still largely reactive.

Australian privacy professionals are waiting to see is how the Privacy by Design requirements will be enforced. The privacy regulator will have a significantly broader set of powers as part of the overhaul. Come March, he will be able to walk into any organisation that is subject to the APPs and audit their compliance. A failure to have documented policies and procedures in place could theoretically mean a breach of these new provisions and an exercise of the regulator's new enforcement powers. He will be able to require enforceable undertakings and to pursue civil penalties of up to AUD$1.7 million (approximately US$1.5 million) for serious or repeated privacy breaches.

Of course, these changes only strengthen the business case for privacy in Australia. A recent survey conducted by the Australian privacy regulator found that 60 percent of Australians had chosen not to deal with a company because of concerns about how it would use their personal information. Transparency is also a primary concern, with 95 percent of people believing that organisations should tell them how their information is stored and protected and 96 percent believing that they should be informed if a company has a data breach that affects their personal information.

Clearly, even the lawmakers in Australia now realise that privacy is not simply a matter of regulatory compliance that can be bolted on to an organisation's usual functions or activities. By introducing the new Privacy by Design provisions, they are pushing Australian organisations to adopt a holistic and proactive approach to privacy planning. If they don't, the regulator will have a much bigger stick to strike them with.

Tarryn Ryan is a lawyer in the Media and Communications Group at law firm, Minter Ellison. Tarryn advises public- and private-sector organisations on defamation, privacy, pre-publication, data protection, intellectual property, surveillance and interception laws, breach of confidence, media regulation and licensing, court reporting and contempt, freedom of information, risk management and online issues including takedowns. 

Veronica Scott is Special Counsel in the Media and Communications Group at Minter Ellison with over 15 years’ experience in Australia, and before that in London, UK, advising on privacy, media, surveillance and freedom of information laws and content-related legal issues to range of government, corporate, media and not-for-profit clients locally and overseas. She is currently helping clients prepare for compliance with the changes to the Australian Commonwealth Privacy Act.