Every SME out there should be concerned about the Protection of Personal Information (PoPI) Act and the impact it has on your bottom-line.
All businesses store and process personal information at some point, be it that of employees or customers. PoPI is all about effectively governing the usage and storage of that data.
Most businesses & their people today, require the ability to access that data online whilst working remotely. This creates a huge risk of non-compliance and exploitation.
The reality is that POPI does impact all businesses that have control over, or process any kind of personal information. According to Botha, Eloff, Swart (2015), “Personal information is defined by PoPI as any information relating to an identifiable, living, natural or juristic person”.
Why is PoPI Important to SME’s?
The answer is simple: Brand reputation, business impact, financial and legal consequences.
According to thought leader, Monisha Prem, “It is in your business’ best interest to comply with PoPI as the consequences of non-compliance are severe”. Monisha reports on some startling financial and criminal penalties:
- Civil action for damages
- Fines of up to R10 million
- 12 months to 10 years imprisonment.
This begs the question: What can a SME owner do to circumvent this risk, and better secure the information that resides on its network?
Below is some advice on how you can secure this information & your network by implementing some basic network security elements.
Step 1: Ask & Answer
If PoPI is all about the protection of personal information then answer some questions about that data:
- Where is the data stored?
- Who has access to the data and is access effectively governed?
- What is the data used for?
- Is the usage or processing of the data tracked and controlled?
Once you understand how and when all this data is being used & stored, you can then look at taking the first step in safeguarding your business against the repercussions of non-compliance or security breach.
Step 2: Start at the beginning, its always a good place to start
You need to secure & govern access to all your data. If you have a website, a CRM server, or are keeping any records accessible via the internet, your data integrity and SME is at risk.
By implementing proper data security and access control, you can protect your accountability as a business, and more effectively govern the use of that data.
By showcasing your willingness to comply, you can also increase trust between your business and your customers.
Think about it: I would rather share more information with a company that I can trust to take the proper precautions with my personal data. I would be more inclined to shop online through their e-commerce store, or place my electronic signature on an order or contract.
Some things to consider about first-line protection, are:
- Draft a data security policy that governs storage, processing, and security of personal data. Ensure that the actions mentioned in the policy are measurable
- Store the data on a secured server/s behind some form of firewall
- Implement stricter access control mechanisms for your network
Step 3: Tighten-up your access points
By controlling access to the data, you decrease the risk of exploitation. The best and most effective way to do that, is:
- Train your staff on proper information management. Most security breaches happen due to human vulnerabilities or ignorance
- Implement secure access control mechanisms such as login’s, passwords etc.
- Secure your network – Control access to your network and data by using a firewall.
Related: PoPI: This Changes Everything
Step 4: Invest in Tech. Educate your Assets
Use firewalls to secure your network/s good and proper. Train-up your staff on information security and data management practice, and lock-down your network – one-time-shoe-shine.
Can Your Words Be Used Against You?
Yes, they most certainly can. Here’s what the RICA Act has to say about recordings.
“This call may be recorded for quality control and records purposes…” Anyone who has been on hold with insurance companies would be familiar with these words — but what are the implications of a recorded conversation and when is it legal?
In essence, the Regulation of Interception of Communications and Provision of Communication-Related Information Act of 2002 (mercifully shortened to ‘RICA’) permits any person, who is a party to a conversation to record that conversation, provided that it is direct communication — which is defined as oral communication between two or more persons that occurs in the immediate presence of those persons.
Section 4 of the RICA Act governs this aspect of our monitoring law. What is unclear, however, is the degree to which this extends to legal persons, such as a company that monitors a call centre agent’s performance, for example.
Related: Understanding Shareholder Agreements
Evidence in legal cases
While limited to direct communications and not covered by third party interception, such as an eavesdropper, the lesson here remains pretty stark — you could legally be recorded during any conversation you have.
The implications of this are significant — just ask former Springbok player Luke Watson, who had a conversation recorded during a function in 2008 that was subsequently leaked to the media.
Furthermore, with the widespread use of smartphones, together with applications freely available on the relevant app stores, designed to record cellphone calls, the likelihood of you being recorded — whether you know it or not, is ever increasing.
Beyond the moral or ethical ambiguity of this, the legal ramifications of what is recorded are more certain — the recording may be used against you as evidence in any criminal proceedings, or equally as possible, in civil proceedings where, for example, agreement to a contract or term thereof is in question, or in the insurance company’s case, whether or not to repudiate a claim based on the information you provide to them.
Related: Protect Your SME From PoPI
Know the business exception
Section 6 of the RICA Act contains a course of business exception that allows the interception of indirect communication:
- a) By means of which a transaction is entered into in the ordinary course of business
- b) Which relates to that business
- c) Which otherwise takes place in the course of that business.
While there has not, to my knowledge, been a reported case that deals with this aspect of the RICA Act, the implications regarding the use of this information to evidence the valid conclusion of a contract or as to the intentions of the parties to a contract are significant, particularly given that the scope is relatively broad, although limited.
The matter has, however, come before the Constitutional Court in the 1999 criminal case of S v Kidson, where the court held, per Justice Cameron, that unless a “reasonable expectation of privacy exists” it would be difficult to prevent the recording or interception falling within the ambit of the RICA Act.
Where to from here?
From both a commercial and criminal perspective, this should serve to remind us all of our wise grandmother’s words — if you have nothing nice to say, rather say nothing at all (especially because you never know whether you are being recorded).
Why You Shouldn’t Be Sweating The Fine Print
Signing a contract is a big deal, and you never want to sign anything you don’t fully understand.
While it is almost always a grudge purchase, ensuring that you have had a legal eye cast over a contract you intend to conclude means that you are protected, that you understand the nature of the obligations you are taking on and perhaps, an even better deal for you.
Given that legal agreements are an important aspect of commerce, we have distilled key points for you to consider, before engaging with external counsel. This will make the process more efficient and, hopefully, less expensive.
Reviewing a contract is a tricky business, not entirely different from asking a builder to finish building a half built house. However, there are some useful techniques to ensure you get the most out of the exchange with your lawyer.
Always create a timeline
You have lived and breathed your business and this transaction, while your attorney is possibly hearing about the matter for the first time.
Setting the scene correctly puts your attorney in the picture and explains what you want out of the exchange. Print this out for your attorney.
It will help an attorney identify key areas of risk which you might not have anticipated. Be sure to also tell your external counsel how quickly you need the review to be done. Setting expectations means there is less chance of disappointment later.
Provide supporting documents
It wastes your time and money when your attorney has to come back to ask you for supporting documentation.
Try to anticipate which documents will be relevant to your transaction and bring copies of them to the meeting for your attorney to consider. If you have previous versions of the agreement, for example, bring those too.
Remember, the more background work you do, the simpler and more efficient the process will be.
Understand your needs
Are you looking for a high level overview of your document to highlight some key contractual risks or are you looking for a thoroughly sanitised document reviewed from every possible angle?
I recently had to look over Jim’s Sale of Business Agreement for the potential acquisition of his Technology Company. He came to me with limited areas of risk which he had identified and wanted me to look at these clauses.
I was able to advise him to push back on certain clauses he had already negotiated and the resulting document placed him in a stronger legal and financial position. It was easy to justify the costs associated with the review.
This is not always necessary though — where there is limited legal exposure, or you have no bargaining power, the role of the attorney can be restricted, but still worth the investment since you have assurance that your legal exposure is as restricted as possible.
Be guided by the relative value of the document and the ensuing legal responsibilities — is this a standard supply agreement with a strange payment clause or a multi-national acquisition of intellectual property? The type of expert you engage with will vary, as will the cost of the review.
Areas of concern
Directly related to knowing your business and understanding your needs, is your responsibility to communicate specific areas of concern to your attorney.
A recent client’s business processed a lot of personal information, in accordance with the Protection of Personal Information Act, but, the contractor they were about to sign a service supply agreement sought to have access to some of this personal information.
Seen alone, there was little risk, but within the context of this business, we were able to avoid this. A trusted and qualified expert will help you navigate the complex commercial world.
Are You Protecting Your Customer’s Data?
The collection, usage and sharing of personal information is regulated primarily by the Protection of Personal Information Act 4 of 2013. The Act was recently promulgated and is yet to be implemented. The Act seeks to give expression to the right to privacy provided for in the Constitution.
At the time of writing, the primary enforcement arm contemplated by the Act, the Information Regulator, has yet to be appointed. Once appointed, all businesses will be required to register with the Information Regulator to make public what personal information is being collected, and what it is being used for.
The Information Regulator will be empowered to enforce compliance with the Act, and able to investigate whether an entity is lawfully processing the public’s personal information.
Related: Protect Your SME From PoPI
How are privacy policies affected?
The Act defines the term ‘processing’ broadly, and includes “the collection, receipt, recording, organisation, collation, storage, updating or modification, retrieval, alteration, consultation or use of a person’s personal information”. To process a person’s personal information, the prior consent of the person (data subject) is needed.
The Act restricts a company’s ability to store personal information outside of the country by requiring that it be transferred only to countries in which comparable security laws and data protection measures exist.
A situation such as this arises more easily than expected. Consider the example of the humble contact form: Your website, with its local server situated in Midrand, utilises a plugin to create custom contact forms.
Although your server may be in Midrand, every person who completes the contact form on your website has their personal information transferred and stored on servers in the home jurisdiction of your plugin creator, which may be in the US. But the plugin creator may also make use of third-party service providers based in Vietnam. An in-depth investigation of all third-party plugins and processes of a website is therefore required to ensure that you comply with the Act.
Access by a data subject to personal information
A data subject is entitled to request a full disclosure of any personal information held by the company.
As the procedures governing access to personal information overlap, companies should also ensure compliance with the processes outlined by the Promotion of Access to Information Act 2 of 2000 (‘PAIA’).
In terms of PAIA, all companies are required to compile a manual that needs to be registered with the South African Human Rights Commission. This manual sets out the company’s contact information, what records are available for inspection, the identity of the leadership of the company, as well as the manner in which a person may request access to information held by the company.
However, the Minister of Justice and Correctional Services has exempted private bodies from complying with this requirement for a period of five years, starting from
1 January 2016.
- LaunchLab Fellows – Great Opportunities For Aspirational Young African Students
- 9 Reliable Ways To Cultivate Creative Thinking
- Bitcoin Family Of Coins – Who Will Win?
- The Future Of Franchising Looks Smaller (And Fancier)
- As Consumers’ Tastes Change Can Your Franchise Keep Up?
- How Strong Is Your Franchise’s Quality Control?
- 3 Internet-Based Businesses You Can Start In 2018
Start-up Industry Specific3 months ago
How Do I Start A Transport Or Logistics Business?
Business Plan Advice3 months ago
Writing a Business Plan May Not Be Your Idea Of Fun, But It Forces You To Build These 4 Crucial Habits
Company Posts1 month ago
Enhance Your Entrepreneurial Flair With An Online Postgraduate Diploma From The University Of Pretoria
Upstarts3 months ago
10 Young Entrepreneurs Under 30 Share Their Start-Up Secrets