The pending Protection of Personal Information legislation will require companies to do more than just secure their data – it will force them to extensively review their business policies and processes. Data privacy in terms of the South African legislation is about information relating to an individual’s personal information being safeguarded. Whether the company concerned operates within the public or private sectors, is big or small, is irrelevant. If you have information about people, you can no longer deal with it as you used to.
From the point where personal information is collected, organisations will have to get a person’s permission to use his or her information. Historically, South African organisations collected data and used it liberally. “The PPI legislation will require that any terms or contract concluded must have a consent element built in,” says Dean Chivers, Director of Deloitte Legal. Information can only be used in terms of the permissions obtained and when information is no longer required for the purposes for which it was collected, it will have to be destroyed.
Scrambling to meet deadlines
This and other requirements will mean that organisations which have so far not planned for the law will have to scramble to meet the deadlines imposed by the legislation, especially given that a sound PPI solution can take approximately three years to implement.
“Information will have to be secured regardless of whether it’s in ‘soft data’ form (electronic information) or ‘hard data’ form (documents) and the security requirements include control of access to information,” adds Chivers. In the case of information being sent across borders and to outsourced service providers, such recipients will need to meet the same security requirements.
Significant changes to systems to make them compliant with the demands of the PPI legislation will have to be accompanied by extensive training of staff across disciplines as new rules will apply to what were previously routine corporate functions.
Access to information
Access to information within a company will have to be controlled on an ‘as needed basis’. This will dictate which of a company’s officers have access to what material. For example, HR data should only be accessed by a small number of employees, this being the HR team. “Policies controlling the use and storage of files within personal offices, access controls and the removal of data from company premises will also have to be written. Sanctions for contravention of legal provisions will therefore have to be included in a company’s HR disciplinary code,” says Chivers.
Processes will have to be built around the collection, processing, monitoring, distribution and ultimately destruction of all personal information held by an entity. The primary responsibility of safeguarding information will rest with the collector of the data. In this regard, the proposed legislation makes it clear that the safe-guarding cannot be outsourced. In markets like the EU where strong PPI laws already exist, major companies are using the services of independent auditing companies to certify compliance with destruction and other privacy requirements. Industries that are highly reliant on direct marketing or who process significant amounts of personal information will be the first to be impacted by PPI. Companies using marketing tools such as competitions to create data bases will have to operate differently.
A global edge
Some South African companies, especially those with international links to countries with well-developed PPI legislation, are already working towards ensuring their future compliance. Some have made significant investments in establishing a ‘privacy office’ that will take control of meeting PPI requirements.
“The South African PPI legislation is sound legislation. It is modern and aligned with internationally accepted practice. It also meets the needs of a technological age in which information flows easily across the globe.
“The onus will be on South African companies to ensure that security across their operations is effective and can be introduced in the time stipulated,” concludes Chivers. If they can achieve this, they will be more competitive globally.
Top Sectors For SMEs In 2019
“As such, SMEs in the construction, communications and electrical fields are all likely to benefit from supply and sub-contracting agreements over the coming years.”
While the South African economy has been underperforming for a number of years, the first positive signs of turnaround started to become visible by the second quarter of 2018, and by the end of the third quarter, data supplied by Statistics South Africa showed that the economy had indeed grown by 2.2 percent, compared to the previous quarter. This uptick is expected to have a positive effect on business confidence in 2019.
This is according to Jeremy Lang, regional general manager at Business Partners Limited (BUSINESS/PARTNERS), who says that certain business sectors have already seen an increase in opportunities for small businesses and start-ups.
“While these sectors will not be without challenges, the following four industries are likely to offer the best opportunities for small and medium enterprise (SME) owners to grow their enterprises in the coming year.”
The World Travel and Tourism report 2018, revealed that the direct contribution of the travel and tourism sector to South Africa’s GDP has been projected to rise from R136bn in 2016 to R197.9bn by 2028 – set to make up a total of 3.3 percent of the country’s total GDP, says Lang.
“Although this sector experienced some setbacks in 2018, such as the drought in the Western Cape and stricter visa regulations for children entering the country, both the water restrictions and visa regulations have been relaxed and the sector is once again poised for growth,” he says.
Statistics South Africa has credited this industry with being the biggest driver of growth in the country’s GDP, having expanded by 7.5 percent in September 2018, says Lang. “To bolster this, Government has made a concerted effort to stimulate small business growth in this area with initiatives such as the Black Industrialist Programme and the SA Automotive Masterplan.”
He adds that businesses in the manufacturing sphere could therefore likely see significant opportunities in the form of outsourcing contracts and new partnerships with large corporates.
“The debate around land expropriation has occupied most of the discussions surrounding the agricultural sector in 2018, with some questioning growth prospects of this sector. However, this industry has a lot of growth ahead of it, as demonstrated by its 6.5 percent growth over the last three months of 2018,” explains Lang.
“Further to this, the industry is also already taking significant advantage of seven climatic regions in South Africa, with the export of a wide variety of high quality fruit and vegetables increasing substantially,” he points out. The recent outbreak of foot and mouth disease that has resulted in the suspension of the country’s FMD-free status will however significantly impact meat exporters.
In terms of opportunities for SMEs, he says that these may most likely be found in the rural and underdeveloped regions, where the need for resources like efficient transport, state-of-the-art cold storage, better irrigation and private power generation will be key to making agriculture projects more productive and competitive in the export market.
Data and information technology
Connectivity and information technology infrastructure are both crucial to business and employment growth in South Africa, says Lang.
“With many municipalities and the Western Cape government committing to providing all of its residents with free data as part of a plan to expand public Wi-Fi network access, it is clear that this is also becoming a high priority on a state level.”
It has also been reported that South Africa is awaiting the arrival of three international data centres, and large players in the communications sphere, including Vodacom, Telkom and Vumatel, are making huge strides in drastically growing the country’s fibre optic backbone, he adds. “As such, SMEs in the construction, communications and electrical fields are all likely to benefit from supply and sub-contracting agreements over the coming years.”
In conclusion, Lang says that as South Africa’s economic growth has started to turn around, business owners should keep their ears to the ground as 2019 is highly likely to be a year of opportunity.
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Herman Mashaba to talk on City of Jo’burg job creation initiative at 2019 Business Day TV SME Summit.
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SME Insurance Checklist For New Year
Malesela Maupa, Head of Product and Insurer Relationships at FNB Insurance Brokers, advises SMEs to consider the following factors when reviewing their policies.
Business owners who are planning for the year ahead should not overlook the importance of reviewing their insurance policies to ensure they are adequately covered against insurable risks.
Malesela Maupa, Head of Product and Insurer Relationships at FNB Insurance Brokers says, every year businesses face unique challenges ranging from credit and market risks, technological disruptions, compliance, operational and regulatory risks, amongst others. As a matter of precaution, insurance policies should at least be reviewed or updated once a year.
He advises SMEs to consider the following factors when reviewing their policies:
- Employee movements – if there are any employees who have left or joined the company, ensure that your policy is updated accordingly.
This type of cover normally depends on the role and contribution of the employee to the business. For instance, directors may be covered for Key Person Insurance and Directors & Officers Liability insurance.
- Protest Actions – this year is the national election year and leading up to elections we can expect to see an increase in the frequency and severity of protest actions, riots and strikes. Thus, it is essential to ensure that adequate special risks cover is in place from the South African Special Risks Insurance Association (SASRIA).
SASRIA provides cover to both individuals and businesses against special risks like civil commotion, public disorder, strikes, riots and terrorism at affordable premiums.
- Cyber risks – it is essential to communicate with your insurer or broker and find out if there are any new risks that your business should be protected against. Cyber incidents continue to be a major risk for businesses especially in the SME sector. Over the last couple of years there has been a major increase in the number of reported cyber incidences.
More businesses are now facing increased cyber threats due to their increased dependency on technology, relating to their internal and customer data being compromised by fraudsters. It is therefore essential to have some form of cyber risk insurance cover and/or enhancement of data security protocols.
- Regulatory changes – every year there are a number of regulatory changes that impact businesses directly or indirectly, which may result in fines and penalties for non-compliance.
- Natural catastrophes – the increase in the frequency and severity of extreme weather conditions, coupled with intensifying natural catastrophes will continue to have a significant impact on businesses.
Businesses should ensure they are adequately protected against these risks to avoid incurring sever financial losses.
- Business changes – should a business consider moving to a new location, purchasing new premises or venture into new business activities, these types of changes could have a major impact on its risks profile. As a result, the policy needs to be updated accordingly.
- New and Enhanced products – An innovative culture has taken over the insurance industry and ever so often we see the introduction of new products or the enhancement of existing products. Get in touch with you broker to advise you on any new products that might add value to your existing insurance portfolio.
“Reviewing your policy regularly gives you peace of mind knowing that you can focus on running your business effectively, without worrying about unforeseen risks,” concludes Maupa.
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