April 25, 2024

Data protection and data privacy laws in South Africa

Data protection and data privacy laws in South Africa

South Africa is one of Africa’s leading economies and the country has been has been proactive in embracing data privacy.  The journey toward data privacy in South Africa traces back to 2013 when the Protection of Personal Information Act, 2013 (POPIA, Act 4 of 2013) was signed into law. While most of POPIA took effect on July 1, 2021, Section 58 followed suit on February 1, 2022, marking a significant milestone in data privacy in South Africa.

Similar to other data protection laws across Africa, POPIA has broad applicability, extending to all entities involved in processing personal information within the country. In this discussion, we’ll delve into the details of POPIA and illustrate how InCountry can assist your company in meeting POPIA’s requirements and data sovereignty compliance.

Who needs to comply with South African data protection laws?

The following entities are required to comply with the requirements of the POPIA:

  • Private organizations

All private or non-governmental organizations (within or outside South Africa) that collect, process, and store the personal information of South African residents are required by law to fully comply with applicable provisions of the POPIA.

  • Governmental organizations

All governmental organizations involved in collecting, processing, and storing personal information of South African residents are required by law to comply with applicable provisions of POPIA.

Simply put, the POPIA applies to individuals or entities involved in collecting, processing, or storing the private information of residents of South Africa, regardless of whether such individual or entity is within or outside the country.

What South African data privacy laws do you need to know?

South Africa’s major data protection law is the Protection of Personal Information Act 2021 (POPIA). In this section, we will review some key provisions of the POPIA as follows:

  • Conditions for processing personal data

The POPIA lists conditions that must be fulfilled before the organization can process the personal data of South African residents. These conditions are as follows:

  1. Obtaining the consent of the data subject.
  2. The reason for processing must be legitimate.
  3. Must be a requisite part of completing a contract.
  4. Compliance with a legal obligation.
  5. It is done to protect the vital interest of a data subject, etc.

All of these conditions are critical requirements to embark on processing the personal information of South African residents.

  • Rights of data subjects

As the name suggests, the POPIA lists the rights of data subjects that must be respected by all entities seeking to collect, process, and store the private data of South African residents. These rights are as follows:

  1. The right to be informed about the reasoning for collecting the personal information,
  2. The right of access to that personal information,
  3. The right to edit or correct any portion of the information,
  4. The right to erase or delete the information,
  5. The right to object to the processing of their data,
  6. And the right to data portability.
  • Data protection officer

This policy requires some organizations to appoint a Data Protection Officer. The role of the Data Protection Officer is to ensure that the organization stays compliant with all the provisions of POPIA. This mostly applies to large organizations with international operations or dealing with large amounts of client data.

  • Security safeguards

POPIA compels organizations that handle personal information (responsible parties) to implement robust security measures. These safeguards protect this data from loss, damage, unauthorized access, and other threats.

  • Data breach notification

Responsible parties (organizations handling personal information) must act swiftly if a data breach occurs. Suppose the breach could cause serious harm to affected individuals (data subjects). In that case, they are legally required to notify the Information Regulator and the data subjects without unnecessary delay.

  • Cross-border data transfers

Although it does not ban cross-border data transfer, the POPIA provides guidelines that should be followed for such data transfers. This is even more important when the data is transferred to a country with different data protection laws. The cross-border data transfer requirements of the POPIA will be discussed in a later paragraph.

  • Enforcement and penalties

POPIA gives the South African Information Regulator some teeth. This independent body enforces compliance with the Act and has the power to investigate potential violations. They can also issue warnings for non-compliance and hit organizations with hefty fines. These fines can be as high as 10 million Rand or 10% of a company’s annual turnover, whichever is steeper.

Ultimately, POPIA strikes a balance. It safeguards personal information and upholds individual privacy rights while providing a clear framework for responsible data use by South African organizations.

Data residency requirements in South Africa

While acknowledging the importance of data residency, it’s crucial to understand that the Protection of Personal Information Act (POPIA) in South Africa allows for the transfer of data outside the country under certain conditions. Unlike some jurisdictions, POPIA doesn’t impose strict requirements on where client data should be stored. However, it emphasizes the necessity of robust protection measures for personal information, irrespective of its location. POPIA governs these transfers to ensure that adequate safeguards are in place. This is similar to what is applicable in some countries under Middle Eastern data residency. This legislation stands as a cornerstone of data protection law in South Africa.

Under POPIA, organizations can transfer personal information internationally, provided they adhere to specific criteria. These criteria include ensuring that the recipient country has data protection laws equivalent to POPIA or establishing agreements that guarantee the security of the information.

However, financial institutions, including banks, investment firms, and insurance companies, are subject to stringent data residency requirements imposed by South African regulators. These requirements aim to ensure that customer financial data remains within the country’s borders, thereby enhancing data security and regulatory oversight.

Similarly, telecom firms operating in South Africa must adhere to data residency regulations set forth by local authorities. Given the nature of telecommunications services and the volume of customer data involved, telecom companies are required to store certain data within the country. This requirement helps safeguard personal information and ensures compliance with South African data protection laws, including POPIA. 

In simpler terms, entities bound by POPIA must ensure that any cross-border data transfers comply with the Act’s provisions. For further insights, we offer a valuable resource on data residency requirements by country.

In the following section, we will delve into the specifics of cross-border data transfer requirements under POPIA.

South African cross-border data transfer requirements

Fortunately, cross-border data transfer is possible under POPIA; however, it must be done under certain conditions to ensure that the data in transit remains safe. Here are some key considerations for cross-border data transfer under POPIA:

  • Legal basis for data transfer

Your organization must have a legitimate reason for the cross-border data transfer for such transfer to be valid. The following could pass for a valid reason for cross-border data transfer:

  1. You have the client’s consent,
  2. It’s necessary for a contract,
  3. You’re following the law,
  4. Or it’s in the client’s best interest.

Whichever reason you choose to present, ensure that it is legitimate.

  • Ensure adequate security

If you’re sending information overseas, POPIA requires the receiving country to have strong data privacy laws similar to South Africa’s. If those laws are not up to the standard of the POPIA, you’ll need to take extra steps to keep the information secure.

  • Binding Corporate Rules (BCRs)

The POPIA provides this option and is often an escape route for big corporations seeking to transfer data to other countries with poor or no data protection rules. It allows such organizations to create their own internal rules for transferring data within the company. This is also known as Binding Corporate Rules. Notably, these rules need approval from the Information Regulator first before they can come into effect. Finally, they must guarantee strong protection for everyone’s data.

  • Standard Contractual Clauses (SCCs)

This is similar to BCRs, as they can be used to enable data transfers to a country with weaker privacy laws than the POPIA. The South African Information Regulator has approved special contracts, called standard contractual clauses, that organizations can use. These contracts spell out clear obligations to keep the data secure and private during the transfer process.

  • Consent & notification

In other cases, organizations may rely on the data subject’s explicit consent for cross-border data transfers. However, it’s important to inform data subjects about the potential risks associated with transferring their data to another country.

  • Full protection of data subjects’ rights

The POPIA places a premium on protecting the rights of data subjects, even when approving cross-border data transfer. Organizations are mandated to ensure that all the rights of data subjects are fully protected in cross-border data transfer. Such rights include the right to access their data, to correct it, and to delete it any time they feel the need to.

  • Notifying the information regulator

Organizations must inform the South African Information Regulator before sending personal information to countries with weaker privacy laws. After notifying the regulator, they may step in and ask for extra security measures, or limit the transfer altogether to protect everyone’s information.

Adhering to these requirements is a smart way for any organization to ensure compliance and avoid the penalties that could come from non-compliance. As you would expect, you do not need to fulfill all the conditions listed above before making a cross-border data transfer. You only need to comply with a few, and you are all clear. Seeking clarity with the regulator would be helpful.

How to comply with data protection laws in South Africa — InCountry’s approach

At InCountry, we specialize in simplifying compliance with data privacy regulations in South Africa and beyond. Our Data-Residency-as-a-Service offers a streamlined solution for ensuring your organization meets regulatory requirements in South Africa and other countries of operation. You shouldn’t have to worry about data transfer, residency, or localization – our service enables you to securely store your data in one or multiple locations while maintaining global accessibility.

Our approach incorporates cutting-edge security tools and protocols to guarantee its safety. From robust data firewalls to secure encryption tools, we employ a range of measures to protect your data whether it’s at rest or in transit. With us, your data is in trusted and reliable hands.

Get in touch with us today to discover the significant value we can bring to your organization.