South Africa recently became the continent’s largest economy. As a regional leader not only in economic affairs but also in data protection, South Africa has made significant strides with its legislative framework. Notably, the Protection of Personal Information Act (POPIA) of 2013 stands as one of Africa’s pioneering data privacy laws.
In June 2024, the South African government introduced the National Policy on Data and Cloud, marking a critical step in reinforcing the nation’s commitment to data sovereignty. This new policy aims to fortify data privacy regulations, ensuring that data generated within the country remains under local control. Additionally, it seeks to enhance public service delivery through the adoption of cloud-based technologies and to encourage collaboration between government bodies, private enterprises, and academic institutions.
In this article, we will explore data sovereignty laws in South Africa and examine how they ensure data protection.
What lies in South Africa’s data sovereignty landscape?
Several key factors, including data privacy laws, data residency requirements, and technological advancements, influence data sovereignty in South Africa. Here’s an overview:
Protection of Personal Information Act (POPIA)
POPIA is South Africa’s main data protection law, designed to safeguard personal information by regulating its collection, storage, processing, and sharing. It ensures that South African residents have rights over their data and mandates that data processing be lawful, transparent, and secure. POPIA strengthens data sovereignty by requiring that personal data transferred abroad receive the same level of protection, keeping it under local jurisdiction.
Cybercrimes Act 2020
This law targets cybercrimes like hacking, identity theft, and cyberextortion. It establishes legal procedures for investigating and prosecuting these offenses and enhances data sovereignty by ensuring that cybercrimes affecting local data are dealt with under South African law. This act reinforces the security of the country’s digital assets.
Technological factors
With major cloud providers like Microsoft Azure, AWS, and Google Cloud establishing data centers in South Africa, there’s a growing emphasis on local data storage. This not only supports data sovereignty but also boosts economic growth by reducing latency and benefiting local businesses. This shift aligns with South Africa’s aim to build a robust digital economy and keep data under local control.
International trade
South Africa’s data sovereignty policies are also shaped by international trade, balancing domestic data protection with global trade advantages. The country’s participation in international agreements like the African Union’s Malabo Convention helps align its data sovereignty approach with global standards while addressing the needs of key sectors such as finance, telecommunications, and e-commerce.
Is data sovereignty an important point in South Africa?
South Africa’s government data sovereignty laws are essential for several key reasons:
- Economic impact
As South Africa’s digital economy expands, data sovereignty ensures that the economic value of this data stays within the country, fostering local businesses and innovation. Data sovereignty supports local businesses and innovation by ensuring that global tech investments, like those from Microsoft and AWS, create jobs and advance technology.
- National security
Data sovereignty helps protect sensitive information from foreign surveillance and cybercrime, especially in critical sectors like finance, healthcare, and governance. Keeping data within the country enhances national security and cybersecurity.
- Privacy protection
These laws are crucial for safeguarding South African residents’ personal information. They ensure that data is managed according to local regulations, which is vital for maintaining privacy and trust in digital services.
- Regulating cross-border data transfers
In a globalized economy with many multinational companies operating in South Africa, data sovereignty laws are essential. They ensure that businesses handle personal data responsibly and prevent misuse.
Who must comply with data sovereignty regulations in South Africa?
Every organization involved in collecting, processing, and storing the personal information of South African residents is bound by law to comply with these regulations. They are discussed in more detail below:
- Businesses and organizations
Any local or international company that handles the personal data of South African citizens or residents must comply with POPIA. This includes sectors like banking, healthcare, retail, and telecommunication.
- Public bodies
Government departments, municipalities, and other public institutions processing personal information must adhere to data sovereignty laws.
- Individuals
These regulations apply to individuals processing personal data for commercial or professional purposes, such as sole traders or freelancers handling client information.
- Third-party service providers
Companies that manage data on behalf of others, such as cloud service providers or data storage companies, are also obligated to follow POPIA.
- Multinational corporations
International companies operating in South Africa or dealing with data related to South African residents must ensure their practices align with POPIA.
Here are other data sovereignty compliance checklists that every business leader of multinational corporations should be familiar with.
South Africa’s data sovereignty laws
The POPIA and the Cybercrimes Act 2020 primarily govern South Africa’s data sovereignty laws. These laws are frameworks designed to regulate the collection, processing, storage, and sharing of personal information and protect it. They reflect South Africa’s commitment to protecting the privacy rights of its citizens and ensuring that personal data is handled in a manner consistent with national legal standards, particularly as digital services and data-driven technologies become increasingly prevalent. We shall review both laws in this section.
Protection of Personal Information Act
POPIA is the foundation of data protection in South Africa. It was designed to uphold the constitutional right to privacy by ensuring that personal information is processed responsibly and securely. Enforced in 2020, the Act applies to private and public sector organizations that collect, process, share, or store the personal information of South African residents, regardless of their size or industry. Below are the major features of the POPIA:
Data subject rights
POPIA grants individuals specific rights over their personal information. These include:
- Right to be Informed: Data subjects have the right to know when their data is being collected and for what purposes.
- Right to Access: Individuals can request access to their personal information held by an organization.
- Right to Rectification: Data subjects can request corrections to inaccurate or incomplete data.
- Right to Erasure: Also known as the “right to be forgotten,” the right to erasure allows individuals to request the deletion of their personal information when it is no longer necessary for the purposes for which it was collected.
- Right to Object: Data subjects can object to processing their personal information, especially for direct marketing purposes.
Processing principles
POPIA outlines eight processing principles that organizations must comply with when handling personal information. They are as follows:
- Accountability: Organizations must take responsibility for ensuring compliance with POPIA.
- Processing Limitation: Personal data must be processed lawfully and minimally, meaning only the necessary information should be collected.
- Purpose Specification: Data should be collected for a specific, explicitly defined purpose and not for unrelated purposes.
- Further Processing Limitation: Further processing of data must be compatible with the purpose for which it was originally collected.
- Information Quality: Organizations must ensure that personal information is accurate, complete, and up-to-date.
- Transparency: Organizations must inform individuals about collecting their data and how it will be used.
- Security Safeguards: Adequate security measures must be implemented to protect personal data from unauthorized access, loss, or damage.
- Data Subject Participation: Data subjects have the right to access and correct their personal information if necessary.
Requirements for cross-border transfers and data localization
While POPIA does not explicitly require data localization (storing data within South Africa), it sets strict conditions for transferring personal data outside the country. These conditions encourage organizations to keep data within South Africa to simplify compliance with cross-border data transfer regulations. Data can only be transferred to another country if that country has adequate data protection laws or the data subject has given explicit consent.
Information regulator responsibilities
The Information Regulator is an independent authority responsible for overseeing and enforcing compliance with POPIA. It has the authority to investigate complaints, conduct audits, issue fines, and take legal action against organizations that do not comply with the law. Additionally, the Regulator offers guidance to organizations on how to meet POPIA requirements and provides educational resources to the public about their rights under the legislation.
Penalties
Organizations that do not comply with POPIA may face substantial penalties, including fines of up to ZAR 10 million (about $650,000) or imprisonment for up to 10 years, depending on the severity of the breach. Beyond financial penalties, non-compliance can result in reputational damage, erosion of customer trust, and potential legal action from affected data subjects.
Cybercrime act
The Cybercrimes Act is an important legislation in South Africa that took effect in December 2021. It addresses the growing cybercrime threats by establishing legal frameworks for investigating, prosecuting, and preventing cyber-related offenses. The Act aligns South Africa with international standards for combating digital threats, reflecting the global nature of cybercrime. It defines various crimes, such as unauthorized access to data, computer systems, and networks; data interception; cyber fraud; forgery and extortion; and the dissemination of harmful data messages. The Act applies to any individual committing an offense, whether within South Africa or beyond, as long as the offense affects the country. We shall review some provisions of the law below:
Enumerating cybercrime offences
The Cybercrimes Act criminalizes several types of cyber offenses, as follows:
- Unauthorized access: Criminalized under the Act, this includes gaining entry to data, computer programs, or systems without permission, such as hacking or bypassing security measures.
- Interception of data: Prohibited activities include the unauthorized interception of data, such as eavesdropping on emails or capturing messages without consent.
- Cyber fraud: Encompasses acts of deception via electronic communications that result in financial or personal gain, including phishing schemes and online scams.
- Cyberextortion: Defined as threatening to damage or disrupt a computer system or data in exchange for money or other benefits.
- Cyberforgery and uttering: involve creating false data or computer programs with the intent to deceive and using this forged information.
- Distribution of harmful data messages: Criminalized under the Act, this includes distributing data messages that incite violence, promote hate speech, or contain child pornography.
Cybersecurity measures and obligations
The Act places specific responsibilities on electronic communication service providers and financial institutions, requiring them to support law enforcement agencies investigating cybercrimes. These entities must preserve data related to offenses, report suspicious activities, and assist in identifying suspects. Additionally, certain cybercrimes, such as attacks on critical infrastructure, must be reported to the relevant authorities. Failing to fulfill these reporting obligations can lead to penalties.
Investigation and prosecution
The Act empowers law enforcement agencies to investigate cybercrimes using various tools, including search and seizure warrants, preservation orders, and electronic evidence collection. It also allows for the interception of communications and surveillance under specific conditions to gather evidence pertinent to cybercrime investigations.
Protection of critical infrastructure
The Act includes provisions for safeguarding critical information infrastructure, encompassing systems and networks vital to national security, the economy, public health, and safety. It mandates special measures to protect these essential systems from cyber threats.
Penalties
The Cybercrimes Act imposes stringent penalties on offenders, including substantial fines and imprisonment. The duration of imprisonment varies based on the offense’s severity, with some crimes carrying sentences of up to 15 years. Additionally, the Act permits the forfeiture of any tools or equipment used in committing a cybercrime.
The National Data and Cloud Policy
The National Data and Cloud Policy in South Africa is a strategic framework designed to leverage data and cloud computing to drive economic growth, improve public services, and enhance national security. This policy aims to create an enabling environment for data-driven innovation, ensure cloud data sovereignty, and foster trust in digital services.
Objectives of the National Data and Cloud Policy
- Economic Growth and Innovation: Promote data and cloud technologies to drive innovation, create jobs, and stimulate economic growth.
- Data Sovereignty: Ensure that data generated within South Africa is stored, processed, and managed in a way that adheres to national laws and protects citizens’ privacy.
- Public Service Improvement: Enhance the efficiency and effectiveness of public services by adopting cloud technologies and data analytics.
- Cybersecurity and Trust: Strengthen the security of data and cloud services to build trust among citizens and businesses.
- Digital Inclusion: Ensure that all South Africans, regardless of their socio-economic status, have access to the benefits of data and cloud technologies.
In Summary, these policies form the legal framework for South African data sovereignty.
Data sovereignty requirements in South Africa
The requirements for data sovereignty in South Africa can easily be deduced from the provisions of POPIA, the Cybercrime Act, and the National Data and Cloud Policy. In this section, we shall highlight the key requirements every organization must be familiar with to stay out of trouble.
- Data localization
Although POPIA does not explicitly mandate data localization, it does impose restrictions on cross-border data transfers to ensure that data is protected according to South African standards. Data can only be transferred to another country if that country has laws offering adequate protection or if the data subject has provided explicit consent.
- Processing of personal data
Organizations must handle personal information lawfully and respect individuals’ privacy. Processing should be carried out either with the data subject’s consent or based on another legitimate basis outlined by POPIA.
- Accountability & compliance
Organizations must ensure POPIA compliance by establishing data protection policies and appointing a Data Protection Officer (DPO) or Information Officer. They should also conduct regular audits and assessments to verify that their data processing activities meet legal requirements.
- Data security and safeguards
Organizations must adopt suitable technical and organizational measures to protect personal information from unauthorized access, loss, or damage. This includes using encryption, access controls, and other cybersecurity practices to ensure data integrity and confidentiality.
- Data minimization
Organizations should collect only the minimal amount of personal data necessary for a specific purpose and avoid gathering excessive information. Data should be retained only for as long as necessary to fulfill the purpose for which it was collected.
- Transparency and purpose specification
Data subjects must be informed about why their data is being collected, how it will be used, and with whom it will be shared. Organizations must process data solely for the specific, explicit, and lawful purposes that were disclosed to the data subject.
- Data subject rights
Individuals have the right to be informed when their personal information is being collected and for what purpose. Data subjects can request access to their data, request corrections, or demand deletion if the data is no longer needed for its original purpose. They also have the right to object to processing their personal information, especially for direct marketing.
- Cross-border data transfers
When transferring data outside South Africa, organizations must ensure that the recipient country has adequate data protection laws. If such protection is not guaranteed, the transfer may still proceed if it is necessary for fulfilling a contract, benefiting the data subject, or if the data subject has given consent.
- Breach notification
In the event of a data breach affecting personal information, organizations must notify both the Information Regulator and the affected data subjects as soon as reasonably possible after the breach is discovered.
Here are other data sovereignty laws that will help your understanding of Data Sovereignty globally.
How InCountry helps companies stay compliant with South Africa’s data sovereignty laws
Think of data compliance like a game—just as having the right players and coaches is crucial for winning in sports, having the right partner for managing your data is essential for staying compliant with data sovereignty laws. In South Africa, where data regulations are becoming increasingly stringent, partnering with a trusted provider like InCountry can make all the difference.
At InCountry, we’re committed to helping our clients navigate the complex landscape of data privacy laws. Our team has years of experience ensuring organizations meet all local privacy requirements. We stay on top of the latest regulations to keep you in compliance, so you can focus on running your business.
Reach out to us today. Let’s discuss how we can support your data management needs and add real value to your organization.