Imagine waking up, picking up your phone, and noticing a headline exposing your company to be a source of a major data breach. Then, imagine dozens of calls and WhatsApp messages from outraged clients/customers. In 2023, the Information Regulator issued its first significant fine, imposing R5 million on the Department of Justice and Constitutional Development for failing to comply with an enforcement notice related to a data breach. Furthermore, late in 2024, the Information Regulator issued another 5 million Rand fine to the Department of Basic Education, following their failure to address an enforcement notice from the Information Regulator.
Consequences go beyond a fine; companies may also suffer a knock on their reputation following a data breach. We must realise that compliance with POPIA goes beyond meeting the legal requirement; compliance becomes the essence of protecting all personal data, from employees to clients/customers, particularly in the digital age.
Before we explore this topic further, we have to discuss the Information Regulator vs The Department of Education, under which the Department of Education was requesting the Court to Bar the DBE from publishing the Matric results in newspapers, indicating that the results can be directed to the persons via SMS and from the different schools. However, the Court declined to determine the case because of the perceived lack of urgency. As it stands this case has no bearing on your ordinary business functions.
Consequences of Non-Compliance
Although we have seen the Information Regulator issuing fines of R5 million, they have the power to issue fines of up to R10 million or imprisonment of Responsible Parties.
Additionally, organisations may face lawsuits from affected individuals seeking compensation for damages. These financial burdens can cripple small to medium enterprises, pushing some to insolvency.
The Department of Justice and Constitutional Development’s data breach is a notable case to illustrate these consequences. In July 2023, the Information Regulator fined the department R5 million for failing to comply with an enforcement notice related to the breach.
This penalty underscores the regulator’s commitment to enforcing compliance and the high stakes for entities that neglect their obligations.
Reputational damage is equally severe. The fallout may include the erosion of customer trust and the tarnishing of the brand image, imagine the effort and time it takes to build a brand and the destruction of the said brand in a matter of minutes, perhaps even hours. Disruptions are not only limited to fines and reputational damage, it is rare that we consider the operational disruptions that take place when there is non-compliance with data privacy best practices.
In 2024 Information Regulator indicated that the reported breaches now exceed 140 reports a month, and further indicated that the major reason is the over-processing of personal information as well as complacency when it comes to cyber security.
Benefits of Compliance
Compliance with POPIA should not just be seen as a counter to financial penalties, companies should start seeing data protection as an investment to one of the company’s assets that would further translate to customer loyalty and reputational safeguard, but above that the compliance ensures operational efficiency. Implementing data protection measures often involves streamlining data management processes, which reduces redundancies and enhances productivity.
Businesses that proactively protect personal information distinguish themselves in the market. Compliance can be leveraged as a unique selling point, or in the alternative, the different industries may require different levels of data protection, for example, finance and healthcare sectors.
Steps to Compliance
Achieving POPIA compliance may seem daunting, but it can be broken down into manageable steps:
Assess Your Data: Begin with a comprehensive audit of the personal information your business collects, processes, and stores. Identify potential risks and areas of non-compliance.
This assessment should not be considered as an HR department aspect, the assessments should be directed to all functions of the business, many times businesses treat POPIA compliance as a mere HR checklist. This must be seen as simply implementing Policies, that are irrelevant in an “attempt” of compliance.
Develop Policies: Establish clear data protection policies that outline how personal information is handled. The aim of the policies must address aspects of collection, storage, sharing and ultimately the destruction of data in their possession.
Train Staff: Educate employees about POPIA and their responsibilities. Constant training ensures that the staff understands the requirements of compliance, this also allows for the identification of potential breaches.
Implement Security Measures: The Protection of data cannot be limited to simply the implementation of policies and procedures. Invest in robust cybersecurity measures, such as firewalls, encryption, and secure access controls. The systems, inclusive of the policies and procedures need to be tested and upgraded, according to the results of the risk assessments that are continuously done.
Monitor and Review: Compliance is an ongoing process. Conduct regular audits to ensure adherence to policies and identify areas for improvement.
For further guidance, consider consulting resources such as the Information Regulator’s website or engaging with data protection/privacy professionals. Investing in expert advice can save time and reduce risks.
Conclusion
POPIA compliance is not just a legal obligation; it is one of the functions of a business and must be considered in the overall business strategy. By prioritizing compliance, organizations can avoid costly penalties, enhance customer trust, and enhance operational efficiency. Now is the time to take proactive steps toward compliance.
Ready to make compliance a priority? Sign up for our upcoming webinars to assist you in understanding POPIA requirements and actionable strategies. For more information on the above topic, please contact LabourNet Eastern Cape at Regional Support: 087 292 5808. Contact: Phikolomzi Malamlela (060 6428 659) at pmalamlela@labournet.com or Robert Niemand (082 824 7359) at robertn@labournet.com
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