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Kindly note that Naavi has no relationship with Navi.co.in, navi loans etc.
The uncertainty over the Data Protection Regulations in India are now behind us. The law in India at present is Section 43A of ITA 2000 until the DPDPB 2022 becomes an Act and notified for implementation. The law even if passed in February may become operative after 1 year.
However, as per the current legal environment today, DPDPB 2022 will be a “Due Diligence” under ITA 2000 and hence “Section 43A of ITA 2000 plus DPDPB 2022” will be the Data Protection Law of India.
Organizations need to therefore start working on compliance based on this framework.
Ujvala has now designed a new consultancy window for corporates on implementing Data Protection Compliance programs in their respective organizations.
Cyber Law College which is a division of Ujvala is introducing a DPO training program to meet the current requirements.
These services would be exclusively offered through FDPPI of which Ujvala is a Patron member.
The consultancy will be a two stage process. The first would be based on current version of the DPBB 2022 and the follow up consultancy would be up to one month after the release of the first set of rules.
FDPPI has thrown open it’s platform to other consultants also to offer services under the banner of FDPPI which will be like a Federation of such organizations. Presently this is open to all supporting members of FDPPI. Others who want to associate with FDPPI may contact fdppi.
The discussions on DPDPB 2022 in the professional circles have reminded us of the dilemma about the Glass-Half-Half-empty syndrome.
Those of you who followed my series of articles on “Shape of Things to Come” are aware that I myself have many expectations and probably DPDPB 2022 is far different from what I myself would have liked.
However, instead of worrying about what is not done, it is time to reflect what can be done now. After all a glass half full is actually full with half water and half air. It is left to us to pour more water and make it full if that is what we want.
I therefore urge all professionals and present day critics to look at the positive aspects of the Bill and facilitate its passage.
In fact, had the Bill been as complicated as PDPB 2019 or GDPR, consultants like us will have more work to do. If it is too simple, the role of consultants would be less. If the penalty is thousand crores we can scare companies in to investing more into compliance than when the penalty is not more than Rs 500 crores peppered with Voluntary undertaking, Mediation etc.
But our commitment need not be to our making ourselves indispensable as consultants. It is to make the society better. If Privacy law will make the society better, we do support it. But if Government adopts a simple law and wants to make compliance less painful, we need to welcome it.
We will give our suggestions to the Government when the public comments are submitted which may point out many omissions. But it is not necessary to pick any shortcomings and start criticising the Bill.
We all know that this Bill will be supplemented with the Rules and every detail which has been left out can be brought back in the rules. Some legal professionals may challenge this approach as dependency on subordinate legislation. But this will provide flexibility to the legislation and hence will be more practical.
Those critics who are objecting to the lack of clarity of DPB constitution should look at how Supervisory authorities are appointed in EU countries. Do they have the same rigorous standard that they should be a retired Supreme Court judge only? If DPB is made into a “Tribunal” then who will take care of all the developmental requirements?
DPB has to be therefore led by a Corporate CEO type person. If critics force the hands of the Government by going to the Court, the Government has the option of reducing the DPB into a glorified Adjudication office and take over all aspects of Governance of the law into a department of MeitY which will be headed by a Deputy Secretary level official.
I therefore urge those who are contemplating on challenging the Bill after it is passed or during the Parliamentary debate to consider whether it is good for the society to elt this Bill pass and later try to contribute through the DPB to ensure that the rules are designed properly.
The first thing one noticed in GDPR when it was implemented in 2018 was the fear it induced in the Data Controllers about the “Penalty” which could go upto 4% of global turnover or Euro 20 million. Since then there have been hundreds of penalties above Euro 20 million on the basis of the turnover.
The biggest GDPR fine is Euro 746 million imposed by Luxemberg authority on Amazon, followed by 405 million euros on Meta imposed by Ireland authority and 225 million euros imposed on WhatsApp,. There are at least 9 more penalties above Euro 20 million on organizations including Marriot International, British Airwars, Enel Energia, TIM, H & M online shop, and Google.
Not all these fines are based on actual data breaches causing loss to the community. They may be related to non compliance of various issues such as general data processing principles, insufficient legal basis for processing etc.
These fines have left a bitter taste in the mouth of these agencies which have made them distrust all such regulations including the Indian proposals in the past.
There is no doubt that this “Fear” induced some awareness about the law but the feeling that many supervisory authorities were perhaps raising revenue through the penalties to fund their existence rather than enabling the community for better compliance.
We must appreciate that the Indian DPDPB 2022 has taken a different approach.
Firstly it has pegged the penalty at Rs 500 crores per instance. At the same time it has provided a “Voluntary Undertaking system” which if accepted can close any penalty proceedings.
DPB may also suggest mediation to resolve the issues before it imposes the penalty.
It has also mandated that any inquiry will not prevent access to any premises or take into custody any equipment or any item that may adversely affect the day-to-day functioning of a person.
To cap it all Section 25 of DPDPB 2022 states that while determining the penalty, the Board will take into account the likely impact of the imposition of the financial penalty on the person.
This is the most humane feature in any penalty system that we can expect. This means that SMEs and MSMEs need not fear that they would be forced to shut shop on one instance of data breach since penalty would be proportionate also to the capacity of the organization to bear. On the other hand, the GDPR approach would shut down most SME/MSMEs and only allow Big Tech companies to be able to bear the brunt of data breach fines.
Let us appreciate this approach that recognizes that if the Data Fiduciaries seize to exist, there will be no data business and hence they cannot be eliminated with a threat of elimination.
May be this soft attitude could dent the business of many of us who are professionals advising “Compliance” and providing “Consultancy” and “Audit” services. But ultimately we should all support a fair system that does not try to drive compliance by fear. Persuasion and appreciation of the benefit of the society should be the guiding factor for imposing penalties and perhaps that suggestion is available in the draft Bill.
The provision in DPDPB 2022 regarding restrictions on Data Transfer outside India has evoked interesting reactions.
While some are rejoicing that Data Localization has been given a go by, some are stating that this is unacceptable to many countries such as the EU countries who may not consider the provisions of DPDPB 2022 as “Adequate” from their standards.
The entire discussions on Data Localization has been dismissed with a short section which states as follows:
17. Transfer of personal data outside India
The Central Government may, after an assessment of such factors as it may consider necessary, notify such countries or territories outside India to which a Data Fiduciary may transfer personal data, in accordance with such terms and conditions as may be specified.
To be fair, the last word on how this provision will roll out after the rules are framed is not known. Given the general approach of India taking independent stand on many international decisions, I would be surprised if India surrenders to the EU in terms of accepting their conditions for transfer into India while forgoing the export of data from India to other countries.
At present, India is predominantly a Data Importing country and hence it may not matter much if other countries are not ready to take Indian data for processing in their countries.
The Bill however has correctly distinguished that Data Imported to India is data of foreign data principals and most of them come through a contractual processing channel where the Indian company will be only a “Data Processor” and there will be a Data Controller abroad. There could be a few Indian MNCs who may be an exception to this rule who may have data of foreign data principals processed in India.
The Bill however provides an exception to Indian Data Processors through Section 18 (1)(d) similar to the erstwhile Section 37 of PDPB 2019.
There is a view that this may not be acceptable to EU due to the Schrems Judgement which insisted that the importing country should provide an opportunity to the EU data subjects to exercise their rights against the Indian Data Processor leaving the EU based Data Controller. This judgement also frowned on the law enforcement agencies of the data importing country and its Government having access to the data even in times of exigencies.
The demand of the Schrems Judgement which later became part of the Standard Contractual Clauses are basically ultra vires the laws of the data importing country. Presently the SCC leaves it to the Data Controller to evaluate the laws of the destinationn country and take necessary steps to comply with the Schrems Judgment expectations.
Even if Indian companies would like to sign on the dotted line for their business, it is unlikely that the Indian law enforcement agencies would accept a situation where their demand for access to data is sought to be stone-walled by the Data Importer because of his contract with the Data Exporter.
However, there is a possibility that through this section, India may provide an innovative option to the Data Exporting countries to be able to remain in compliance with Schrems Judgement and also with the Indian law by drafting suitable conditions for mutual personal data transfer.
With such an instrument, India may be able to convince a group of countries in South East Asia and perhaps countries outside the EU control to form a “Data Union” of countries who will accept Indian leadership.
As a result this Section holds a key for working towards a global leadership of like minded countries where the regulations will be similar to what India proposes.
Instead of toeing the line of EU and surrendering its sovereignty, India may therefore opt to use this as an opportunity to get the globe turn to Indian solution the same way the US attempts on India not importing oil from Russia was effectively avoided by India.
In PDPB 2019 (Now withdrawn) there were two sections namely Section 18 and Section 20 which spoke of Right to Correction and Erasure and Right to Forget
|Sec 18.Right to correction and erasure.||Sec 20.Right to be forgotten.|
(1) The data principal shall, where necessary, having regard to the purposes for which personal data is being processed, subject to such conditions and in such manner as may be specified by regulations, have the right to—
(a) the correction of inaccurate or misleading personal data;
(1) The data principal shall have the right to restrict or prevent the continuing disclosure or processing of his personal data by a data fiduciary where such disclosure or processing—
(a) has served the purpose for which it was collected or is no longer necessary for the purpose;
In the New DPDPB 2022,
Section 13 states as follows:
Right to correction and erasure of personal data
(1) A Data Principal shall have the right to correction and erasure of her personal data, in accordance with the applicable laws and in such manner as may be prescribed.
(2) A Data Fiduciary shall, upon receiving a request for such correction and erasure from a Data Principal:
(a) correct a Data Principal’s inaccurate or misleading personal data;
(b) complete a Data Principal’s incomplete personal data;
(c) update a Data Principal’s personal data;
(d) erase the personal data of a Data Principal that is no longer necessary for the purpose for which it was processed unless retention is necessary for a legal purpose.
It can be observed that section 13 of DPDPB 2022 is closely aligned to Section 18 of PDPB 2019.
PDPB made a distinction between “Erasure” and “Stopping disclosure” and associated Right to be forgotten with stopping of disclosure. Though it used the term “Processing” along with “Disclosure” it could be interpreted as “Processing Associated with Disclosure” where as processing associated with Section 18 was related to the purpose for which the information was collected.
In the GDPR however, Article 17 was titled Right to erasure (right to be forgotten) as if the two are same.
Now with DPDPB 2022 using only one section on “Erasure” a doubt does occur whether the definition of erasure should include the “Right to be forgotten” or not.
In the PDPB 2019, Right to be forgotten was dependent on a review by the Adjudicator and the Data Fiduciary was not permitted to implement the right to be forgotten without an intervention of a Judicial authority.
Some of the Court cases in which the “Right to be forgotten” was applied in India were cases where published judicial verdicts carried the names of accused who were later exonerated and claimed that their names should be removed from published judgement information found in websites like IndiaKanoon.com etc. and the search engines. It could not be said that the Courts wanted the names to be erased from the primary Judgement copy itself which could still carry the identity. If one picked up a Certified Copy and processed it for an appeal, it was perhaps acceptable to use the identification in the Certified Copy.
Both the law and the Court interpretation related to “Disclosure” being different from “Processing” for a given purpose.
Now whether the DPDPB 2022 has to be interpreted with reference to the jurisprudence arising from the Indian Context or from the EU Context is a matter which may pose some difficulty to establish at this point of time. The Courts may have the last word on this unless the rules provide the necessary clarification.
If possible the Government can resolve this problem by adding an explanation to Section 18 as follows.
Explanation: Right to erasure under this section is subject to the Rights of retention and disclosure under any other law for the time being.