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Overview of Indonesia’s Draft Data Protection Law

Data mining is gathering the personal information of as many users as possible where users are the subject, the product, and the prize. The more users’ personal data an organization has, the better they can predict a user’s future behavior.

Data protection is tasked with ensuring organizations do not collect information they are not entitled to, that any data they do have is kept safely, updated, and deleted when requested and not shared with third parties without appropriate controls.

This is where data protection laws come; to defend users’ personal information and exercise their rights to know what happens to the data gathered by companies. Governments and data regulators worldwide are actively working on mechanisms to safeguard user data, the national interests, and secure cross-border data transfer.

Introduction

The need for data protection stems from the concern of personal data being collected, stored, or shared without the knowledge and consent of the individual(s).

As of this writing, there is no comprehensive data protection law in Indonesia. However, as a general rule of thumb, Indonesia protects the data of its citizens in the Constitution of the Republic of Indonesia 1945 ('the Constitution'). Article 28G of the Constitution states: 'Each person shall have the right to the protection of their personal selves, families, respect, dignity, and possessions under their control.'

Furthermore, there are several regulations that regulate the personal data processed in the electronic systems by the electronic service providers. These PDP Regulations are:

  • Regulation No. 20 of 2016 concerning Protection of Personal Data in Electronic Systems (MoCI Reg);
  • Amended Law No. 11 of 2008 on Electronic Information and Transaction (EIT Law);
  • Government Regulation No. 71 of 2019 on the Implementation of the Electronic System and Transaction (GR 71).

There are also sectoral regulations that regulate the personal data in a specific sector e.g, banking sector, health sector, etc.

Indonesia’s Incoming Personal Data Protection (PDP) Law

Following delays due to COVID-19, Indonesia is now geared to pass its first Personal Data Protection Act (PDP Law). On January 24, 2020, the bill’s final draft was submitted to the Indonesian House of Representatives. The PDP law will address the much-needed reforms to the country’s data privacy protection rules. The law is built on the European Union’s General Data Protection Regulation (GDPR).

In essence, Indonesia will soon follow the same data subject rights and personal data processing regulations set by the European Union in their GDPR.

The PDP Law will have 72 articles across 15 chapters. These articles and chapters will extensively cover data ownership rights, prohibitions on data use, along with the collection, storage, processing, and transfer of personal data of Indonesian users.

With Indonesia being an active part of the global economy and attracting millions of tourists annually, businesses should quickly align their business operations to comply with the upcoming PDP law.

Who Needs to Comply with the PDP Law

The PDP law will impact local businesses in Indonesia and will also have an impact on companies across the globe that deal with Indonesian consumers. . The PDP law will apply to any registered company dealing with Indonesian residents, irrespective of where they are registered.

Whether an entity is public or private, local or international, the PDP Law will automatically apply to them if they deal with the personal data of Indonesian residents. The new PDP Law is expected to apply to all sectors, bringing forward comprehensive provisions on personal data protection, both electronically and non-electronically.

Material Scope of the PDP Law

The PDP law will regulate sensitive personal data as well as other personal data that may endanger or harm the privacy of the data subject.

Territorial Scope of the Law

The PDP Bill applies to companies both within and outside of the territory of Indonesia where their actions:

  • Involve legal consequences within the territory of Indonesia;
  • Affect Indonesian citizens in and outside of the territory of Indonesia.

Definitions of Personal Data and Sensitive Personal Data Under the PDP Law

  1. Personal Data: Under the PDP Bill, personal data is defined as any data regarding an identified person or a person that can be identified either individually or in combination with other information, directly or indirectly, by using electronic and/or non-electronic systems.
  2. Sensitive Personal Data: Article 3 of the PDP Bill defines sensitive personal data as personal data that requires special protection, and includes data concerning religion or belief, health, physical and mental conditions, sexual life, personal financial data, and other personal data that may be dangerous or detrimental to the privacy of the data subject.

Recognizing Key Roles of a Data controller and a Data Processor

The upcoming PDP Law states that a data controller and a data processor will be separated.

Definition of a Data Controller

A data controller determines the purpose of and controls the processing of personal data.

Definition of a Data Processor

A data processor processes personal data on behalf of the personal data controller.

Data controllers and data processors can be individuals, corporations, public entities, business actors, organizations, or institutions. Under the PDP Bill, the primary liability of personal data processing is borne by the data controller.

Data Subjects Rights

The upcoming PDP Bill states that data subjects will be granted the following rights, similar to those recognized under the GDPR. These include:

  • Right to access.
  • Right to the consent withdrawal.
  • Right to object to automated decision making.
  • Right to restrict Processing.
  • Right to Deletion.
  • Right to be informed and to sue.
  • Right to compensation in case of any violations.

Data controllers and data processors will be required to observe and respect these rights.

Lawful Basis of Processing

Under the PDP Bill, consent is only one of several requirements for the lawful processing of personal data. The PDP Bill has introduced the following exceptions for personal data processing without relying on consent:

  • For the performance of a contract to which the data subject is a party, or in order to fulfill a request of the data subject prior to entering into the contract;
  • To comply with an obligation that is imposed on a data controller by law;
  • To fulfill the vital interests of the data subject;
  • For the exercise of authority vested in the data controller by law;
  • For the fulfillment of a public service obligation to which the data controller is subject in the public interest; and/or
  • For the pursuit of a legitimate interest of the data controller or the data subject.

Cross-border Data Transfer Requirement

The PDP Bill introduces new requirements on cross-border data transfer, which will be subject to the following conditions:

  • The recipient country has a personal data protection level that is equal to or higher than the provisions in the PDP Bill;
  • An international agreement exists between the countries;
  • A contract between data controllers that covers personal data protection matters; and/or
  • Consent from the data subject.

Data Breach Notification Requirement

The PDP Law will require that data controllers must inform the Ministry of Communication and Information Technology (MCIT) and data subjects within 72 hours of a data breach. These notifications must include:

  • The compromised data;
  • When and how the data was compromised;
  • Management and recovery efforts.

PDP ensures that the relevant data subjects must be informed as soon as possible to limit the damage.

Empowering Data Protection Officers (DPOs)

The PDP Bill requires that data controllers and data processors must appoint a DPO if:

  • They process personal data to provide public services;
  • Their main activities require regular and systematic monitoring of personal data on a large scale;
  • Their main activity consists of processing specific data, including criminal data, on a large scale.

Data protection officers will be designated based on their professional qualifications, legal knowledge, and experience in data privacy. However, there are currently no specific mandatory qualifications, skills, or educational requirements. This may be clarified in the future.

Penalties

The PDP Law will enforce strict action against companies that fail to comply with the PDP Law and regulations set by the state, including fines of up to US$14.4 million.

On that account, companies operating in Indonesia or dealing with Indonesian residents’ personal data should adopt a proactive approach to identifying and resolving any potential challenges to comply with the PDP Law.

Conclusion

Even though the PDP Law is a priority, it is unclear when the bill will be signed by the president and come into effect as a law. With COVID-19 causing havoc in the country, the bill might get delayed to 2022. However, to comply with the PDP Bill and further gain customer trust, businesses in Indonesia should begin strategizing comprehensive and consistent activities that safeguard the personal data of Indonesian citizens.

How Securiti Can Help?

The global dynamics of accessing and sharing personal data is rapidly changing, requiring organizations to become more privacy-conscious of their processes and responsible guardians of their consumers' data, all while automating privacy and security operations for swift action.

With a growing database of users and potential users, organizations need to incorporate robotic automation to operationalize compliance without missing out. While multiple services offer software that enables companies to comply with global privacy regulations, those solutions only go as far as possible with various restrictions or elementary data-driven functions.

Securiti binds reliability, intelligence, and simplicity, working on the PrivacyOps framework to allow end-to-end automation for organizations. Securiti can help you stay compliant with Indonesia’s PDP law and other privacy and security regulations worldwide. See how it works. Request a demo today.

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