POPI breach could mean fines of up to r10 million and a 10-year jail sentence

09 July 2020 Cliffe Dekker Hofmeyr (CDH)

Parts of the long-awaited Protection of Personal Information Act 4 of 2013 came into force on 1 July 2020, and companies will have a period of one year to get their ducks in a row or risk substantial fines and even imprisonment.

The Act seeks to regulate the processing of personal information (which includes, amongst other things, collection, storage and dissemination) to ensure greater security of data and privacy. From the storing of customer date, employee data, to direct marketing and e-commerce, the commencement of POPI will have far-reaching implications, but first, businesses will need to be clear that what they are collecting is in fact personal information.

This is according to Justine Krige, a Director in the Corporate & Commercial practice at business law firm Cliffe Dekker Hofmeyr (CDH), who notes that it is almost impossible to do business these days without collecting personal information of customers, suppliers and employees. “The wide definition of personal information includes any data or information that can be used to identify a person; from physical descriptors and contact details, to personal history, opinions and preferences.

“This information is collected in many ways, but there are generally four key areas for businesses to be aware of: market research via direct marketing; online contact forms, browsing and profiles; employment agreements; and service level agreements. For POPI compliance, it is critical to ensure that the requisite approvals are in place from data subjects in all of these areas.”

In terms of compliance requirements, Fatima Ameer-Mia, a Director in CDH’s Technology, Media & Telecommunications practice, highlights the importance of having a tailor-made ‘POPI Policy’. “This is essentially a privacy policy which describes how an organisation collects, uses, stores, processes, and shares personal information of its data subjects. An organisation’s POPI Policy may be embedded on its website (where applicable) and/or included in contractual arrangements with suppliers and customers.

“Critically, no one size fits all when it comes to privacy policies, so organisations should avoid ‘off the shelf’ bought policies and rather tailor their own. For some businesses, multiple POPI Policies may be required – for external purposes (i.e. suppliers and services providers, on the one hand, and customers on the other) and internal purposes (i.e. employees and prospective employees),” Ameer-Mia explains.

On the topic of employment, Director in CDH’s Employment practice, Gillian Lumb warns that employers will also bear increased liability for the conduct of their employees, with effect from 1 July 2021. “In terms of section 99(1) – which came into effect last week – an employer may be held liable for the conduct of its employees, regardless of whether there is any wilful or negligent conduct on the part of the employer."

“Employers therefore have one year to prepare for and take steps to mitigate the risk which this section creates, in particular ensuring that their employees do not process information unlawfully and that they are aware of the conditions for lawful processing and act in accordance with these conditions at all times.”

With the coming into force of POPI, the role of the Information Officer – who is responsible for the lawful processing of personal information – has also expanded. Kendall Keanly, Director in CDH’s Corporate & Commercial practice says, “The Information Officer’s role within an organisation is now not only governed by the provisions of the Promotion of Access to Information Act 2 of 2000 (PAIA), but also POPI, which requires the drafting of a compliance framework, attending to any personal information impact assessment; and providing internal POPI awareness sessions.”

The organisation is, however, entitled to appoint as many deputy information officers as may be necessary to perform these duties, Keanly adds. “Selecting the right individual(s) for this role is important because if a deputy information officer fails to perform the duties delegated to them, it could have adverse implications for not only the responsible party (as defined in POPI) but also the Information Officer.

“For business owners, contravention of POPI could result in far-reaching sanctions, including the imposition of fines, imprisonment for a period of 12 months to 10 years and/or a damages claim by the data subject. Each role player has one year within which to ensure that their business practices comply with POPI, failing which, they will fall foul of the statutory provisions,” Keanly concludes.

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