Engaging overseas contractors can be an effective way for businesses to respond to their business needs. However, while there are many advantages to hiring overseas contractors, you must consider this against legal risks, such as the risk of sharing the personal information of Australian individuals with overseas parties.
This article considers how you can comply with your privacy obligations under the Australian Privacy Principles outlined in the Privacy Act 1988 (Cth) when disclosing information with overseas contractors.
Are You an APP Entity?
Before sharing information with an overseas contractor, you must determine if you are an APP entity. This distinction is important because if an APP entity shares information overseas and that overseas party breaches the APPs, that breach will be taken to be a breach by the APP entity itself.
For example, suppose your business generates more than $3 million in annual turnover. In that case, it will likely be considered an APP entity and will have obligations under the Privacy Act, including concerning the disclosure of personal information overseas.
Sharing Information With Overseas Contractors
Suppose you are an APP entity. If so, let us explore several precautionary measures you can take when sharing information with your overseas contractors.
2. Risk Mitigation
As a best practice, you should only share information essential for your overseas contractors to be able to deliver the services.
When engaging an overseas contractor, consider the following questions.
1. Whether the volume of information you are sharing with the contractor is necessary to enable them to perform the services?
- Tip: As a rule, do not provide the contractor with more personal information than is necessary. The more information you share, the higher the risk of individuals using data in a way that breaches the APPs.
2. What is the nature of the information?
- Tip: You should consider the nature of the information, and whether it is personal or sensitive information. Sensitive data requires a higher level of confidentiality due to its delicate nature.
3. How much access does the contractor have to my existing databases?
- Tip: Ensure that you only provide access to the databases that the contractor needs to perform their services. All other access should be limited or subject to your approval.
3. Contractual Terms
You should ensure that the terms of your contractor agreement impose strong privacy obligations on the contractor, particularly concerning any personal information they receive or have access to during the term.
You can include clauses addressing the following:
- an acknowledgement by the contractor that you are required to comply with the APPs;
- a warranty that the contractor will not breach the APPs;
- an indemnity by the overseas contractor if it breaches the APPs (for example, by disclosing personal information to an unauthorised party); and
- a data breach response plan that includes a straightforward process for reporting a data breach.