Mandatory Disclosure Legislation – Coming To A Parliament Near You!

Dane Meah
November 29, 2016


The Australian Financial Review recently reported that “the notion of compulsory data breach notifications is leaving some internet security experts and business leaders cold.” Particular concerns have been raised around what organisations will get caught in the net, and “who gets to be the umpire”. Are these concerns anything that will delay the passage of the legislation?


Business Council of Australia CEO Jennifer Westacott’s concerns about the size and type of businesses that may be caught in the net are already dealt with in the legislation. The Explanatory Memorandum clearly states that the Bill exempts “those entities already exempt from the operation of the Privacy Act in whole or in part, such as intelligence agencies and small business operators”.

The “umpire” is the Australian Information Commissioner, whose office has been executing its responsibilities efficiently and effectively in its current incarnation since 2010 and prior to that as Privacy Commissioner since 1989.

With those objections dismissed, there’s no escaping the pressure is on.

Consumers and citizens are increasingly intolerant of poor or tardy breach transparency. They know that most people use exactly the same passwords at work; at home; for internet banking; and for the shopping; dating and…err…other sites they visit each day. If someone lifts and on-sells one of your employee’s usernames and passwords – but you don’t find out about it for years – there is a good chance your system could be compromised without you even knowing about it.

It’s kind of like using the same key for your home, the office, your car and your gym locker… and an email address that can identify your name and employer paramount to writing your addresses and car plate ID on your key ring!

It’s a case of mutually assured destruction – breaches in my organisation expose security in yours, and vice versa. We both need to know about it immediately so we can work together to protect our mutual interests.

So there’s good reason to prepare for mandatory notification, but you can’t do it in isolation from your holistic data security and data management capability.

Prepare and Protect

Identify your critical assets. Where and how are they stored? Who is responsible for them and are they encrypted?  Build and practice your Incident Response Plan. Are your policies and procedures robust and adhered to by all your staff? Are your people adequately trained? This goes for the IT team, C-levels and end users.

Unstructured “dark” data presents a massive risk for most organisations. To be ready for mandatory reporting, all Australian organisations need to curb unstructured data by automating governance through workflows and customization.

Detect, Respond and Recover

Next, it’s important to implement controls that quickly detect breaches and then implement rapid responses to mitigate the impact. As I’ve mentioned in previous posts, SIEM (Security Incident Event Management) tools like Splunk and Advanced Threat Protection and Managed Security Services (SOC-aaS) are readily available controls.

Quick, effective response means isolating and neutralising threats via automated controls and processes, where possible. That way you can quickly enact Business Continuity and Incident Response Plans, and recover normal operations fast.

This is particularly important because the 2016 draft legislation incorporates a new exception “where entities have taken remedial action following an eligible data breach or potential eligible data breach”, in particular “where a reasonable person would conclude that, as a result of the remedial action, the unauthorised access or unauthorised disclosure of personal information … is not likely to result in serious harm to the affected individuals.”

Archiving & eDiscovery

Hand in hand with good data governance, archiving must be a priority when mandatory reporting becomes a reality. All organisations with more than 250 employees – and quite a few smaller firms and government agencies too – need to be thinking seriously about investing in an archiving platform that isolates potentially relevant items, reveals context and prioritises what’s most important.

The bottom line

At the end of the day the Privacy Amendment (Notifiable Data Breaches) Bill 2016 will be enacted either later this week in the dying hours of the parliamentary year, or early next year. Penalties for non-compliance start with significant fines.

Boards who do not require their executives to implement adequate information security capabilities are exposing their organisations to penalties of $1.7 million per breach. Penalties for individuals can be as much as $340,000.

Other penalties may include public or personal apologies; compensation payments; or enforceable undertakings like the one imposed on Singtel Optus back in 2014. Reputational damage will also be amplified with the existence of a mandatory requirement.

The real challenge will be to implement efficient processes and systems that allow you to get on with core business while protecting your organisation from cyber attack, and making it easy to respond, recover and report as and when required.

As ever, if you would like support understanding how this could affect your business or would like to mature your Cyber Security Strategy, please reach out.