As the data protection landscape evolves, compliance with the Indian Data Protection and Digital Privacy (DPDP) Act becomes increasingly important. This is not only a legal requirement, but also builds trust between data fiduciaries (entities that collect, store and process data) and data principles (individuals/users/customers). This article outlines the key steps data controllers should take to ensure compliance and effectively protect personal data, as well as the importance of written agreements with data processors.
Outline of steps to ensure compliance
- Appoint a data protection officer and an independent data controller
The DPDP Law requires major data fiduciaries to appoint a data protection officer (DPO) and an independent data auditor and all data fiduciaries should consider adopting this practice: The DPO is the main point of contact for data protection matters and ensures compliance with legal obligations, while the auditor is responsible for data practices
- Assess Existing Data Collection, Storage, Processing and Deletion mechanisms
Every step of the process is regulated by the new Act, from collection up until deletion. It is important to first assess the current mechanisms and systems for how the data is collected, the data protection protocols, the persons who can access and process such data, and the tools for automatic deletion of the data once the purpose has been fulfilled or when the data principle no longer consents to the processing of their data. Comprehensively assess the current data lifecycle, including collection, storage, processing and deletion mechanisms. Involving legal experts can help identify compliance gaps and recommend improvements accordingly.
- Improve data protection measures
Based on the assessment, implement robust security measures such as encryption, access control and intrusion detection systems to protect data from unauthorized access.
- Publish notices on the use of data
Transparency is a core principle of the DPDP Act. Data Fiduciaries must publish clear notices detailing how personal data will be used. These notices must be available in English and in India’s 22 official languages so that all data principles can understand their rights and data use.
- Implementation of consent mechanisms
It is important to obtain informed consent from Data Principles. Develop user-friendly mechanisms that enable individuals to understand and control how their data is processed. Legal counsel can help ensure compliance with the law and best practices.
- Implement automated data deletion protocols.
Establish automatic data deletion protocols to ensure that personal data is not retained longer than necessary for fulfilling the purposes that the Data Principle was informed of, or if the Data Principle withdraws their consent.
- Create a grievance portal
Implement a dedicated platform to handle complaints and requests from Data Principles. This system will allow individuals to easily contact the DPO and submit their requests.
- Conduct regular data protection impact assessments
Regularly conduct Data Protection Impact Assessments (DPIAs) to assess the impact of data processing on the rights of Data Principles. These assessments should outline the rights of individuals, the purpose of the data processing and the risk management strategy. Legal support is essential to conduct a comprehensive DPIA that meets regulators’ expectations.
- Conduct regular audits
Continuous compliance requires regular audits of data practices. Engage legal experts to conduct such audits and provide practical insights for improvement. This practice not only strengthens compliance, but also increases the trust of Data Principles.
The Importance Of Drafting Robust Contracts With Data Processors
The relationship between data controllers and processors is crucial to ensure compliance with the DPDP Law. The drafting of a well-crafted contract is essential to protect the interests of the Data Principle and to clearly set out the obligations of the processors. The key aspects of such agreements are as follows:
- Definition Of Data Processing Activities: The contract must clearly define the data processing activities to be performed by the processor and set out the relevant services and performance standards.
- Access to records: Data controllers must have access to all records and information relating to processing activities kept by the processor to ensure transparency and accountability.
- Ongoing monitoring and evaluation: The contract must allow for ongoing monitoring and evaluation by the controller and prompt corrective measures if necessary.
- Data privacy and liability: contracts should include clauses that protect the confidentiality of customer data and hold data processors accountable for security breaches and data breaches.
- Business continuity planning: It is essential to implement contingency plans to ensure business continuity in the event of a processing interruption.
- Subcontractor approval: prior approval must be obtained for the use of subcontractors for processing activities to ensure compliance standards are met.
- Right to audit: data fiduciaries must reserve the right to audit the work of data processors and receive relevant audit reports.
- Government access and compliance: The contract must allow access to the data fiduciary’s records by government or regulatory authorities and require compliance with any instructions from the competent authority.
- Right To Audit: The data controller must reserve the right to audit the data processor’s IT and cybersecurity systems to assess security measures.
- Post-contract confidentiality obligations: specify that personal data must remain confidential after the contract ends.
- Record-keeping obligations: processors must fulfil their record-keeping obligations in accordance with legal requirements.
A well-drafted data protection agreement (DPA) should outline certain obligations of the data processor, such as
- Acts only according to the written instructions of the data fiduciary.
- Ensure confidentiality and security throughout the data processing lifecycle.
- Employ sub-processors only with the prior approval of the data fiduciary under a written contract.
- Delete or return all personal data at the end of the contract.
- Allow the data fiduciary to conduct audits and provide necessary information upon request.
- Immediately notify the data fiduciary of any problems arising during data processing.
- Help comply with requests from Data Principles and data protection impact assessments.
Compliance with the DPDP Law requires commitment from data fiduciaries at all levels. By following these steps and leveraging legal expertise, data fiduciaries can build a robust framework for data protection. This proactive approach not only reduces legal risks, but also increases the trust of Data Principles and ultimately contributes to a safer digital ecosystem. Investing time and resources in both compliance measures and well-crafted contracts is crucial to creating a responsible data processing environment.
Author: Sumedha Vadhulas
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