In 2022, Indonesia introduced a comprehensive data privacy regulation, Law No. 27 of 2022 on Personal Data Protection (PDP Law), which is set to take full effect in October 2024. As organizations worldwide increasingly handle personal data, this law has broad implications for those operating within Indonesia but also for any international entity processing data belonging to Indonesian citizens regardless of location.
What is Indonesia's PDP Law?
The PDP Law is Indonesia’s first extensive framework for personal data protection, largely inspired by the EU's General Data Protection Regulation (GDPR). It governs how organizations collect, use, store, and share personal data, aiming to safeguard individuals’ privacy and ensure organizations handle data responsibly. The law applies to all sectors, from small businesses to multinational corporations, and includes both general and sensitive data.
Who Does the Law Apply To?
The scope of the PDP Law is broad, applying to organizations both inside and outside Indonesia if their activities involve personal data processing that impacts Indonesian citizens. This includes Indonesian organizations in any sector, along with any international organizations that handle or store Indonesian data protected under the PDP. This extraterritorial scope is significant, meaning organizations located outside Indonesia must also take measures to ensure compliance if their data activities have legal consequences in the country.
Key Requirements of the PDP Law
Complying with the PDP Law involves several important elements for organizations:
1. Legal Basis for Data Processing: Organizations that wish to process Indonesians' personal data must identify a clear legal basis, informing individuals of why their data is being collected and how it will be used. This includes providing consent forms, maintaining transparency in communication, and ensuring data is used strictly for the purposes defined at the point of collection.
2. Data Security: Organizations are required to implement safeguards to protect personal data against unauthorized access, misuse, loss, or damage by ensuring its visibility and confidentiality. Data security precautions can include employing data classification, data loss prevention, encryption, and access control solutions like a secure collaboration tool. Regular audits and data protection impact assessments (DPIAs) can also help ensure ongoing compliance by identifying potential risks before they become liabilities.
3. Cross-Border Data Transfers: Organizations transferring data outside of Indonesia must ensure the receiving country implements equal or greater security measures to maintain compliance. This can include binding corporate data policies, standard contractual clauses, or other mechanisms that ensure data remains secure during cross-border transfers. Organizations need to carefully assess their international data flows to avoid non-compliance.
4. Data Protection Officer (DPO): If handling large volumes of sensitive data or engaging in activities that rely heavily on data processing, organizations are required to appoint a DPO to oversee compliance with the PDP Law. The DPO serves as a key liaison between the organization and regulatory authorities, ensuring that any potential data risks are mitigated and that compliance measures are maintained and updated as necessary.
PDP Non-Compliance Penalties
Organizations that violate Indonesia's PDP Law can face administrative fines of up to 2% of their annual revenue for offenses like failing to obtain consent or mishandling data. Unauthorized access or data transfer without consent can lead to up to five years of imprisonment and fines of up to IDR 5 billion (USD 330,000). Similarly, the most severe violations, such as illegal processing or intentional data breaches, may also result in criminal penalties, including up to six years of imprisonment and fines of up to IDR 6 billion (USD 400,000). Additionally, organizations may need to compensate individuals for damages from data misuse.
Ready to Ensure PDP Compliance?
Staying compliant with Indonesia’s PDP Law can seem overwhelming, but it’s crucial for protecting your organization and customers. Start your compliance journey today by learning more about the PDP and the steps your organization can take to meet its requirements. Then, when you're ready, chat with one of our experts to learn how our data protection solutions can help you meet your goals.
