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SA's privacy law might do more harm than good

SA's privacy law might do more harm than good

The anticipated negative impact that South Africa's Protection of Personal Information Act (POPI) will have on the country's economy has led to a call from experts for considered laws and regulatory measures in SADC and on the rest of the continent. Signed into law on the 27th November 2013, with the commencement date yet to be determined by the President, POPI has raised concern among experts about what it will mean for the economy and employment despite its positives intentions.

The enactment of data privacy legislation in South Africa was prompted to a large extent by European countries during the 2010 FIFA World Cup Finals said Wayne Mann, director of group risk at financial services firm The Unlimited.

According to Mann these countries wanted the assurance that data gathered from their travelling citizens would be protected.

Mann has called for a more imaginative approach to international data exchange laws in Africa, and in the interest of small business in particular.

"The AU and regional blocs must stay true to their mandate and ensure that our data as consumers and as private citizens is protected and used responsibly. At the same time within the context of access, especially in South Africa to financial services for example we've got a big part of the population that is uninsured and direct marketing enables insurance companies to take their products to the underserved in a cost effective manner and that is why we are concerned that POPI will mean that those living in the rural areas are not going to get those smses anymore."

Mann also noted the constructive aspects of POPI as evidenced by the benefit enjoyed by south african business when country's legislature took steps to protect personal information.

"There have been positive spin offs for South Africa because it has enabled our companies that do business overseas to do so in a manner that complies with global data laws and there is a burgeoning business process outsourcing industry in South Africa with local call centres calling overseas and POPI has made that possible which is wonderful and in those respects South Africa is getting ahead of the rest of the continent."

Doom spelled for businesses that depend on electronic marketing

Warren Moss, Chairman of the Direct Marketing Association of Southern Africa said POPI would impact negatively on small businesses in most sectors in the country. Moss is of the view that the piece of legislation would add to the already high failure rate because SMEs would need to spend thousands of rands in an attempt to comply with the upcoming law. 

Francis Cronje, chief executive officer of InfoSeal and MD at, said that insofar it relates to SMS sending as a medium of communication in order to allow all citizens to partake in the advantages of the economy, one could argue that the so-called “opt in” might hamper economic growth as this form of communication is sometimes the only form of access certain individuals might have to information, and the subsequent gaining of such consent might either be impractical or impossible, taking the lack of internet access in the country into account.

"The way to resolve this would be for the relevant industry representative bodies to create codes of conduct that could address these issues, but by ensuring that the correct balances are found between individuals’ right to privacy and their socio and economic interests as well as between these rights and the public’s interest.”

Economist Mike Schüssler sought to emphasise the negative effect that a cut down in the number of businesses that rely on direct marketing would have on employment number, especially those of the youth.

"Very often young people are working in this industry as a way to find their feet and we need to recognise the value of that."

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