Understanding the Implications of the GDPR on the Maritime Industry

0
Image is for representational purposes only. Courtesy: CNBC

The General Data Protection Regulation (GDPR) (Regulation (EU) 2016/679) is set to come into force in May 2018. It is a regulation by which the European Parliament, the Council of the European Union and the European Commission intend to strengthen and unify data protection for all individuals within the European Union (EU).

The GDPR replaces the EU Data Protection Directive and applies to all member countries without the need for national legislation. After four years of discussion and amendments, the regulation officially takes effect on May 25, 2018 and places the EU at the forefront of data protection standards.

Ince & CO explains, “Shipping companies collect a great deal of personal data, including passenger information, crew and employee details, customer lists and details of business contacts. The complex global nature of the industry and high level of personal data processed and exchanged, often across national borders, can leave information vulnerable to security breaches, intentional or otherwise. Implementing effective data protection controls into daily operating procedures is a huge challenge. However, when the EU General Data Protection Regulation and the UK’s Data Protection Act 2018 come into force on 25 May 2018, businesses ignore them at their peril, as non-compliance can result in large fines and reputational damage. There are also commercial benefits to effective compliance: companies that protect the privacy of their passengers, employees and business associates and conduct properly targeted marketing campaigns will be more likely to attract and retain business and staff.”

Lester Aldridge underlines the steps companies need to take to prepare for the GDPR, stating, “under the GDPR, there is a full list of action points for businesses to take to ensure data protection compliance. The following 5 key steps are perhaps the most important ones that should help company’s process data correctly:

  1. Appoint a data protection officer to ensure compliance.
  2. Implement a system internally to ensure the relevant supervisor is informed of a personal data breach within 72 hours of first becoming aware of the breach.
  3. Adopt an updated data protection and privacy policy by analysing your system and practice to ensure that data is processed in accordance with the permitted legal grounds
  4. Run audits and risk assessments on collected personal data and keep the individuals informed about processing their personal data.
  5. Provide training to your employees and ensure that they are abreast with the correct processes and ensure that data controllers have contracts with all of their data processors.”

With large potential fines (the greater of up to 4% of global turnover or 20 million Euros), risk of claims from individuals and reputational damage, businesses need to make the necessary changes to their systems and policies now in order to be prepared when the GDPR “goes live” on 25 May 2018.

HFW states, “The GDPR will also apply to organisations established outside of the EEA if certain conditions apply, including where they monitor the behaviour of individuals within the EEA (for example, via cookies), offer goods or services to individuals within the EEA (note that if you offer goods or services to a business that business has individuals within it) or where EEA Member State law applies in accordance with international law, e.g. where a vessel is flagged with an EEA Member State registry.

Particular factors to consider when determining whether the GDPR will apply are:

  • Are any of your vessels flagged within the EEA?
  • Is your website directed towards customers based in the EEA, for example by giving an option to choose a “UK” setting, an EEA currency, or a particular language?.
  • Can your services be bought from within the EEA?
  • Do you have a registered establishment or an office in the EEA?
  • Is your business currently registered with an EEA data protection authority, such as the UK’s Information Commissioner’s Office (the “ICO”)?
  • Do you use servers located in the EEA?
  • Do you monitor the behaviour of any individuals within the EEA (irrespective of their nationality or habitual residence)? For example, if your website uses tracking cookies, then you are “monitoring individuals” for the purposes of the GDPR.

If the answer to any of these questions is yes then it is likely that the GDPR applies to you.

The GDPR introduces a host of new obligations and requirements with which businesses must comply. Five key action points are as follows:

  1. Conduct a data audit. Data controllers and processors alike are required to keep records of their personal data processing. Analyse your systems and practices to check what personal data you process, why, how you use them, where they are stored and whether you still need them. Check whether you process them in accordance with one of the permitted legal grounds (e.g. has the individual given their consent, or is the processing necessary for the performance of a contract with the individual, or necessary for a legitimate business interest). “Sensitive” personal data are subject to stricter rules and processing usually requires the individual’s consent. Note that “consent” is more difficult to obtain under the GDPR regime than under the UK Data Protection Act 1998 which implements the current EU data protection regime. Criminal records of employees or service providers can only be processed in accordance with specific EEA Member State laws. Document your findings and decisions.
  2. Draft or amend policies and procedures. The GDPR strengthens and adds to individuals’ rights, for example it strengthens the rights to have personal data deleted or frozen, adds a new right of “data portability” where an individual can request that personal data stored electronically be transferred to a different data controller, and shortens timelines for compliance with individuals’ requests. It also imposes new obligations on all data controllers to report personal data breaches to relevant data protection authorities within 72 hours, and to report breaches to individuals concerned (if the breach is high risk) “without undue delay”. It introduces a new concept of “privacy by design”, which requires businesses to think about protecting individuals’ privacy at the very beginning of any new project and to conduct “privacy impact assessments” calculating the potential risks to individuals’ privacy rights. Businesses will need to update (or draft) policies and procedures to ensure compliance with these obligations.
  3. Inform individuals about your processing through fair processing notices. Individuals must be kept informed about the processing of their personal data. The GDPR increases the amount of information which must be included in these notices. Privacy policies will need to be updated and businesses will need to amend (or draft) notification forms.
  4. Amend or put contracts in place with data processors. The GDPR requires data controllers to have contracts in place with all of their data processors, containing certain elements specified in the GDPR.
  5. Appoint a data protection officer. Many businesses will be required to appoint data protection officers, or may choose to do so voluntarily, given the increased risks associated with data protection.”

The UK P&I Club suggests an action plan in accordance with the GDPR stating, “In order to comply to the full scope of the GDPR, it is recommended that organisations seek legal counsel.

At a minimum, here are a few high-level action items:

  • Get consent: A data controller must be able prove that consent was given by the data subject.
  • Conduct a Data Protection Impact Assessment: It’s important to assess privacy risks of processing personal data of individuals.
  • Where appropriate, appoint a data protection officer: This person is responsible for overseeing compliance and data protection strategies.
  • Be prepared to report data breaches: Under the GDPR organisations must report a breach within 72 hours.
  • Maintain records of processing: Article 30 states that controllers “shall maintain a record of processing activities under its responsibility.”

The GDPR will change the way the shipping industry handles data forever. It is something that must be taken very seriously as any violation will result in severe repercussions. Organisations that fail to comply will face significant fines—as high as four percent of the organisation’s annual revenue. Furthermore, individuals may take action against any entity that improperly handled their personal data.

Sea News Feature, April 9