The logistics and supply chain industry is undergoing a major transformation, driven by global economic shifts, growing calls for sustainability, and the COVID-19 pandemic. Customers now want more secure, flexible, and predictable supply chains, while ensuring efficient logistics are maintained. Logistics service providers must adapt to these new demands and challenges, while also complying with the legal and regulatory frameworks that govern the collection, processing, and transfer of personal data.
One of the most significant developments in this regard is the Digital Personal Data Protection Act 2023 (DPDP Act), which was notified by India on August 11, 2023. The act aims to provide statutory recognition to some aspects of informational privacy, while balancing the need to process personal data on lawful grounds. The Act regulates the governance of personal data collected by organizations and empowers individuals with rights over how their data is processed.
The DPDP Act introduces several key provisions and considerations for logistics and supply chain companies. It defines the concept of a data fiduciary, designating organizations that collect and determine the use of personal data as such. For logistics firms, this encompasses the collection and management of customer data, emphasizing the importance of responsible data handling, especially when collaborating with various transportation partners.
The Act places a responsibility on larger logistics companies to educate and sensitize smaller entities regarding data protection obligations, given that smaller outfits may lack resources or awareness in this regard. Additionally, it encourages the use of secure digital methods for data sharing to ensure data is accessed and utilized only as necessary for specific tasks. Recognizing the critical role of technology, the Act also emphasizes investing in secure digital tools for data sharing, particularly as smaller partners may struggle to implement robust security measures independently.
Responsibilities and Guidelines for Data Handling
Consent management is a pivotal aspect, with the Act granting data principals the right to withdraw consent for personal data processing. Logistics service providers must promptly cease data processing upon such requests, underlining the need for a robust consent management system. As per the provisions of the Act, a Data Protection Board is to be established to monitor compliance and impose penalties for non-compliance, focusing on deterrence rather than compensating individuals affected by data misuse.
The Act also addresses cross-border data processing, offering flexibility for international business expansion. Companies, especially large logistics firms, should prepare for data audits, potentially necessitating independent data auditors to ensure compliance with regulations. Clear processes for managing consent, honoring withdrawal requests, and promptly ceasing data processing are crucial.
Data privacy governance is highlighted as both a legal requirement and governance issue, calling for the establishment of Data Protection Officers (DPOs) and Security Operations (Sec Ops) teams to oversee data protection measures. Also, while collaborating with aggregators or tech platform providers who are data processors, shippers and carriers must define their roles as data fiduciaries to ensure compliance with the Act and contractual agreements. These provisions collectively shape the landscape for data protection and governance in the logistics and supply chain sector under the DPDP Act of 2023.
Best Practices for Ensuring Compliance To ensure compliance with the DPDP Act and foster more secure and resilient logistics and supply chains, logistics service providers need to embrace several best practices. These include conducting a thorough assessment of their data-related activities to identify DPDP Act compliance gaps and risks. Logistics players should also develop transparent privacy policies to inform customers and employees about data processing details, obtain valid consent for data collection, minimize data collected to what’s necessary, and implement robust security measures. Promptly reporting data breaches and conducting regular audits for policy updates are essential. Moreover, staff training, the appointment of a qualified data protection officer, and establishing a grievance resolution mechanism are crucial steps in achieving DPDP Act compliance and building trust in data handling processes.
