Protecting Your Data: Key Clauses to be kept in mind while negotiating data processing agreements.

In our data-driven world, safeguarding individual privacy and minimizing risks are paramount. Whether you're entrusting your data to a vendor (acting as a data controller) or processing data on behalf of another organization (acting as a data processor), a well-crafted Data Processing Agreement (DPA) ensures data security, minimizes risks, and fosters trust with individuals whose data is involved.

Given below are some key clauses that should be included in your DPA:

1. Defining Roles and Responsibilities:

• Clarity is Key: Clearly define the roles and responsibilities of each party involved in data processing. This includes specifying who is the Controller and who is the Processor, as per relevant data privacy regulations.
• Avoid Joint Controllerships, wherever possible: Under Article 26 of the GDPR, data subjects (individuals whose data is processed) can hold any Joint Controller responsible for their data's security and privacy. This means even if a data breach occurs due to the negligence of your partner, your organization could face legal repercussions and penalties.

2. Minimizing Your Liability and Contract Termination:

• Disclaim and seek indemnification: It is important to explicitly disclaim the liability that may be caused due to breach/negligence of the other party and seek indemnification requiring the other party to indemnify you for all costs, damages, and liabilities arising from data breaches caused by their actions or omissions.
• Defined Termination Clauses: Outline specific grounds for terminating the agreement and the process for handling data in such scenarios.

3. Enhanced Auditing Rights:

• Annual Audits, Not a Distant Dream: Stipulate the right to conduct thorough audits of your vendor's data practices at least once a year, with reasonable notice.
• Independent Auditor Option: Reserve the right to appoint independent auditors for in-depth assessments, if needed.
• Defined notice terms: While acting as a data processor, it is important to define clear notice terms (Eg- 14 days/30 days depending upon available facilities and time required to prepare for such audits) in consultation with your administration, legal, and Infosec teams for allowing your clients to conduct audits.
• Third Party Audit Reports: If your organisation goes through annual independent audits (such as SOC-2, ISO Audits) you can provide such reports to your clients which would facilitate them in assessing your compliance with the data security and privacy.

4. Empowering Data Subject Rights: Require your processors to notify you and provide reasonable assistance in fulfilling data subject rights requests (access, rectification, erasure, objection) within a reasonable time from the data of receipt. It is also preferable to restrict your processors from directly reverting to such requests except for intimating the data subjects about the details of the controller.

5. Swift Breach Notification: Mandate that the Processor notifies you of any data breaches within 24-48 hours of their discovery, facilitating timely response and mitigation. The notification requirement should be based on the reporting requirements as per the applicable legislative requirements of your country. Require detailed breach reports, including the nature of the breach, affected data subjects, and remedial actions taken.

6. Data Localization and Data transfer restrictions: Ask your processor to consider data localization options to store data within specific geographic regions for additional compliance and control. Further, impose restrictions on the Processor's ability to transfer data to third-party countries without your prior written consent and compliance with necessary safeguards like SCCs.

7. Right to restrict or suspend processing: Reserve the right to restrict or suspend data processing by the Processor in case of non-compliance, security concerns, or suspected breaches.

8. Defined data retention and deletion: Agree on clear data retention periods based on legitimate business needs and legal requirements, outlining secure deletion methods upon reaching the retention period.

9. Regular review and updates: Data privacy regulations evolve, so regularly review and update your DPAs to reflect changes and maintain optimal protection.

10. Robust Safeguards: Specify the technical and organizational security measures (in consultation with your InfoSec team) that the processing party must implement to protect data, aligning with industry best practices and relevant regulations.

11. Notification of violations: Ask your processor to notify you if your processing instruction violates any data privacy or industry specific law.

By incorporating these best practices and seeking expert guidance, you can write a robust DPA that minimizes your liability, empowers data subjects, and ensures your data remains secure and protected throughout the processing lifecycle.