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As technology develops, the law develops with it, as well as our changing understanding of how businesses operate in a digital space. Data, when it refers to the information your business holds and deals with, is growing in its utility to your business and its functioning. In New Zealand, the law around how we deal with data in different ways is developing, particularly regarding privacy and ownership issues. One of these developing areas is the concept of data sovereignty, which can particularly impact your business when you deal with any personal or identifying data. Therefore, this article will explain data sovereignty and why it is relevant for your business.

What Is Data Sovereignty?

Online data can pass through many hands and reach numerous devices across the world. This convenience is beneficial for your business when engaging with customers or partners and sending them important information. However, this greater connectivity and ease does raise some issues, namely:

When data can reach multiple people in various areas, different countries’ laws may apply to it. This fact can raise issues when deciding what laws to use if there is a dispute or problem. Consequently, data sovereignty is a concept that relates to what country’s laws should apply to a piece of data over the others. In particular, how data originating from one country should be subject to that country’s laws.

For example, say that you store your business’ databases in a cloud server that exists outside of New Zealand. Since you created or collected the data in New Zealand, our laws should still apply to it. Under data sovereignty rules, this applies even though the storage location of the information itself is offshore.

The goals of data sovereignty are to protect the original owners of data and the privacy of the people that data may be about. Therefore, it often intersects with these legal issues.

Is Data Sovereignty Relevant For My Business?

Data sovereignty will likely be relevant for your business if you deal with data coming from different countries or send data from New Zealand to other countries. Examples of these scenarios can include:

  • storing your data in a local or foreign cloud service provider;
  • exchanging data with foreign companies;
  • selling to overseas customers;
  • collecting the personal information of overseas customers; or
  • working with overseas partners.

For example, even if you store your data in local New Zealand servers, US law may apply to your data if a US company owns those servers. This fact is due to various corporate laws in the US.

Additionally, data sovereignty and the law can become quite complex. So, when you transmit or store your data in an international context, it is crucial that you clarify:

  • any ownership issues with contracts;
  • where you store any data;
  • what parties hold and have access to your data;
  • where your data servers are;
  • where any storage providers are based;
  • robust data security measures; and
  • what laws apply to your data.

Some countries have laws that implement concepts around data sovereignty, whereas some do not. Therefore, it is important that you seek legal advice where necessary.

For a greater likelihood of being sure that New Zealand law applies to your data, where possible, try to use New Zealand data storage providers based in the country.

Privacy Law and Data Sovereignty

Data sovereignty often comes into play where it intersects with privacy law. These are separate concepts but often come together, particularly in an online context. Notably, operating online can generate various privacy issues. As a result, it can be difficult to determine what country’s privacy laws should apply to a dispute where a person’s personal data exists in many different countries.

Some countries, including New Zealand, impose privacy obligations based on the contents of the data itself. The Privacy Act specifies certain standards for how you share individuals’ personal information. Likewise, your business must meet those standards. Data sovereignty issues can come into play when your data deals with multiple countries with laws like this.

Therefore, it is important that you investigate what countries’ privacy laws may apply to you and take steps to comply.

Māori Data Sovereignty

Another aspect of data sovereignty is the power it gives to particular nations, and in particular, those nations’ Indigenous peoples. The concept of Māori data sovereignty refers to the idea that Māori should have control over their data, rather than organisations that may use it for making decisions concerning Māori without any consultation.

For example, government organisations will rely on Māori health data and data analytics for policy decisions, where Māori may have little say in those decisions themselves.

Māori data sovereignty relates to the rights and interests that Māori have to their digital information and its ethical distribution. It aims to protect the knowledge and information that comes from uniquely Māori sources.

Key Takeaways

Data sovereignty is a broad legal concept that determines what country’s laws apply to data when it may exist in multiple areas and engage different legal systems. Importantly, this area is still developing and will continue to do so. However, if your business uses data in international contexts, you will likely engage this data issue. 

For more information or help with managing data for your business, contact LegalVision’s data, privacy, and IT lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

What is data sovereignty?

It can be a broad concept but generally refers to the idea that data you collect or create in a country should be subject to their laws.

Is data sovereignty relevant for my business?

If you store data using cloud services or share data with overseas partners, you will likely encounter issues that engage data sovereignty matters.

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