Privacy Compliance: Practical Ways to Avoid Risk and Sanctions under the Personal Data Protection Law

In almost every company today, personal data is scattered everywhere: customer databases, HR systems, emails, cloud storage, third-party applications, to simple spreadsheets saved by operational teams.

This data is a company asset that helps drive decision-making, service personalization, operational efficiency, and product innovation.

However, behind that strategic value, there is a major risk that is often underestimated: data breaches, misuse of information, and failure to manage privacy.

Although data is an asset, it is also a major liability if it is not managed properly.

Many companies feel they are “already compliant” simply because they have a Privacy Policy page or a consent template on their website.

In reality, when an internal audit is conducted or regulators start asking questions, it becomes clear that those policies are not truly translated into daily business processes.

Privacy compliance is ultimately not about documents, but about business risk. Risk of fines, risk to reputation, risk of operational disruption, and risk of losing market trust.

Companies that view personal data protection as merely a legal issue usually realize its impact too late when problems have already occurred.

What Is Privacy Compliance?

Privacy compliance is business compliance in managing personal data responsibly, consistently, and in accordance with regulations across all company operational processes.

However, in business practice, privacy compliance is not just about having a privacy policy document or placing a disclaimer on a website.

It means that you have full control over data flows within the organization and can be held accountable for them. Privacy compliance reflects how a company:

• Collects personal data with a clear purpose
• Uses data proportionally and lawfully
• Stores and protects data from unauthorized access
• Shares data with third parties on a lawful basis and with adequate controls
• Deletes or archives data when it is no longer needed

In many companies, personal data is collected through various business processes. The marketing team manages lead and customer data, the HR team processes employee data, while customer support accesses transaction histories and customer complaints.

The problem is that each function operates based on its own assumptions, without an integrated privacy compliance framework.

For example, the marketing team stores customer data in a cloud-based CRM platform, while the sales team downloads the same data to personal devices for follow-up purposes. This practice is often considered normal for the sake of speed and work flexibility.

However, what if:

• A sales employee’s laptop or personal phone is lost or stolen, while customer data is stored without encryption or additional safeguards?
  The company is still considered negligent in protecting personal data, even though the incident occurred on an employee’s personal device.
• The employee resigns, but there is no clear procedure to ensure all customer data is deleted from their device?
  The data remains outside the company’s control and can potentially be used without authorization.
• The downloaded data is no longer synchronized with the CRM, then used for offers that are no longer relevant or violate customer preferences?
  This can trigger complaints, loss of trust, or even reports to regulators.
• The company is asked to explain data management flows by clients or auditors, but is unable to prove who accessed the data, where the data is stored, and how it is secured?
  From a privacy compliance perspective, this is not merely an administrative gap, but a control failure.

In situations like these, the main problem is not employee intent, but the lack of organizational controls.

Without clear access policies, storage rules, and data deletion procedures, the company loses visibility and control over personal data. Yet legally and reputationally, the responsibility remains with the company.

This is why privacy compliance is not about “whether data is breached or not,” but whether the company can prove that data is managed in a controlled, responsible, and auditable manner.

Why Is Privacy Compliance Important?

Privacy compliance is important because its failure directly impacts three pillars of business: finance, reputation, and operational sustainability.

Compliance with privacy is no longer merely a “best practice,” but a strategic necessity for measurable risk mitigation. The following are the strategic reasons:

1. Direct Financial Risk

Regulatory sanctions are now highly material. In Indonesia, Article 57 paragraph 3 of the PDP Law states that violations of the PDP Law are subject to administrative fines of up to 2% of annual revenue.

Not only that, the PDP Law also regulates criminal sanctions. Under the provisions:

• Disclosure of personal data without the consent of the data subject can result in criminal sanctions in the form of imprisonment of up to 5 years and/or fines that can reach up to IDR 4 billion.
• Unlawful collection of personal data also carries serious consequences, with the threat of imprisonment of up to 5 years and/or fines of up to IDR 5 billion.

At the global level, such as under the EU GDPR, fines can reach 2% of global turnover or €10 million (whichever is higher). Not to mention the potential for class action lawsuits from affected individuals.

2. Erosion of Trust and Brand Reputation

From a reputational perspective, customer trust is the most fragile asset. In many cases, customers may tolerate business mistakes, but are extremely sensitive to misuse or leakage of personal data.

Once trust is lost, the cost of restoring it is far greater than the cost of building a privacy compliance system from the start.

3. Severe Operational Disruption

Operationally, personal data incidents often force companies to temporarily halt systems, restrict internal access, or conduct sudden audits amid business activities.

These disruptions directly impact productivity and business targets, especially if the company relies on digital systems.

4. Demands from the Business Ecosystem

For B2B business owners, this fourth factor is critical. Corporate clients, especially global companies, now often include compliance audits, particularly privacy compliance, in their due diligence processes before collaborating.

If your business cannot demonstrate an adequate privacy framework, you may lose partnership opportunities and major projects.

Laws and Regulations on Privacy

Privacy compliance obligations do not originate only from local regulations, but also from cross-border rules that directly affect how businesses operate.

Companies must map which regulations apply based on their operating locations, the origin of data subjects, and the markets they serve.

1. Law No. 27 of 2022 on Personal Data Protection (PDP Law)

In Indonesia, the PDP Law is the main foundation for personal data protection. For companies, this law is not just an administrative obligation, but a signal that personal data management will be supervised more strictly.

Regulators do not only look at whether policies exist, but at how those policies are implemented in real processes.

Its main principles include:

• Transparency in data collection and use
• Limitation of purpose
• Security and confidentiality of information
• Individual rights over personal data (access, deletion, or correction)

For businesses, this means internal processes must be aligned with these principles.

2. General Data Protection Regulation (GDPR) of the European Union

For companies operating across borders or serving global customers, international regulations such as global data protection standards have a significant impact.

These regulations often have extraterritorial effect, meaning obligations still apply even if the company is not based in that country.

3. Other Applicable Regulations

In addition to GDPR, there are also various sectoral and regional regulations that often arise in international partner due diligence. For example, the California Consumer Privacy Act (CCPA) in the US is also relevant for global digital platforms.

In discussions with management and boards of directors, this issue often arises when companies want to expand, seek investors, or establish strategic partnerships.

What is the implication? Privacy compliance can no longer be viewed as a local issue, but as a cross-jurisdictional business risk that must be managed centrally and consistently.

You need to conduct data mapping to understand where data subjects from certain jurisdictions are located, and apply additional controls.

A common mistake is assuming that local businesses will not be subject to international regulations, even though website traffic and digital services can easily attract cross-border regulatory attention.

Implementing Privacy Compliance in Companies

Implementing privacy compliance is a strategic process that transforms legal obligations into a sustainable operational framework embedded in company culture.

In practice, this means building a systematic program that is not only reactive to regulations, but proactive in managing data risks.

The following are implementation steps based on industry standards that have proven effective across organizations:

1. Conduct Comprehensive Data Inventory and Data Flow Mapping

The first mandatory step is knowing exactly what personal data you have, where it comes from, where it is stored, and with whom it is shared. This goes beyond a static register.

In many companies, this process reveals surprises: customer data stored in other departments without IT’s knowledge, or sensitive files shared through insecure channels.

Use tools that enable the creation of a living Data Processing Inventory or Record of Processing Activities (ROPA) that can be continuously updated. This is the foundation of all subsequent compliance decisions.

2. Build a Clear Policy and Governance Framework

Once data mapping is clear, establish the rules.

This framework must include the company’s main privacy policy, specific procedures (such as data breach handling or responding to customer requests), and a responsibility structure defining who is the data owner, who processes data, and the role of the Data Protection Officer (DPO).

The critical point here is ensuring policies do not become decorative documents, but are actually implemented.

In discussions with management, ensure they understand and support these policies as part of corporate governance.

3. Integrate Risk Assessment into the Business Project Cycle

Effective privacy compliance is proactive. Conduct Privacy Impact Assessments (PIA) or Data Protection Impact Assessments (DPIA) as mandatory for every new product, business process, or vendor cooperation involving personal data.

This assessment process forces the business to think about privacy from the beginning (privacy by design). For example, before launching a new analytics feature, IT and product teams must jointly assess risks from additional data collection and implement mitigation controls from the development phase.

4. Implement Specific and Measurable Operational Controls

This is the core of program execution. These controls must include:

• Data Subject Rights Management: Establish official channels (portal/ticketing) and clear internal procedures to respond to access, correction, or deletion requests within legally mandated timelines.
• Incident and Data Breach Management: Prepare detailed playbooks, from identification, escalation, investigation, notification (to regulators and individuals), to remediation. Train core teams through simulations.
• Vendor and Third-Party Management: Remember that your risk also depends on vendors. Conduct due diligence, include strong data protection clauses in contracts, and perform periodic third-party risk assessments.
• Consent Management: For consent-based processing, ensure mechanisms exist to record, store, and manage proof of consent and customer preferences.

5. Invest in Continuous Training and Building Culture

Human error is the primary cause of incidents. Therefore, training programs must be conducted regularly and tailored by role.

Marketing teams need to understand cold messaging rules, HR teams must know how to securely store employee data, and developers must understand privacy by design principles.

A common mistake is one-time onboarding training. Privacy compliance requires repetition and value internalization.

6. Monitor, Audit, and Continuously Improve

A good program is measurable and continuously improved. Conduct annual internal audits, periodically review policies, and use dashboards to monitor key metrics such as incident volume, customer request resolution time, and training completion rates.

Data from monitoring is vital for reporting progress to the board and demonstrating accountability to regulators.

Integrating Privacy Compliance as Part of Corporate GRC

Effective privacy compliance can only function if it is directly integrated into the company’s Governance, Risk, and Compliance (GRC) framework.

In practice, many organizations still manage privacy compliance separately: data mapping in spreadsheets, PIAs conducted manually, and compliance reports compiled just before audits.

This pattern makes data protection risks difficult to monitor, difficult to report to management, and prone to lagging behind business changes.

The GRC approach unifies privacy compliance with risk management and governance. Personal data risks are treated like other operational and IT risks: mapped, assessed, monitored, and reported regularly.

This way, management can clearly see the compliance position, rather than relying on assumptions.

Adaptist Privee helps companies implement this approach practically. Through a single platform, companies can manage data mapping and ROPA, Privacy Impact Assessments (PIA), data subject rights management, breach incidents, and third-party risks within one consistent GRC framework.

As a result, privacy compliance no longer depends on manual efforts or specific individuals. Companies gain better visibility, are audit-ready, and can demonstrate accountability for personal data protection to regulators and stakeholders.

Conclusion

Privacy compliance is a critical foundation in modern business risk management, not merely a legal obligation or documentation project.

Personal data protection directly affects reputation, customer trust, and operational stability.

When managed reactively, the risks are costly and damaging. When managed proactively, privacy compliance becomes an effective risk control tool.

For management, the key message is simple: privacy compliance is not a one-time task. It is an ongoing process that must grow alongside business complexity, technology, and regulatory expectations.

Companies that seriously build privacy compliance early will be far better prepared to face audits, business expansion, and unexpected crises without sacrificing the trust they have built in the market.

FAQ: Privacy Compliance