Privacy Commissioner Timothy Pilgrim has defended the public's right to privacy, but warned that privacy was not "absolute" following revelations about a US surveillance program called PRISM.
PRISM is an initiative by the US National Security Agency (NSA) that allegedly sources data from a number of major tech firms for surveillance, including Apple, Facebook, Google and Microsoft.
The use of the system was exposed by Edward Snowden, an employee of an NSA contractor, who released information about the spying program to the media. Snowden is now reportedly in hiding in Hong Kong.
Pilgrim said the reports about PRISM have raised several questions around individual privacy.
"Privacy is a fundamental human right, recognised in international law and protected under Australian laws such as the federal Privacy Act and telecommunications laws," he said in a statement.
"However, the right to privacy is not absolute - it must be balanced against other important rights and ideals, such as freedom of expression and national security."
Pilgrim said there are provisions in the Privacy Act that allow law enforcement agencies to obtain personal information from private sector organisations, which can extend to practices occurring outside Australia in some circumstances.
"However, the Act also provides that an act or practice of an organisation done outside Australia does not breach the Privacy Act if it is required by an overseas law," he said.
"Further, the Privacy Act will generally not cover the acts and practices of overseas government agencies."
The use of PRISM has caused considerable debate on all sides of politics.
Shadow communications minister Malcolm Turnbull has said the public needs clarity on the scope of programs such as PRISM.
Meanwhile, the Greens have revealed plans to legislate for more transparency around data collected by Australian government agencies in response to revelations about the program.
So far the Australian government has refused to confirm or deny whether US intelligence agencies have shared information gleaned from PRISM with authorities in Australia.
Overseas, the European Union has warned the US about citizens' rights from US surveillance programs.
Viviane Reding, the EU's justice commissioner, has written a letter to the US Attorney-General Eric Holder demanding "swift and concrete" answers about PRISM.
"Programs such as PRISM and the laws on the basis of which such programs are authorised could have grave adverse consequences for the fundamental rights of EU citizens," she wrote.
Reding is demanding answers about whether European citizens were targeted by PRISM and whether the public has means to find out if their personal data has been accessed.
US President Barack Obama has defended the use of the program and has been critical of Snowden leaking information.
"I don't welcome leaks. There's a reason why these programs are classified." he said
"If every step we are taking to prevent a terrorist act is on the front of newspapers or on television, then [the terrorists] are going to be able to get around our preventative measures."
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