Introducing debate on the bill in National Assembly on Tuesday, Justice Minister Jeff Radebe said it protected consumers from the unlawful use of personal information.
He cited ways in which a lack of privacy concerning personal information was affecting citizens.
"Unprotected personal information may lead to identity theft, credit card fraud, stalking, the proliferation of unsolicited pornography, spam and market manipulation practices."
But the minister warned the right to privacy was not absolute.
"In protecting a person's personal information, consideration should also be given to competing interests such as the administering of national social programmes, maintaining law and order and protection of the rights, interests and freedoms of others."
The chairperson of a technical team which helped draft the bill, ANC MP John Jeffrey, said the bill would establish an independent information regulator.
"This implementation [by the regulator] includes education and research, but also monitoring and enforcement compliance, and the handling of complaints."
Jeffrey said sectors like the media industry would be encouraged to regulate themselves by drawing up codes of conduct for the processing of information. The regulator may then approve these codes.
"With a few exceptions, crimes are only committed when a party does not abide by an enforcement notice issued by the regulator, and an aggrieved party has the right to take the enforcement notice on review to a high court... it's only if you don't comply or don't appeal to court, and if you continue to process the information, that you would be guilty of a crime."
DA MP Dene Smuts described the bill as the "best of the best".
"Our e-mail addresses, our cellphone numbers, our transactional history, our financial details, are constantly offered for sale.
She explained that currently consumers needed to opt-out when they were spammed. Under the new bill, a marketer was only allowed to contact a consumer once to obtain consent for future contact.
Smuts said those who unscrupulously procured, disclosed and sold bank account numbers would become criminals liable for a jail sentence of up to 10 years.
"We have seen just one consumer too many... often poor ones, suddenly find debit orders running off their bank account, whose details they never supplied, for services or products they did not order, or which they were duped into signing for."
Smuts said consumers were often told the banking details were obtained from a national consumer database, which actually did not exist.