The new rules are a reaction to the recent jailing of a News of the World reporter and a private investigator. Clive Goodman and Glenn Mulcaire tapped the phone messages of Royal Family employees to source stories.
The PCC, which is the industry's self-regulatory body and which publishes a Code of Practice for newspapers and magazines, conducted an investigation both of the News of the World and of the newspaper industry to discover the industry's practices in relation to subterfuge and newsgathering.
At the end of its investigation it made a number of recommendations. It has now told newspapers that contracts for freelance or external contributors should require that they obey both the Data Protection Act and the PCC's Code in the same way that staff contracts now do.
The new recommendations also said that all journalists working for a paper should be trained and briefed on privacy and the law, and that controls of cash payments should be very strict.
"There should be rigorous audit controls for cash payments, where these are unavoidable," the PCC said.
The PCC conducted an investigation into the News of the World case, interviewing editor Colin Myler and owner News International's chief executive Les Hinton. The editor at the time of the incident, Andy Coulson, resigned over it.
The PCC said that it believed the newspaper's assertion that it was an isolated incident. "No evidence has emerged either from the legal proceedings or the Commission’s questions to Mr Myler and Mr Hinton of a conspiracy at the newspaper going beyond Messrs Goodman and Mulcaire to subvert the law and the PCC’s Code of Practice," it said.
"There is no evidence to challenge Mr Myler’s assertion that Goodman had deceived his employer in order to obtain cash to pay Mulcaire; that he had concealed the identity of the source of information on royal stories, and that no-one else at the News of the World knew that Messrs Goodman and Mulcaire were tapping phone messages for stories. However, internal controls at the newspaper were clearly inadequate for the purpose of identifying the deception."
The PCC then conducted a wider investigation into practices in other newspapers, and said that it found many examples of good practice. It said that it was essential that newspapers police themselves effectively, because the Information Commissioner was seeking to introduce jail terms for journalists who broke the Data Protection Act (DPA).
"The Commission condemns breaches of the DPA – or any law – when there are no grounds in the public interest for committing them," said the PCC. "However, it has said before that it does not consider that the case for stronger penalties has been made out. Jailing – or threatening to jail – journalists for gathering information in the course of their professional duties is not a step to be taken lightly, and would send out a worrying message about the status of press freedom in the United Kingdom."
