Commonwealth of Australia Explanatory Memoranda

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EDUCATION SERVICES FOR OVERSEAS STUDENTS BILL 2000

1998-1999-2000

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

SENATE










EDUCATION SERVICES FOR OVERSEAS STUDENTS BILL 2000



REVISED EXPLANATORY MEMORANDUM









(Circulated by authority of the Minister for Education, Training and Youth Affairs,
the Honourable Dr David Kemp MP)










THIS MEMORANDUM TAKES ACCOUNT OF AMENDMENTS MADE BY THE HOUSE OF REPRESENTATIVES TO THE BILL AS INTRODUCED

ISBN: 0642 454191

EDUCATION SERVICES FOR OVERSEAS STUDENTS BILL 2000

OUTLINE

The Education Services for Overseas Students (Registration of Providers and Financial Regulation) Act 1991 (the old ESOS Act) was introduced with the objectives of:

· Ensuring that international students in Australia are treated with equity and fairness;

· Providing a positive basis for promoting Australia’s international reputation as a provider of reliable, high quality education and training; and

· Ensuring that taxpayers’ funds are not required to recompense international students who may have been let down by individual education and training providers.

The old ESOS Act established key national elements for the regulation of the international education and training services industry. The old ESOS Act has been amended and extended since its introduction, increasing industry responsibility and further protecting Australia’s international reputation. As the industry develops, a more effective framework is required. The Education Services for Overseas Students Bill 2000 provides such a framework.
This Bill has been developed following a review of the old ESOS Act, involving consultation with industry, State and Territory authorities and Commonwealth agencies. The Department of Immigration and Multicultural Affairs was closely involved in this process. The review considered the problems facing the industry; the uncertain financial protections for students’ pre-paid course fees; the emergence of a small minority of unscrupulous providers; inconsistent quality assurance; and the need to strengthen public confidence in the integrity of the student visa programme. The major provisions of the Bill will effect regulatory and administrative changes with a whole of government focus.

The Bill establishes a new regime for the registration of education and training providers, which have been approved by State and Territory authorities. A nationally consistent code as a prerequisite of registration is being developed in consultation with State and Territory authorities and industry. Legally enforceable under the Bill, the national code will provide greater quality assurance for overseas students.

The Bill contains measures to continue the obligations under the old ESOS Act for education and training providers to belong to a tuition assurance scheme, to refrain from misleading or deceptive recruitment of students and to refund student money in cases of default. It provides again the penalties of suspension and cancellation from the Commonwealth Register of Institutions and Courses for Overseas Students, and creates new sanctions for non-compliance with the new Act and the national code. The Bill establishes new Commonwealth powers to investigate, impose sanctions and remove non bona-fide or poor quality operators from the industry.

The Bill establishes reporting requirements on providers concerning their students and a new secure electronic confirmation of enrolment system to preclude fraudulent practices and provide evidence for scrutinising compliance with the new Act. Co-ordination between the Departments of Immigration and Multicultural Affairs and Education, Training and Youth Affairs will minimise the presence in the industry of providers who facilitate student breaches of their visa conditions or engage in other fraudulent or unethical practices. Complementary measures are being introduced in the Migration Legislation Amendment (Overseas Students) Bill 2000.

The Bill also provides for an independent review of the Education Services for Overseas Students Act, to commence within three years of the Act receiving Royal Assent.

FINANCIAL IMPACT

The financial impact of the Bill will be minimal and no additional budget funding will be required. The cost of DETYA exercising its more pro-active role is estimated at an additional $0.5 to $1million per annum. This is to be covered by an increase in the Annual Registration Charge paid by providers. Any net cost to revenue of these measures will be met within Departmental resources.

REGULATION IMPACT STATEMENT

INTRODUCTION

The international education and training industry earns Australia over $3 billion per annum. It creates jobs and yields tax revenue from businesses both within and outside the education sector. The Government supports the industry through bilateral and multilateral activities and targeted program assistance. International student numbers have risen from 47,882 in 1991 to 157,834 in 1999.

In addition to direct economic benefits, the international student industry reinforces positive perceptions of Australia as a trade and investment partner with future leaders throughout the region. International students gain insights into Australian culture, law, institutions and business practices, which foster a better understanding of Australia overseas. Australians in turn benefit from these students’ contributions to teaching and research, from the exchange of international perspectives and the diversification of fields of study in response to international demand.

A—SUMMARY

This Regulation Impact Statement (RIS) examines the legislative proposals for this industry. A suite of four Bills is to be introduced into Parliament:

· Education Services for Overseas Students Bill 2000 (the ESOS Bill 2000);

· Education Services for Overseas Students (Consequential and Transitional) Bill 2000;

· Education Services for Overseas Students (Registration Charges) Amendment Bill 2000; and

· Education Services for Overseas Students (Assurance Fund Contributions) Bill 2000

The Education Services for Overseas Students (Registration of Providers and Financial Regulation) Act 1991 (the ESOS Act) is to be repealed and replaced by the Education Services for Overseas Students Bill 2000 (“new ESOS Act”). The ESOS (Registration Charges) Act 1997 (ESOS Charges Act) will be amended, and there will be a new Act imposing the Assurance Fund Contributions.

The RIS examines regulatory and non-regulatory options to deal with the risks posed to our education and training export industry and our overseas reputation by mismanaged and/or disreputable providers and non-bona fide students. The Minister for Education, Training and Youth Affairs, Dr David Kemp, announced a review of the ESOS Act on 19 August 1999. This review involved consultations between Commonwealth, State and Territory authorities, industry groups and education providers. The timeframe was short because of the need to deal with the problems with some urgency. Table 1 provides a summary of the problems identified, the objectives of the regulation and recommended solutions.

Table 1: RIS Summary

B—CURRENT FRAMEWORK

The ESOS Act was designed to ensure:
• That institutions and courses for overseas students are of a good standard (only those registered on the Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS) may offer or provide courses to students on student visas);
• That overseas students receive the education and training for which they have paid;
• That taxpayers’ funds are not required to recompense overseas students let down by individual education and training providers; and
• That the Department of Immigration and Multicultural Affairs (DIMA) has a Register of approved courses for students applying for student visas.

The current framework has three tiers of regulation. Voluntary industry codes of practice govern provider conduct; State/Territory legislation and policy set requirements for providers wishing to be registered on CRICOS; and Commonwealth regulation under the ESOS Act provides for financial and tuition assurance. The sunset clause effects expiry of the ESOS Act on 1 January 2002. Accordingly, The Senate Employment, Education and Training Legislation Committee recommended to the Senate in August 1998 that there be “consultations between the Commonwealth, State and Territory governments and representatives of the education export industry” and that the Committee inquire and report to the Senate “by no later than the last sitting day of the Autumn Sittings 2000, matters relating to the operation of the ESOS Act.”

Details of the origins of the ESOS Act are at Attachment A. Analysis of Australia’s education and training export industry is at Attachment B.

B1. CRICOS

The State and Territory education authorities approve courses and institutions, and advise the Commonwealth to include them on CRICOS. The legislative and other provisions for accrediting and approving providers and courses differ between State and Territory authorities. In general terms, there are State and Territory benchmarks for qualifications of teachers and administrative and teaching facilities of the provider institution. Once providers and courses are approved, State/Territory authorities notify DETYA to register them on CRICOS. The Commonwealth, which administers CRICOS, must accept the advice of State/Territory authorities.

B2. EXEMPT AND NON-EXEMPT PROVIDERS

Under the ESOS Act, providers hold either exempt or non-exempt status. The Act exempts from the financial and tuition guarantee requirements of the ESOS Act providers in receipt of Commonwealth recurrent funding or administered by a State/Territory education authority. Other (non-exempt under this classification) providers may also be exempted from the financial, reporting and tuition assurance requirements if they meet certain specified requirements.

All other providers are non-exempt and required to belong to a Tuition Assurance Scheme (TAS) and maintain a Notified Trust Account (NTA) for the safeguarding of overseas students’ pre-paid course monies.

In 1999, there were 594 exempt providers (with 71,172 students). These included universities, TAFEs, government and non-government schools and colleges. There were also 493 non-exempt providers (with 35,670 students). These included private education and training providers and the corporate arms of universities and TAFEs.

B3. NOTIFIED TRUST ACCOUNT

The ESOS Act aims to protect the pre-paid course fees of overseas students who come to Australia on student visas by requiring non-exempt providers to deposit the prepaid course fees in their NTAs, and withdrawing only in accordance with the ESOS Regulations. Providers must supply both the details of their NTA to DETYA, and submit annual audited returns.

B4. TUITION ASSURANCE SCHEME

TASs place students with alternative education providers in the event of a provider collapse. The student does not have to pay again for that part of their course for which they have already paid, and members place students in existing classes. A TAS must be approved by the Minister. There are currently seven approved TAS operators with a total of 305 members (see Table 2).

Table 2: Tuition Assurance Scheme Membership

Non-exempt providers may seek exemption from membership of a TAS if no student monies have been accepted, if payments are accepted in arrears, or if they hold insurance, a bank guarantee or a parent organisation guarantee (POG). In 1999, there were 185 non-exempt providers who were exempted from the TAS requirements.

B5. INSURANCE

Under the ESOS Regulations, non-exempt providers may seek exemption from the requirement to join a TAS by purchasing a compliant insurance policy. Approximately 100 providers have such policies. At present only two insurance agencies offer them. One of them insures one provider, and the other covers the rest. Insurance premiums with both insurance agencies are based on the previous year’s earnings from overseas student course fees.

B6. COST RECOVERY

The Commonwealth recovers the costs of administering the ESOS Act. In the 1996/97 budget, the Government introduced an Initial Registration Charge (IRC) for newly registering providers and an Annual Registration Charge (ARC) for all providers listed on CRICOS as at 1 January each year. These initiatives were effected on 24 April 1997 by the commencement of the Education Services for Overseas Students (Registration of Providers and Financial Regulation) Amendment (No 1) Act 1997 and the Education Services for Overseas Students (Registration Charges) Act 1997.

A provider registered on CRICOS on 1 January 2000 is liable to pay the ARC for 2000 based on total enrolments of overseas students in 1999. The amount of the charge for the year is calculated using the table in the Charges Act with an annual CPI increase. Table 3 shows the charges for 2000.

Table 3: ARC Rates for 2000

The direct cost to DETYA of administering the ESOS Act is approximately $1.1m per annum. In 1998/1999, IRC/ARC revenue was approximately $0.95m. The revenue cannot be simply compared with the direct cost because other DETYA expenditures, including for example on its overseas counsellor network contribute to ESOS Act objectives.

B7. NATIONAL CODE OF PRACTICE

In 1994, the Ministerial Council on Education, Employment, Training and Youth Affairs (MCEETYA) endorsed a “National Code of Practice in the Provision of International Education and Training” (the MCEETYA Code) which was intended to form the basis of State and Territory legislative, policy and administrative requirements for the approval of providers offering courses to overseas students and for industry sector codes of ethical practice.

Under this voluntary code, providers are expected to maintain high professional standards in the delivery of services, maintain a learning environment conducive to a student’s success and monitor and assess students’ performance, course attendance and progress in registered courses of study.

B8. CONFIRMATION OF ENROLMENT

An applicant for a student visa must enrol with a CRICOS-registered provider and course and provide evidence of such enrolment for the purposes of obtaining a visa. Once in Australia, visa conditions require that they must maintain such enrolment. Holders of student visas must be enrolled in full time study, but they can obtain permission to work up to 20 hours per week in Australia. Until recently, education providers have issued a signed Confirmation of Enrolment (CoE) form to intending students. Prospective students would then include this form with their student visa application. Recently, an electronic Confirmation of Enrolment (eCoE) system has been introduced, with DIMA moving to require this form of evidence of confirmation of enrolment.

C—PROBLEMS

There is general agreement within the industry and also among Commonwealth, State and Territory agencies, that there are serious deficiencies with the existing regulatory framework and that there is a very strong case for changes to it. It is imperative that the regulatory framework promotes stability and integrity in the industry.

The industry is operating in the context of immigration fraud that has become more sophisticated with the development of a worldwide illegal immigration industry. Poor quality providers do not necessarily go out of business on the basis of consumer choice, if they offer non-bona fide students the chance to evade visa obligations. Consumer discontent is passed on in the home country and influences the choice of other students to study in a country other than Australia. The problems are described below in C1 to C3.

There is some evidence of other countries, for example the US and UK, similarly experiencing problems with overseas students abusing their student visa conditions. The US is introducing over the next three years “a $45m project that will keep closer tabs on the nearly half million foreigners who study in the US each year” (Center for Immigration Studies News, USA, 1 Feb 2000).

C1. STUDENT PROTECTION

The current provisions of the ESOS Act have not protected student fees against this risk. Since 1995, there have been 11 cases of collapse or voluntary liquidation amongst non-exempt providers. Of these, seven involved the placement of students by a TAS (however, NTA funds were not available for transfer with the students in five cases) two involved lengthy insurance payouts and two involved no students. The total number of students affected by the three college failures that occurred in 1999 was approximately 1,200.

In only two cases were there sufficient funds in the NTAs to cover alternative tuition or refunds. In the two cases where claims have been made against an insurance policy, the claim processing has taken more than six months. This is longer than many education courses and places young students in Australia on a student visa in an extremely difficult position as they have no certainty that they will receive a refund and many do not have the resources to pay for an alternative course.

The number of collapses is not large, however, each time a provider collapses and there are insufficient funds or delayed insurance payouts, there is considerable publicity on and off-shore, with the potential to damage the reputation of the entire industry and encourage prospective students to choose a study destination other than Australia.

C2. UNSCRUPULOUS PROVIDERS

A few providers appear to focus not on providing education services, but rather, on deriving profit from the supply (or non-supply) of courses to persons who have come to Australia on student visas primarily in order to work. Disproportionately large numbers of students enrolled with a small number of these providers have had their visas cancelled due to breaches of the Migration Act 1958. Concern with this problem has led to greater DIMA monitoring and the number of student visa cancellations for breaches of visa conditions increased by 56% between 1998 and 1999.
While DETYA, DIMA and the relevant State authority have investigated such providers, it is difficult to prove allegations such as collusion with student visa fraud under the existing regulatory framework. There is no statutory requirement for providers to keep student attendance records or to report non-attendance. It is difficult to quantify the size of the problem in the light of poor compliance monitoring in some States.

The current CoE system does not assist the prevention and tracking of visa fraud. The CoE system relies on paper forms, which are easily copied, forged or misused. There is evidence that some agents forge forms and that some providers supply offshore agents with pre-signed forms. Moreover, there is no systematic means for tracking progress once a student has commenced studies in Australia. Whilst the MCEETYA Code of Conduct requires providers to advise DIMA of a student’s failure to attend, the Code is only voluntary and is easily ignored.

It has become clear that the Commonwealth will need to play a stronger role in order to ensure the integrity of the industry. While DETYA is currently working in conjunction with relevant State and Territory bodies and DIMA to investigate specific complaints, existing Commonwealth powers are insufficient to deal effectively with unscrupulous providers and to deter other providers who may be tempted to follow them.

C3. QUALITY ASSURANCE

State/Territory quality assurance processes for international education providers are not consistent and in some States not sufficiently robust. The MCEETYA Code is only voluntary and procedures for registration of new providers under the Code across the States are not always satisfactory. The Commonwealth cannot compel education providers to observe the Code, nor States/Territories to apply it.

C4. POWERS TO ACT AGAINST UNSCRUPULOUS PROVIDERS

Responsibility for undertaking investigations into complaints or breaches of registration requirements lies with the relevant State bodies. Where these matters are not properly investigated, the Commonwealth does not have the power to initiate its own inquiries. CRICOS is a Commonwealth Register: the Commonwealth needs the power to act where quality and integrity are below par.

D—OBJECTIVES

The legislative and regulatory changes sought by the government have the objective of:

· Ensuring students receive the tuition for which they have paid and in the case of provider collapse, that they receive either alternative tuition or a refund;

· Minimising the presence in the industry of providers lacking integrity or who facilitate student breaches of their visa conditions;

· Providing greater quality assurance for overseas students.

E—OPTIONS

Several alternative regulatory and non-regulatory measures have been considered in relation to achieving the stated objectives (above). These options are discussed below.

E1. STATUS QUO

No change would mean static costs for industry, State/Territory and Commonwealth governments and no regulatory changes.

However, as explained in Section C, the current legislative and regulatory framework has been found to have major shortcomings, such that the objectives of the ESOS Act cannot be met with any certainty. It is not an option supported by industry or government.

E2. SELF-REGULATION

Industry self-regulation could reduce costs for industry and in addition, reduce regulatory and monitoring costs for State/Territory and Commonwealth governments. Industry would bear the costs of self-regulation, monitor provider behaviour and compliance and set the cost of entry into the industry. Industry associations and peak bodies would regulate the behaviour of their members through by-laws, rules of ethical conduct and codes of practice.

Industry is not seeking self-regulation: if anything, it has argued for a stronger Commonwealth role in regulation. The industry associations argue that the problems in the industry require greater enforcement powers than they could, or would like to be able to, exert. State/Territory education authorities are opposed to self-regulation, arguing that it would fit uneasily with regulation of domestic education and training. Concerns regarding self-regulation include:

· Lack of quality control for entry into the industry;

· The industry could become controlled by a small number of providers or industry associations who could promote anti-competitive practices;

· In practice industry associations by themselves have had difficulty in controlling unscrupulous providers who do not comply with by-laws and codes of conduct;

· The 150 non-exempt providers that are not members of an industry association would be unregulated;

· Failure of self-regulation could be perceived as the Government’s responsibility. There would be pressure to intervene and/or inject funds in order to maintain Australia’s international reputation, as has occurred in the past;

· The withdrawal of a Commonwealth Government regulatory role would undermine marketing efforts in some countries;

· Self-regulation would diminish confidence in the financial and other integrity of the industry;

· Servicing overseas students involves international trade, immigration and foreign affairs issues which may not readily be coordinated and appropriately handled by industry groups;

· Legislative amendment to the Migration Regulations 1994 would be necessary to allow for the issuance of student visas without recourse to CRICOS.

E3. CO-REGULATION

A co-regulation option would require mandating membership of industry associations, which would then regulate their members and require compliance with their standards. It would also require adhering to State requirements. Industry associations are opposed to what they see as the risky option of the Commonwealth mandating membership with them.

Apart from that objection, possible problems with this option include many of the points raised under self-regulation (E2 above). Co-regulation would also place additional costs on industry associations for administering and monitoring regulatory arrangements of members. The Commonwealth might still have to continue a monitoring role to ensure industry compliance with the mandated requirements.

Co-regulation is not viewed as a viable solution by either the industry or the State/Territory and Commonwealth agencies. However, there may be some scope for devolving more responsibility to industry in the future. This option could be reconsidered at the next review of the ESOS Act.

E4. SOLE REGULATION BY STATES AND TERRITORIES

This option would place sole regulatory responsibility in the hands of the States and Territories. It is not a viable option and faces significant legal and administrative hurdles. Sole regulation by States and Territories would be inconsistent with Commonwealth responsibilities for international trade relations and migration control.

ESOS contains provision for "roll-back". The Commonwealth could scale back its involvement and leave the regulation to the States, if States were to enact their own requirements similar to those of ESOS. The rollback provision was included in ESOS to avoid duplication of State/Territory and Commonwealth regulatory requirements, were that to occur. Rollback would necessitate the six States and two Territories legislating to meet the minimum requirements of the Commonwealth legislation. The States do not have plans to legislate, such that rollback could be implemented.

E5. LEGISLATIVE AND REGULATORY REVISION

The extension and amendment of the cooperative regulatory model will assist in the maintenance of a stable domestic environment for the education and training export industry. Amendment, rather than wholesale change in the system of regulation will maintain consistency, reduce the amount of changes to be accounted for by industry and government and provide a timeline for stakeholders to focus on possible future regulatory models with a view to progressing a greater degree of self-regulation. Legislative and regulatory revision will allow the retention of effective elements of the current framework. Several regulatory recommendations are proposed within this context.

E5.1 Electronic Confirmation of Enrolment

Problem: Misuse of “Confirmation of enrolment” forms. Lack of information on student transfers, cessation of attendance/enrolment.
Objective Reduce the fraudulent/dishonest use of CoE forms, provide reliable data on student enrolment, increase student compliance with visa conditions.

Options for reducing fraudulent use of student visas have been considered. A paper-based CoE system incorporating a unique registration number and the use of serially numbered and customised paper was rejected on the grounds that it would be administratively cumbersome, needing to be checked and reconciled at a number of points and also still quite easy to be counterfeited.

The preferred option is an electronic CoE system (eCoE) for confirming enrolment and tracking student movements. Each provider will be issued with a unique password and identification number and be responsible for approving any eCoE issued by his or her institution. Automated transfer of the eCoE to DIMA’s system will allow DIMA officers to validate the students’ “evidence of enrolment”, when processing student visa applications.

An electronic system will make it considerably more difficult for dishonest agents to forge CoEs, or for providers to deny knowledge of enrolments that have been confirmed against their name. It will also prevent providers from recruiting beyond their registered capacity and reduce their ability to collude with non-bona fide students. Amendments to the ESOS Act will require providers to input all enrolments of people on student visas into the eCoE; to report student non-attendance or withdrawal and to keep student records up to date (including residential addresses) and to provide this to authorised officers.

The information in the eCoE system will provide some evidence of any collusion between students, agents and providers in the abuse of student visas. It will also reveal enrolment in excess of registered capacity. Such a system will also meet the Commonwealth’s e-commerce objectives of automating exchanges of information with businesses.

DETYA, DIMA and industry have developed a framework for the electronic CoE system. It is to be implemented in two phases:

· On 1 July 2000 a secure electronic system for all registered providers to confirm student enrolment was introduced; and

· By 31 December 2000 it will be fully integrated with DIMA visa systems and provide tracking from enrolment to course completion.

Recommendation 1: Introduction of an electronic CoE system in order to reduce student visa fraud and strengthen the integrity of compliance monitoring.

E5.2 Education and fee assurance for overseas students

Problem: Unreliable protection for overseas students against the risk that their provider collapses.
Objective: Ensuring students receive the tuition for which they have paid and in the case of provider collapse, that they receive either alternative tuition or a refund.

Several options for protecting students’ monies and tuition have been considered. The option of increased regulation around the NTAs was considered but rejected. The flaw in the existing provisions is that the trust money is under the control of the operator of the business and can be removed (and has been) at a time of crisis or financial difficulties, before students are able to claim a refund. Increased monitoring and auditing by the Commonwealth would be cost prohibitive for both the Commonwealth and industry. “Spot checks” would increase the potential administrative burden on small business providers by requiring that day-to-day NTA monitoring would be subject to ad hoc scrutiny by DETYA.

The option of making TAS membership compulsory (i.e. without the existing exemptions) was canvassed but rejected by the TAS organizations on the grounds that such a provision would force existing TAS organizations to take on high-risk members. The option of mandatory insurance was rejected because, as is currently the case, insurance payouts are slow and involve only fee refunds to students and not tuition. The option of broadening the requirement for a bank guarantee was considered. This was rejected on the basis that even though the provision currently exists in the ESOS Act, to date no provider in the industry has been able to obtain a bank guarantee in order to gain exemption.

The preferred option is compulsory membership of an assurance fund. An assurance fund will replace the NTA and insurance provisions of the ESOS Act with a requirement that all non-exempt providers belong to an assurance fund, to be funded solely by industry contributions. An assurance fund will provide assurance through a collective responsibility that did not depend on the honesty and good financial management of the provider. In the case of provider collapse, the assurance fund will arrange and (if necessary) pay for the tuition of students or refund students from the fund where alternative tuition were not possible.

DETYA has received actuarial, legal and financial advice as to the operations and costs associated with assurance funds. A single assurance fund is preferable to several TAS-operated funds because it:

· Consolidates monies into one single fund and strengthens financial viability;

· Reduces administration costs and takes advantage of economies of scale;

· Gives greater control over assets and revenue;

· Reduces the possibility of providers being locked out of funds;

· Prevents the creation of different levels of access to a fund, thus ensuring protection under an assurance fund regardless of TAS-membership; and,

· Precludes competitive market forces destabilising the fund.

Member contributions will be based on two elements - income derived from student fees plus a risk assessment of liability. The contribution could be significantly reduced where a provider is a member of a TAS. This is because TAS members provide an assurance of student tuition at no cost to the fund whereas a place must be found and paid for out of the assurance fund in the case of non-TAS providers. Table 4 shows base contributions suggested by preliminary actuarial advice.

Table 4: Proposed Base Contributions

A further risk assessment could be applied to the base contribution and include the current financial position of the provider, whether the provider follows best-practice small business guidelines such as keeping trust accounts, length of time in the industry; the mix of domestic/overseas students; and the mix of source countries of overseas students. Depending upon the assessed level of risk, a discount/loading could be applied to the base figure or average (see Table 5).

Table 5: Proposed Discounts by Level of Risk

Further tools could be employed to protect the viability of the fund, including reinsurance to cover the event of claims in a particular year exceeding the capacity of the fund; an entry (joining) fee to ‘boost’ the funds capacity in the early years; increasing contributions to establish an appropriate level of surplus in the fund and the capacity to levy supplementary contributions, as necessary.

DETYA has received actuarial advice strongly recommending the repeal of the sunset clause of the ESOS Act. This is in order to ensure that the assurance fund can be managed by the fund manager for the purposes of the fund and informed by the commercial implications of decisions. If the sunset clause remained the fund arrangements would be considerably hampered. The fund manager would have to make decisions on the basis of possible imminent cessation.


Recommendation 2: Introduction of an assurance fund to replace the existing notified trust account and insurance provisions of the ESOS Act, and repeal of sunset clause of the ESOS Act.

E5.3 PROCEDURES FOR PROVIDER REGISTRATION

Problem: CRICOS includes some providers of uncertain quality and State processes for approving providers are not entirely satisfactory.
Objective: Provide greater quality assurance of education and training providers for overseas students.

Several options for improved quality assurance through provider registration have been considered. Self-regulation was not considered an option as the powers for provider registration lie with the States/Territories and they are reluctant to relinquish those powers to the Commonwealth or industry. Moreover, while industry associations have adopted voluntary codes for provider behaviour these codes are not enforceable and relate to provider behaviour and not bona fides.

Another option would be a greater Commonwealth role in compliance monitoring. Industry peak bodies have continued to argue for strengthened Commonwealth involvement in quality assurance processes. In the Commonwealth’s view however, the States should continue to have first-line responsibility for quality assurance of institutions and courses for overseas students, as they do in respect of home students. But the Commonwealth proposes a limited discretion for DETYA to query and if need be, overturn State advice.

In discussions with representatives of State/Territory education authorities, there has been support for the adoption of nationally consistent benchmarks that providers seeking registration must meet. This option would facilitate a nationally consistent approach to quality assurance while retaining the respective roles of the Commonwealth and State and Territory governments.

The Commonwealth proposes to develop a national code and benchmarks drawing on the existing MCEETYA Code and best-practice State benchmarks. It will require that States/Territories agree that they will conform to the code and benchmarks, in approving a provider to be registered on CRICOS. Providers and courses will be registered on CRICOS only where the State/Territory authority has certified that the provider has been visited and that compliance with the code has been established.

The primary responsibility for undertaking investigations into providers whose integrity or quality has been called into question will remain with relevant State/Territory bodies. The Commonwealth will assist by referring matters to these bodies for investigation. Where providers are found not to meet the code requirements, sanctions will include fines and suspension/cancellation.

In the case of State/Territory authorities failing to investigate in a timely or adequate manner, DETYA will be able to initiate its own investigation. This will require the Commonwealth creating reserve powers to act in the national interests, in order to ensure the integrity and quality of the industry.

The purpose of these measures is to improve the integrity and viability of the industry. Only unscrupulous providers would be excluded from the industry, that is those who do not provide genuine educational services, but are in the business of colluding with non-bona fide students. The code and benchmarks would set broad standards, agreed at the national level, within which States would be expected to perform their quality assurance role. They build on national quality assurance frameworks that already exist in all sectors of education and training.

The costs of administering the ESOS Act will increase with the amendments outlined above. DETYA has estimated that running costs will increase from approximately $1.1 million (current) to up to $2.0 million. A cost recovery system is currently in place and it is proposed that this system be used for raising increased revenue to offset the costs to the Commonwealth for regulating and registering education export providers. DETYA seeks through the Education Services for Overseas Students (Registration Charges) Amendment Bill 2000 to introduce an increase to the ARC for the purpose of raising current receipts from close to $1 million to a target of around $1.5 million, and introduce a modified charging formula to replace the current ARC.


Recommendation 3: Introduction of strengthened national code of registration benchmarks and increased Commonwealth power to ensure provider quality and integrity.

E5.4 Procedures for dealing with providers facilitating visa fraud

Problem: Limited powers to act against providers colluding with students in visa fraud/breaches.
Objective: Provide more systematic and effective arrangements for DIMA and DETYA to deal with providers working to facilitate student breaches of their visa conditions.

The ESOS Act and Migration Act do not deal with unscrupulous education providers facilitating/co-operating with students who breach visa conditions. One option is available to the Commonwealth for dealing with the situation – amendment of the two acts to confer new powers on DIMA and DETYA.

This will require amendment of the ESOS Act to require providers to report non-attendance and to maintain current enrolment details such as residential address, to provide a greater capacity for DIMA to sanction non-complying students and for DETYA to take action against unscrupulous providers as well as a reserve power for DIMA to stop issuing visas where providers are facilitating extreme levels of student visa abuse.

DETYA is to have the power to investigate providers apparently flouting the requirements to report non-attendance of students and to take action appropriate to the evidence (fine, suspension, cancellation).

The new power would enable the DIMA Minister to issue a certificate if he is satisfied that an unsatisfactorily high number/proportion of students enrolled with a provider have had visas cancelled or are or have been, or are suspected by DIMA to be or have been, in breach of a visa condition or conditions, are suspected by DIMA to have lodged false or misleading or incorrect documentation when applying for student visas, been the subject of notices of intention to cancel visas issued to them.

During the period within which the certificate is in existence, a registered provider will be forbidden from making an offer to an intending overseas student either outside or inside Australia to provide a course. This will be similar to the existing ESOS provisions for suspension. Failure to observe this restriction would be the subject of a criminal penalty.

It is proposed that the power not be subject to merits review, although judicial review would be available. The justification for this is that the power would only be used in extreme cases where prompt government action is required to prevent significant abuse of the migration system and where the Minister considers that other available measures have proven ineffective.

Providers in relation to whom the Minister is considering issuing a certificate are to be given an opportunity to comment on the information on which the Minister is considering issuing such a certificate. The certificate is to remain in effect for six months and a further certificate can be issued, unless the provider satisfies the Minister he should not take such action. A decision not to revoke is, for the same reasons as provided above, not to be subject to merits review.

Amendments of the Migration Act relating to student visas would also be necessary in order to make it a condition of the visa grant criteria that a provider not be the subject of a certificate and prevent the grant of a student visa to students applying to enrol with such a provider. Consequential amendments to the Migration Act may also be necessary. Proposals to enhance DIMA’s power in relation to individual visa applications and holders are being dealt with separately.


Recommendation 4: Introduction of increased powers for DETYA and DIMA to deal with providers facilitating student visa fraud and/or misuse.

F—IMPACT ANALYSIS

As noted in Section E, the option, which meets the needs of the Commonwealth and industry, is amendment of the ESOS Act so that it more effectively deals with the problems described in Section C. Stakeholders affected by the regulatory environment are overseas students, current and potential service providers, industry associations, State/Territory education and training authorities and Commonwealth agencies. The impact of the four recommendations on these stakeholders in order to assess the consequences of the proposed measures is discussed in detail in Tables 6 and 7 below.

F1. COSTS

Table 6: Costs Associated with Proposals

F2. BENEFITS

Table 7: Benefits Associated with Proposals

F3. OTHER IMPACTS

F3.1 Competition effects

It could be argued that the requirement to contribute to an assurance fund could be a barrier to entry into the industry, as assurance fund contributions present an additional cost to individual providers. The assurance fund costs will be offset for non-TAS members by not having to take out insurance policies, and for TAS members, who would have a far lower rate of contribution, offset to an extent by savings in not having to maintain and report on NTAs. For new providers there will be an incentive to join a TAS since the assurance fund contributions will be lower than for non-TAS members.

The net effect of the assurance fund proposal is considered to be neutral, or marginally more costly for providers but it is possible that the assurance fund arrangement could involve a cost saving over NTAs for low-risk providers.

The assurance fund would be a small component of a range of costs and conditions that must be met to enter their industry. These would also include dedicated premises for teaching, curriculum development, administrative facilities and so on.

The view of the Commonwealth is that the assurance fund would not be prohibitive in the sense of competition or industry entry to either current or prospective providers. It is considered that the benefits of the assurance fund outweigh any increase in costs or marginal restriction on competition. If however, the assurance fund was required to have a limited life span – under the ESOS sunset clause provision- the cost to private industry providers would be greatly increased and the effect as a barrier to entry and in terms of competition in relation to government funded providers would be substantial. The fund’s effectiveness would be limited by the operation of a sunset clause and its repeal is recommended.

During industry consultations, the ELICOS Association questioned the exemption given to government-funded providers from the financial and tuition assurance requirements of the ESOS Act. The Commonwealth Competitive Neutrality Complaints Office has advised that this exemption is unlikely to be a significant concern from a competitive neutrality perspective. For this reason and taking into consideration the accountability measures applying to government-funded providers and the negligible risk of them collapsing, we do not propose to alter this exemption.

F3.2 Small business

The small business impact of the assurance fund and eCoE recommendations is considered to be marginal.

Industry claims that the current requirement to establish, maintain and report on NTAs is a significant administrative burden. The removal of the requirement for NTAs will substantially reduce the compliance costs and paperwork burden for all providers and is supported by industry associations. In particular, it will increase flexibility in handling cash, eliminate the administrative expenses associated with NTA auditing and reporting and will increase levels of earnings on cash held in trust accounts through use of other investment vehicles.

For those providers that maintain insurance policies as an alternative to TAS membership the cost of the assurance fund will be offset by not having to pay insurance premiums.

For small scale providers there may be increases in initial costs related to the electronic CoE. A recent DETYA survey of providers indicates that at least 95 percent currently have Internet access and the move from a paper-based to electronic CoE would not involve any additional costs. Options for providers currently without Internet access are being considered including making access to the Internet available at DETYA offices nationally, or the use of publicly available Internet facilities. The eCoE will also avoid duplication of administration and keying tasks by including a facility for data exchange between institutions and the system.

Table 8 provides a comparison of the current and proposed provisions of the ESOS Act.

Table 8: Comparison of Current and Proposed Provisions

F3.3 Regional impact

DETYA is of the view that a Regional Impact Statement is not necessary in this instance. The effect of the proposed amendments will be nationwide and there will be no differential impact between regional and urban areas. The amendments do not concern and will not result in a withdrawal of services from regional areas. Table 9 provides an indication of the locality and numbers of providers affected.

Table 9: Location of Providers

F4. RISK ANALYSIS

A comparison between the risk of retaining the status quo and the proposed changes indicate that the latter will significantly reduce the existing problems in the industry. There is no way to guarantee eradication of all the problems, but the proposed changes will significantly reduce them without unreasonable costs to industry and the Commonwealth.

The risk of student visa fraud/breaches is significantly reduced by the implementation of the electronic CoE system. The problem that the paper-based CoE system is open to manipulation and forgery is overcome by the implementation of a closed and secure electronic CoE system with associated tracking and monitoring features.
 
The risk that a student would not receive a fee refund or tuition assurance in the event of a provider collapse is removed with the implementation of an assurance fund.

The risk that an unscrupulous provider would gain CRICOS registration is reduced with the implementation of clearer quality assurance measures. The variation in standards of registration between individual States and Territories is removed with the creation of a nationally consistent set of standards and benchmarks for provider compliance.

Table 10 provides a summary of the identified risks associated with each option.

Table 10: Risks Associated with Options

 
The proposed changes also address the two types of problem providers that exist in the industry. Recommendation 2 addresses those providers who suffer financial collapse without having adhered to the regulatory requirements for protecting student pre-paid course fees. Recommendation 1 addresses those providers who aim to attract non bona-fide students through visa fraud in order to profit but are unlikely to collapse, or leave the industry because of lucrative gains. Recommendation 3 assists the other two Recommendations because improved quality assurance reduces the risk of unscrupulous providers gaining entry into the industry in the first place.

G—CONSULTATION

Consultation was undertaken with stakeholders as part of DETYA’s review of the ESOS Act. These included meetings with peak industry bodies and State/Territory authorities between September 1999 and July 2000 and continuing on the provisions of the National Code. Parties consulted by DETYA during the course of the review are identified at Attachment C. The views of key stakeholders are described below in relation to the Commonwealth’s proposals. A summary is provided in Table 11.

G1. ACPET

The Australian Council for Private Education and Training (ACPET) participated in the consultations and submitted a comprehensive proposal for regulation and oversight through a statutory body, which they called the Overseas Students Education Regulation Authority (OSERA). It was proposed that it be funded and supported by the Commonwealth with some industry contribution. The proposal was considered in the consultation processes and contributed to the proposals for reform.

G2. ACIVC

The Australian Council of Independent Vocational Colleges (ACIVC) also contributed to the development of reform proposals.

G3. ENGLISH AUSTRALIA (EA) (FORMERLY ELICOS ASSOCIATION)

EA, formerly the English Language Intensive Courses for Overseas Students (ELICOS) Association, argued to run their own separate fidelity fund, but this argument was not accepted on actuarial and regulatory grounds.

G4. AVCC

The Australian Vice-Chancellors’ Committee (AVCC) represents the universities, which are and will continue to be, exempt from the financial and tuition assurance requirements of ESOS. They will only be affected by the non-assurance fund reforms.

G5. WAPETIA

Western Australian Private Education and Training Industry Association (WAPETIA) members operate within the WA State regulatory regime, which they argued is more rigorous than in other states. They consider the State regime a sufficient protection.

G6. SUMMARY OF INDUSTRY VIEWS

Table 11: Industry Views of Proposals, by Sector

H—RECOMMENDATION

Section E provides an assessment of the various options available to the Commonwealth for regulation of the Australian education and training export industry. It was concluded that the best option available was amendment and strengthening of the current legislative and regulatory framework and that amendments could be made to the ESOS Act consistent with this. The recommendations of this RIS were subjected to broad stakeholder consultation and cost/benefit analysis with the conclusion that the benefits of increased quality and integrity of the education and training export industry far outweighed any costs.

I—CONCLUSION

The current framework for the education and training export industry is a cooperative approach between the Commonwealth, State and Territory governments, industry associations and individual providers. In recognition of the contribution the ESOS Act has made to industry stability and quality, the new ESOS Act will strengthen and build upon this approach. The new ESOS Act 2000 will have provisions that are clear, consistent, administratively sound and financially minimal to both industry and government. Some increased costs to industry will provide the regulatory framework necessary for the reputation and wellbeing of the industry and will result in considerable improvement to education quality and assurance.

Replacement of the old ESOS Act with the ESOS Act 2000, as outlined in this RIS, will ensure that Australia’s reputation remains one of integrity and quality. This is important because the failure of just a few providers to assure student fees and tuition has the ability to damage the image of Australia as a desired education destination, knock back student numbers, spark international relations issues with source countries of students affected, involve Commonwealth bailouts using taxpayers money and place further community pressure on government to more tightly control inflows and the movements of overseas students to Australia.

J—IMPLEMENTATION AND REVIEW

The ESOS Act 2000 will provide a new approach to regulating this industry. It is replacing the notified trust account requirements with the requirement to belong to an Assurance Fund. It is providing new powers for the Commonwealth to investigate and impose sanctions on providers who breach the Act or the national Code. It is providing a new electronic form of Confirmation of Enrolment, for the purposes of student visas being issued. These provisions are intended to address problems in the industry and they will be reviewed in 2005 in terms of their effectiveness in addressing the problems and new problems that might emerge over the intervening period. They will be comprehensively reviewed for both their effectiveness and efficiency and the ongoing needs of the industry for regulation.

APPENDIX A

ORIGINS OF THE ESOS ACT

The international student program was put under severe pressure in the late 1980s/early 1990s by the closure of a number of private institutions. The closures resulted from the inability of a number of private providers to refund prepaid course fees to students who were refused student visas under tightened entry measures applied by the Department of Immigration and Multicultural Affairs (DIMA) in response to evidence of non-compliance with student visa conditions by students, predominantly from the People’s Republic of China. A backlog of student visa applications resulting from the evacuation of DIMA and DETYA officers from the Australian Embassy in Beijing post-Tiananmen Square also had an impact on the cash flow of some colleges.

A special DETYA task force was established in July 1990 to implement a refund program for international students who had pre-paid fees but were not given visas and to recover taxpayers’ money from those institutions on whose behalf the Commonwealth had made refunds to students. The Commonwealth has paid more than $70 million in the past ten years in refunds to overseas students and associated costs.

The Commonwealth was concerned at the potential damage to Australia’s reputation as a reliable provider of quality education and training services and responded by introducing the ESOS Act. The Senate Standing Committee on Employment, Education and Training, “Inquiry into the operation of the Education Services for Overseas Students (Registration of Providers and Financial Regulation) Act 1991 (ESOS Act), December 1992” summarised that:

“Australia’s reputation as a provider of educational services to overseas students was threatened in the late 1980’s by a combination of events. These included:
• The emergence of some unscrupulous providers in the private education sector;
• Some evidence of unevenness in the quality of both services provided and the support structures for students;
• The financial collapse of several private institutions and the consequent adverse publicity in overseas countries about the problems of students who lost money as a result.

The ESOS Act was therefore designed to address the legitimate concerns that had been raised about some educational institutions that were dealing with overseas students. The Act was intended to protect provider and course quality through registration of institutions and to protect student funds held by providers.

The Act also signalled to education providers and potential overseas students that the Government was serious about remedying problems arising from the failure of institutions and the loss of funds by students and preventing any recurrence of such problems in the future.”

APPENDIX B

AUSTRALIA’S EDUCATION EXPORT INDUSTRY

The 1990s saw significant growth in the number of overseas students choosing Australia as a study destination and a consequential increase in the number of providers of education and training services to those students. An overseas student is a student who is in Australia on a student visa issued under the Migration Regulations 1994. The Migration Regulations 1994 require all fee paying applicants for student visas to provide evidence that they are enrolled with a provider and in a course registered on the Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS) which is maintained under the ESOS Act.

Overseas student numbers grew from close to 50,000 in 1990 to around 150,000 in 1999. By January 2000 the number of providers had grown to 1071. Of these, about half are administered by State/Territory education authorities or are entitled to receive Commonwealth recurrent funding. These providers, who are subject to Commonwealth and State audit requirements under their funding arrangements (for example, the rigorous government financial accountability arrangements under the Higher Education Funding Act 1988) are exempt from the financial and tuition guarantee requirements of the ESOS Act.

The majority of providers are privately operated. The size of institutions ranges from single establishment providers (some 60% of private providers) to larger scale, multi-establishment providers. In recent years there has been a trend towards provider expansion with operations across State/Territory borders and the take over of smaller institutions by larger providers. Some larger providers have established joint venture or twinning arrangements with providers in other countries. Multinational education and training providers have also entered the Australian market, delivering courses both on-shore and offshore.

While some providers offer only one specialised course to overseas students, most providers offer a range of courses from non-degree awards to Diploma and Degree courses. For example, English Language Intensive Courses for Overseas Students (ELICOS) colleges specialise in English language training while higher education and vocational education institutions offer Diploma and higher qualifications.

Generally, the higher education sector is the most expensive sector of study, followed by vocational education and then school education. The highest course cost is for students studying at the postgraduate level followed by the undergraduate level, vocational foundation courses, secondary school and primary school. ELICOS course costs are not directly comparable to other course costs as their average duration is only 25 weeks.

The international education program attracts overseas students primarily from countries in the Asian Region - they accounted for 86% of the overseas student population in 1998. The majority of overseas students are enrolled in higher education institutions (50%) with the remainder distributed in vocational education institutions (25%) ELICOS (15%) and Secondary Schools (10%). The most common age group for students is between 20 and 24 years with 45 percent falling into this age group. Overall there are slightly more female (52 percent) than male students. The total numbers and distribution of students by country of origin across the different types of institutions is as below.

An analysis of the higher education sector shows that, in terms of overseas student numbers, Australia is ranked third in the English speaking world behind the United States and the United Kingdom and seventh worldwide behind the United States, France, Germany, the United Kingdom, the Russian Federation and Japan (UNESCO figures cited in 1997 Survey of International Students Studying in Australia”, AEI, 1998.)

With the exception of Singapore (where Australia is the top provider) and Malaysia (where the United Kingdom is the top provider), the United States is the most popular destination for international students from all of Australia’s top 10 source countries. Australia ranks second behind the United States in Hong Kong, Indonesia, India, Thailand and China; and third behind both the United States and the United Kingdom in Taiwan, South Korea and Japan. Australia outranks Canada and New Zealand in all of Australia’s top 10 source countries.

Current indications are that the total number of overseas students in 1999 will exceed the 1998 figures, with the biggest growth being in the higher education sector.

Table 12: Students from Main Source Countries, by institution type, 1998

Source: Overseas Student Statistics 1998, AEI, 1999.

APPENDIX C

STAKEHOLDER BODIES CONSULTED

APPENDIX D

GLOSSARY & ABBREVIATIONS

ACIVC Australian Council of Independent Vocational Colleges

ACPET Australian Council for Private Education and Training

AEC Australian Education Centre

AEI Australian Education International

ARC Annual Registration Charge

AVCC Australian Vice Chancellors Committee

CoE Confirmation of Enrolment

CRICOS Commonwealth Register of Institutions and Courses for Overseas Students

DETYA Department of Education, Training and Youth Affairs

DIMA Department of Immigration and Multicultural Affairs

ELICOS English Language Intensive Course for Overseas Students

ESOS Act Education Services for Overseas Students (Registration of Providers and Financial Regulation) Act

IRC Initial Registration Charge

MCD Melbourne College of Divinity

MCEETYA Ministerial Council on Education, Employment, Training and Youth Affairs

NTA Notified Trust Account

POG Parent Organisation Guarantee

SCD Sydney College of Divinity

SPABC South Pacific Association of Bible Colleges

TAS Tuition Assurance Scheme

WAPETIA Western Australian Private Education and Training Industry Association

EDUCATION SERVICES FOR OVERSEAS STUDENTS BILL 2000

NOTES ON CLAUSES

PART 1—INTRODUCTION

Clause 1 Short title

This clause provides for the Act to be cited as the Education Services for Overseas Students Act 2000.

Clause 2 Commencement

This clause provides for commencement of various provisions in the Act as follows:

Sections 1 and 2 are to commence on the day on which the Bill receives the Royal Assent; and

The remaining provisions of the Act commence on a day or days to be fixed by Proclamation.

The clause further provides that any provision of the Act that has not commenced by Proclamation within 6 months of the date of Royal Assent will commence on the first day after the end of that period.

Clause 3 Crown to be bound

This clause binds the Crown in right of the Commonwealth, of each of the States, of the Australian Capital Territory and of the Northern Territory. However, the Crown (in any of those capacities) is not liable to be prosecuted for an offence.

Clause 4 Criminal Code applies

This clause provides that the Criminal Code applies to all offences against the Act.

Clause 5 Definitions

This clause defines certain terms used in the Act.

Clause 6 Meaning of associate

This clause contains a definition of “associate” for the purposes of the Act.


Clause 7 Meaning of course money

This clause contains a definition of “course money” for the purposes of the Act and in particular for the purposes of establishing the quantum of a refund to which a student may be entitled under Division 2 of Part 3.

This includes money received by a provider from an overseas student or intending overseas student for tuition fees, for the purposes of Overseas Student Health Cover and any other amount that the student has to pay the provider, directly or indirectly, in order to undertake the course.

PART 2—REGISTRATION OF APPROVED PROVIDERS

This Part sets out the requirements for an approved provider to become registered on the Commonwealth Register of Institutions and Courses for Overseas Students, the procedure and charge for registration and the offence of providing or promoting a course while unregistered.

Clause 8 Offence: providing or promoting a course without a registered provider

This clause makes it an offence for a person to provide or promote a course without a registered provider.

Subclause (1) outlines that a person is guilty of an offence if the person undertakes certain activities without being registered to provide the course for that State or does so in accordance with an arrangement that the persons has with a registered provider for the State. These occur where that person either: Provides a course in a State to an overseas student; makes an offer to an overseas student or an intending overseas student to provide a course to that student; invites an overseas student or intending overseas student to undertake, or to apply for a course or holds himself, herself or itself out as able or willing to provide a course in a State to overseas students.
The maximum penalty for this offence is 2 years imprisonment.

Subclause (2) states that the legal burden in relation to proof of registration is to be borne by the prosecution. However, the defendant bears an evidential burden in relation to any arrangements that the person may have with a registered provider for the course.

Subclause (3) provides that a person does not commit an offence defined above if the conduct was only for either or both of carrying out surveys and other investigations to assess the demand for the course, or negotiating with another institution or other body or person in connection with designing or developing the course.

In addition, the person must take reasonable steps to ensure that any interested overseas student or intending overseas student and any another institution or other body or person who might also provide the course were aware that the person was not a registered provider or carried out pursuant to an arrangement with a registered provider.

Clause 9 Registering approved providers

Subclause (1) enables the designated authority for a State to recommend that an approved provider for the State be registered to provide a specific course to overseas students in that State.

Subclause (2) specifies that the Secretary must register the provider if the provider is a resident of Australia and either a member of the ESOS Assurance Fund or is exempt from being a member of the Fund as provided for in the regulations. The designated authority for the State is required to give the Secretary a written certificate that the provider complies with the Act and the national code. In addition, the Secretary must have no reason to believe that the provider is not complying with the Act or the national code. If the Secretary has any reason to believe that this is not the case the Minister is required to notify the relevant designated authority. This subclause also requires that outstanding payments of the annual registration charge, re-instatement fee or late payment penalty be settled before registration of the provider on CRICOS.

Subclause (3) provides that the Secretary must not register the provider in any other circumstances.

Subclause (4) clarifies that subclause (2) creates a duty for the Secretary to seek any information about the matters mentioned.

Clause 10 The Register

This clause provides for the establishment of the Register.

Subclauses (1) and (2) require that the Secretary must keep a register for the purposes of this Act to be known as the Commonwealth Register of Institutions and Courses for Overseas Students.

Subclause (3) states that the Secretary may make the contents of the Register available to the public by electronic or other means (i.e. the Secretary is not required to do so).

Subclause (4) specifies the type of information that must be entered on the Register. This includes the name of the approved provider, the register number allocated and any other matters prescribed by the regulations.

Subclause (5) specifies that an approved provider be registered when the Secretary has entered the name of the provider, the course and the State on the Register.


Clause 11 Approved providers must notify the Secretary and designated authority of previous breaches etc.

This clause requires an approved provider to tell the designated authority of previous breaches of the Act or the old ESOS Act.

This is intended to enable further investigation of the appropriateness for registration of an approved provider where the provider or an associate of the provider:

· Has had an offence proven against him, her or it under this Act or the old ESOS Act at any time during the last 5 years; or

· Has ever had his, her or its registration cancelled or suspended under this Act or the old ESOS Act; or

· Has ever had a suspension certificate issued in respect of him, her or it under this Act; or

· Was involved in the provision of a course by another provider who is covered by the circumstances above at the time of the events that gave rise to the relevant prosecution or other action.

This clause requires the designated authority to give the information to the Minister as soon as practicable after receiving it. If an approved provider breaches this section and later becomes registered, the Minister may take action against the provider under the Act.

Clause 12 Initial registration charge

This clause establishes the day for payment of the initial registration charge for registration on CRICOS. The clause has the same meaning as section 5B of the old ESOS Act.

The day specified in the notice must be at least 28 days after the day the notice is given.


Clause 13 Fund Manager may require information

This clause authorises the Fund Manager to, at any time, request an intending registered provider to provide information that is relevant to determining the amount of annual fund contribution payable by that provider. The provider must comply with the request.

A note is provided at the end of this clause, which indicates that if the provider breaches this provision and later becomes registered the Minister may take action against the provider under this legislation.

Clause 14 Notifying States if Minister suspects non-compliance with this Act or the national code

This clause applies where the Minister has reason to believe that an approved provider who is not yet registered, is not complying or will not comply with this Act or the national code and where the source of the information is not the designated authority that recommended the approved provider for registration.

For example the situation may occur that the Commonwealth becomes aware of non-compliance, that the State may not be aware of, or may not have authority to take action. The information may be provided to the Secretary by an industry association, a tuition assurance scheme, or from another registered provider.

Subclause (2) requires the Minister to give the information to the designated authority that made the recommendation to register the provider.

Subclause (3) specifies that before the Minister may register the provider under section 9, the Minister must allow the designated authority at least 7 days to respond in writing to the information.

PART 3—OBLIGATIONS ON REGISTERED PROVIDERS

Division 1—General obligations

This Division establishes the general obligations on providers, which arise on a provider’s registration on the Commonwealth Register of Institutions and Courses for Overseas Students.


Clause 15 Registered providers must not engage in misleading or deceptive conduct

This clause requires that a registered provider must not engage in misleading or deceptive conduct in connection with the recruitment of overseas students or intending overseas students or in the provision of courses to overseas students.

For example, a registered provider that advertised that the Australian Government endorsed its courses, or that it was associated with another registered provider or other institution where there was no such association would be regarded as engaging in misleading or deceptive conduct under this provision.

This section reproduces the obligation under section 12(1)(a) of the old ESOS Act and extends the pool of subject students to include those already on student visas.


Clause 16 Residency requirement

This clause requires that a registered provider must be a resident of Australia. The Minister may take action under the Act against a registered provider who has breached this provision.


Clause 17 Registered providers must notify the Secretary of breaches, etc. by associates

This clause requires a registered provider to tell the Secretary as soon as practicable if the provider becomes aware that an associate of the provider has breached specified provisions under the ESOS Act or has had certain conditions imposed on the associate’s registration.


Clause 18 Only registered providers may receive course money

Where a registered provider for a course enters into an arrangement with one or more other providers those arrangements must provide for students to pay their course money to the other providers.


Clause 19 Giving information about accepted students

Subclause (1) requires a registered provider to give certain information concerning accepted students to the Secretary within 14 days. The information required to be given to the Secretary includes, but is not limited to; the student’s name, course details, details of changes to the student’s studies, any termination of studies before the end of the course or change to the course.

Subclause (2) requires a registered provider to give the Secretary details of any breach by an accepted student of a visa condition relating to attendance or satisfactory academic performance as soon as practicable after the breach occurs.

Subclause (3) provides that the information must be given in the form approved by the Secretary. This may be electronic.

It is intended that these records would be required for tracking a student’s progress through the electronic confirmation of enrolment system, for use in monitoring a student’s compliance with relevant visa conditions concerning attendance or satisfactory academic performance and for assisting in the provision of a refund to a student where required under Division 2 of Part 3.

A registered provider that breaches this section commits an offence under the Act. In addition, it is an offence to provide false or misleading information in complying, or purporting to comply, with this section. In the case of registered providers who are unincorporated bodies, the obligations to be imposed by this section are on the principal executive officer of the provider.


Clause 20 Sending students notice of visa breaches

This clause requires that a registered provider must send an accepted student written notice if the student has breached a student visa condition relating to attendance or satisfactory performance.

Subclauses (2), (3) and (4) outline the requirements for sending a notice to an affected student. The sending of a notice to an affected student triggers a process of automatic student visa cancellation under provisions to be inserted into the Migration Act 1958.

A registered provider that breaches this section commits an offence under the Act. In addition, it is an offence to provide false or misleading information in complying, or purporting to comply, with this section.

Clause 21 Record keeping

This clause requires that a provider must keep records of its accepted students who are enrolled with the provider or who paid course money. The records must consist of each student’s current residential address (as supplied by the student to the provider) and other details prescribed by the regulations. The provider must retain the records for at least 2 years after the person ceases to be an accepted student. However the records do not need to be kept up to date after the cessation of the student’s studies.

It is intended that these records would be required for orderly management of a provider’s business, for tracking a student’s progress through the electronic confirmation of enrolment system, for use in monitoring a student’s compliance with relevant visa conditions concerning attendance or satisfactory academic performance and for assisting in the provision of a refund to a student, where required under Division 2 of Part 3.

A registered provider that breaches this section commits an offence under the Act.


Clause 22 Registered providers must belong to a tuition assurance scheme

This clause requires a registered provider to be a member and comply with the rules of a tuition assurance scheme.

Subclause (2) specifies that a registered provider breaches subclause (1) if it is not a member of a tuition assurance scheme. This is the case even if the provider’s application for membership was rejected or their membership of a scheme has been cancelled.

Subclause (3) provides for regulations to exempt providers from being a member of a tuition assurance scheme.

It is intended that the tuition assurance schemes will make the arrangements for a provider to offer another course to a student as an alternative to a refund.


Clause 23 Annual registration charge

This clause establishes the day for payment of the annual registration charge for registration on CRICOS. The clause has the same meaning as section 5 of the old ESOS Act. The Minister may take action against a registered provider who has breached this provision.

Clause 24 Annual Fund contributions

This clause outlines the details of the annual Fund contributions.

Subclause (1) specifies that a registered provider must pay an annual Fund contribution for each calendar year. Details of how these contributions are determined and general information concerning the Fund is outlined at Part 5.

Subclause (2) states that the regulations may exempt a registered provider from the requirement to pay the annual Fund contribution.

Subclause (3) specifies that a registered provider who is required to pay the annual Fund contribution must do so by the day stated in the notice provided by the Fund Manager. The Minister may take action against a registered provider who fails to do so.

Clause 25 Special levies for the Fund

This clause specifies that a registered provider who is required to pay a special levy must do so by the day stated in the notice provided by the Fund Manager. The Minister may take action against a registered provider who fails to do so.


Clause 26 Disclosure obligations of registered providers

This clause requires a registered provider to tell the Fund Manager as soon as practicable of any matter that might increase the level of contribution payable for that or a later year. The Minister is empowered to take action against a person who breaches this provision.

Subclause (2) specifies that the obligation above continues to apply even after that registered provider has paid its annual Fund contribution for the year.

Subclause (3) enables the Fund Manager to request a registered provider to provide information that is relevant to determining the provider’s amount of contribution. The provider is required to comply with this request. The Minister is empowered to take action against a person who breaches this provision.

Division 2—Refunds of course money

This Division sets out the circumstances of, and requirements for, a refund of course money to a student.

Clause 27 When this Division applies

This clause sets out the circumstances in which a refund of course monies may be required to be provided to an overseas student or intending overseas student, in either the case of a provider default or a student default.

Subclause (1) deals with the issue of provider default. It covers the circumstances where a course either does not start on the agreed starting day; ceases to be provided at any time; or does not start because of sanctions imposed on the registered provider under Part 6 of the Act. This also requires that the student has not withdrawn from the course.

Subclause (2) addresses the issue of student default where the student either fails to start the course or withdraws from the course.

Subclause (3) provides definitions of the terms “agreed starting day” and “default day” for the purposes of Division 2 of Part 3.

Clause 28 Refund if there is a written agreement about student default

This clause applies in relation to student default.

Subclause (1) provides that the clause applies in a situation where the registered provider or the former registered provider and the student have a written agreement setting out refund requirements that apply. The agreement must also meet the requirements set out in the national code.

It is intended that the written agreement meet the requirements of the national code—that it is a fair and reasonable agreement and does not contain provisions that would prevent the student being able to obtain a refund in particular circumstances.

Subclause (2) requires the provider to pay the student the amount required by the agreement.

Subclause (3) specifies that the provider must pay that amount within 4 weeks after receiving a written claim from a student.

The Minister is empowered to take action against a registered provider that has breached this section.

Clause 29 Refund in other cases

This clause specifies that unless section 28 applies, the registered provider (or the former registered provider) must pay the student a refund of course money according to the formula outlined in this provision. A negative result is treated as nil.

Subclause (2) outlines that regulations may prescribe different amounts to be refunded to students in different circumstances.

Subclauses (3) and (4) provide time constraints in relation to the payment of refunds.

A registered provider that breaches this clause commits an offence.

Clause 30 Recovering the amount

This clause enables a student to recover the relevant amount as a debt in a court of competent jurisdiction.

Subclause (2) provides that this Division does not affect any liability that a provider has apart from this Division to pay an additional amount to the student.

Clause 31 Alternative arrangements

This clause enables a registered provider or a former registered provider to make alternative arrangements with the student.

Subclause (1) specifies that the provider may arrange for another course, or part of a course to be provided to the student at the registered provider’s expense, as an alternative to making a payment under this Division.

Subclause (2) relieves the provider from liability to make a payment if the student agrees to accept the alternative arrangements.

Clause 32 Registered provider must notify the Fund Manager of non-compliance

This clause provides that a registered provider must tell the Fund Manager as soon as practicable if the provider has not complied or will not be able to comply with its obligations under this Division.

The Minister may take action against a registered provider that breaches this provision.

PART 4—THE NATIONAL CODE

This Part establishes the national code and sets out the requirements for amending the code and making it publicly available. It also sets out the requirement for the Secretary to notify States of breaches of the national code.

Clause 33 The national code

This clause requires the Minister to establish a national code before 1 April 2001.
The code is to be called the National Code of Practice for Registration Authorities and Providers of Education and Training to Overseas Students. The national code is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.

Clause 34 Purpose of the national code

This clause provides that the purpose of the national code is to provide nationally consistent standards for the registration and conduct of registered providers.

Clause 35 National code must be publicly available

This clause requires the Secretary to make the text of the national code publicly available. This may be done by electronic or other means.

Clause 36 Minister must consult States and industry representatives

This clause requires the Minister to consult the States and persons who, in the Minister’s opinion, represent the interests of providers.

The State Minister responsible for education may nominate a person for the purpose of consultations about the national code. The Commonwealth Minister must consult that nominated person from each State and representatives of providers before establishing the national code.

Clause 37 Establishing the national code

This clause requires that the Minister publish a notice in the Gazette to establish the national code. The notice must state how the public are to obtain access to the text of the code and specify the date on which the code will take effect.

Clause 38 Contents of the national code

This clause sets out the standards, procedures, rules and any other matters that must be included in the national code.

They relate to varying issues concerning the required practice for the registration authorities and providers of education and training to overseas students. These include, but are not limited to: the standards and procedures for recommendation of registration of providers; the provision of courses; monitoring arrangements to ensure compliance with the code; dealings with agents and other providers; and agreement making, particularly in relation to the issue of refunds to student.

Clause 39 When the national code takes effect

This clause requires the national code to state the day on which it takes effect. The day must be at least 28 days after the national code is established.

Clause 40 Legal effects of the national code

This clause clarifies that the only legal effects of the national code are those expressly provided for in the Act. In particular, compliance with the national code is a prerequisite for registration. Sanctions under Part 6 may be imposed on a registered provider who breaches the national code.

The Bill is not intended to affect students’ consumer protection rights under other legislation.


Clause 41 Notification of the national code

This clause sets out the requirements for notification of the national code to providers by the Secretary.

Subclause (1) specifies that the Secretary must give each registered provider written notice of the intended establishment of the national code before it is established. The notice must set out the day on which the national code takes effect for existing registered providers and details of how the provider can get access to the text of the national code.

Subclause (2) sets out arrangements for notification of the national code by the Secretary after the code is established. Whenever the Secretary, registers an approved provider the Secretary is required to notify that provider of the establishment of the code and if the code has not yet taken effect, of the day on which the national code takes effect for that provider. The provider must also be notified of details on how it can obtain access to the text of the code.

Subclause (3) clarifies that a breach of this clause does not affect the validity of the national code.

Clause 42 Amending the national code

This clause sets out the procedures for amending the national code.

Subclause (1) enables the Minister to amend the national code.

Subclause (2) requires the Minister to consult with any person nominated by a State Minister under subsection 36(1) and persons who, in the Minister’s opinion, represent the interests of providers before amending the national code.

Subclauses (3) provides for the national code to be amended by the Minister publishing a notice about the amendment in the Gazette.

Subclause (4) specifies the content of a valid notice.

Subclause (5) specifies that the Secretary must give each registered provider a written notice stating the day on which the amendment of the national code takes effect and how the public can get access to the text of the amendment and the amended national code.

Subclause (6) provides that any breach of subclause (5) will not affect the validity of the amendment.


Clause 43 States to investigate breaches of the national code

This clause addresses the responsibilities of States to investigate breaches of the national code.

Subclause (1) applies in circumstances where the Secretary has information, which suggests a possible breach of the national code by a registered provider for a State and the source of the information is not the designated State authority.

For example, the information may be provided to the Secretary by an industry association, a tuition assurance scheme, or by another registered provider.

Subclause (2) requires the Secretary to notify the designated authority responsible for approving a provider of the possible breach and must request that the authority investigate the matter or take any other suitable action. This must be done before the Secretary can investigate the matter further or take any other action under this act.

Subclause (3) enables the Secretary to investigate the matter or take any other action, including action under Part 5, without notifying the designated authority if, in the Secretary’s opinion, the circumstances of the possible breach require urgent action.

Clause 44 Regulations may prescribe penalties

This clause provides that the regulations may make it an offence to breach prescribed provisions of the national code.

PART 5—THE ESOS ASSURANCE FUND
Division 1—Basics of the Fund

Clause 45 Establishment of the Fund

This clause establishes the ESOS Assurance Fund.

Clause 46 Purpose of the Fund

This clause outlines the purpose of the Fund as being to protect the interests of overseas students and intending overseas students of registered providers.

The intention is to ensure that students are provided with suitable alternative courses or have their money refunded if the provider is unable to provide a course that the student has paid for.

Clause 47 What money goes into the Fund

This clause outlines the monies payable into the Fund.

Subclause (1) outlines the payments that must be credited to the Fund. These include: all annual funds contributions and special levies received from registered providers; amounts recovered from providers; proceeds from investments; money borrowed by the fund manager; any other money appropriated by the Parliament; any late fees or review fees received by the Fund Manager; and any other amount given to the Fund.

Subclause (2) provides that whenever an amount of annual fund contribution or special levy is received and section 81 of the Constitution applies to the receipt, the consolidated revenue fund is appropriated by that amount for the purpose of the fund.

Clause 48 What money comes out of the Fund

This clause outlines the money that comes out of the Fund.

Subclause (1) provides that the amounts in the Fund must be held by the Fund Manager on trust for the benefit of overseas students for the purposes of the Fund.

Subclause (2) provides that those amounts must only be used for certain specified purposes.


Division 2—The Fund Manager

Clause 49 Appointment of the Fund Manager

This clause requires the Secretary to appoint, in writing, a Fund Manager, which may be an individual or a Company. Under the terms of appointment, the Fund Manager will be required to protect confidential and sensitive information given to it by providers.

Clause 50 Functions and powers of the Fund Manager

Subclause (1) outlines the functions and the powers of the Fund Manager.

Subclause (2) empowers the Fund Manager to do all things necessary and convenient for or in connection with performance of its functions.


Clause 51 Terms and conditions of the appointment of the Fund Manager

This clause specifies that the Secretary and the Fund Manager agree terms and conditions of the Fund Manager’s appointment, including duration of appointment, in writing.

Clause 52 Acting Fund Manager

Subclause (1) permits the Secretary to appoint a person to act as the Fund Manager in certain circumstances.

Subclause (2) specifies that anything done by or in relation to a person acting under subclause (1) is not invalid merely because of any defect or irregularity relating to the circumstance of the appointment.

Clause 53 Indemnity

This clause provides an indemnity for the Fund Manager.

Subclause (1) specifies that the Fund Manager be not personally subject to any liability to any person other than the Commonwealth, for any act done or omitted to be done in the performance of powers and functions under the Act, provided those acts or omissions were done in good faith.

Subclause (2) clarifies that this section does not affect the operation of the Privacy Act 1988.

Division 3—The Contributions Review Panel

Clause 54 Establishment of the Panel

This clause deals with the establishment of the Contributions Review Panel.

It provides for the Minister to appoint, in writing, ten people who in his opinion have appropriate qualifications and experience to form the Contributions Review Panel. One of the members must be appointed as Chair of the Panel and at least five must be people who, in the Minister’s opinion, represent the interests of providers who are liable to pay annual contributions to the Fund. At least 4 of these provider Panel members must also, in the Minister’s opinion, represent the interests of providers who are members of a tuition assurance scheme.

After initial appointments to the panel have been completed, regulations may be made that change the number of members on the Panel. However, the Minister must consult with providers’ representatives before making such regulations. The regulations would apply only to appointments made after the regulations take effect and would not affect the composition of the Panel or the tenure of a person who is a Panel member at the time the regulations take effect.

Clause 55 Functions and powers of the Panel

Subclause (1) outlines the functions of the Panel that are to establish criteria determining amounts of annual Fund contributions to be paid by providers and to hear and determine appeals by providers against determinations of such amounts.

Subclause (2) specifies that the Panel have powers to do all things necessary and convenient in connection with the performance of its functions.

Subclause (3) specifies that the performance of the functions or exercise of the powers of the Panel be not affected merely because of a vacancy in the membership of the Panel.

Clause 56 Terms and conditions of Panel Members

Subclause (1) specifies that each member of the Panel be to be appointed on a part-time basis.

Subclause (2) specifies the remuneration and allowances and other terms of each members appointment is to be as agreed in writing by the Minister and the member.

Clause 57 Procedures of the Panel

Subclause (1) provides for regulations to be made establishing procedures for the Panel.

Subclause (2) provides that the panel may determine its own procedures subject to the regulations.

Subclause (3) provides for procedures that may allow applications for review of Fund Manager’s detrimental decision by the Panel to be heard by one or more members of the Panel.


Division 4—Annual Fund contributions and special levies

Subdivision A—Annual Fund contributions

Clause 58 Fund Manager to set contributions

This clause provides that the Fund Manager must apply the criteria determined under this Division in determining the amount of annual Fund contributions required from each provider for each calendar year.


Clause 59 How the contributions criteria are determined

This clause requires the Fund Manager to provide draft contributions to the Panel, which may accept the draft or ask the Fund Manager to revise it and if no draft from the Fund Manager is acceptable to the Panel, the Panel may determine the contributions criteria itself.


Clause 60 Content of the contributions criteria

Subclause (1) outlines the criteria that must be taken into account in determining the annual contributions. This criteria must be determined having regard solely to the purpose of the fund and must enable the amount of contributions to each provider to reflect the risk of calls being made on the fund in respect of that provider.

Subclause (2) specifies that one of the criteria must address whether the provider is a member of the tuition assurance scheme and in those circumstances it must outline the characteristics of that scheme

Subclause (3) specifies that the criteria may allow for a reduction of the providers contribution where the provider agrees to the Fund Manger taking charge or other security over an asset owned by the provider.


Clause 61 Changing the contributions criteria

This clause empowers the panel to review and change, by adding, revoking or subtracting, the criteria previously determined. It may do so at its own initiative or upon receiving draft changes from the Fund Manager. The procedure for dealing with draft changes and the content of the changed contributions criteria must meet the requirements of sections 59 and 60, respectively, governing the establishment of the contributions criteria.

The clause further specifies the criteria and requirements that must be taken into account in any change to take place. The contributions criteria must not be changed more than once each year.


Clause 62 Dissemination of contributions criteria

This clause requires the Fund Manager to make the contributions criteria publicly available.


Clause 63 Notice of amount of annual Fund contribution

This clause specifies that the Fund Manager must give written notice to each provider who is liable to pay an annual fund contribution. That notice must specify the amount of contribution and the due date for payment, which must be at least 14 days after the notice is given. The provider may seek a review of the amount of the contribution from the Fund Manager and the panel.


Clause 64 Notifying the Secretary of initial contributions

This clause requires the Fund Manager to notify the Secretary when a provider who is not yet registered has paid its first annual contribution. This is required by the Secretary to enable registration of the provider.


Clause 65 Increasing annual Fund contributions

This clause allows the Fund Manager to increase a provider’s required contribution during the year on the basis of new information.

The Fund Manager must be given another written notice specifying the new amount of annual fund contribution and the date of payment, which must be at least 14 days after the notice is given.


Subdivision B—Rights of review

Clause 66 Applying to the Fund Manager for a review of the contribution amount
Clause 67 Review by the Fund Manager
Clause 68 Applying for review by the Panel
Clause 69 Review by the Panel

This Subdivision (clauses 66 to 69) establishes procedures to be followed by the provider, the Fund Manager and the Panel in dealing with the application by a provider seeking a review of its annual Fund contribution.

The provider must apply within 14 days after it is given a notice of its annual Fund contribution and must pay the contribution on time even though it has applied for a review to the Fund Manager or the Panel.

A review of a provider’s Fund contribution by the Fund Manager or the Panel is limited to the application of the contributions criteria to the particular provider the contributions criteria themselves cannot be challenged.


Clause 70 Fees for review

This clause specifies that the regulations may prescribe fees payable and to whom a fee is payable in relation to an application for review by either the Fund Manager or the Panel. Such fees must not amount to taxation.


Clause 71 Refund of overpaid contributions

This clause provides that if a review results in a lower assessment of the amount of fund contribution, the Fund Manager must refund or remit the difference.


Subdivision C—Special levies

Clause 72 Special levies

Subclause 72(1) provides that if the Fund Manager considers that at any time the Fund does not have sufficient monies to meet current or future liabilities, it may require all registered providers to pay a special levy for that year. However, subclause 72(2) requires the Fund Manager to obtain the approval of the Panel before requiring registered education providers to pay a special levy. Subclause 72(3) requires the Panel, in deciding whether or not to give its approval, to consider relevant matters including the ability of the Fund to meet current and future liabilities.


Clause 73 Amount of levy

The assessment of each registered providers special levy must as far as practicable be equal to the providers proportion of the total annual fund contribution required for that particular year.


Clause 74 Fund Manager must give written notice

This clause requires the Fund Manager to give a written notice to each registered provider who is liable to pay a special levy. This notice must specify the amount of that levy and the day on which the provider must pay the amount, which must be at least 14 days after the notice is given.


Subdivision D—Reminder notices for late payers

Clause 75 Reminder notices

This clause requires the Fund Manager to give a reminder notice to a register provider who has not paid an amount of annual Fund contribution or levy by the due date. The notice must specify the amount owing, state that the registered provider must pay the amount owing plus a penalty within 7 days of being given the notice, and advise that the provider may be automatically suspended under section 89.

The Fund Manager must tell the Secretary if the registered provider fails to comply with the reminder notice.


Division 5—Calls on the Fund

Clause 76 When a call is made on the Fund

This clause clarifies the situation where a call is made on the Fund.

It specifies that a call be made on the Fund where a Fund Manager determines that certain events have happened which affect an overseas or intending overseas student in relation to a course for which there was a registered provider.

This includes circumstances where a Fund Manager decides that a provider appears unable to satisfy its obligations to the student or a student cannot be placed promptly in a suitable alternative course.

Subclause (2) provides that a call is not made on the Fund if the provider was exempt under the regulations from making an annual Fund contribution to the Fund for that year.


Clause 77 What the Fund Manager must do when a call is made

This clause provides that the Fund Manager must, in consultation with the student, place the overseas student or intending student in a course that the Fund Manager regards as a suitable alternative or alternatively pay the student out of the Fund an amount equal to the amount to satisfy the refund requirements under Division 2 of Part 3 in circumstances where a call is made on the Fund.

Subclause (2) provides that the Fund Manager may spend more than the amount of that Fund entitlement in placing a student in an alternative course, if it is considered that this would best promote the purpose of the Fund.


Clause 78 Taking the student’s place as creditor

This clause outlines the procedures that may be adopted by the Fund Manager in taking the students place as a creditor.

This clause provides that a student has no claim against any provider in respect of the student’s course money once the Fund Manager has paid an amount to or on behalf of a student. The Fund Manager may then recover that amount, from the provider and may also enforce any charge or other security over any assets of the provider in satisfaction of the debt.


Division 6—Miscellaneous

Clause 79 Investments

This clause specifies investment procedures that may be adopted by the Fund Manager concerning any monies standing to the credit of the Fund.


Clause 80 Financial accountability

This clause requires the Fund Manager, as soon as practicable after the end of each calendar year, to arrange for an independent audit of the financial state of the Fund by an auditor who meets the requirements of subclause 80(2). The audit report must be provided in writing to the Minister and the Panel.

In addition, the Minister may, by notice in writing, require the Fund Manager to arrange for other reports about the Fund. For example, an actuary may be appointed to examine the Fund at specified times if required.


Clause 81 No income tax

This clause indicates that the Fund Manager does not have to pay income tax on amounts of annual Fund contribution or special levies collected.


Clause 82 Future cessation of the Fund

This clause provides that, should an Act provide for cessation of the Fund, any surplus money in the Fund at the time of cessation must be repaid to providers liable to pay an annual Fund contribution for the year in which the cessation occurs. Calculation of repayments and other related matters may be specified in regulations.

PART 6—ENFORCEMENT

This Part sets out the powers to impose sanctions on registered providers for breaches of the Act, the national code, or providers’ registration conditions and in certain other circumstances. This Part also sets out examples of conditions that may be imposed on providers’ registrations, procedures that must be followed if a sanction is to be imposed and specifies the breaches that are offences for the purposes of this Part and the maximum penalties for those offences.

Division 1—Conditions, suspension and cancellation

Division 1 sets out the circumstances under which a provider’s registration may be suspended, cancelled or have conditions imposed on it. This Division also sets out the procedures that are to be followed if a sanction is to be imposed and provides inclusive examples of the conditions that may be imposed on a provider’s registration.


Subdivision A—Sanctions for non-compliance etc.

Subdivision A provides the Minister with the power to impose conditions on a provider’s registration, to suspend or to cancel a provider’s registration.

Clause 83 Minister may impose sanctions for non-compliance etc.

This clause enables the Minister to suspend, cancel or impose conditions on a provider’s registration for breaches of the Act, the national code or a condition of the provider’s registration, if the Minister believes that there are reasonable grounds for doing so. Section 93 sets out the procedure to be followed when taking such action.

Clause 84 Minister may take further action

This clause enables the Minister to take further action under section 83 even if action has already been taken under that section in relation to the same matter. For example, the Minister may consider it appropriate to suspend a provider’s registration, having already imposed one or more conditions on that registration.

Clause 85 Minister may take action for breaches occurring before provider registered

This clause enables the Minister to impose a sanction on a registered provider under section 83 regardless of whether the provider was registered at the time of the breach.

Clause 86 Examples of conditions

This clause provides examples of conditions that the Minister may impose on a registered provider under section 83. The conditions enumerated in the clause are not exclusive.


Subdivision B—Suspension and cancellation by the Minister

This Subdivision sets out the Minister’s powers to suspend or cancel a provider’s registration in circumstances other than for a breach of the Act, the national code or conditions of the provider’s registration.

Clause 87 Suspension for financial difficulty etc.

This clause enables the Minister to suspend a provider’s registration if the Minister believes on reasonable grounds that the provider may not be able to provide courses or refund course money to students it has accepted because of financial difficulty or any other reason.


Clause 88 Cancellation if suspended providers cease to provide courses

This clause enables the Minister to cancel a provider’s registration if the provider ceases to provide courses to overseas students while the provider’s registration is suspended and in all the circumstances, the Minister considers it appropriate to do so.


Subdivision C—Automatic suspension and cancellation

Subdivision C sets out the circumstances in which a provider’s registration will be suspended or cancelled automatically under the Act.

Clause 89 Automatic suspension for loss of approval

Under this clause, a provider’s registration to offer a particular course in a State is automatically suspended if that State suspends its approval for the provider to offer that course to overseas students. The provider’s registration is reinstated when the State’s suspension is removed.

If the State’s suspension is removed, the Minister may also remove the suspension under this clause if the Minister considers it appropriate in all the circumstances.

The effect of suspension is set out in section 95. A reinstated provider may have to pay a reinstatement fee under section 171.


Clause 90 Automatic suspension for non-payment of annual Fund contribution or special levy

Provides for suspension of the registration of a provider who fails to comply with a reminder notice issued under section 75 of the Act. A provider suspended under this section is suspended for all courses for all states until the provider pays the amount owing as well as the associated late payment penalty.


Clause 91 Automatic cancellation of registration for provider who ceases to be approved for a course for a State

This clause provides for the automatic cancellation of a provider’s registration to provide a course in a State if the provider ceases to be an approved provider of that course for that State.

Clause 92 Automatic cancellation for bankruptcy

This clause enables the automatic cancellation of a provider’s registration if the provider becomes bankrupt, where the provider is an individual, or a winding-up order is made in respect of it, where the provider is a body corporate.

Subdivision D—Common rules for conditions, suspension and cancellation

This Subdivision sets out the procedures to be followed when imposing sanctions on a provider. It provides for the Minister to remove registration conditions and suspensions and proscribes suspended providers from doing certain things. It also requires the Secretary to keep the Register updated with details of suspensions, cancellations and conditions imposed.

Clause 93 Procedure for taking action etc.

This clause sets out the form of written notices and the procedures to be followed if the Minister intends to suspend, cancel or impose conditions on a registered provider’s registration under Subdivision A or B of this Division, or refrains from removing a suspension under subsection 89(2).

The clause specifies the minimum amount of time that must be given to a registered provider to make written submissions before a decision can be made in relation to the possible suspension, cancellation or imposition of sanctions.

In urgent cases involving the possibility of the imposition of sanctions in relation to possible breaches of the Act, the national code or a condition of registration, the provider must be given at least 24 hours to make written submissions.

Clause 94 Minister may remove condition or suspension

This clause enables the Minister to remove a condition on, or suspension of, a provider’s registration at any time by giving the provider written notice.


Clause 95 Effect of suspension

This clause sets out the effect on a provider of suspension for a State under Subdivision A.

While suspended for a State a provider must not do any thing for the purpose of recruiting or enrolling, or solicit or accept any money from an overseas student or intending overseas student for a course provided in that State by the provider. If an accepted student of the provider has not begun the course, a suspended provider must not permit the student to begin the course.

A suspended provider is registered for all other purposes.

It is intended that a provider whose registration is suspended for a course must continue to teach an accepted student who has commenced the course.


Clause 96 Updating the Register

This clause requires the Secretary to alter the Register established under section 10 to reflect the suspension or cancellation of, or the imposition of a condition on a provider’s registration. The Secretary’s failure to alter the Register does not affect the validity of the relevant action.


Division 2—Immigration Minister’s suspension certificate

This Division provides that the Immigration Minister, acting personally, may issue a special suspension certificate to a registered provider in certain circumstances. The Immigration Minister's power to issue this certificate is a supplement to the sanctions which can be imposed on providers under Part 6 Division 1. The exercise of the power is based on a series of indicators agreed in consultation with education export industry peak bodies. It is intended that the power to issue the certificate would normally be exercised after consultation with the Minister administering the new ESOS Act.

Clause 97 Immigration Minster may give a registered provider a suspension certificate

Subclause 97(1) provides that the Immigration Minister may issue an Immigration Minister’s suspension certificate to a registered provider if, in the Minister’s opinion, a significant number of overseas students or intending overseas students in respect of a provider or a provider's associate are entering or remaining in Australia for purposes not contemplated by their visas.

The Parliamentary Secretary for Immigration and Multicultural Affairs may also issue the certificate, as the definition of "Immigration Minister" in new section 5 includes "any of the Ministers" who administers the Migration Act. Since the enactment of the Ministers of State and Other Legislation Amendment Act 2000 Parliamentary Secretaries are appointed as "officers to administer...departments of State" under section 64 of the Constitution.

Subclause 97(2) provides that in considering whether to issue such a certificate, the Immigration Minister may have regard to the following matters in respect of the registered provider or associate:
• the number of applications for student visas made by overseas students and intending overseas students that have been refused where there were fraudulent statements or documents submitted in connection with the application (subclause 97(4) clarifies that the fraudulent material does not have to have been a reason for refusing the visa application);
• the number of accepted students who have breached conditions of their visas;
• the number of accepted students and former accepted students who remain in Australia unlawfully after finishing their courses; and
• any other matter set out in the Migration Regulations 1994.

Subclause 97(3) provides that the above list is not exhaustive. The Immigration Minister may have regard to any other matter relevant to forming the opinion referred to in subclause 97(1). The Department of Immigration and Multicultural Affairs is developing, in close consultation with the education export industry, a list of further indicators and benchmarks relevant to the issue of the suspension certificate. A provider will be given details of why the Immigration Minister is considering issuing a certificate (and be given an opportunity to respond) before it is issued (see clause 98 below).

Subclause 97(5) provides that the power to issue a suspension certificate must be exercised by the Immigration Minister personally.


Clause 98 Procedure for issuing certificate

Clause 98 sets out the procedure for issuing an Immigration Minister’s suspension certificate. This procedure is consistent with procedures in respect of other discretionary powers exercised personally by the Immigration Minister under the Migration Act 1958.

New subclause 98(1) provides that the Immigration Minister must, before issuing a suspension certificate, give the registered provider a written notice:
• stating that the Immigration Minister intends to issue the provider with an Immigration Minister’s suspension certificate and setting out the reasons for this intention; and
• giving the provider at least 7 days in which to provide the Immigration Minister with written submissions about the matter.

(Section 28A of the Acts Interpretation Act 1901 provides for how such a written notice may be given or sent).

New subclause 98(2) provides that after considering any submissions received from the provider, within the period specified in the notice, the Immigration Minister may still issue a suspension certificate if the Immigration Minister considers that he or she should do so.

New subclause 98(3) provides that the Immigration Minister must table a copy of the certificate in both Houses of Parliament within 15 sitting days of giving it to the provider.

New subclause 98(4) provides that the Immigration Minister may delegate the function of giving notices under subclause 98(1) to the Secretary of his or her Department, or to an SES employee or acting SES employee in that Department.


Clause 99 Content of certificate

Clause 99 provides that an Immigration Minister’s suspension certificate must set out:
• the day on which it takes effect;
• why it has been given; and
• the effect of clauses 100, 101 and 102.


Clause 100 Duration of certificate

Subclause 100(1) provides that an Immigration Minister’s suspension certificate remains in effect for a period of 6 months beginning on the day that it states that it takes effect. However, subclause 100(2) provides that the Immigration Minister may revoke an Immigration Minister’s suspension certificate at any time by giving the registered provider written notice.

Subclause 100(2) is consistent with clause 94 above (which provides for removal of a condition on, or a suspension of, registration by written notice to a provider), but in the case of revocation of an Immigration Minister's suspension certificate the provider does not have to pay a re-instatement fee.

Clause 101 Effect of certificate: offence

Clause 101 sets out the effect of an Immigration Minister’s suspension certificate. Subclause 101(1) provides that a person is guilty of an offence if a person:
• makes an offer to an overseas student, an intending overseas student or any other prescribed non-citizen, for him or her to be provided with a course by a registered provider; or
• invites an overseas student, an intending overseas student or any other prescribed non-citizen, to undertake, or apply to undertake, a course of studies offered by a registered provider; or
• holds a registered provider out as able or willing to provide a course to overseas students or prescribed non-citizens;
while an Immigration Minister’s suspension certificate is in effect for that provider.

"Prescribed non-citizen" is defined in subclause 101(3) to mean a non-citizen (within the meaning of the Migration Act 1958) who is of a kind prescribed for the purposes of clause 101 in the Migration Regulations 1994.

The maximum penalty for the offence in subclause 101(1) is 2 years imprisonment.

Subclause 101(2) provides that the provider is still registered for all other purposes.

Under Part 2.5 of the Criminal Code (Corporate criminal responsibility), a registered provider which is a body corporate can be liable in certain circumstances for an offence committed by its agent under clause 101, if the agent acts within the actual or apparent scope of his or her employment, or within his or her actual or apparent authority.

Complementary amendments to the Migration Regulations 1994 will prevent a student proposing to study with a provider from:
• making a valid visa application; or
• being granted a visa
while an Immigration Minister's suspension certificate is in effect in respect of that provider. Where a student has already paid course fees, but cannot have a course provided to him or her because the provider is subject to a sanction under Part 6 (including an Immigration Minister's suspension certificate), Division 2 of Part 3 provides for refund of course fees by the provider.

Clause 102 Further certificates

Subclause 102(1) provides that by the end of the period that the Immigration Minister’s suspension certificate is in effect, unless the registered provider has satisfied the Immigration Minister that it should not be issued with another certificate, the Immigration Minister may issue a further certificate.

Subclause 102(1) requires the provider to satisfy the Immigration Minister why a further certificate should not be issued. This is because the matters it is envisaged would be relevant to this issue are matters which lie peculiarly within the knowledge of the provider. Examples of such matters would include:
• steps taken to address unsatisfactory student recruitment processes;
• changes made to marketing strategies and publicity material;
• changes made to relationships with the provider's agents;
• tightened monitoring of attendance requirements;
• other steps taken to reduce the number of non-genuine students attending the provider's courses.

Subclause 102(2) provides that the Immigration Minister does not have to follow the procedure in subclauses 97(1) and (2) in order to issue a further Immigration Minister’s suspension certificate. However, subclause 102(3) provides that the Immigration Minister must table a copy of the further certificate in both Houses of Parliament within 15 sitting days of giving it to the provider.

Subclause 102(4) clarifies that this section applies to a further Immigration Minister's suspension certificate or certificates in the same way as it applies to an original Immigration Minister’s suspension certificate.

Clauses 103 Updating the Register

Subclause 103(1) provides (consistently with clause 96 above) that the Secretary must alter the CRICOS Register appropriately once an Immigration Minister’s suspension certificate has been given to a registered provider or revoked. However, subclause 103(2) provides that a failure to do so will not affect the validity of the certificate or the revocation.

In addition, a provider is subject to obligations to disclose previous certificates issued in respect of the provider or the provider's associate under clause 11 (which deals with previous conduct of approved providers and associates) and clause 17 (which deals with previous conduct of associates of registered providers).


Division 3—Offences

This Division sets out offences under the Act and penalties to be levied. The notes to the clauses refer to Chapter 2 of the Criminal Code for the general principles of criminal responsibility and to section 4AA of the Crimes Act 1914 for the current value of a penalty unit.

Clause 104 Notification requirements

This clause sets out offences and maximum penalties relating to breaches of the information and notification requirements of sections 19 and 20 of the Act. Section 19 requires a registered provider to give information about accepted students to the Secretary when any of the events specified in subsections 19(1) and 19(2) occur. Section 20 requires a registered provider to keep certain records relating to accepted students enrolled with, or who have paid course money to, the provider.

A registered provider who breaches subsections 19(1), 19(2) or section 20 is guilty of a separate offence for each breach. Strict liability applies to a breach of the notification requirements of subsection 19(1).

Clause 105 Record-keeping

A registered provider is required by section 21 to keep certain records relating to accepted students enrolled with, or who have paid course money to, the provider.

This clause stipulates that a registered provider who breaches section 21 is guilty of a separate offence for each breach and sets out the maximum penalty for such a breach. Strict liability applies to a breach of the record-keeping requirements of section 21.


Clause 106 Infringement notices

Subclause (1) sets out that where the regulations provide, the Minister may give an infringement notice requiring the payment of a penalty to a registered provider as an alternative to prosecution for offences for infringements of the notification requirements of section 104 or the record keeping requirements of section 105.

Subclause (2) sets out the amount of the penalty payable under subclause (1).

Subclause (3) stipulates that the regulations may provide for matters concerning the infringement notice.


Clause 107 Failing to identify registered provider in written material

This clause specifies that a person is guilty of an offence if, in written material, the person:

• Makes an offer to provide a course in the State to a student or intending overseas student; or

• Invites an overseas student or intending overseas student to undertake or apply to undertake a course in a State; or

• Holds himself or herself out as able or willing to provide the course in a State to overseas students;
And the written material does not identify the registered provider for the course for that State, the number allocated to the provider under section 10 and other information that may be prescribed by regulations.

The clause also sets the maximum penalty for an offence under this section.


Clause 108 Providing false and misleading information

This clause provides that a person is guilty of an offence if the person provides false or misleading information in complying or purporting to comply with section 13, 19, 20, 26(1) or 26(3). The maximum penalty for an offence under this clause is imprisonment for 2 years.

Clause 109 Access to electronic notification system

This clause permits the Secretary to disclose information from, or give any person access to, a computer system established to receive and store information given about accepted students.

Subclause (1) provides that this section applies if a computer system is established for the purpose of receiving and storing information about accepted students that is given to the Secretary under section 19.

Subclause (2) permits the Secretary to give any person access to the system referred to in subclause (1) for the purpose of the Act.

Subclause (3) sets out that access given under subclause (2) may be given subject to conditions that the Secretary determines in writing relating to the use of the system and of means of obtaining access to the system.

Subclause (4) sets out that a person given access subject to conditions must be given a copy of the conditions.

Subclause (5) sets out that a person is guilty of an offence if the person intentionally breaches a condition and knows, or is reckless to whether, that conduct breaches a condition. The subclause also specifies the maximum penalty for the offence.


Clause 110 Bogus providers

Subclause (1) provides that an offence is committed if a registered provider provides, purports to provide, or offers to provide a course to overseas students in a State and the course is not genuine and in providing or purporting or offering to provide the course, the provider intends to facilitate or is reckless as to facilitating the breach of one or more conditions of the students’ visas. Subclause (1) also sets the maximum penalty for this offence.

PART 7—MONITORING AND SEARCHING PROVIDERS

This Part empowers authorised employees of the Department to require the production of, to search for and inspect, and to seize, relevant records of providers. The powers in the new Division can be used where it is believed that the Act or the national code are not being or have not been, complied with by a provider. The Part also contains protections for providers and for students against arbitrary use of these powers.

Division 1—Introduction

Clause 111 Powers conferred on magistrates in their personal capacity

This clause clarifies the nature of the conferral of powers on magistrates under this Part.

Clause 112 Immunity of magistrates

This clause provides that a magistrate who exercises a power under subsection 111(1) has the same protection and immunity as if he or she were exercising that power as or as a member of the court of which he or she is a member.

Division 2—Notices requiring information and documents

This Division enhances the Department’s capacity to ensure compliance with the Act and the national code by providing for the issue of notices requiring the production of relevant information or documents, or requiring people to answer questions. The Division also contains rules in relation to notices and sets out offences under this Division in relation to notices, information and documents.

Subdivision A—Production notices

If the Secretary reasonably believes that a person specified in Subdivision A has information or documents relevant to a monitoring purpose, he may issue a written notice requiring the production of that information or those documents. Subdivision A sets out the individuals to whom a production notice may be given, the information that the notice must contain and the procedure for serving the notice.

Clause 113 Production notices

This clause provides for the issue of a written notice where the Secretary reasonably believes that the individual has, or has access to, information or documents that are relevant to whether the Act or national code are being or have been complied with.

It is envisaged that the types of information or documents that may be requested include student records, students’ addresses, academic transcripts, student attendance records and the provider’s business record as they relate to obligations under the national code or the Act generally.

Subclause (2) provides that the notice may require the individual to:

· Give information or documents to an authorised employee; or

· Show documents to an authorised employee; or

· Make copies of documents and give the copies to an authorised employee.

Subclause (3) provides that if information or documents are in a particular form, the production notice may require the information or documents to be given in that form.

Subclause (4) provides that a production notice may be given to:

· An officer or employee of a provider; or

· A consultant to a provider; or

· A partner of a provider (for example, where it trades as a partnership); or
· An individual who trades as a provider.


Clause 114 Contents of the production notice

This clause specifies the information to be contained in a production notice and sets out the period for compliance with the notice.

Subclause (1) requires that a production notice:

· State that it is given under section 113;
· Set out the effects of sections 120, 121, and 122 (offence provisions relating to the failure to comply with a notice, and to false or misleading information or documents);
· State how the information, documents or copies must be given or shown; and
· State the period within which the information, documents or copies must be given or shown.

Subclause (2) provides that the period for complying with a notice must be at least 24 hours where the requested information or documents relate to any extent to the calendar year in which the notice is given and are to be produced at premises where they are currently located.

Subclause (3) sets out that the compliance period must be at least 72 hours if the notice covers any information or documents other than those described in subclause (2).


Clause 115 Serving production notices

This clause sets out the procedure for serving a production notice on an individual.
The clause also provides that the compliance period under section 114 is increased if the notice is sent by ordinary or other class of pre-paid post.


Subdivision B—Attendance notices

This Subdivision provides for the issue of a written notice requiring attendance before an authorised employee to answer questions for the purposes of monitoring providers’ compliance with the Act or the national code.


Clause 116 Attendance notices

This clause provides for the issue of a written notice requiring attendance before an authorised employee to answer questions. Such a notice may be issued to an individual specified in subclause (3) where the Secretary reasonably believes that the individual has information or documents that are relevant to a monitoring purpose.


Clause 117 Contents of an attendance notice

Subclause (1) specifies that an attendance notice must:

· State that it is given under section 116;

· Set out the effects of sections 120, 121, and 122 (proposed offence provisions relating to the failure to comply with a notice, and to false or misleading information or documents);

· State where the individual is to attend; and

· State when the individual is to attend, which must be at least 14 days after the notice is given.

Subclause (2) permits an attendance notice and a production notice to be included in the same document if they are being given to the same individual.


Subdivision C—Common rules for production and attendance notices

This Subdivision sets out various rules relating to production and attendance notices, including the payment of expenses and compensation, the provision for certain actions to be offences.

Clause 118 Scales of expenses

This clause provides that the regulations may prescribe scales of expenses to be allowed to persons required to give information or documents under this Division.


Clause 119 Reasonable compensation for giving copies

This clause entitles a person to be paid reasonable compensation by the Commonwealth for providing documents in compliance with a production notice under paragraph 113(2)(c).

Clause 120 Offence: failing to comply with a notice

This clause makes it an offence for a person to refuse or fail to comply with a production or attendance notice. The maximum penalty for this offence is 6 months’ imprisonment. The clause also provides that a person who complied with a notice to the extent practicable within the allowed period shall not be guilty of an offence.

Clause 121 Offence: giving false or misleading information

This clause makes it an offence for a person to give false or misleading information in complying or purporting to comply with a production or attendance notice. The maximum penalty for this offence is 12 months’ imprisonment.


Clause 122 Offence: giving false or misleading document

Subclause (1) makes it an offence for a person to give or show an authorised employee a document that is false or misleading in a material particular. It is an offence whether the document or copy is given or shown when complying, or purporting to comply, with a production or attendance notice. The maximum penalty for this offence is 12 months’ imprisonment.

Subclause (2) provides that a person is not guilty of an offence under this clause if the document is accompanied by a written statement from the person that the document is, to the person’s knowledge, false or misleading in the material particular concerned and setting out or referring to the material particular.

Clause 123 Information and documents that incriminate a person

This clause abrogates the privilege against self-incrimination. Consequently, a person is not excused from giving information, a document or a copy of a document, or answering a question under this Part because doing so might tend to incriminate the person or expose them to a penalty.

However, in accordance with Commonwealth criminal law policy, this clause grants an individual prosecutorial indemnity to offset the abrogation of the privilege against self-incrimination. The only exceptions to complete prosecutorial indemnity under this clause are proceedings under, or arising out of, section 121 or 122.

Clause 124 Copies of documents

This clause permits an authorised employee, or another employee of the Department with an authorised employee’s permission, to:

· Inspect a document given or shown to the authorised employee under Division 2; and

· Make and retain copies of, or take and retain extracts from, such a document; and
· Retain a copy of a document given to an authorised employee under a production notice under paragraph 113(2)(c).

Clause 125 Employee may retain documents

This clause provides that a document given to an authorised employee under this Division may be retained for the purposes of this Act, for the purpose of an investigation into the commission of an offence, or to enable evidence to be obtained for a prosecution. A document must not be retained for longer than 60 days but an application may be made under section 128 for an extension of that period.

Clause 126 Owner of document must be given copy

Where a document is being retained, a copy is to be made and given to the owner of the original document.

Subclause (1) requires that an employee retaining a document must copy the document, certify the copy to be a true copy and give the copy to the person otherwise entitled to possess the document as soon as practicable.

Subclause (2) provides that courts and tribunals are to receive the certified copy made under subclause (1) as evidence as if it were the original document.

Subclause (3) provides that until a certified copy of the document has been given, the owner, or his or her authorised person, may make copies of, and take extracts from, the original at times and places that the employee thinks appropriate.


Clause 127 Retaining documents

This clause provides that an authorised employee must take reasonable steps to return a document given under this Division to the person who gave the document or the document’s owner, unless a magistrate has ordered further retention under section 129 or the employee is otherwise authorised by law to retain, destroy or dispose of the document. This clause applies 60 days after the document was given to an authorised employee.

Clause 128 Employee may apply to magistrate or tribunal member for a further period

This clause provides for an application to be made for the extension of the period that a document given under this Division may be retained.

Subclause (1) provides for an application to be made to a magistrate or tribunal member for an order permitting the retention of a document for a further period.

Subclause (2) specifies that an application for retention must be made before the end of the 60-day retention period or before the end of a period previously specified in an order under section 129.

Subclause (3) requires an employee to ascertain whose interests will be affected by extending the retention of the document and, where practicable, notify each person whom the employee believes to be affected by the document’s retention of the application.

Clause 129 Magistrate or tribunal member may order retention for further period

This clause enables a magistrate or tribunal member to extend the retention period if he or she is satisfied that it is necessary to retain the document for the purposes of the Act, for the purposes of an investigation into the commission of an offence, or to enable evidence of an offence to be secured for the purposes of a prosecution. The magistrate’s or tribunal member’s order must specify the length of the further period.


Division 3—Monitoring warrants

This Division enhances the Department’s capacity to ensure compliance with the Act or the national code by providing for powers to enter providers’ premises for a monitoring purpose. Premises can only be entered with the consent of the occupier or pursuant to a monitoring warrant issued by a magistrate or tribunal member.

Subdivision A—Monitoring powers

This Subdivision sets out the main monitoring powers of authorised employees to apply for a monitoring warrant and to enter premises for a monitoring purpose and makes it an offence to fail to answer a question or to give false or misleading information or documents.


Clause 130 Authorised employee may enter premises for a monitoring purpose

This clause gives an authorised employee the power to enter a registered provider’s premises for a monitoring purpose, either with the consent of the occupier or under a monitoring warrant.

Premises an authorised employee may enter for a monitoring purpose are premises occupied by a registered provider or at which it is reasonable to believe that there may be something relevant to a monitoring purpose and to exercise the monitoring powers set out in section 131.

It is envisaged that the subclause (1) would, for example, allow an authorised employee to enter a warehouse operated by a private storage company on which a provider stores relevant student records.

Clause 131 Monitoring powers of authorised employees

This clause sets out the monitoring powers an authorised employee may exercise for the purposes of this Division in relation to premises described in section 130.

Clause 132 Authorised employee on premises with consent may ask questions

This clause provides that an authorised employee who is only authorised to enter premises because the occupier has consented to the entry may ask the occupier to answer questions relevant to a monitoring purpose and to give or show the employee any relevant document that the employee requests. The employee may ask any person on the premises to answer any question that may facilitate the exercise of monitoring powers in relation to the premises.


Clause 133 Authorised employee on premises under warrant may ask questions

This clause provides that an authorised employee who is authorised to enter premises by a monitoring warrant may require the occupier to answer any questions relevant to a monitoring purpose, or to give or show any document requested by the employee, relevant to a monitoring purpose. The employee may ask any other person on the premises to answer any question that may facilitate the exercise of monitoring powers in relation to the premises.

Clause 134 Offence: failure to answer question

This clause makes it an offence not to comply with a requirement under section 90 unless answering a question or giving or showing a document might incriminate the person or expose the person to a penalty. The clause sets out the maximum penalty for an offence.

Clause 135 Offence: giving false or misleading information

This clause makes it an offence to give false or misleading information to an authorised employee who is permitted to ask questions by section 132 or section 133 and sets the maximum penalty for an offence.


Clause 136 Offence: giving or showing documents that are false or misleading in material particulars

It is an offence to give or show a false or misleading document to an authorised employee who is permitted to ask questions by section 132 or section 133.

Subclause (1) provides that showing or giving a false or misleading document to an authorised employee is an offence and sets out the maximum penalty.

Subclause (2) provides that a person is not guilty of an offence if he or she makes a written statement that the document is, to the person’s knowledge, false or misleading and sets out or refers to the particular that is false or misleading.

Subdivision B—Applying for monitoring warrants

This subdivision provides the powers for applying for and issuing, monitoring warrants and sets out the content of such warrants.

Clause 137 Authorised employee may apply for a monitoring warrant

This clause permits an authorised employee to apply to a magistrate or tribunal member for a monitoring warrant in relation to the premises referred to in subsection 130(1) and requires the employee to give the magistrate or member an information on oath or affirmation setting out the grounds for seeking the warrant.

This provision also enables the authorised employee to apply for a warrant in premises in a State other than the magistrate’s or member’s State.

Clause 138 Magistrate or tribunal member may issue a monitoring warrant

This clause provides that a magistrate or tribunal member may issue a monitoring warrant if he or she is satisfied that access to the premises is reasonably necessary for a monitoring purpose.

Clause 139 Magistrate or tribunal member may require more information

This clause provides that a magistrate or tribunal member may require an authorised employee or other person to give further information concerning the grounds on which the monitoring warrant is being sought before issuing the warrant. This clause provides that the monitoring warrant must not be issued until that information is provided.

Clause 140 Contents of monitoring warrant

This clause sets out the information that must be contained in a monitoring warrant. This incudes authorising persons to enter the premises, specifying the exercise of powers involved and the hours of authorised entry, the date and time it ceases to have effect, the purpose for which it is issued and that it is issued under section 138.

Division 4—Search warrants

This Division sets out authorised employees’ powers to enter and search premises and establishes the legal framework for the issue of search warrants.

Subdivision A—Search powers

This subdivision empowers authorised employees to enter and search premises and sets out their search powers.


Clause 141 Authorised employee may enter premises to look for evidential material

This clause permits authorised employees to enter and search premises to look for evidentiary material on reasonable suspicion that such material may be located on those premises. On entering the premises the authorised employee may exercise the search powers specified in section 142. Should evidential material be found on the premises the employee may seize it if he or she has a search warrant.

An employee may not enter the premises unless the occupier has consented to the entry and been shown the employee’s identity card, if requested, or if the entry is made under a search warrant.

Clause 142 Search powers of authorised employees

This clause sets out the search powers that may be exercised by an authorised employee in relation to premises. This includes powers to take photographs, inspect documents, operate equipment and remove equipment.

Subclause (7) provides that an authorised employee may also secure anything on the premises that he or she reasonably believes might involve the commission of an offence under the Crimes Act 1914 or the Criminal Code.

Subdivision B—Applying for search warrants

This subdivision permits authorised employees to apply for search warrants and sets out the requirements for their issue.

Clause 143 Authorised employee may apply for a search warrant

This clause permits an authorised employee to apply to a magistrate or tribunal member for a search warrant in relation to the premises referred to in subsection 1411) and requires the employee to give the magistrate or member an information on oath or affirmation setting out the grounds for seeking the warrant.

This extends to enabling the authorised employee to apply for a search warrant in premises in a State other than the magistrate’s or member’s State.

Clause 144 Magistrate or tribunal member may issue a search warrant

This clause provides that a magistrate or tribunal member may issue a search warrant if he or she is satisfied that there are reasonable grounds for suspecting that evidence may be on the premises concerned.

Clause 145 Magistrate or tribunal member may require more information

This clause provides that a magistrate or tribunal member may require a person to give further information on oath or affirmation concerning the grounds on which the search warrant is being sought before issuing it. The clause provides that the further information may be given orally or by affidavit and that the search warrant must not be issued until the required information has been provided.


Clause 146 Contents of a search warrant

This clause sets out the information that must be contained in a search warrant.


Division 5—Common rules for monitoring warrants and search warrants

Subdivision A—Common powers etc. under monitoring warrants and search warrants

Clause 147 Use of reasonable force and assistance

This clause empowers an authorised employee to enter a provider’s premises under a monitoring warrant or a search warrant in exercising powers under sections 131 or 142 of the Act with such force as is necessary and reasonable.


Clause 148 Use of electronic equipment in exercising search or monitoring powers

This clause permits an authorised employee (or person assisting) to operate electronic equipment on the premises when exercising search or monitoring powers if he or she reasonably believes that this can be done without damaging the equipment or the data recorded on it.

Clause 149 Securing electronic equipment for use by experts

This clause provides that in certain circumstances, electronic equipment may be secured where an authorised employee, or a person assisting that authorised employee believes, on reasonable grounds, that:

· There is at the premises information belonging to the provider concerned:
- That is relevant to a monitoring purpose; and
- That might be accessible by operating electronic equipment that is at the premises; and
· Expert assistance is required to operate the equipment; and
· If he or she does not take action, the information may be destroyed, altered or otherwise interfered with.

Under this clause the occupier of the premises must be given notice of any intention to secure electronic equipment and of the fact that the equipment may be secured for up to 24 hours. It is envisaged that the equipment would be secured by means such as locking it up or placing a guard on it.

The electronic equipment may be secured for these purposes for a maximum of 24 hours or until the equipment has been operated by the expert, whichever happens first.


Clause 150 Extension of period

Under this clause an application may be made to a magistrate for an extension of the period mentioned in clause 149 if there are reasonable grounds for believing that expert assistance will not be available within 24 hours.

The occupier of the premises must be given notice of the intention to apply for an extension of the 24-hour period and is entitled to be heard in relation to the application.

The provisions of Subdivision B of Divisions 3 and 4 relating to the issue of monitoring and search warrants apply to the issue of an extension, with necessary modifications.

Clause 151 Powers without warrant in emergency situations

This clause provides that an authorised employee may exercise certain powers in emergency situations when that authorised employee is on premises for purposes authorised under sections 130 or 141 of the Act and suspects on reasonable grounds that:

· A thing relevant to an offence against the Act, the regulations, the Crimes Act 1914 or the Criminal Code is at the premises; and

· It is necessary to exercise a certain power in order to prevent the thing from being concealed, lost or destroyed; and

· It is necessary to exercise the power without the authority of a monitoring warrant because the circumstances are so serious and urgent.

In the above circumstances, an authorised employee may:

· Search the premises, and any receptacle at the premises, for the thing; and

· Seize the thing if he or she finds it there; and

· Exercise the powers mentioned in subsections 131(2), 131(3), 142(2) and 142(3), as applicable, in relation to the thing.

Clause 152 Retaining seized things

This clause provides for the retention of a thing seized pursuant to the emergency powers in section 151 of the Act. However, this clause does not apply where the thing is forfeited or forfeitable to the Commonwealth or is the subject of a dispute as to ownership.

Under this clause a thing seized must be returned if the reason for its seizure no longer exists or it is not to be used in evidence or the period of 60 days after its seizure ends.

After 60 days, an authorised employee must take reasonable steps to return the thing to the person from whom it was seized or to the owner if that person is not entitled to possess it.

However, the clause does not require a seized thing to be returned in circumstances enumerated in subclause (3).


Clause 153 Authorised employee may apply for a thing to be retained for a further period

This clause provides for the extension of the period a thing, seized pursuant to the emergency powers under section 151, may be retained.

Under this clause an authorised employee may apply to a magistrate for an order that the seized thing may be retained for a further period where proceedings in respect of which the thing may afford evidence have not commenced.

Such an application must be made:

· Before the end of a 60 day period referred after the seizure; or

· Before the end of a period previously specified in an order of a magistrate or tribunal member under section 154.

However, before applying for an extension of the retention period, the authorised employee is required to:

· Take reasonable steps to discover which persons’ interests would be affected by the retention of the thing; and

· If it is practicable to do so, notify each person (who the authorised employee believes to be such a person) of the proposed application.

For example, in certain circumstances this clause may require an authorised employee to notify the person who gave him or her the thing of a proposed application to extend the retention period.

Clause 154 Magistrate or tribunal member may order that the thing be retained

This clause enables a magistrate to extend the retention period if he or she is satisfied that it is necessary for the authorised employee to continue to retain the seized thing:

· For the purposes of an investigation as to whether an offence has been committed; or

· To enable evidence of an offence to be secured for the purposes of a prosecution.


Clause 155 Occupier to provide authorised employee with all facilities and assistance

This clause requires that if a monitoring warrant is being executed, an occupier of the relevant premises must provide the authorised employee with all reasonable facilities and assistance for the effective exercise of their powers under this Part.

This clause makes it an offence for the person to fail to comply with this obligation.


Subdivision B—Obligations on authorised employees etc.

This Subdivision sets out authorised employees’ obligations when exercising their powers under monitoring warrants.


Clause 156 Being on premises with consent

This clause provides that an authorised employee may enter premises under section 130 or section 141 at any time of the day or night with the consent of the occupier but must leave if asked to do so by the occupier.


Clause 157 Consent

This clause provides before their consent is obtained, a person must be informed that they may refuse consent. The clause also provides that entry by an authorised employee is unlawful if the consent obtained was not given voluntarily.

Clause 158 Announcement before entry

This clause provides that before entering premises pursuant to a warrant, an authorised employee must announce that he or she is authorise to enter and give a person on the premises the opportunity to allow entry.


Clause 159 Copy of warrant to be given to the occupier before entry

This clause requires that a copy of a warrant be made available to the occupier of the premises if that person is present when the warrant is being executed. This clause also requires the authorised employee executing the warrant to identify himself or herself to the occupier.

Clause 160 Compensation for damage to electronic equipment or data

This clause sets out the circumstances in which the owner of damaged electronic equipment or the user of damaged or corrupted data or programs will be entitled to the payment of compensation by the Commonwealth, as a result of its being operated in exercising search or monitoring powers.


Clause 161 Occupier entitled to be present during execution of the monitoring warrant

This clause entitles the occupier of the relevant premises, if present at the premises, to observe the execution of a monitoring warrant. However, the right to observe the execution of the warrant ceases if the person impedes that execution. This clause does not prevent the execution of the warrant in more than one area of the premises at the same time.

Clause 162 Identity cards

This clause provides that the Secretary must give an authorised employee an identity card that is in an approved form and which must be returned to the Secretary as soon as practicable after the employee ceases to be an authorised employee.

A person who does not return his or her identity card as required by subclause (3) is guilty of an offence, unless the identity card was lost or destroyed.

Clause 163 Authorised employee must produce identity card on request

This clause provides that if an authorised employee fails to show his or her identity card when requested by the occupier of the premises, the employee may not exercise any powers under Division 3, 4, or 5.

Subdivision C—Issue of warrants by telephone etc.

This Subdivision allows for the issue of monitoring warrants by telephone and sets out procedures and rules in relation to their issue and use.


Clause 164 Employee may apply for warrants by telephone etc.

This clause provides that, if necessary, an authorised employee may apply to a magistrate or tribunal member for a warrant by telephone, fax or other electronic means in urgent circumstances.

The authorised employee must prepare an information on oath or an affirmation setting out grounds on which the warrant is being sought. The information on oath or affirmation should be made before the application is made, but the application may be made first if necessary.

Clause 165 Magistrate or tribunal member may grant warrant by telephone etc.

This clause provides that, if after having considered the information prepared under subsection 164(3) and any further required information and that there are reasonable grounds for issuing the warrant by electronic means, the magistrate or tribunal member may issue a monitoring warrant, if satisfied that access to the premises is reasonably necessary, or a search warrant, if satisfied that there are reasonable grounds for suspecting that evidence is on the premises.


Clause 166 Procedure for issuing warrant by telephone etc.

This clause requires that where a magistrate or tribunal member issues a warrant under section 165, he or she must complete and sign a warrant that is the same as the warrant that he or she would have issued under section 137 or 143.

The magistrate or tribunal member must inform the authorised employee of the terms of the warrant, the day and time it was signed and the time it ceases to have effect. The employee must complete a form of warrant in the terms given by the magistrate or member, including the magistrate’s or member’s name and the day and time the warrant was signed.


Clause 167 Procedure after telephone warrant ceases or is executed

This clause requires the authorised employee to send to the magistrate or tribunal member who signed the warrant the completed form of warrant and the information duly sworn or affirmed in connection with the warrant. This must be done not later than the day after:

· The day on which the warrant ceases to have effect; or

· The day on which the warrant is executed;

whichever happens first.

This clause requires the magistrate or tribunal member, on receiving the documents mentioned in section 166 to attach them to the form of warrant and information. The magistrate or member must also deal with the documents in the same way he or she would have dealt with the information if the application for the warrant had been made under section 137 or 143.

Clause 168 Form of warrant authorises exercise of power

This clause clarifies that the form of warrant completed under section 166 is, if it is in accordance with the terms of the warrant issued by the magistrate or tribunal member under section 165, authority for any exercise of a power that the warrant so signed is authority.


Clause 169 Court to assume that exercise of power not authorised by telephone etc. warrant

This clause provides that if the warrant signed by a magistrate or tribunal member under section 166 is not produced in evidence, the court must assume (unless the contrary is proved) that the entry, search or other exercise of power authorised was not authorised by a monitoring warrant or a search warrant.

PART 8—MISCELLANEOUS

This Part sets out miscellaneous provisions including the delegation of powers, fees and penalties payable by registered providers, debts, liability of unincorporated bodies, disclosure of information, review of decisions and provision for the making of regulations under the Act.


Clause 170 Delegation

This clause enables the Secretary or Minister to delegate any of their respective powers under the Act.

Subclause (1) enables the Minister to delegate all or any of the Ministers powers to the Secretary, an SES employee or an acting SES employee in the Department.

Subclause (2) enables the Secretary to delegate all or any of the Secretary’s powers to an SES employee or an acting SES employee in the Department.


Clause 171 Reinstatement fee

This clause requires the provider to pay a reinstatement fee where the provider’s registration is restored to the Commonwealth Register of Institutions and Courses for Overseas Students.

Subclause (1) specifies that a registered provider is liable to pay a reinstatement fee if a suspension of the registration of the provider is removed.

Subclause (2) specifies that the fee must be paid by the day stated in a written notice given to the provider by the Secretary.

Subclause (3) specifies that the date in the notice must be at least 28 days after the day notice is given to a provider.

Subclause (4) outlines the amount of the reinstatement fee payable for the year 2000 and the method of calculation for any subsequent years.

Subclause (5) outlines the index factor that applies to the current year and the formula for calculation.

The index calculation is repeated from the old ESOS Act.

Subclauses (6), (7) and (8) provide further information in relation to the calculation of the indexation factor.


Clause 172 Late payment penalty

This clause requires a provider to pay a late payment penalty for any annual registration charge, reinstatement fee, annual Fund contribution or special levy that is payable by the provider and remains unpaid after the time when it became due for payment.

Subclause (2) specifies that the amount of penalty is 20% per year on the unpaid amount calculated from the day when the original amount became due for payment.


Clause 173 Debts due to the Commonwealth

This clause provides that any annual registration charge, any reinstatement fee or late payment penalty or any annual Fund contribution or special levy is recoverable as debts due to the Commonwealth by action in a court of competent jurisdiction.

Subclause (2) permits the Fund Manager to recover a debt in relation to the annual Fund contribution or special levy on behalf of the Commonwealth.


Clause 174 Amounts payable by unincorporated bodies

This clause specifies the persons who are jointly and severally liable to pay an amount for which a registered provider that is an unincorporated body is liable under this Act and the Education Services for Overseas Students (Registration Charges) Act 1997 or the Education Services for Overseas Students (Assurance Fund Contributions) Act 2000. These persons are: the Principal Executive Officer of the provider at the time the liability arose and if there was a governing body of the provider at that time, each of those persons who were members of that governing body.


Clause 175 Giving information to relevant bodies

Subclause (1) permits the Secretary to give information obtained or received to an Agency of the Commonwealth or of a State that is responsible for or otherwise concerned with immigration or regulation of providers, or to the Fund Manager for the purposes of promoting compliance with this legislation, the regulations or the national code. This information may also be provided for the purposes of assisting with the regulation of providers, promoting compliance with the conditions of the particular student visa or visas generally, or facilitating the monitoring and control of immigration.

Subclause (2) permits the Secretary to give information relating to an accepted student’s student visa to the registered provider for the accepted student, provided such disclosure is for the purposes of promoting compliance with this legislation, the regulations and the National Code, or for promoting compliance with a conditions of a particular student visa or of student visas generally.


Clause 176 Review of decisions

This clause provides for Administrative Appeals Tribunal review of a decision that an approved provider should not be registered under section 9; or a decision to take action under sections 83, 87 or 88; or a decision not to remove a suspension under subsection 89(2).

Written notice must be given to the person whose interests are affected by a reviewable decision and such a notice must include a statement to the effect that application may be made to the Administrative Appeals Tribunal for review of the decision. If a person is entitled to reasons for the decision under section 28 of the Administrative Appeals Tribunal Act 1975, that person must be advised of that right in the notice.

Subclause (3) provides that a breach of the notice provisions of this clause does not affect the validity of the decision concerned.


Clause 176A Review of this Act

Provides for an independent evaluation of the operation of the Education Services for Overseas Students Act, to commence within three years after the Act receives Royal Assent.


Clause 177 Regulations

This clause provides that the Governor-General may make regulations prescribing matters permitted by the Act or necessary or convenient for carrying out or giving effect to the Act.

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