Bills Digest No. 38 2002-03
Education Services for Overseas Students Amendment Bill
2002
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage History
Purpose
Background
Main Provisions
Concluding Comments
Endnotes
Contact Officer & Copyright Details
Passage History
Education Services for Overseas
Students Amendment Bill 2002
Date Introduced:
28 August 2002
House: House of Representatives
Portfolio: Education, Science and
Training
Commencement:
Royal
Assent.
Purpose
To amend the
Education Services for Overseas Students Act 2000 (ESOS
Act) in order to address some issues which have arisen in the
interpretation and implementation of the Act.
The amendments:
-
- provide greater specificity in the compliance and sanctions
regime with respect to courses run by registered providers and the
States in which the courses are run
-
- provide greater flexibility in the compliance and sanctions
regime with respect to financial failure by providers which results
in inability to provide courses or refunds
-
- preserve the rights of a person other than the student in terms
of refunds, etc., and
-
- transfer certain administrative functions from the Minister to
the Secretary,
The regulation of providers of education
services to overseas students is a responsibility shared by the
Commonwealth and the State and Territory governments. The States
and Territories have primary responsibility for the quality control
of education providers and their courses and exercise this through
their processes of approving, registering and monitoring providers
and their courses. The Commonwealth's interest is in ensuring that
its immigration laws are not being breached and in protecting the
reputation of this $4 billion per year export industry, and in so
doing the interests of the overseas students which invest in it.
The regulatory framework therefore involves Commonwealth and
State/Territory legislation and the administrative effort of the
Commonwealth Departments of Education, Science and Training and of
Immigration, Multicultural and Indigenous Affairs and the
State/Territory education and training authorities.
The ESOS Act introduced substantial changes to
the Commonwealth's arrangements for regulating the providers of
education services to overseas students, which were first put in
place in 1991. The 1991 legislation had been subject to a sunset
clause. However, though the arrangements had come under the
scrutiny of the Senate Employment, Workplace Relations, Small
Business and Education Committee and its predecessor on various
occasions, and some legal and administrative limitations had been
highlighted(1), the sunset clause had been extended.
Therefore, despite the continuation of the 1991
Act which included measures to protect the interests of students
and to regulate the activities of providers, there were still cases
where institutions which had closed, for one reason or another, had
not adequately provided for their students. In addition, there were
allegations that some providers were facilitating illegal
immigration activities. Based on the conclusions of a Departmental
review which had involved consultations with major stakeholders,
the ESOS Act was enacted with the aim of strengthening the
regulatory arrangements(2).
The arrangements under the ESOS Act include:
-
- provisions for the registration of education providers and
their courses on the Commonwealth Register of Institutions and
Courses for Overseas Students (CRICOS)
-
- the compulsory membership by providers of a tuition assurance
scheme
-
- contributions by providers to an assurance fund to ensure that
there are funds to pay for student tuition in cases of provider
collapse
-
- reporting obligations on providers eg. in relation to
disclosure of provider activities such as previous breaches or
breaches of associates, and in relation to student breaches
-
- a compulsory national code which sets standards and benchmarks
for providers and their courses in order to qualify for
registration and which serves to guide States and Territories in
their approval, registration and monitoring activities
-
- compulsory compliance with the national code, and sanctions for
being in breach of both the Act and the national code, and
-
- Commonwealth powers to investigate providers, impose sanctions
and remove non bona fide operators from the industry
including:
-
- the issuing of suspension certificate by the Minister for
Immigration and Multicultural and Indigenous Affairs to a
registered provider
-
- the issuing of production and attendance notices by the
Secretary of the Department of Immigration and Multicultural and
Indigenous Affairs to providers who it is believed have access to
information or documents relevant to the monitoring purpose,
and
-
- monitoring powers to authorised Department of Employment
Science and Training (DEST) employees which enable them to enter a
premises to search, examine, take photos and extracts, secure a
thing, ask questions etc. for a monitoring purpose. This can be
done either with the consent of the provider or under a monitoring
warrant, and search powers to authorised DEST employees which
enable them to enter a premises to search and examine, take photos
and extracts, seize, ask questions etc for the purpose of looking
for evidential material. This can be done either with the consent
of the provider or under a search warrant.
The proposed amendments notwithstanding, the
ESOS Act is to receive a more thorough review before December
2003.
Item 1 seeks to make clear that
'registered as a provider' specifically means 'entered on the
Register as a provider' where the Register is CRICOS.
Items 2, 3, 5, 6, 9 and
29 introduce greater clarity in relation to which
specific courses and States would be covered.
Items 4, 7 and
8 replace 'the Minister' with 'the Secretary' in
relation to the responsibility for notifying the designated
authority if there is suspicion of non-compliance with the Act or
the national code. Presently, where the Minister reasonably
believes that a yet-to-be-registered provider is or may end up
failing to comply with the Act or the national code, s/he must give
information to the designated authority in the relevant State and
Territory.
Ordinarily, it might be expected that, for
administrative necessity, this function would not be exercised
personally by the Minister, but would be exercised by the
Secretary. This result might be achieved by implied delegation or
agency, but it is clearly preferable for the power to be vested
directly in the Secretary to avoid any uncertainty.
Items 11-15 provide for a
refund to be paid to a person other than the student where this
person is specified in a written agreement which sets out the
refund requirements that apply in that situation.
Items 16 - 19 amend section 83
which deals with the imposition of sanctions. Broadly the sanctions
include conditions, suspension or cancellation of registration.
Items 16, 17 and 19 effectively
extend or diversify the Minister's powers in all of these
areas.
Item 16 substantially extends
the Minister's powers beyond taking actions in relation to a
provider who s/he reasonably believes is or may have been in breach
of the Act, etc. The powers would include taking actions in
relation to those who may not be able to provide courses or refunds
because of financial difficulties or for 'any other
reason'.
Item 17 is also an extension of
powers insofar as it allows the Minister to impose conditions not
just in respect of any one or more specified courses but also
'generally'.
Item 17 effectively generalises
a specific power in relation to conditions.
Item 18 provides greater
flexibility in relation to the actions that can be taken in that it
allows for course-specific sanctions. Suspensions and cancellations
of a provider's registration need not apply to all its courses but
to 'any one or more specified courses'. Item 19
makes it clear that sanctions may be imposed in respect of a
particular course for a State even if the situation that resulted
in the action relates to a different course or State.
Items 18 and
19 diversify general powers in relation to
suspension and cancellation.
Together, these provisions allow the sanctions
regime to apply selectively to a person or body for any or all of
its courses in respect of any or all of its possible compliance
failures.
Evidence presented to the Senate from the
Department of Education, Science and Training suggests that the
Commonwealth has exercised its considerable powers under the ESOS
Act to suspend and cancel registrations on many
occasions(3). While many of these proposed amendments
are of a minor technical nature others will considerably extend,
strengthen and diversify the Commonwealth's powers particularly in
relation to the imposition of sanctions and conditions. In addition
to those providers who are in breach of the Act or the national
code, the Minister's powers will be extended to cover those
providers who, because of financial difficulty or for any other
reason, may not be able to meet their course and refund
obligations. At the same time the Minister will have access to less
severe sanctions in that suspension or cancellation of registration
would need no longer apply to all courses, but could apply to one
or more specified courses.
On one view, the proposed amendments effect a
measured balance between a stronger sanction regime and a more
flexible regulatory environment. In introducing the sanctions
measures the Minister emphasised their flexibility. He said that
the Government would 'have the option of imposing less severe and
more suitable sanctions than are currently possible'.(4)
Moreover, he said that it could 'take a more flexible approach to
providers believed to be in financial difficulties' by imposing
conditions in addition to suspensions or cancellations 'giving
providers greater opportunity to trade their way out of
trouble'.(5)
On another view, the proposed amendments simply
diversify and strengthen the sanctions already available without
providing anything constructive from a provider's perspective.
Implicit in the argument above is a suggestion that there is a gap
between the severe suspension and cancellation powers and the
moderate powers relating to conditions. But it is difficult to see
where the gap exists. There are no express restrictions on the
types of conditions that may be imposed on a provider. Moreover,
the Minister may already impose a condition that a provider 'not
provide a specified course' (paragraph 86(1)(e)), which may apply
'for any one or more courses for any one or more States' (paragraph
83(3)(a)). This would seem to have virtually the same purpose and
reach as the measures in item 18.
If the 'flexible regulatory environment'
argument is ignored, the amendments look to have the effect of
strengthening the sanction regime and widening the discretions
involved.
-
- The reports were:
-
- Education Services (Export Regulation) Bill 1990
(tabled 7 May 1991) Operation of the Education Services for
Overseas Students (Registration of Providers and Financial
Regulation) Act 1991 (ESOS Act) (tabled 1 December 1992)
-
- The Efficacy of the Education Services for Overseas
Students (Registration of Providers and Financial Regulation) Act
1991 in the light of the collapse of the Australian Business
College in Perth in January 1993 (tabled 19 August 1993)
-
- Overseas Students Tuition Assurance Levy Bill 1993 and
Education Services for Overseas Students (Registration of Providers
and Financial Regulation) Amendment Bill 1993 (tabled 9
December 1993)
-
- The Nature, Implementation and Effects of the Statutory
Rules 1994 Nos 146 and 154 Being Regulations Pertaining to the
Education Services for Overseas Students (Registration of Providers
and Financial Regulation) Act 1991 (tabled 28 June 1994)
-
- Consideration of the Provisions of the Education Services
for Overseas Students (Registration of Providers and Financial
Regulation) Amendment Bill 1998 (August 1998).
-
- For details on the background to these changes, see Bills
Digest, Nos. 62, 2000-01.
- 'Overseas student colleges suspended', Canberra times,
22 June 2002 reports that (based on DEST evidence to the Senate)
since June 2001, 33 providers were suspended for breaches of the
ESOS Act, one provider was suspended for breaches of both
the Act and the national code and two providers had their
registration cancelled. Figures reported in the Sydney Morning
Herald, 1 July 2002, 'Students in illegal visa scam', vary.
They say that 100 colleges had been suspended or closed in the past
year and that 33 of them were in NSW.
- Brendan Nelson MP,
Education Services for Overseas Students Amendment Bill 2002,
Second Reading Speech, House of Representatives, Debates,
28 August 2002, p. 5909.
- ibid.
Carol Kempner and Nathan Hancock
25 September 2002
Bills Digest Service
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ISSN 1328-8091
© Commonwealth of Australia 2002
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