Office of the Minister of Immigration
Chair
Cabinet Economic Development Committee
REGULATING IMMIGRATION AGENTS
Purpose
1. This paper examines the need to regulate immigration agents and proposes a model of licensing
under an independent governing body. The paper seeks Cabinet agreement in principle to working
definitions of what immigration advice is and is not, who is an immigration agent, who should be
exempt from regulation and how the costs could be met. The paper proposes that the Department
of Labour develop the detail of the model and report back by December 2004.
Executive Summary
2. The immigration advice industry plays a significant role in assisting and representing migrants,
temporary entrants and refugee status claimants, and ultimately influences New Zealand’s
reputation as a migrant destination. There are, however, few regulatory constraints on the practice
of immigration agents and few market incentives for agents to provide good service. This concern
is supported by reports of serious harm caused to individuals by incompetent and unethical agents.
Overall, there is a compelling case for regulating immigration agents, both onshore and offshore.
3. To address the harm caused to individuals and the resulting damage to New Zealand’s safety,
security and reputation, the proposed policy objectives are to: enhance the ability of immigration
applicants to make a well-informed choice of immigration agent; reduce the risk of serious harm to
those who use an immigration agent by creating effective incentives for agents to provide
competent and ethical services; and provide clear and accessible complaint and redress procedures.
4. Two broad regulatory options have been examined against the objectives: enhanced voluntary
regulation and statutory regulation. The immigration advice industry is unusual as it is fragmented
across a wide range of occupational and not-for profit groupings. Given this, the industry would
struggle to establish an effective voluntary scheme. Incompetent or unethical agents would be
unlikely to participate and their clients would not be protected.
5. Of the statutory options considered, licensing is preferred because it would create a legislative
basis for including all immigration agents in the scheme, and give the consumer most protection
from harm. As licensing focuses on minimum standards for all agents, it is the only option to
specifically target those who cause serious harm. It would create incentives for them to improve
their standards, and prevent them from practising where they choose not to. The New Zealand
Immigration Service (NZIS) would be able to refuse to accept applications from unlicensed agents,
who would be subject to offence provisions. There would be a clear avenue of complaint and
redress for consumers. While licensing is unlikely to totally eliminate the problems identified, it is
the option most likely to make significant improvements over time in regard to the practices of
agents.
6. Two options for the governing body were considered: an industry body and an independent
body. Industry regulation is not recommended because the industry lacks the cohesion to develop
and support an effective governing body. An independent governing body would be most likely to
generate the support of the diverse range of stakeholders. It would also have responsibility for the
investigation and prosecution of unlicensed agents, which would allow resources to be most
efficiently focused on problematic agents.
7. The paper also proposes working definitions of what immigration advice is and is not, as the
basis for a definition of ‘immigration agent’ for the purposes of regulation. It seeks agreement to
exempt lawyers on the basis that adequate regulation exists for lawyers already.
8. The paper contains split recommendations on the regulation of offshore agents:
 The Department of Labour considers that ability of the NZIS to refuse to accept
applications from offshore agents who fail to meet certain requirements is essential to the
success of the scheme and therefore proposes that offshore agents be subject to licensing
requirements.
 The Ministries of Foreign Affairs and Trade, and Economic Development, the Treasury
and New Zealand Trade and Enterprise consider that extending licensing requirements to
offshore agents could pose risks to the international education industry, be considered
unacceptable by countries in which agents are legitimately operating, create serious
liability issues for the New Zealand government; impose heavy compliance costs for the
industry, and create incentives for agents to not declare their involvement in an
immigration application. These agencies recommend consideration of other options. The
Ministry of Education supports the principle of stronger management of offshore agents,
including the immigration advice activity of education agents, but considers that there are
significant issues to work through in this area, including the feasibility of enforcement and
the impacts on trade and education services and bilateral relationships. These impacts need
to be worked through before a decision is made to regulate offshore agents.
9. Should Cabinet agree to the proposals in this paper, officials will develop the model in
consultation with stakeholders and report back in December 2004.
Background
10. In June 2000 the Minister of Immigration sought responses to a public discussion document on
regulating immigration consultants. Cabinet then considered the issue in December 2000 [CAB
(00) M 41/2D refers]. Cabinet noted that immigration applicants who purchase services or advice
from immigration consultants are often: unable to make a well-informed choice of consultant;
subject to excessive charging, fraud or unethical conduct; subject to poor or incompetent service by
immigration consultants; and lacking avenues of redress or unable to use existing avenues. Cabinet
also noted that while there are no firm statistics on the extent of the problem, the significant harm
caused to many applicants, and the irreversible harm to some, justifies government intervention.
11. In July 2001 Cabinet considered advice on enhanced self-regulation and a statutory model
involving aspects of registration, certification and licensing. Cabinet noted that neither model
would totally eliminate problems in the immigration advice industry, but that a statutory model was
more likely to contribute to the objectives of regulation. The Minister of Immigration was directed
to report back with detailed policy options on self-regulation under a statutory umbrella, and
enhanced self-regulation [CAB Min (01) 22/26 refers]. This work was deferred while the
government considered a range of changes to immigration policy.
12. In September 2003 a discussion document Regulation of the Immigration Advice Industry was
sent to targeted stakeholders including professionals, ethnic community groups, the not-for-profit
sector, and relevant government agencies. The document canvassed three models: enhanced selfregulation, self-regulation under a statutory umbrella, and independent regulation under a statutory
umbrella. It also outlined a number of issues including what and who should be regulated, and how
the costs could be met. The feedback gathered from follow-up focus group meetings held
2
throughout the country in October 2003 and a number of written submissions inform the advice in
this paper.
The immigration advice industry
13. A range of professional and not-for-profit organisations and individuals provide immigration
advice both onshore and offshore (referred to below as immigration agents). They include
immigration consultants, lawyers and education agents. The number of active immigration agents
at any one time varies in response to immigration policy changes and other external factors.
Despite likely reductions in the number of agents active in the last year, the industry appears to have
grown from around 500 agents in 20001 to around 600 agents in 2002/03.2 The number of
immigration applications using an immigration agent has also grown since 2000. Around 10,000
residence applications, and around 66,000 temporary entry applications, used an immigration agent
in 2002/03. The role of the immigration advice industry is therefore significant.
14. The immigration advice industry offers a wide range of services to migrants, temporary entrants
and refugee status claimants. The most common service is to act as an agent for applicants in their
dealings with the NZIS. In addition, many immigration agents offer assistance with education,
settlement and citizenship matters.
15. There are, however, no industry-wide standards of practice for immigration agents, and the
government has minimal powers to intervene or address poor practice. The NZIS cannot refuse to
accept an application based on the case (or criminal) history of an agent. There are also few market
incentives for agents to provide good service because consumers often use their services only once,
and often have insufficient information to make a well-informed choice of agent. The current New
Zealand situation contrasts with Australia and Britain, which have statutory regulatory systems, and
Canada, which is introducing one in April 2004. The regulation that does exist, detailed below,
creates insufficient incentives to prevent significant and irreversible harm in some cases:
 Immigration agents operating in New Zealand are subject to normal business legal requirements
and the offence provisions under section 142 of the Immigration Act 1987. Section 142(1)(j)
creates an offence of wilfully misleading, or acting negligently or unprofessionally while
assisting a person in a visa or permit application or appeal. This section has not been tested
since its introduction in 1999, as its wording makes proof of an offence problematic.
 Immigration applicants in New Zealand can make use of consumer protection measures, such as
the Fair Trading Act 1986, the Consumer Guarantees Act 1993 and the Disputes Tribunal.
Given that immigration applicants are often based offshore, or new to New Zealand, they are
unlikely to be aware of their rights under the consumer protection laws.
 Members of industry organisations, the New Zealand Association for Migration and Investment
and the New Zealand Immigration Institute, are subject to their standards. Membership is
voluntary, however, and their standards do not have statutory backing. Lawyers are subject to
the Law Society’s disciplinary processes and voluntary associations of education agents also
exist. Many immigration agents do not belong to any industry or professional body.
Evidence of harm
16. Reports of harm caused to individuals by immigration agents (working both onshore and
offshore) support the concern that there are insufficient market or regulatory incentives to prevent
1
Department of Labour (Immigration Research Programme) The Immigration Consulting Industry in New Zealand
(July 2001).
2
In 2002/03 600 agents lodged 50 or more temporary entry or residence applications each. This figure represents
organisations rather than individuals, unless the agent did not belong to an organisation.
3
serious harm. A 2004 survey of NZIS branches indicated a higher degree of concern with onshore
agents than offshore agents, but concerns were evident with the practices of some offshore agents. 3
17. Complaints to the Minister of Immigration about agents have included: lodging unfounded or
abusive refugee status claims without the knowledge of the client, inaccurate advice about
immigration policy leading to poor and costly decisions, theft of money and documents, failing to
lodge applications and appeals, failing to pass on information from the NZIS to the client, and
knowingly submitting false information or fraudulent documents to the NZIS. 4 A 2004 survey of
NZIS branches and feedback from the 2003 focus groups5 reiterated that there continue to be
problems with agents in these areas.
18. Letters to the Minister of Immigration and feedback from the 2003 focus groups have indicated
that problems with agents have caused some immigration applicants to suffer from a series of poor
decisions and financial losses, extending over many months, and in some cases years. In some
cases of incompetent or unethical practices by an agent, applicants have suffered serious financial
loss due to high fees and unsuccessful settlement in New Zealand. Some have also suffered damage
to careers, family dislocation, significant personal hardship, and are unable to gain approval to reenter New Zealand. The cumulative harm caused has been significant in many cases and
irreversible in some.
19. The following two examples illustrate the harm that can be caused:
 From 2001 to 2003 a group of agents lodged several hundred abusive refugee claims (the ‘Wat
Thai’ scam). All of the claims that have been determined have been declined. These people
they have either left New Zealand, been removed, or remain here illegally (and will be removed
in the future where possible). Those who have been removed are banned from returning to New
Zealand for five years, but even after five years are unlikely to be able to return as they would
be deemed high-risk. The adverse consequences are likely to have extended to their working
and family lives, as well as New Zealand’s reputation.
 …[information withheld under sections 9(2)(f)(iv) and 9(2)(g)(i) of the Official
Information Act 1982]… In many of these cases, when interviewed, the client had no
knowledge of the refugee claim but thought they were applying for a work or residence permit.
In similar cases in 2003, claimants were charged between $12,000 and $30,000 by their agent
for services which were unethical or incompetent.
The case for regulation
20. The key trigger for occupational regulation is the possibility that incompetent or dishonest
services could result in significant harm to the consumer. The Ministry of Economic
Development’s Policy Framework for Occupational Regulation states that if significant, irreversible
harm is likely, there is a case for intervention in the practice of the occupation. Reports of harm
support the concern that there is a lack of market or regulatory incentives for agents to provide
adequate services. As noted above, the harm to immigration applicants from incompetent or
dishonest agents is significant in many cases and irreversible in some. In addition, regulation could
improve the ability of the industry to: help potential migrants make informed decisions that would
allow them to settle well; assist in protecting New Zealand’s safety and security by reducing
3
Survey of NZIS branch managers, February 2004.
Department of Labour (Immigration Research Programme) The Immigration Consulting Industry in New Zealand
(July 2001).
5
All stakeholders who were sent the discussion document Regulation of the Immigration Advice Industry were invited
to participate in focus groups in October 2003. Focus groups were held in Auckland, Hamilton, Wellington and
Christchurch and around 100 people participated overall.
4
4
immigration fraud; and promote New Zealand as an attractive migrant destination. Therefore, a
compelling case for regulating immigration agents exists, both onshore and offshore.
Objectives of regulation
21. From an outcomes perspective, regulating immigration agents could both reduce the harm to
individuals and ultimately assist immigration’s contribution to the government’s goals. The
objectives proposed are set out in table one below.
Table one: Recommended objectives of regulation
- Enhance the ability of immigration applicants to make a well-informed choice of immigration agent
- Reduce the risk of serious harm to those who use an immigration agent by creating effective incentives
for agents to provide competent and ethical services
- Provide clear and accessible complaint and redress procedures for those who use an immigration agent
22. Meeting these objectives is likely to improve the levels of service provided by immigration
agents and reduce the harm to individuals. It could also reduce immigration fraud (such as false
health and criminal records) and thereby assist government to meet its goal of maintaining trust in
government. By applicants receiving competent and ethical advice that leads to positive outcomes
for them and their families, New Zealand’s reputation as an attractive destination for skilled
migrants, skilled temporary workers, international students and visitors to New Zealand is likely to
be enhanced. In turn this outcome would contribute to government’s goals of growing an inclusive,
innovative economy, and improving New Zealand’s skills.
23. Any model of regulation must also meet New Zealand’s obligations under the Trans-Tasman
Mutual Recognition Arrangement (TTMRA). The TTMRA provides that a person registered to
practise in an occupation in New Zealand or Australia is entitled to register in the other jurisdiction
to practise an equivalent occupation. Australia has federal legislation that requires migration agents
to register. If New Zealand introduces statutory registration for immigration agents, New Zealand
citizens and residents who are registered under New Zealand law as immigration agents would
therefore be entitled to register in Australia as immigration agents, and vice versa. Information has
already been shared with the Australian Department of Immigration and Multicultural and
Indigenous Affairs (DIMIA) and discussions are ongoing. Any proposals will be developed in
consultation with Australia.
Options for regulation
24. Two broad options for regulation have been examined: enhanced voluntary self-regulation, and
statutory regulation. These models are summarised below.
Option A: Enhanced voluntary self-regulation
25. The current situation, where there are many voluntary industry bodies, is one form of voluntary
self-regulation. Under an enhanced form of voluntary self-regulation, stakeholders would be
invited to work together to develop a scheme where a single industry body registered immigration
agents. Participants in this process could include the full range of currently fragmented
immigration agents: existing industry and professional bodies, unaffiliated agents, and not-for-profit
organisations, as well as consumers and their representatives. Under this model, the governing
body would be responsible for setting and administering entry standards, a code of conduct, and
complaint and disciplinary procedures. While the scheme would be voluntary, the governing body
would be free to market the scheme and the benefits to both immigration agents and consumers.
Option B: Statutory regulation
26. The government could introduce legislation to regulate the immigration advice industry in one
of a number of forms: disclosure; registration; certification; or licensing:
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 Disclosure - Immigration agents would be required to provide all prospective clients with
specified information such as their immigration experience and knowledge, and criminal or
business records.
 Registration - Immigration agents would be required to maintain up-to-date contact details on a
register. There would not be any restrictions to entry to the occupation (such as entry and
ongoing standards) other than the requirement to be registered.
 Certification (accreditation) - An agency would be empowered by statute to certify that
individuals have satisfied requirements indicating their competence. Certification would
operate on a voluntary basis; those who were not certified could offer their services in
competition with certified practitioners, but under a different title. Certification would be
accompanied by a disciplinary process that allowed the protected title to be removed if the
practitioner fell below acceptable standards.
 Licensing - Under licensing, it would be illegal to operate as an unlicensed immigration agent
and the NZIS could refuse to deal with unlicensed agents. Entry to the occupation would be
dependent on the immigration agent meeting minimum standards, which would likely include
criteria related to education and character or fitness to practise. As with certification, a
disciplinary process would exist that would allow transgressors to have their licence suspended
or removed. Both Australia and Britain use licensing to regulate immigration agents.
Assessment of options
27. The following section assesses each of the options against the objectives identified earlier.
Option A: Enhanced voluntary self-regulation
28. Under voluntary self-regulation, the NZIS would still have to recognise potentially incompetent
or unethical agents that chose not to join the scheme. Enhanced self-regulation would therefore not
reduce the risk of serious harm for those who used the services of non-members, or provide them
with a clear avenue of complaint and redress.
29. In New Zealand, successful voluntary regulatory schemes such as the Banking Ombudsman and
the Electricity Complaints Commissioner have full and very high industry participation respectively
because their industries are cohesive and all members are easily identifiable. The immigration
advice industry differs in that it has a comparatively large number of small players that are not
easily identifiable. The occupation is not clearly defined and agents are fragmented across a wide
range of for-profit, not-for-profit and occupational groupings. The industry has been unable to
achieve broad participation in any voluntary scheme to date, and given its diversity, is unlikely to
do so under any new voluntary scheme. There would be no minimum standards or clear avenue of
complaint for the clients of agents who remained outside the scheme.
30. In addition, given its diversity, the immigration advice industry would be unlikely to form an
effective governing body. It would struggle to enforce standards upon its members or to create
effective incentives for agents to provide competent and ethical advice. Enhanced voluntary selfregulation is therefore unlikely to meet the objectives of regulation, and is not recommended. There
was no support for this option from either practising agents or community groups who participated
in the 2003 focus groups.
Option B: Statutory regulation
31. Disclosure or registration alone would not create sufficient incentives for agents to provide
acceptable standards of service and therefore would not reduce the risk of harm to individuals. As
with Option A, a voluntary certification scheme would be unlikely to achieve high levels of
participation due to the diversity of the industry. Certification would be likely to reduce the harm to
individuals to some extent, but would not provide a mechanism for addressing the incompetent or
6
unethical behaviour of agents who chose to practice under an uncertified title. Likewise, it would
not provide an avenue of redress for those applicants who engaged a non-participating agent.
32. Licensing is the model which is most likely to comprehensively address the objectives of
regulation over time. The benefits and risks of this approach are set out below:
Benefits
33. Licensing would give a legislative basis for including all immigration agents in the scheme,6
ensuring minimum standards across the board, and giving the consumer most protection from harm.
As licensing focuses on minimum standards, it would allow regulation to target those agents that
cause serious harm. The governing body could focus on creating positive incentives for higher risk
agents to meet the minimum standards, by clearly setting out the requirements and the benefits these
would bring to agents. Where agents chose not to participate in spite of the benefits, the NZIS
could refuse to accept applications from them, and they would be subject to offence provisions.
Entry and ongoing requirements should be met easily by agents who provide professional services
of a high standard. Licensing is therefore the only option that would focus on the behaviour of
those agents who are involved in immigration fraud, and harm to individuals.
34. Licensing would allow the governing body to establish a code of conduct, which would assure
the consumer of ethical conduct and benefit the agent by providing a positive marketing tool.
Should concerns arise, consumers would be assured of a clear avenue of complaint and redress, and
sanctions and penalties would ultimately have the force of law.
35. The issues raised by immigration agents are similar worldwide, and licensing is the preferred
approach to regulating immigration agents internationally. It is used in Australia and Britain, and is
to be used in the new Canadian system. In New Zealand, other industries and professions where the
potential harm to the consumer is significant, such as motor vehicles sales and psychology, also use
licensing models. Further, there was a high level of agreement among the 2003 focus groups that
licensing was the only effective way to meet the objectives of regulation.
Risks
36. While licensing is the option most likely to significantly reduce the serious harm caused to some
immigration applicants by an immigration agent, it is unlikely to totally eliminate such problems.
The scheme would take time to develop and shift the incentives for agents to provide ethical and
competent services. Some agents could attempt to remain unlicensed or provide advice without
identifying themselves on the immigration application. Agents could also attempt to allow their
registered name to be used by unlicensed agents. The risk of agents remaining outside the scheme,
or providing unacceptable services, is common to all options identified. Licensing, however, is the
only option to provide clear mechanisms for addressing these risks. The NZIS would be able to
stress the dangers of using an unlicensed agent on its website and forms, and any person could make
a complaint about both licensed and unlicensed agents. Penalties would have the force of law.
37. A further risk of licensing is that it could introduce barriers to entry into the industry. This
could reduce the viability of the scheme, or reduce competition among members of the industry
leading to higher prices, poorer standards, and reduced consumer choice. In both Australia and
Britain, however, the introduction of a licensing regime for immigration agents has been followed
by an increase in the number of industry players. This may be the result of introducing a clear
definition for an occupation that was previously undefined, and legitimising the professional
practice of an occupation that had been widely criticised. Even so, a focus on minimising
unnecessary entry barriers, and creating positive incentives for participating would be essential to
the success of the scheme. Introducing simple additional disclosure requirements, such as success
6
The exemption of lawyers is discussed later in the paper.
7
and failure rates, would increase competition within the industry, and as discussed below, an
independent governing body may also reduce the risk of decreased competition.
38. The statutory backing of a licensing regime would not apply offshore which means there is a
risk that the problems identified would only be addressed in part by licensing. It is considered,
however, that licensing onshore agents would address a significant part of the problem and go a
long way to meeting the objectives. This has been the experience in Australia and Britain.
Moreover, while offshore agents may not be subject to offence provisions, the ability of the NZIS to
refuse to deal with unlicensed agents is likely to result in many offshore agents opting to meet
licensing requirements. The regulation of offshore agents is further discussed later in the paper.
39. As licensing most comprehensively addresses the objectives of regulation, it is also expensive to
administer. It would require the development of clear entry standards, transitional arrangements for
currently active agents, a code of conduct, and complaints and disciplinary procedures. Experience
in Australia and Britain has shown that the scheme would require ongoing development during the
initial years of operation, and would take time to achieve its objectives. The costs, however, should
largely be offset by a licensing fee for agents and, over time, savings for the government in areas
such as refugee determination, immigration border and investigations, and in the health, justice, and
welfare systems.
Options for the governing body: Industry regulation or independent regulation
40. Two broad options for administering the licensing regime have been considered: industry
regulation and independent regulation. Under a system of industry regulation it is implicit that the
body would comprise representatives of the immigration advice industry. Australia uses the main
industry body under a licensing framework to regulate immigration agents. Under independent
regulation, a governing body would be established either as a Crown entity or as statutory body
within a government department.7 Britain uses an independent regulator (a Commissioner) under a
licensing framework to regulate immigration agents. As in Britain, the regulator could be informed
by an advisory panel comprising industry and consumer representatives.
41. Under a licensing framework, both industry regulation and independent regulation have the
potential to meet the objectives, and costs are likely to be similar. There are, however, more risks
associated with industry regulation. For industry regulation to be effective, it would be essential
that:
 the industry was cohesive and had the broad support required to form an effective governing
body that could administer the statutory framework;
 there were relatively homogenous objectives and cultures within the industry; and
 the industry body could maintain a healthy existence separate from its role as regulator.
42. As noted earlier, the immigration advice industry is diverse. It would be difficult for an industry
body to agree on effective standards of behaviour to apply to all participants. Also, the lack of
homogenous objectives would mean than an industry body would be unable to call on ‘peer
pressure’ to discipline its own members and its decisions could be perceived as biased.
…[information withheld under section 6(b)(i) of the Official Information Act 1982]…
7
Either a Crown entity or a statutory body within a department would ensure that the governing body was separate from
the industry, as well as the NZIS. The work of an immigration agent often involves representing clients who are
appealing a decision made by the NZIS. It is important that the NZIS, (whose decisions are being challenged), should
not have any role in, or be seen to have influence over, any investigation of the agent who takes the case.
8
43. Industry regulation is also less likely to address consumer concerns or the practices of
unlicensed agents for the following reasons:
 It is implicit that the function of the industry body would be to set and maintain standards for its
members. Regulation and its resources would therefore focus on improving standards for agents
that are less likely to be the cause of serious harm. Complaints and compliance activities
regarding unlicensed agents, as in Australia, would sit with government.
 Industry regulation could amplify the risk of decreased competition. If licensing was primarily
within the control of the occupational group, the group would have incentives to increase the
barriers to entry by raising the standards required. As noted above, this could reduce
competition, which could result in higher fees, poorer standards of service and reduced
consumer choice.
44. An independent governing body would have responsibility for investigating and prosecuting
unlicensed agents. This would allow the governing body to focus on the problematic agents rather
than those who provide competent and ethical services. Independent regulation would also:
 provide consumers with enhanced confidence in the standards set and maintained for the
industry, and in the administration of the complaints procedure;
 minimise the potential for current practitioners to create barriers to entry and be more likely to
ensure that entry to the industry remained ‘open’; and
 better serve a fragmented industry and assist in incorporating the views of a diverse range of
consumers and immigration agents.
45. On balance, a governing body independent of industry and the activities of the NZIS is more
likely to be respected by all stakeholders, and more likely to be an effective industry regulator that
could focus on problematic agents. Nearly all focus group participants, including the core industry
representatives and community groups, also considered that any governing body should be
independent. The proposed model draws on aspects of the British model and the industry
ombudsman model in New Zealand (such as the Banking Ombudsman) and is illustrated below:
Figure one: A licensing framework with an independent governing body
Independent governing body
 Maintains a register of immigration agents
 Sets a code of conduct
 Receives and handles complaints about both
registered and unregistered agents
 Takes disciplinary action against registered
agents and prosecutes unregistered agents
Complaints may be made
to the governing body
about any agent –
registered or unregistered
Advisory panel
 Regularly meets
governing body
All immigration agents (except lawyers) must
register with the governing body
Who should be regulated?
46. Any system of regulation must be clear about what activity, and therefore who, is to be
regulated. ‘Immigration advice’ potentially covers a broad range of activities concerning both
temporary and permanent migration. It is important that the activities which most frequently lead to
abuse are included, while not creating an unnecessary barrier for basic assistance to be given.
47. Advice, assistance or representation regarding immigration applications (all temporary or
residence visa or permit applications, refugee status claims, and appeals) are considered to be the
core activities of concern. The provision of general information (such as information prepared by
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the NZIS), clerical work, translation or interpreting services, and settlement services (such as
assisting new migrants to find jobs, schools and houses) are not considered to be areas of concern.
The scope of this approach is consistent with that taken in Australia and Britain.
48. It is recommended that Cabinet agree to the following working definitions of what immigration
advice is, and what it is not, as the basis for a definition of ‘immigration agent’ for the purposes of
regulation:
Immigration advice is: Advice, assistance or representations, including oral and written
submissions and advice given in regard to an immigration application or potential
immigration application. These include applications for temporary entry, residence, appeals,
exemptions, refugee status claims and appeals, and advice given to third parties such as
sponsors, employers and education providers.
Immigration advice is not: The provision of information prepared by the NZIS; directing a
person to the NZIS or a list of licensed immigration agents; clerical work; translation or
interpreting services; and settlement services.
An immigration agent is: A person who provides immigration advice as defined above.
Who should be exempt from regulation?
Personal contacts
49. It is neither desirable nor practical to attempt to regulate the provision of immigration advice by
family and friends where no fee is paid and the person is not acting in their capacity as a
professional or representative of an organisation. The Australian and British systems both exempt
this group and it is recommended that personal contacts be exempt from regulation.
The not-for-profit sector
50. There is a strong case for requiring the not-for-profit sector to meet the same standards as the
commercial sector on the basis that the potential harm to the applicant is the same, whether or not a
fee is paid. There is also an expectation that not-for-profit organisations that regularly provide
immigration advice will be competent and well-informed. It is important, however, to recognise the
cost implications for not-for-profit services, because they play an important role in ensuring
consumer access to information. Accordingly, it may be desirable to waive or reduce the
registration fees and training costs for not-for-profit organisations that choose to provide
‘immigration advice’. This approach would be similar to that taken in both Australia and Britain
and was supported by most focus groups. It is therefore recommended that not-for-profit
immigration agents are subject to regulation.
Professionals
51. Professionals form the most significant portion of the immigration advice industry. It is
considered that professional groups that provide immigration advice should only be exempt from
regulation where adequate regulation already exists for that group.
Lawyers
52. In 2001, approximately one third of New Zealand-based immigration agents were lawyers,
handling one fifth of applications involving agents. As some reports of incompetent or unethical
immigration advice are about lawyers, some stakeholders consider that lawyers should be included
in any regulatory framework. Others, including the New Zealand Law Society and the Auckland
District Law Society, oppose the inclusion of lawyers on the basis of unnecessary ‘double
regulation’ and the potential risks it poses to core legal principles, in particular client privilege.
53. Australia, Britain and Canada all have different approaches to the regulation of lawyers who
provide immigration advice:
10
 Australia requires all lawyers practising as migration agents to be licensed.
 Britain exempts lawyers from registration, but they must still meet industry standards. The
independent Immigration Services Commissioner monitors the performance of the law societies,
and must report to the Secretary of State if he or she considers that a law society is failing to
provide effective regulation of its members in their provision of immigration advice.
 Canada is to exempt lawyers from registration on the basis that adequate public protection
already exists for members of the public who retain lawyers.
54. The regulatory system for lawyers in New Zealand is based on setting a consistent standard for
the profession, regardless of the area of law in which the individual practises. It would be contrary
to this principle to require specific standards and complaints procedures for the provision of
immigration advice by lawyers, as in Australia, or to have an independent monitoring body for
lawyers providing immigration advice, as in Britain. In addition, the Lawyers and Conveyancers
Bill (currently before Select Committee) provides for better consumer protection for those who
retain lawyers. Under the Bill, lawyers will be required to meet a fundamental set of obligations
and rules made by the New Zealand Law Society, and will be subject to a centralised, consumeroriented complaints and disciplinary regime, including an independent Legal Complaints Review
Officer. The Bill allows for the New Zealand Law Society to impose particular requirements, such
as ongoing training in immigration law and policy for example, on certain groups of lawyers.
55. While there have been problems with the standard of some immigration advice provided by
some lawyers, it is considered that the Lawyers and Conveyancers Bill is likely to address these,
and that practising lawyers should therefore be exempt from the proposals in this paper. To impose
a further regulatory regime on lawyers who provide immigration advice would be duplicative and
create unnecessary compliance costs. It could also confuse immigration advice consumers who
would have two avenues for complaint. As with any new regulatory regime, the new system for
lawyers will take time to take effect. Over time, should the new regulatory system for lawyers fail
to ensure that lawyers meet appropriate standards, their exemption would need to be reconsidered.
Cabinet agreement in principle is therefore sought to exempt practising lawyers from the
requirement to be licensed as an immigration agent.8
Education recruitment agents who provide immigration advice
56. In the export education industry, there are two types of agents who provide immigration advice:
those contracted to education providers to provide advice to and recruit international students (and
who should be contractually bound to the education provider under the Code of Practice for the
Pastoral Care of International Students (the Code)); and those engaged by individual international
students. Education providers that are signatories to the Code are expected to have robust
contractual arrangements with the recruitment agents they use and must enforce certain minimum
standards of ethics by those agents. Agents themselves, however, cannot be signatories to, or bound
by, the Code, and the complaints procedures established under the Code cannot address complaints
regarding agents. Agents engaged by individual international students have no constraints placed
on them by the Code.
57. It is considered that education agents who provide immigration advice should be subject to
regulation. Better regulation of education agents has been a concern within the export education
industry for some time. The proposals in this paper are likely to address these concerns in part and
8
Exempting lawyers from this proposal would mean they were also exempt from the ability to automatically register as
a migration agent in Australia under the TTMRA. Lawyers would need to meet Australia’s full registration
requirements to practice as a migration agent in Australia. Neither the Ministry of Justice nor the New Zealand Law
Society consider this requirement to be problematic.
11
complement the objectives of the Code. The Ministry of Education and the peak export education
industry body, Education New Zealand, both support regulating the immigration advice activities of
onshore education agents. However, concerns have been raised regarding the possible adverse
impacts of including offshore education agents, which are discussed below. The 2003 discussion
document was not explicit about the implications of regulation for education agents who provide
immigration advice and further consultation with the education sector will therefore be necessary.
Further work is also required to clearly identify which immigration related activities of education
agents fall within the scope of regulation as defined above, and which do not.
Offshore agents
58. The Department of Labour considers it is desirable to include offshore immigration and
education agents who provide immigration advice, given the ongoing concerns regarding the
unethical and incompetent practices of some offshore agents.9 Offshore agents provide the first
point of contact for some migrants and may be seen as ambassadors of New Zealand. Reducing the
serious harm caused by some offshore agents would help enhance New Zealand’s reputation as an
attractive migrant destination.
59. There are some issues arising if offshore agents were fully included in a licensing framework,
including the difficulty of legal sanctions applying only within New Zealand. Due to similar
difficulties, the Australian and British systems do not require offshore agents to participate. DIMIA
(Australia), however, is committed to including offshore agents in its scheme, including offshore
education agents who provide immigration advice,10 and has indicated that it would like to work
closely with New Zealand on this issue. Canada will require all offshore agents to be licensed from
April 2004.
60. There are a range of views among agencies on the regulation of offshore agents. The
Department of Labour considers that ability for the NZIS to refuse to accept applications from
offshore agents who fail to meet certain requirements is essential to the success of the scheme in
addressing the practices of those agents that are of most concern, and recommends that offshore
agents be required to meet licensing requirements. The Ministry of Education supports the
principle of stronger management of offshore agents, including the immigration advice activity of
education agents, but considers that there are significant issues to work through in this area,
including the feasibility of enforcement and the impacts on trade and education services and
bilateral relationships. These issues need to be worked through before a decision is made to
regulate offshore immigration agents. The Ministry of Foreign Affairs and Trade supports a regime
that enables the NZIS to refuse to accept applications from certain offshore agents but does not
support a requirement for offshore agents to be licensed. The Ministry considers that further work
on options for regulating offshore agents is necessary, including consideration of any implications
for New Zealand’s international obligations and consultation with Australia, given our obligations
under the TTMRA.
61. The Ministry of Economic Development, the Treasury, NZTE and Education New Zealand
oppose compulsory regulation on the basis that: they wish to see education agents handled in an
education specific manner; other countries may consider compulsory requirements imposed on
businesses operating legitimately in their own country to be unacceptable; the international
education industry is one of New Zealand’s largest export earners and the risk of trade diversion
9
A 2004 survey of NZIS branches indicated that there were particular concerns with the practices of offshore education
agents and with offshore agents providing incorrect advice generally. Eight out of ten offshore branches reported
concerns with education agents in the areas of false and deceptive advertising, lodging applications supported by
fraudulent documents, providing incorrect advice to potential applicants regarding changes to student policy and the
conditions on student visas, and using student visas to bring non-genuine students into the country.
10
DIMIA 2001-02 Review of Statutory Self-Regulation of the Migration Advice Industry.
12
needs to be minimised; there could be serious liability issues for the New Zealand government;
there could be heavy compliance costs for the industry; and a compulsory scheme is likely to create
incentives for agents to not declare their involvement in an immigration application. These
agencies would support voluntary regulation, however, where work could be undertaken to expand,
or develop schemes in line with, the voluntary training schemes that exist for immigration agents
and education agents in some markets.
62. Ministers are asked to agree to one of two approaches to this issue. The Department of Labour
recommends that Ministers agree in principle at this stage that offshore agents, including the
immigration advice activity of education agents, be subject to licensing requirements, with further
consultation to be undertaken with stakeholders and consideration given to the implications for New
Zealand’s international obligations. The risks identified above would be carefully addressed in the
next stage of work, with attention being given to the development of standards that are competitive
internationally. The Ministries of Foreign Affairs and Trade, and Economic Development, the
Treasury and New Zealand Trade and Enterprise recommend that a decision on the regulation of
offshore agents not be made at this stage and that further work be undertaken to examine both
voluntary and compulsory options for regulating offshore agents.
Financial implications
63. Should Cabinet agree in principle to the proposed licensing model, full advice on costings and
funding options would be prepared as part of the report back to Cabinet. In the interim, indicative
establishment and annual costs have been identified, along with possible sources of funding, and are
set out in table two below. All figures are GST inclusive. Table two provides costings for the
regulation of onshore agents only. If offshore agents are to be included in the scheme, there would
be additional operating costs, which will be identified for the December 2004 report back.
Table two: Estimates of costs
Annual cost of governing body
Costs (GST inclusive)
Operating: $1.4 - $2 million
Capital: $0.5 - $0.9 million
$1.2 - $2.2 million
Annual departmental costs
$0.1 - $0.2 million
Establishment costs
Possible sources of funding
 Memorandum account
 Crown funding
 Immigration agents (licensing fees)
 Crown funding
 Third party revenue
 Crown funding
 Third party revenue
Note: The lower estimates are based on assumptions that the governing body would require four full-time staff. The
upper estimates are based on assumptions that the governing body would require seven full-time and three part-time
staff. It would have greater capacity to audit and investigate agents and to undertake reviews and development.
Departmental costs are based on assumptions that the monitoring government department (yet to be determined)
would incur costs arising from policy and legislative work; ensuring the governing body is funded to meet agreed
outcomes; and monitoring the body’s achievement of performance and financial objectives.
64. Details concerning the appropriate mix and balance of funding sources will form part of the
report back to Cabinet. Possible funding options include:

a recoverable establishment grant;

the NZIS’s Memorandum Account;

licensing fees;

Crown funding; and

third party revenue (collected through immigration visa and permit fees).
65. Establishment costs - A recoverable grant is not viable as the industry would be unlikely to
generate sufficient funds through fees to repay it. The NZIS Memorandum Account could
13
potentially contribute to establishment costs.11 While using this money may be considered a tax on
applicants who did not use an agent, longer-term benefits would be experienced by all New
Zealanders, including those who have directly contributed to the account funds. Regulating the
provision of quality immigration advice and services would lead to more positive settlement
outcomes (and therefore reduced calls on social services) and would improve New Zealand’s
international reputation as an attractive migrant destination. For these reasons it is also appropriate
to consider a Crown contribution to establishment costs.
66. Annual costs - For-profit agents could contribute to annual costs through licensing fees. A scale
of fees could be developed to ensure that the fees did not threaten a firm’s viability. Based on 200
agents paying a licence fee of $1000-$2000, it is estimated that $0.2 to $0.4 million could be
recovered through licensing fees. Licensed agents should not, however, bear the cost of those who
choose to evade the system. It is therefore considered that the costs of investigating and
prosecuting unlicensed agents should sit with the government. It may also be appropriate for the
government to meet some of the costs incurred by not-for-profit agents on the basis that they play
an important role in making information and assistance accessible. These costs could be recovered
by future savings in Crown-funded border and investigations work and refugee determination, as
well as in the health, justice and welfare systems. Should Cabinet wish to reduce the level of annual
Crown-funding, a further option is to consider using third party revenue generated by immigration
visa and permit fees.12 Based on the forecast level of visa and permit applications in 2004/05, it is
estimated that the cost per application would be $2 for the small governing body and $4 for the
larger body incorporating audit and investigation.13
67. It is recommended that Cabinet agree in principle, subject to a detailed report-back on costs,
that:



establishment costs be met through a variety of sources such as the NZIS’s Memorandum
Account and Crown funding;
for-profit agents should pay an annual licensing fee proportionate to the cost of regulating forprofit agents; and
the annual costs of regulating not-for-profit agents, investigating and prosecuting unlicensed
agents, and departmental costs should be met largely through Crown funding, with
consideration given to using some third party revenue.
Further work
68. If Cabinet agrees to the recommendations in this paper, it is proposed that the Department of
Labour: develop the detail of the model and a framework for legislation within the parameters
outlined in this paper; undertake consultation with all stakeholders including the State Services
Commission; and report back to the Cabinet Economic Development Committee by
11
This account was established in 1999 to smooth, over time, the revenue from and expenditure of fees or charges
associated with visa and permit activities. The account is currently in surplus. Appropriate uses of surplus funds in the
Memorandum account are limited. Funds can be used to fund services to fee-payers, including funding better ways of
providing services. Cross-subsidisation is undesirable, although it will be considered by Treasury on a case-by-case
basis.
12
The same rationale for using the Memorandum Account applies in that, while not all fee payers would use an agent,
there are longer-term benefits for all New Zealanders including those who pay the fee. Further, under s148A of the
Immigration Act 1987, fees can include the cost of services not directly provided to the person who pays the fee but
which are an indirect or potential cost arising from delivery of the service.
13
Visa and permit fees vary according to the type of application. For example, the application fee is $85 for a visitor
visa, $140 for a student visa, $660 for an application under the Skilled Migrant Category and $2200 for the Investor
Category.
14
1 December 2004. Any legislative proposals would be included in an Immigration Amendment Bill
in 2005.
69. To inform this work, it is proposed that a list of all active providers of immigration advice,
(including individual advisers working in a business and offshore agents), be developed, drawing
primarily on NZIS records. A public invitation would also be made to encourage agents to register
their interest in receiving information on the proposed changes, and to inform officials of the
number of advisers in their business and the area of immigration they primarily work in. The list
would be used to communicate with agents and to form a clearer picture of the size and nature of
the industry.
Consultation
70. The Ministries of Economic Development, Justice, Social Development, Foreign Affairs and
Trade, Education, Consumer Affairs, Tourism and Pacific Island Affairs, the Department of Internal
Affairs (Identity Services), the State Services Commission, the Treasury, New Zealand Trade and
Enterprise and the New Zealand Police were consulted in the preparation of this paper and their
views are reflected in the discussion. The Department of the Prime Minister and Cabinet and the
Department of Internal Affairs (Office of Ethnic Affairs) were also consulted.
71. Targeted stakeholders including professionals working in the immigration advice industry,
ethnic community groups, and the not-for-profit sector were sent the discussion document
Regulation of the Immigration Advice Industry (September 2003). Feedback on the discussion
document was gathered via focus group meetings held throughout the country in October 2003 and
a number of written submissions. Most focus group participants and written submissions supported
the proposals that are being recommended. It should be noted, however, that the discussion
document was not explicit about the implications for education agents who provide immigration
advice, and minimal feedback was received from the education sector on this issue. Broad
inclusion of education providers and agents will therefore be essential at the next stage of
consultation.
72. The proposals in this paper have also been discussed with Australia in light of New Zealand’s
obligations under the TTMRA. The TTMRA concerns mutual recognition of standards that must be
met to register to practise an occupation, which is not directly the subject of this paper.
Nonetheless, under the TTMRA both countries need to be confident that the outcome of each
other’s regulatory system jointly meets our respective objectives. Australia has confirmed that it
wishes to maximise the extent to which the New Zealand and Australian regulatory requirements
share similar standards and processes. Consultation with Australia at each level of future decision
making will therefore be essential to ensure that New Zealand meets its obligations under the
TTMRA, and considers mobility in the trans-Tasman labour market.
Human Rights
73. The recommendations in this paper are consistent with the Human Rights Act 1993 and the New
Zealand Bill of Rights Act 1990.
Legislative implications
74. There are no immediate legislative implications resulting from this paper.
If the
recommendations in this paper are agreed, however, and following a report-back to Cabinet on the
detailed framework for regulation, legislation would be required.
Regulatory Impact Statement and Business Compliance Cost Statement
75. A regulatory impact and business compliance cost statement (RIS/BCCS) is attached as
Appendix A. Based on the information provided in the attached RIS/BCCS, the Regulatory Impact
Analysis Unit considers that the disclosure of information is adequate, and the level of analysis is
15
appropriate given the likely impacts of the proposal. Business compliance costs would be incurred
by immigration agents under the proposed model. It is, however, too early in the policy
development process to clearly identify the compliance costs. A further RIS/BCCS will be
prepared when the details of the proposal are developed and policy decisions sought.
Publicity
76. It is proposed that, should Cabinet agree to the recommendations in this paper, the Minister of
Immigration announce its decisions in due course.
Recommendations
77. It is recommended that Cabinet:
1. note that in July 2001 Cabinet directed the Minister of Immigration to report back with
detailed policy options on self-regulation for immigration consultants under a statutory
umbrella, and an enhanced self-regulation model for immigration consultants [CAB Min (01)
22/26 refers];
2. note that due to insufficient market or regulatory incentives for immigration agents to
provide adequate standards of services, and considerable reports of serious harm, regulation
of immigration agents is required;
Objectives of regulation
3. agree that regulation should:
3.1 enhance the ability of immigration applicants to make a well-informed choice of
immigration agent;
3.2 reduce the risk of serious harm to those who use an immigration agent by creating
effective incentives for agents to provide competent and ethical services; and
3.3 provide clear and accessible complaint and redress procedures for those who use an
immigration agent.
Policy proposals
4. agree in principle to a system of licensing for immigration agents, which may include
disclosure requirements;
5. note that unlicensed agents onshore would be subject to sanctions and penalties under the
law, and the New Zealand Immigration Service could refuse to accept applications lodged by
both onshore and offshore agents;
6. agree in principle to establish a governing body independent of industry to administer the
licensing of immigration agents, including the investigation and prosecution of unlicensed
immigration agents;
7. agree to the following working definitions of what is and what is not immigration advice,
and therefore who is an immigration agents for the purposes of regulation:
7.1 Immigration advice is: Advice, assistance or representations, including oral and
written submissions and advice given in regard to an immigration application or
potential immigration application. These include applications for temporary entry,
residence, appeals, exemptions, refugee status claims and appeals, and advice given
to third parties such as sponsors, employers and education providers.
7.2 Immigration advice is not: the provision of information prepared by the New
Zealand Immigration Service; directing a person to the New Zealand Immigration
16
Service or a list of licensed immigration agents; clerical work; translation or
interpreting services; and settlement services;
7.3 An immigration agent is a person who provides immigration advice as defined at
recommendations 7.1 and 7.2;
8. agree in principle to exempt the following groups from the licensing requirements for
immigration agents:
8.1 personal contacts where no fee is paid and the person is not acting in their capacity as
a professional or representative of an organisation; and
8.2 practising lawyers;
9. EITHER
[Department of Labour preferred option]
9.1 agree in principle that offshore immigration agents, including the immigration
advice activity of education agents, be subject to licensing requirements; and
9.2 direct officials to undertake further consultation with stakeholders, including the
education industry, on licensing requirements and to consider any implications for
New Zealand’s international obligations;
OR
[Ministries of Foreign Affairs and Trade, and Economic Development,
Treasury and New Zealand Trade and Enterprise preferred option]
9.3 note that extending licensing requirements to offshore agents could pose risks to the
international education industry, be considered unacceptable by countries in which
agents are legitimately operating, create serious liability issues for the New Zealand
government; impose heavy compliance costs for the industry, and create incentives
for agents to not declare their involvement in an immigration application; and
9.4 direct the Department of Labour to examine, in consultation with stakeholders, both
voluntary and compulsory options for including offshore agents and offshore
education agents, where they provide immigration advice;
Financial implications
10. note that the estimated costs of the proposed model for the regulation of onshore agents
include:
10.1 establishment costs of $1.4 to $2 million in operating costs and $0.5 to $0.9 million
in capital costs; and
10.2 annual ongoing costs of $1.3 to $2.4 million (GST inclusive):
11. note that if offshore agents are to be included in the licensing regime, there would be
additional operating costs, which would be identified in the 1 December 2004 report back;
12. agree in principle, subject to a detailed report-back on costs, that:
11.1 establishment costs be met through a variety of sources such as the New Zealand
Immigration Service’s Memorandum Account and Crown funding;
11.2 for-profit agents should pay an annual licensing fee proportionate to the cost of
regulating for-profit agents;
11.3 the annual costs of regulating not-for-profit agents, investigating and prosecuting
unlicensed agents, and departmental costs should be met largely through Crown
funding, with consideration given to using some third party revenue;
17
Further work
13. direct the Department of Labour to: develop the detail of the model and a framework for
legislation within the parameters outlined in this paper, in consultation with all stakeholders
including the State Services Commission; and report back to the Cabinet Economic
Development Committee by 1 December 2004;
14. note that to inform further work, the Department of Labour will develop a list of all active
immigration advice agents, including offshore agents; and
Publicity
15. invite the Minister of Immigration to announce Cabinet’s decisions in due course.
Hon Paul Swain
Minister of Immigration
18