A deal to strengthen vocational education and training (VET) ties with China could increase the incidence of corruption and bribery occurring at Australian education institutions, with one commentator warning that education providers must assess and manage the quality assurance risks associated with international student enrolments.

Griffith University Business School senior lecturer and Renmin University visiting research fellow Dr Rakesh Gupta recently told ABC’s Radio National that corruption in the Chinese higher education system is rampant, and normalised to a degree that he “ha[s] not seen anywhere else in the world”.

Dr Gupta expressed concerns about the quality of graduates from the offshore campuses of Australian education and training providers, and the risks posed to the reputation of Australian education facilities. “One institute not performing will mean there’s an effect on the whole education sector from Australia,” Dr Gupta warned.

Exporting Education

Australia’s international student market contributed $17 billion to the economy in 2014 and was the country’s largest export after iron ore, coal and gold.

International students, who often pay more than three times as much as locals for their degrees, generate a quarter of the annual income at some Australian universities. China supplies the greatest proportion of international students enrolled with Australian education providers.

The growth of China’s VET market is also seen to hold promise. In 2013, over 35,000 people enrolled with Australian VET providers in China. More than 30 million students undertake formal VET in China, with the State Council targeting growth of total VET student numbers to 38.3 million by 2020 to develop a skilled workforce.

The Australian Government has set a target to double the number of international students in Australia and double the offshore delivery of education by 2025. Reaching this target will require Australian education providers to enhance their global competitiveness. The Australian international student industry has faced growing competition from universities around the world, even as the global supply of university places continues to outpace the growth in the number of students with academic competency and adequate English-language proficiency.

Strengthening Ties with China

Last month the Australian Skills Quality Authority signed a memorandum of understanding (MOU) with the China Education Association for International Exchange to strengthen collaboration on quality assurance for VET. Assistant Minister for Education and Training Senator Simon Birmingham says that assuring the quality of skills training delivered by Australian providers in China is a key focus for building stronger educational ties in the future.

The MOU follows the ratification of the China-Australia Free Trade Agreement in June. Minister for Trade and Investment Andrew Robb says the agreement will “lock in existing trade and provide the catalyst for future growth across a range of areas including goods, services and investment”.

These agreements may pave the way for Australia to meet its 2025 targets, but it remains incumbent on Australian education and training providers, both current and emergent, to ensure they are well-prepared to engage the international student market.

ICAC Report

In April this year, the NSW Independent Commission Against Corruption (ICAC) released a report identifying several corruption risks created by universities’ international student businesses.

The report suggests that Australian universities were ill-prepared to enter the international student market, resulting in the adoption of detrimental practices, including the aggressive marketing of international students without adequate cost- and risk-assessments, reliance on largely unregulated agents and the establishment of offshore partnerships without necessary due diligence.

Offshore Corruption

Offshore VET collaborations countenance a number of corruption risks. The ICAC reports that universities in NSW have experienced long-running problems with nepotism and corrupt handing of plagiarism at offshore campuses, offshore bribery, and loss of intellectual property to offshore partners. Systemic cheating and widespread fraud in English-language testing are also widely reported, the ICAC notes.

The risks associated with education provision at offshore campuses are just one aspect of the endemic difficulties plaguing the international student business. Corruption has long been a major concern in international student admissions. An investigation by ABC’s Four Corners earlier this year suggests that Australian universities are paying more than an estimated $250 million annually to unregulated agents for the recruitment of international students, despite widespread acknowledgement that a number of these agents are corrupt and deal in fraudulent documents.

Onshore Corruption

The ICAC report demonstrates that corruption is not confined to offshore campuses. With universities increasingly dependent on “on a cohort of students, many of whom are struggling to pass, but who the university cannot afford to fail … [t]he equilibrium between student capability, financial security of the university, course rigour and reputational standing has been disrupted”.

Academic misconduct is not limited to international students, but those with inadequate English proficiency or poor educational preparation are placed in a particularly desperate position. The recent investigation into the online essay ghostwriting service, MyMaster, exposed the widespread use of cheat sites by mainly international students.

Conversely, the ICAC reports, “the financial dependence on international student numbers and student success creates pressures on university staff to accept cheating and plagiarism and to re-mark assessments to pass students who would otherwise fail”. The range of corruption issues which have emerged suggest standards have been compromised. Past inquiries by the Corruption and Crime Commission (CCC) into an English-language testing centre revealed serious misconduct amongst staff members and academics, ranging from the acceptance of financial bribes to sexual favours in exchange for higher marks.

Consequences of Falling Quality Standards

The problems associated with offshore and onshore corruption are not only costly, but publicly embarrassing. Australian education providers must prepare for the anticipated increase in international student numbers, and the corresponding increase in corruption risk, by having robust internal systems in place. We recommend that Australian education providers review their internal policies to ensure they are:

  • managing risk through monitoring of lecturers’ marking and teaching standards
  • initiating best practice due diligence on all agents
  • providing comprehensive training for executive and staff on anti-corruption and bribery laws
  • ensuring offshore partnerships are established with necessary due diligence

Squire Patton Boggs has specific and extensive experience in:

  • advising on domestic and global Anti-Bribery and Corruption legislative frameworks
  • working with Australian universities
  • partnership agreements
  • intellectual property agreements