Introduction

1. The Department of Immigration and Citizenship’s (DIAC’s) purpose is to build Australia’s future through the well-managed entry and settlement of people. To achieve its purpose, in 2010–11 DIAC had a budget of $2.2 billion and 7284 full-time staff in Australia and overseas.[1]

2. An important part of DIAC’s role is to implement the Government’s immigration policies in accordance with the Migration Act 1958 (Migration Act), the objective of which is to ‘… regulate, in the national interest, the coming into, and presence in, Australia of non-citizens’. A non-citizen must apply for and be granted a visa to lawfully enter and remain in Australia. To be eligible for a visa, applicants must satisfy DIAC’s decision-makers that they meet certain criteria, including the character requirements. Once a visa has been granted, a visa applicant becomes a visa holder. DIAC may cancel a visa in certain circumstances, such as when a visa holder no longer satisfies the character requirements.

The character requirements

3. Section 501 of the Migration Act (s501) establishes the character requirements. The purpose of the character requirements is to protect the public through the refusal of visa applications or cancellation of visas to non citizens who may be of concern for reasons such as their criminal record or associations, past and present criminal or general conduct, or the risk they pose to the community if allowed to enter or remain in Australia.[2]

4. Character decisions are made in two stages. Firstly, a visa applicant or holder must satisfy the decision-maker that they pass the character test. Secondly, if a visa applicant or holder fails the character test, the decision maker may exercise discretion to refuse a visa application or cancel a visa on character grounds.[3] A Ministerial Direction, Direction [No.41]–Visa refusal and cancellation under s501, provides further guidance to DIAC officers when exercising this discretionary power.[4]

5. The initial character screening of visa applicants is undertaken by DIAC’s network of processing centres in Australia and overseas. Visa applicants identified to be of potential character concern are to be referred to DIAC’s National Character Consideration Centre (NCCC) for character assessment under s501 of the Act. In relation to visa holders, the NCCC directly identifies persons for character assessment primarily through prisoner lists provided by state and territory departments of corrections. Staff of the NCCC assess visa applicants and holders against s501 of the Act and decision-makers make the decision whether or not to refuse the visa application or cancel the visa.

6. The majority of character decisions are positive. Most visa applications pass unhindered through the character screening process, and only a small minority of visa holders are identified for consideration under s501 of the Act. In 2009–10, DIAC processed 4 322 710 temporary and permanent visas, while the NCCC administered 1519 cases, refusing 156 visa applications and cancelling 58 visas on character grounds.

Audit objectives and scope

7. The objective of this audit was to assess the effectiveness of DIAC’s administration of the character requirements of the Migration Act. Particular emphasis was given to the following areas, as they related to the character requirements:

• policies, guidance and training for staff to support the administration of s501 of the Act;
• processes to identify visa applicants and holders of character concern, administer cases and make decisions; and
• management arrangements supporting s501 processing.

8. Concurrent with this audit, the ANAO audited the effectiveness of DIAC’s administration of the character requirements of the Australian Citizenship Act 2007 (Citizenship Act). The citizenship audit (ANAO Audit Report No.56 2010–11, Administering the Character Requirements of the Australian Citizenship Act 2007) has been tabled as a compendium report to this audit.

Overall conclusion

9. DIAC grants approximately 4.3 million visas annually and, at any point in time, there are around 1.4 million non-citizens in Australia. Managing the flow of people across Australia’s borders requires a balance between facilitating movement and control. To lawfully enter and stay in Australia, a non-citizen must apply for and be granted a visa. To be eligible for a visa, applicants must satisfy DIAC’s decision makers that they meet the criteria specific to the visa for which they have applied, including the character requirements outlined in s501 of the Act. Once granted a visa, a visa applicant becomes a visa holder. DIAC may cancel a visa if the visa holder no longer satisfies the character requirements.

10. Overall, DIAC has established a sound framework for identifying and processing visa applicants and holders of potential character concern. DIAC has provided extensive guidance to its staff about the character requirements, and established processes to identify and assess visa applicants and holders with criminal histories. The department’s relatively new centralised s501 decision-making unit, the NCCC, has also implemented adequate arrangements to manage the assessment of s501 cases that have been referred to it by visa processing centres. However, there are shortcomings in the implementation of this framework that reduce its effectiveness. These shortcomings arise from the:

• narrow administrative focus adopted to identify and assess persons of potential character concern; and
• limitations in the arrangements to assure the completeness and reliability of the information needed to identify and assess persons of potential character concern.

11. The Migration Act, and the associated Ministerial Direction, establish the legislative framework for administering the character requirements. The requirements are quite broad, requiring consideration of a person’s documented criminal convictions (substantial criminal record) to the more general consideration of their associations, general conduct and risk they might pose to the Australian community. In practice, the department’s assessment of s501 cases primarily focuses on whether a person’s background constitutes a substantial criminal record. This focus does not give full effect to the Migration Act, Ministerial Direction and DIAC’s guidance, which support the broader interpretation of the character requirements. Consequently, cases that do not meet the strict thresholds set for substantial criminal record are not routinely assessed by the NCCC. The ANAO identified a number of cases where such assessment may have been warranted. The focus on substantial criminal record has also resulted in a practice of some staff in DIAC’s visa processing centres being reluctant to refer visa applications to the NCCC from applicants that are potentially of character concern but do not meet the substantial criminal record element.

12. To conduct character assessments the NCCC relies on information provided to it by internal and external stakeholders. DIAC’s visa processing centres are to refer visa applicants of potential character concern to the NCCC. The information provided in this referral is used by the NCCC to determine if, in the first instance, a visa applicant should be considered under s501 of the Act and, in the second instance, as the basis for further investigation of the applicant’s character. External stakeholders, particularly state and territory departments of corrections, provide the NCCC with the names and other relevant details about visa holders. This information enables the NCCC to identify and assess visa holders for potential cancellation of their visa under s501 of the Act.

13. DIAC has put in place arrangements that facilitate the flow of this information to the NCCC. However, the current arrangements do not give DIAC assurance that the information received by the NCCC from external stakeholders is reliable, and that all relevant visa applications of character concern are being referred to the NCCC from visa processing centres. These limitations can be addressed by:

• formalising arrangements with external stakeholders, particularly departments of corrections, that provide DIAC with the information necessary to identify and assess visa holders of character concern under s501 of the Act; and
• implementing a quality review process to check that visa applicants of character concern are consistently identified and referred, by visa processing centres to the NCCC, for consideration under s501 of the Act.

14. With DIAC’s focus on the substantial criminal record element of the character test, together with shortcomings in the completeness and reliability of information flows to the NCCC, the department’s ability to identify and assess the character of visa applicants and visa holders is constrained. Consequently, there is a small but potentially significant risk that persons of character concern may enter and remain in Australia. To this end, the ANAO has made four recommendations aimed at improving the effectiveness of DIAC’s administration of the character requirements of the Migration Act.

Key findings

Policy, guidance and training

15. The Migration Act and the Ministerial Direction [No.41]–Visa refusal and cancellation under s501 establish the character requirements that apply to visa applicants and holders. The requirements include a broad character test and discretionary power to refuse an application or cancel a visa. To support the administration of the character requirements, DIAC has developed operational guidance for all staff administering the character requirements.[5] However, this guidance does not reflect DIAC’s more recent administrative changes. Other NCCC resource documents and the Character Helpdesk also provide assistance to staff administering s501 of the Act.

16. DIAC’s visa processing centres in Australia and overseas, the NCCC and DIAC’s national office share responsibility for administering the character requirements. While the arrangements for administering s501 of the Act are complex, the ANAO observed that each of these stakeholders generally understands their role and the role of others in administering character cases. With the centralisation of s501 assessments in the NCCC in 2010, the NCCC’s Principal Assessor should be making the majority of s501 decisions. However, the delegation of s501 powers has not been updated to reflect these new arrangements. Consequently, at the time of the audit, there were 181 officers throughout the DIAC processing network still authorised to make character decisions.

17. Section 501 induction and training for staff administering the character requirements is generally developed and delivered on an ad hoc basis. DIAC does not have a consistent national approach for the delivery of induction and training, except for overseas posted staff. DIAC is currently re-designing its training curriculum, including a role specific course for s501 administrators.

Identifying clients of character concern

18. Visa applications are assessed by processing centres, and persons of character concern should be referred to the NCCC for assessment and decision about whether or not their application should be refused under s501 of the Act. DIAC uses several strategies to identify visa applicants of character concern. These strategies include requiring visa applicants to make declarations about character, checking DIAC’s MAL during visa application processing and requiring some applicants to provide penal certificates. This information is included in referrals from visa processing centres to the NCCC. However, DIAC’s quality review of the referral process is limited and, currently, does not verify whether visa applicants of character concern are consistently being identified and referred by visa processing centre staff to the NCCC. Furthermore, requiring persons of potential character concern to declare these matters relies on their honesty and MAL will only alert officers to applicants whose identity has been entered on the database due to previous immigration concerns. Also, penal certificates from many countries are either not required, not reliable or not available.

19. Once applicants are granted visas, they become visa holders. Visa holders must continue to satisfy the character requirements or risk visa cancellation under s501 of the Act. DIAC’s strategies to identify visa holders of character concern include: checking incoming passenger cards for character declarations; checking entries on MAL when holders enter Australia; and the NCCC receiving prisoner lists from state and territory departments of corrections to identify visa holders who have been imprisoned in Australia. The information the NCCC receives from state and territory departments of corrections contain the details of, on average, 2743 incoming prisoners per month.

20. DIAC has not developed a standard approach to receiving incoming prisoner lists, and the number and type of prisoners referred varies between states and territories. Also, while DIAC has been receiving incoming prisoner lists since 2007, little progress has been made on a project to identify prisoners who entered prison prior to this time. In addition, the arrangements to obtain these lists are informal—there is no formal agreement with the states and territories to provide incoming prisoner lists to DIAC. Without the prisoner lists, DIAC’s ability to identify visa holders who should be considered under s501 of the Act would be severely restricted.

Processing and deciding character cases

21. The NCCC has a number of processes for assessing character cases. After a preliminary assessment to determine if further assessment of the visa applicant or visa holder’s character is appropriate, NCCC case officers decide which of the processes (administrative finalisation, streamlined issues paper or full issues paper) to use in the first instance. Each of the processes, from the preliminary assessment to the full issues paper, increases in complexity, as does the information available to the NCCC to assess a visa applicant’s or holder’s character. The ability to select the most appropriate process for each case allows DIAC to filter and risk manage the character caseload, thereby enhancing administrative efficiency. The NCCC has developed a Refusal Risk Matrix to guide case officers in determining whether a visa applicant’s character should be further assessed and, if so, through which process. A similar risk matrix for the processing of visa holder cases has not been developed.

22. The proportion of character cases processed using the least complex approach (the administrative finalisation) is comparatively few in comparison with the proportion of s501 cases that did not result in visa refusal or cancellation.[6] Conversely, a comparatively large proportion of cases were progressed through the more complex issues paper processes, but were not refused or not cancelled. As such, there may be value in the NCCC identifying opportunities to increase the number of cases processed using processes of lesser complexity and devote more time and effort to the fewer cases with a higher likelihood of being refused or cancelled.

23. The information DIAC seeks for character assessments depends on the processes applied and accumulates from one process to the next. This information includes penal certificates, information provided by the visa applicant or holder and, for visa holders, sentencing remarks and prison reports. The information available for each process was generally sufficient and appropriate. However, as previously discussed, DIAC has not developed formal arrangements to facilitate access to information provided by third parties.

24. DIAC’s approach to identifying and processing character cases is primarily focused on the substantial criminal record element. Visa applicants and holders who could be considered under other elements of the character test, such as association or past and present criminal conduct are not often considered by the NCCC. In 2009–10, the NCCC’s preliminary assessment of 639 visa holders resulted in decisions not to conduct further character assessment processes because their prison sentences had generally not met the substantial criminal record element of the character test. There is no evidence that the NCCC assessed these visa holders against the other elements of the character test. The ANAO’s analysis of these cases identified 65 visa holders for whom further assessment under the past and present criminal conduct element of the character test may have been warranted. These cases involved visa holders convicted of assault or grievous bodily harm (42 cases) and supplying or manufacturing drugs (15 cases), and eight cases where the visa holder had received multiple sentences. For visa applicant cases, only five of the ANAO’s sample of 56 cases were assessed under elements other than substantial criminal record—these cases were considered under the past and present criminal and/or general conduct element of the test. Three of the five applicants were not refused a visa under s501 and two cases were undecided at the time of the ANAO’s analysis.

25. For those visa cases that are referred to the NCCC and progress beyond preliminary assessment to the final processing stage, the Principal Assessor decides whether the visa application is refused or, for visa holders, whether the visa is cancelled. These character decisions are based on the information provided in the issues paper prepared by case officers in the NCCC. The 80 issues papers reviewed by the ANAO provided sufficient information to enable the Principal Assessor to make decisions about the character of visa applicants and holders who had failed the character test because of their substantial criminal records.[7] In addition, decisions were effectively documented in all cases reviewed.

26. The NCCC generally issues warnings to a visa applicant or holder who fails the character test, but whose visa has not been refused or cancelled. Whether the visa applicant or holder has received a prior warning is a consideration for the decision-maker when deciding whether to refuse or cancel a visa on character grounds. However, only a small proportion of visa applicants or holders who had been issued with a warning on one or more previous occasions had their visa refused or cancelled as a result of the most recent s501 consideration. While the decision to refuse or cancel a visa on character grounds rests with the Principal Assessor, DIAC could consider giving more guidance on the weight to be given to circumstances where multiple warnings have been previously issued.

27. The quality control officer reviews visa holder cases where it is likely that the Principal Assessor will cancel a visa; visa application cases that are likely to be refused are generally not reviewed. However, the consequences of refusing a visa application from an applicant who is in Australia are similar to cancelling a visa holder’s visa—removal and exclusion and the person from Australia. As such, there would be benefit in expanding the quality control officer’s role to include all onshore visa applicant cases likely to be refused.

28. Most s501 decisions can be appealed to the Administrative Appeals Tribunal and to the federal courts. In 2009–10, 77 s501 decisions were appealed, with DIAC winning or the appellant withdrawing from 48 cases (62 per cent). DIAC does not generally analyse appeal decisions to identify trends in the reasons for decisions which may have relevant to the broader caseload. The ANAO’s analysis of appeal decisions over the past two years indicates that the Administrative Appeals Tribunal had interpreted the considerations in the ministerial directions differently from DIAC.[8] There are opportunities for DIAC to improve its administration of s501 of the Act by reviewing the information available to the Appeals Tribunal and identifying processes for seeking access to similar information as part of the assessment process.

Management arrangements to support s501 processing

29. DIAC’s Strategic Plan identifies the risk that persons of national security concern or with serious health issues or serious criminal records will enter Australia. DIAC’s business plans at the group, divisional and branch levels are aligned to the PBS and Strategic Plan and generally reflect the contribution required by each stakeholder. However, they do not include a number of significant tasks, such as a prison census project to identify visa holders who entered prison prior to 2007.

30. DIAC’s Strategic Risk Profile also identifies the entry into Australia of persons of national security concern, with serious health issues or with serious criminal records as a risk. A Risk Assessment Summary, for which DIAC’s national office is responsible, supports the Strategic Risk Profile. However, the NCCC and visa processing centres, which are responsible for administering s501 cases, have not developed s501 risk plans or outlined their approach to managing risks in administering the character requirements. A particular risk that has not been formally assessed is the practice of primarily assessing only one element of the character test, namely the substantial criminal record element.

31. The key performance indicator for administering s501 of the Act relates to the effective character screening of visa applications offshore. The key performance indicator is difficult to measure and no performance target has been set. Also, the indicator does not include the processing of visa holders in Australia.

32. There are inconsistencies, within and between, the information that DIAC publicly reports and its internal management data on the administration of the character requirements. DIAC was not able to replicate some of its internal management data, including the number of visa applicants and holders considered under s501 of the Act in 2009–10. The NCCC’s indicators and service standards measure timeliness of decision making. While some standards were met occasionally, the majority were not. For example, throughout 2009–10, the NCCC did not achieve the service standards that require it to finalise 95 per cent of visa applicant cases and 100 per cent of visa holder cases within 180 days of referral.

DIAC’s response

33. DIAC provided the following summary response.

34. The Department of Immigration and Citizenship (DIAC) welcomes the opportunity to contribute to the ANAO performance audit Administering the Character Requirements of the Migration Act 1958 and agrees with the recommendations. DIAC notes that overall, the ANAO has concluded that DIAC has established a sound framework for identifying and processing visa applicants and holders of potential character concern.

35. DIAC notes the suggested improvements to the character framework to improve effectiveness. DIAC is committed to continually improving the administration of the character requirements and integrity of the character program and welcomes these suggestions.

36. The department accepts the recommendations of this report and notes that work has commenced on a number of measures which address many of the issues raised. Other initiatives will be considered as a result of this report.

Footnotes

[1] Department of Immigration and Citizenship, Portfolio Budget Statements 2010–11, Immigration and Citizenship Portfolio, Budget Related Paper No.1.13, Commonwealth of Australia, May 2010, pp.6, 13, 21, 30, 39, 46, 64 and 72.

[2] Migration Act 1958 (Cth), s501(6).

[3] Factors the decision-maker must consider in exercising this discretionary power include: the risk to the Australian public; international obligations; length of time in Australia; and age upon arrival.

[4] Minister for Immigration and Citizenship, Direction [No.41] – Visa refusal and cancellation under s501, Commonwealth of Australia, 3 June 2009.

[5] Department of Immigration and Citizenship, Procedures Advice Manual3: Act – Character – s501 – The character test, visa refusal and visa cancellation, (unpublished) 1 January 2010.

[6] Of the ANAO’s sample, 25 per cent of visa applicants and 20 per cent of visa holders were processed as an administrative finalisation. In 2009–10, 79 per cent of visa applicants and 90 per cent of visa holders were not refused or cancelled on character grounds.

[7] Visa applicants and holders who fail the substantial criminal record element of the character test do not have to be assessed against the other elements of the character test, such as associations and general conduct.

[8] Direction [No.41] – Visa refusal and cancellation under s501 replaced Direction No.21 – Visa refusal and cancellation under s501 in June 2009.