Tip of a corrupt iceberg
The Big Scam: A Stuff investigation has exposed how immigration frauds operate. How can we stop them? Steve Kilgallon and Dileepa Fonseka report.
Immigration fraud is corrupting New Zealand and the problem is getting worse, a senior Immigration New Zealand official has admitted. INZ assistant general manager Peter Devoy believes migrants are being ‘‘exploited up and down the country’’ by schemes similar to the ones uncovered in a investigation.
Critics of INZ say it is understaffed and unable to investigate scams. Our inquiry found multiple schemes in which migrants desperate to secure New Zealand residency ‘‘bought’’ jobs, or repaid their salaries under the table to employers.
Devoy says if the schemes are allowed to grow unchecked, it will lead to wider ‘‘corruption’’ in New Zealand business. ‘‘We have an element of New Zealand society which is here on a corrupt basis.’’
The Government says a review of how INZ handles migrant exploitation is a major priority. Immigration Minister Iain Lees-Galloway says ‘‘sadly, it doesn’t come as a surprise’’ how widespread the schemes are.
He has commissioned a review by the Ministry of Business, Innovation and Employment (under which INZ and the Labour Inspectorate both fall) of its migrant exploitation work and expects a report next year. ‘‘It’s something the Labour Party has been concerned about for some time,’’ he says. ‘‘We identified tackling exploitation for migrants as one of the top two priorities in the [immigration] portfolio.’’
It can be difficult to gauge precisely how many of the scams are in operation because the migrants caught in them are also breaking the law – and so are unwilling to blow the whistle, or speak to media.
found several who were prepared to be identified, despite facing deportation. Migrant workers rights’ activist Sunny Sehgal, an E tu¯ union organiser who helps run the Migrant Workers’ Association, says that’s rare, as fear has stopped effective investigations and stories in the past. ‘‘Other journalists have tried to cover this kind of story, but the people were all blurred-face and not confident to talk.’’
Sehgal says he’s fielded seven complaints about Whangarei restaurateur Gurpreet Singh – a central figure in the investigation – but most wanted to remain anonymous and not make formal complaints. They were afraid of deportation, or being ostracised by the Punjabi Indian community. ‘‘But I am not here to help one individual, I am here to fix the problem forever,’’ Sehgal says. ‘‘So I only help those who are happy to fix it for other people as well.’’
The exception, he says, was one man who begged him for help and he arranged a 50 per cent rebate of the $30,000 he had paid to Gurpreet through Gurpreet’s former lieutenant, Aamir Shah. ‘‘I would say this [these cases] is just the tip of the iceberg. There are many people doing these things.’’
Devoy accepts that claim. During an interview, he unlocks his phone to show an email received just minutes earlier: another tipoff.
He says franchises dominated by specific nationality groups ‘‘would suggest that there might be something going on, and that there is a reason for that, and that they might be able to buy into those areas and dominate those areas and perhaps pay more for the franchise than the market rate because they’ve got a competitive advantage: ie they don’t have the same wage bill.’’
But while it’s difficult to get a precise figure for the number of scams, those spoken to during investigation are convinced the problem is substantial.
Veteran immigration lawyer Alastair McClymont believes entire industries are now reliant on exploited migrant labour. He says kiwifruit orchard owners openly tell him how much they rely on migrant labour.
‘‘They basically say that if the Indian student market dries up then there’ll simply be nobody to pick kiwifruit at all.’’
Lees-Galloway isn’t convinced the issue is that bad, but says because export markets for our primary products demand high labour rights standards, there is a risk for New Zealand around convincing them these are being met.
First Union organiser and Indian Workers Association coordinator Mandeep Singh Bela says he’s dealt with dozens of cases, resolving many of them at mediation when he confronts employers over their exploitation. The organisation’s Facebook page fields about 10 inquiries a month from exploited workers. He too was exploited, he says, working for $9 an hour, cash-in-hand, on a kiwifruit picking gang when he first arrived in New Zealand in 2009.
One member of the Auckland Indian community says that when he worked in a call-centre, securing visas by paying for them was an openly discussed topic. People shared notes on how they could do it.
He knew of at least six people in the city who had arranged visas by paying for a job and a regular amount to cover tax payments to IRD, or were
repaying parts of their salary under the table. ‘‘It is so well setup that I imagine it would be quite hard for Immigration to catch them because they cover their bases so well . . .’’
Sehgal and Bela say the answer is giving whistleblowers extended visas in return for their co-operation.
Both Devoy and LeesGalloway say there’s a policy that whistleblowers won’t be ‘‘unduly penalised’’ for coming forward – but won’t commit to extending that.
Devoy says that would reward corruption, and those who come forward are usually so complicit that their testimony can be attacked in court. Devoy says whistleblowers would, however, not be disadvantaged – unless they are later found to be complicit. ‘‘If they were shown to be complicit or having been a party to the offending, then shouldn’t that be taken into account?’’
Bela says that ignores the power imbalance between employer and employee. The focus should be on acting much more harshly against those organising the scams.
Instead of using punishments such as hiring freezes – which he says really just punish migrants – they should use the Crimes Act and prosecute the scams as fraud and theft. Former immigration minister Tuariki Delamere agrees, saying the only way to curb the scams is by sending a message through tougher sentencing.
Bela says that, in his experience, neither the Labour Inspectorate nor INZ feels a responsibility to look after whistleblowing migrants: his solution would be a specific migrant exploitation division with the power to grant visa extensions to those who agree to testify against the fraudsters.
One positive is a recent change to immigration law which gives students a threeyear ‘‘open’’ work visa once they complete their studies. Previously, they had a study-towork visa, which allowed them time to find an employersponsored job.
Removing the ties to an individual employer could substantially curb ‘‘job-selling’’ – the type of scheme signed up to by Karamjeet Singh, a subject of the Stuff investigation.
Lees-Galloway says that was the intent of the law change, and Bela agrees it’s a good start. But he says recent changes don’t go far enough. In particular, he argues that problems with immigration scams start even before migrants arrive here.
Unlike immigration advisers, education agents (who arrange study visas and college courses for migrants) don’t need to be licensed, giving them the freedom to tell potential migrants unrealistic stories of their prospects of citizenship here. The migrants then become embroiled in scams when they realise the truth, he says.
‘‘They are selling them false promises right from the beginning . . . they come here and reality hits them hard.
‘‘They’ve [the advisers] basically been given a green light by immigration to say anything they want.’’
Lees-Galloway says he’s been advised by MBIE not to license education advisers because it would be too onerous, and enforcement is easier with the colleges where they send students, but he is ‘‘monitoring that very closely’’ and says if there isn’t behaviour change from agents ‘‘giving misleading information’’ about residency prospects, he will make changes.
Bela says the Government’s own sales pitch also makes it complicit: INZ’s website touts a ‘‘world-class education and an unforgettable experience’’. That adds to migrants expecting doors to open easily for them when they arrive – and their desperation when they do not.
Bela says the Government talks about the overseas student sector as a ‘‘$4 billion industry’’ and that shows it’s not really about education at all – it’s a ‘‘transactional exchange’’.
For the students, it’s about a route into residency; for the Government, it’s about dollars into the economy. The education component is ignored. ‘‘A [migrant with] Business Level 5, Level 6, Level 7 [qualifications] ends up working for dairies – what sort of education are they getting?’’
Lees-Galloway says the recent law change that means students qualify for three-year ‘‘open’’ work visas when they graduate (that is, ones not tied to an employer) was not just aimed at reducing ‘‘job selling’’ scams but also at sending a message that education visas are principally about securing a good education – and making the pathway to residency much clearer.
He admits there is education work to be done in some migrant communities to explain that these schemes are not acceptable. Educating migrants on their rights and advising them to join unions is important and will help to convey the message that ‘‘this is not the New Zealand way of doing things’’.
For Devoy, the way the scams have infected particular sectors of industry, such as hospitality, means there’s major unfairness developing in business. The advantage of underpaying staff allows unscrupulous operators to take that advantage and ‘‘buy another business or get ahead and keep doing this, and if that goes unchecked for a period of time you then have corruption of business systems’’.
McClymont says more favourable visa and residency conditions for settling in the regions shifts the problem further out from Auckland to other regions, and says Hamilton and Tauranga are easy targets for such schemes because INZ is grossly understaffed in the Waikato-Bay of Plenty region.
Devoy doesn’t argue with suggestions there aren’t enough investigators or resources to fight the problem. ‘‘You’ll probably at the end of this give me information which needs to be investigated: I don’t know whether I’ll be able to get an investigator onto it straight away. We’ve got 20 investigators – and they’re all busy.’’
Lees-Galloway says he’s asked MBIE to start work before Christmas on a thorough review of migrant exploitation so he can make decisions on where to invest in a ‘‘robust’’ system.
He says questions of a specialist migrant unit; understaffing at INZ and the Labour Inspectorate; and increasing penalties are among the areas he expects to be canvassed.
‘‘This is New Zealand: we believe in treating people fairly and everyone who works in New Zealand has a right to a decent job that pays a fair wage where they are safe and taken care of. We don’t want our reputation to become that of a place where migrants are exploited.’’
‘‘They [education agents] are selling false promises right from the beginning . . . [students] come here and reality hits them hard.’’