Motions — Southern Institute of Technology—Ombudsman's Recommendations 
Motions — Southern Institute of Technology—Ombudsman's Recommendations 
[Volume:619;Page:15085] 
Motions 
Southern Institute of Technology—Ombudsman's Recommendations 
MARK PECK (Labour—Invercargill) 
: 
 I move  
That this House note that the Southern Institute of Technology has rejected the recommendations of the Ombudsman in respect of its dispute with students enrolled in a social service course; and calls on the Southern Institute of Technology to comply with the Ombudsman’s recommendations. 
 It gives me no joy to move this recommendation with regard to a tertiary institution in my electorate. Furthermore I am also acutely aware that it is an unusual practice for Parliament to allow a motion to be debated and I want to thank the House for the leave that was granted this afternoon. I see this as a very important matter indeed and one that does demand the attention of the House because of what I see as a major constitutional issue that has been thrown upon us by the Southern Institute of Technology’s steadfast refusal to do the decent thing after the work done by the House’s representative—the Ombudsman. He investigated a complaint by six students in respect of a course in which they had enrolled in Invercargill where they reasonably expected to complete a nationally recognised qualification. They found out on completion of the first year’s study that in fact the course was not to continue any further. The time and effort they had invested in their study—not to mention the money they had to pay to undertake the study—had been totally wasted. 
The issues involved in this are very clear indeed. The first is that Parliament’s man made a decision having investigated the facts. To get to see the Ombudsman in the very first instance one must have exhausted all remedies before asking him to do his work. The Ombudsman was satisfied that the students had exhausted their remedies and had nowhere else to go but to seek redress from the man we appoint by motion in this House and to ask him to have a look at the activity of this particular State institution. That is the role of the Ombudsman—to protect citizens from the excesses of State-run institutions. In 15 years of there being an Ombudsman in this country never has any institution or any officer of State refused to abide by the Ombudsman’s recommendation. 
I ask the House to consider this: a member applies to a Minister for a release of documents under the Official Information Act. That release is refused by the Minister so the member goes to the Ombudsman who says to release them. The Minister then in my view if that particular precedent is allowed to stand can say: “No. I am not giving it to you.” There is a tension between the Ombudsman and the executive—as there should be. Furthermore there should be a tension between those who are officers of the State and those who use their services when there is a dispute. It is a healthy tension; it keeps our public service honest. For the Southern Institute of Technology to thumb its nose at the recommendation of the Ombudsman is wrong in the extreme. 
Not only that but the institute was given every opportunity to comment on the Ombudsman’s recommendations before they were finalised and it chose to ignore it. I do not accept the protestations from the chief executive of the Southern Institute of Technology that she had not seen the papers. 
I note that she instructed lawyers in Auckland when there were perfectly good lawyers in Invercargill who had represented the institute for a long period of time. But the galling part of that situation is that the students had to go and find out of their own meagre resources the skerricks to actually defend the matter before a Master of the High Court in the first instance. They had to do that out of their own pockets. On  
Morning Report 
 the chief executive of the Southern Institute of Technology had the gall to say that it had not cost the institute one cent because its legal expenses had been met by its insurers. 
I ask members of this House to consider the power imbalance in that situation. The power imbalance is absolute. Those students who had to borrow to get the money to pay their fees in the first place faced the loss of their homes and ruination of their families to try to protect their rights. When they were told by the Master of the High Court that in a legal sense they ran a good chance of losing in the court they simply could not afford to continue. 
There were more than six students. Most of the students dropped out because they could not afford to go even the first step in taking on the Southern Institute of Technology. There was an editorial in the  
Southland Times 
—and it is not often that the  
Southland Times  
and I have found ourselves on the same side—that made the following comments about this matter: “Doing the right thing is seldom a luxury. In the long term it tends to prove a necessity for any individual or organisation reliant on holding good standing with the public. In the case of the six students who were stranded on the path towards their qualification goal because the SIT abandoned the academic programme the right thing to do is compensate them. … Now the Ombudsman has ruled that on the grounds of natural justice it should pay anyway. Ms Simmonds has declined to act on his finding. This is from a national perspective an audacious act of defiance. … If people are suddenly prepared to give the Ombudsman’s decisions the flick a law change may indeed prove necessary.” 
If a law change is necessary for the Ombudsman to be able to do his job it is on the Southern Institute of Technology’s head. I wonder whether that institution wants the ignominy of that rested upon it. It is an institution that prides itself upon being a progressive institution yet it seeks to defy the Ombudsman. Well I hope that tonight Parliament will send it a message: “If you want to defy the Ombudsman defy Parliament too.” That I think would be a very serious thing indeed. 
I have absolutely no regrets about raising this matter today. The reason that we have an honest and reliable public service and strong State institutions is that they are open and accountable through several pieces of legislation and I am not about to sit and watch a recalcitrant organisation in my electorate hold the rest of what we hold so dear in our parliamentary and constitutional processes to ransom. 
This House must send a strong unanimous resolution to the Southern Institute of Technology so that there is absolutely no misunderstanding about the abhorrence that this House holds its actions in in rejecting what the Ombudsman said should be done for six students. It was $21000 that was taken from those students—not public money as Penny Simmonds likes to protest—money taken I would say under false pretences and the only decent thing for the institute to do is to admit it was wrong to do what the Ombudsman told it to do and to give the money back. 
SIMON POWER (National—Rangitikei) 
: 
 This is a very serious matter and in my short time of nearly 5 years in this Parliament it is an issue that when members read in detail the report of the Ombudsman raises a series of issues relating to tertiary institutions which frankly go well beyond the situation at the Southern Institute of Technology that Mr Peck referred to. That was a very odd situation indeed where students wishing to gain a diploma as a qualification were required to complete 2 years of study successfully with the first year being the certificate programme. They then found themselves in a situation where they were unable to complete the second year of that programme and had to leave with just the certificate and presumably without the opportunity to complete the diploma. 
Now the Ombudsman’s report interestingly says that prima facie the qualification those students undertook—the certificate—was of itself a qualification for which they were enrolled as a stand-alone qualification but the impication that the students made very clearly as part of the case they put was that it was always their intention to go on as part of the 2-year programme and complete the diploma qualification. As Mr Peck rightly said those students attempted to exercise their rights by way of application to the High Court. As that point—I think I am right in saying this—the Master at the first instance advised the students that their chances of success in the application were shall we say limited at the least. 
So the students sought recourse to the Ombudsman which again in itself is an odd course of action to take. It is a very odd course to take because from my limited experience in law I would say that one would ordinarily only in very limited circumstances have recourse to the Ombudsman when legal remedies that were available did not meet the outcome one desired. The Ombudsman to my way of thinking is more usually responsible for legislative and public sector indiscretions or for looking for rulings of fairness and equity rather than dealing with specific legal issues. So in that sense the report is quite extraordinary. 
But the issue that Mr Peck raises should not be seen in isolation to the Southern Institute of Technology because the bigger questions that must be asked as part of Mr Peck’s motion are: where were the New Zealand Qualifications Authority and the Tertiary Education Commission and what were those two organisations doing in the background as those types of issues arose? Now the New Zealand Qualifications Authority in my view should have been far more on top of that issue from the beginning. I guess that the one thing we on this side of the House would say is that in difficult situations like this Parliament is on balance probably obligated to support the Officer of Parliament who has made the finding as the Ombudsman had in this case. 
 That does not necessarily mean that the Southern Institute of Technology got it wrong in the eyes of everybody but it does mean that in the end Parliament has to make a decision as to whether it will back the parliamentary-appointed position of the Ombudsman or the institution. I have to say that regardless of whether members agree with the preliminary view of the Ombudsman contained on page 9 of the report the one thing that caught my eye as I read the report earlier today was the sentence the Ombudsman inserted into his report under paragraph 8 on page 9 which was his final view. At that point the Ombudsman felt compelled to say this: “The institute did not respond to my preliminary opinion as I had invited and consequently I confirmed it as my final opinion.” 
One would have thought that the Southern Institute of Technology was very clearly given the opportunity to respond to the Ombudsman’s preliminary view but it did not take that opportunity and I guess the only word to describe that particular course of action or inaction is “unfortunate”. I think it is unfortunate that the Ombudsman was unable to offer up to the reader of the report the Southern Institute of Technology’s response to his preliminary view. As I read through the report I thought that was a bit of a glaring gap. 
So I guess the question then becomes what type of move if any will the Government take from here? The penultimate paragraph of the report states: “The Prime Minister has commented that it is of serious concern to her and the Government that the Southern Institute of Technology has declined to accept my”—that is the Ombudsman’s—“recommendation.” The report goes on to state: “She has asked that I and the Associate Minister of Education (Tertiary) meet to discuss how better protection can be given to students in cases such as this.” 
Now the question for this Parliament is what will the Government do to follow the advice of the Ombudsman in this particular set of circumstances because the Prime Minister also said in those final paragraphs that neither she nor her Ministers were empowered to direct the Southern Institute of Technology in matters of this kind? That may well be the case but does it solve the problem in the long run? So this is not a particularly pleasant motion to be speaking to but it is an important motion for members to have a view on and that is the reason the National Party allowed leave for this matter to be debated in the first instance. 
Hon BRIAN DONNELLY (NZ First) 
: 
 New Zealand First sees this issue as being something much larger than just this particular case. I think we need to look at some of the details of the case so that listeners really understand what we are dealing with here. 
A group of students enrolled at the Southern Institute of Technology in what they thought was a 2-year diploma programme. They were told that the first year would lead them to a certificate then the second year would lead them to a diploma. It was very very clear. That is not disputed. The promotional material that was presented to them stated: “The National Certificate is a programme designed as the first year of a 2-year Diploma in Social Services.” Following the completion of the first year the Southern Institute of Technology decided that it did not have the capacity to deliver the diploma programme. In fact it found out that it would require 2 more years and that it did not have the personnel the staffing or anything else. Therefore it said to those students: “Sorry you are going to be left with a certificate and we are not going to compensate you.” 
Something that needs to be remembered here is that one of the offers that was made was that the students could enrol for free in some other course or programme. The institute was prepared to make the financial contribution that the Ombudsman has now asked it to make but it had to be in the form of some other programme and that is really what we are dealing with. 
Mr Peck has very eloquently pointed out some of the constitutional issues here but to New Zealand First it is also—and probably primarily—an issue of justice and access to justice. As we went through the commodification and commercialisation of the tertiary sector in the 1990s—in fact it started in the 1980s—it was always assumed that consumer guarantee laws would protect students when there was misrepresentation poor delivery of programmes etc. What has been found since then is that the consumer guarantee legislation is not cogent enough or potent enough to be able to provide such protections. For example the Southern Institute of Technology argues that because somewhere else in its book there is a waiver on its programmes it is not obliged to offer up what it has now provided. That is like getting some gadget in a box and one side of the box says what the gadget is supposed to do but the other side says that if the gadget does not work: “Sorry. We take no responsibility for it.” That is what the Southern Institute of Technology is asking those students to comply with. There was a very interesting answer to a question in the House today given by the Associate Minister of Education (Tertiary Education) Steve Maharey. Obviously there has been recognition that the current consumer guarantees law is not strong enough to be able to protect students in what Mr Peck has rightly said is a David and Goliath struggle with institutions that are resistant. 
Therefore the sector itself has got together and said it will allow the Office of the Ombudsman to be utilised. That was the agreement. Yet when the office was used in this particular case this institution said that no it was not going to take on board the recommendations that the Ombudsman had made. That is very very much a matter of justice because what access to justice do these students have if not through such mechanisms? The Southern Institute of Technology is actually challenging a mechanism that has been put in place to provide fair treatment of students who as it stands are in a very weak position. New Zealand First believes that if the Southern Institute of Technology continues to stand out in this particular case it will be necessary to take up the issue that the Prime Minister has talked about and to make laws that ensure that when there are decisions like this there is no way out for the institution. 
I tell the institution that we are talking here about $21000. We are talking here about the same costs that the institution was prepared to offer to those students when it found out that there had been a mistake and it could not deliver. Yet now for some reason the Southern Institute of Technology is prepared to challenge Parliament’s officer—the Ombudsman—who has looked at the case looked at it fairly and come up with a conclusion. 
So New Zealand First does support this particular motion. We believe that it is a motion that goes to the heart of as Mr Peck said constitutional issues but it also goes to the heart of what we consider to be justice in a democratic society. People should not be precluded from access to justice because they do not have the big guns the big pockets or the big purses. That is exactly what has happened in this particular case. We would like to take the opportunity to commend the students because they themselves through their resilience their courage and their commitment have created a test case—that is this most unusual situation in this House of Parliament tonight as we debate this motion. 
 We are throwing down the gauntlet to the Southern Institute of Technology and saying that if it continues with its stance then it is challenging Parliament. I hope Parliament will vote in a way that states very clearly to the Southern Institute of Technology that that is what will happen if it continues with its stance. To the students and their parents we say “Good on you!”. We recognise them and pay credit to them for their courage and commitment to certain principles. In this particular case we in New Zealand First believe that as a consequence of the trauma they have gone though—because obviously they have gone through enormous trauma and as Mr Peck has said some of them were not able to cope with the hardship they incurred—one way or the other some fair procedures and mechanisms will be put in place for students who are provided with misinformation about their courses or are provided with substandard courses. 
New Zealand First will support this motion and we congratulate Mr Peck on bringing it to the House. We remember that the institute is in his own electorate yet he saw fit to take the case because he saw that it is more than just an electorate issue—it is in fact a national issue an ethical issue and an issue about the way we operate our society. We encourage other parties to vote in favour of the motion. 
GERRARD ECKHOFF (ACT) 
: 
 I want to take a short call on this motion. I think the House has been extraordinarily generous to Mr Peck who of course will be leaving this House because he has announced his retirement from politics at the next election. I do not wish to comment any further on that other than to say that this is a legal issue that has been turned into a political issue and that is inappropriate. 
It is a legal issue. As I understand it this matter was brought before the court and an opinion was given that the matter would not proceed and that the students would not win their case. The students then sought advice elsewhere and received different advice. We can all feel some sympathy for those individuals but if they were and if they feel short-changed their recourse is to the court not to Parliament. It is because Mr Peck is retiring—is being shafted by his own party and has been forced to retire—that he has brought this case. [ 
Interruption 
] 
Madam DEPUTY SPEAKER 
: Order! 
GERRARD ECKHOFF 
: Madam Speaker I can shout longer and louder than any of those— 
Madam DEPUTY SPEAKER 
: The member is entitled to be heard. 
GERRARD ECKHOFF 
: I make the point that if anybody tries to shout me down I will win any time of the day or night. There is a certain irony—if Government members care to listen for a moment—in that when such matters come before the House at question time Government Ministers stand and say: “That is an operational matter and I cannot or will not comment further”. That is the standard reply from this Government. Now it is giving Mr Peck— with the generosity of the Opposition—a last hurrah so that he can get a headline in Southland and bag his own Southern Institute of Technology an enormously successful organisation. 
I have listened at every opportunity I could to try to understand both sides of this case. I have heard both sides put. I am not capable—and neither is anybody in this House—of making a judgment call because we are not conversant with all the facts. The facts should be put before a properly constituted court—not before those who feel or fancy themselves to be some sort of quasi-lawyer. The court not this Parliament is the appropriate place to debate such an issue. As I said I think it is very generous to give Mr Peck this opportunity for his last hurrah. The ACT party will not vote for this motion. 
BERNIE OGILVY (United Future) 
: 
 Each of the previous speakers bar one has upheld what I think is a very very serious matter. As has been put to us and from the report we have before us there is virtually no option other than to support the report as it was put out. Otherwise the consequences will flow across the country. Those consequences could allow gaps and allow for other idiosyncrasies which could mean this Parliament would then have to do even more than it is asked to do now. That would not be correct. The processes are there and we want to uphold them. 
I know the motion that is before the House is very difficult and by the way there are mixed emotions within me too just as there are in anyone else here who is struck by this motion. I think one of the worst parts of this matter is that the Southern Institute of Technology has really made some great headlines in New Zealand since the 1990s. It has really stood out in a number of fields and this motion comes across and blurs that image. It is sad that the matter has got as far as this—that it could be placed at this level. I think the institute was the first in New Zealand for instance to introduce a zero fees scheme. I am not sure but I seem to remember that. I think that was a marvellous thing. It brought people into Southland. It brought in a lot of new people and a lot of dollars. I was told somewhere in my reading that up to $23 million was brought into Southland per annum on recent figures. That is a lot of money. The institute has been a lot of help and it has kept young men and women in Southland. In a rural area one of the greatest distractions is young people going off to tertiary training elsewhere so keeping them in Southland has been beneficial. 
Even with those sorts of mixed emotions the fact still remains that we have a very serious matter of justice and ethics before us that needs to be upheld by this Parliament. We in United Future support this motion and we trust that the message will go out loud and clear around the nation that natural justice is being reinforced through this Parliament. 
DAVID PARKER (Labour—Otago) 
: 
 I intend to take a brief call and to tell Mr Eckhoff that the Office of the Ombudsmen is there to protect citizens against abuses by arms of the State. Those arms of the State— 
Gerrard Eckhoff 
: So are the courts. You as a lawyer should know that. 
DAVID PARKER 
: I am a lawyer so the member should listen. Those arms of the State include institutions established under the Education Act like this polytechnic. There are many parties to disputes be they through the court or through the Ombudsman who disagree with the outcome when it goes against them but they have to accept the outcome. The Southern Institute of Technology must abide by the decision of the Ombudsman. This is a matter of principle that Parliament cannot let go unchecked. The Southern Institute of Technology needs to pull its head in and do what the Ombudsman says it should. 
Motion agreed to.