Tertiary institution staff are suspected of fraud and corruption and their employers may be turning a blind eye to some offending, an Immigration New Zealand intelligence report says.

The report dated May this year said some New Zealand education provider staff "are almost certainly" involved in "poor conduct and poor business practices".

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"Issues include significant conflicts of interest (such as having financial stakes in offshore education agencies or onshore high risk places of employment), alleged bribery and corruption, and facilitation of immigration fraud such as attendance records and non-genuine completion of courses," the report said.

"EP [education provider] management and staff may also be ignoring Indian education agent fraud and mistreatment of applicants."

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The report said managers at four education providers "have likely knowingly facilitated abuse" of the Skilled Migrant Category policy.

It said visa applications showed Indians working as marketing managers at tertiary institutions generally received relatively low salaries.

"Some EPs [education providers] are likely to be aware that marketing managers are able to solicit 'kickbacks' from India-based education agents to supplement their low salary."

Emails between Immigration New Zealand and the Qualifications Authority in February and March showed Immigration was keeping tabs on international marketing staff at 10 private training establishments regarded as being at severe risk of immigration offending, five polytechnics included in a high-risk category and another private institution regarded as an emerging risk.

The emails said in some cases Immigration regarded the institutions rather than the individuals as the source of the risk.

Chief executive ignorance

Some polytechnics' international marketing managers had been keeping their chief executives in the dark about problems including fraud and misrepresentation, Immigration New Zealand communications also said.

Immigration New Zealand told RNZ polytechnic leaders were now more aware of the Indian student market and had more oversight of their operations, partly because Immigration had made a concerted effort to communicate with them.

The documents showed that in August last year Immigration warned an international education conference there was a "significant disconnect" between marketing managers and institutions' chief executives or directors.

It said senior managers might not be fully aware how their institution was being marketed, the commissions being paid to agents and the type of students they were attracting.

It also warned there were "clear conflicts of interest developing among marketing staff operating in India", which had the potential to drive bad behaviour.

A senior Immigration staff member said in a November email the situation was improving.

The email said polytechnic chief executives were "increasingly aware and concerned with the potential conflicts of interests amongst many of their staff ... an issue that we have been raising for some time now".

It said polytechnic chief executives were acknowledging that their marketing managers were too influential in the Indian market and had too much impact on their institution's reputation and on the quality of student they were attracting.

An email regarding a meeting of polytechnic chief executives in February this year said there had been "integrity issues" with some education providers' representatives in India.

The issues included failure to disclose conflicts of interest such as a family member owning a student recruitment agency in India and receiving preferential treatment "and possibly also financial kickbacks".

"However a more serious conflict of interest is where the EP rep arranges for illegal work for their students at a NZ workplace where they are a shareholder - or even a director of."

The email said some providers might not regard the conflicts as significant.

Immigration New Zealand general manager of settlement, protection and attraction Steve McGill said tertiary institutions had improved a lot, including many institutions that formerly had a high rate of declined study visa applications.

"There is a big incentive for providers to do the right thing.

"If they are not there yet, most are heading in the right direction."

'Dodgy practises' rife in parts of the sector - Labour

Labour immigration spokesperson Iain Lees-Galloway said there needed to be a crackdown on "dodgy practices".

He told Morning Report some private tertiary institutions have essentially set up a pathway to residency to bring in students to act as a pool of labour for employers to exploit.

"This is something which Immigration has been warning the minister about for a very long time."

He said the reports showed that the poor behaviour was likely just the tip of the iceberg.

"There's been very limited action from the government and we think it's time for a much more aggressive approach to weed out these poor performers."

Immigration Minister Michael Woodhouse declined to be interviewed on Morning Report.