1

Clause 1 contains the short title of the Act and the Higher Education Minister's power to set the date of the Act coming into force.

2

2

Clause 2 contains the definition of words and expressions. The amendment adds five new terms. These are ‘initial fund’, ‘foreign branch campus’, ‘college’, ‘minister’ and ‘fee structure’.

The terms ‘private educational institution’, ‘branch campus’, ‘university college’ and ‘university’ are redefined to accommodate some of the changes the Bill makes.

3 & 5

12 & 15

Under s. 12 of the Act, applicant companies that have obtained approval to establish a PHEI are subject to several ministerial stipulations concerning paid-up capital, equity participation, the composition of the board of directors and restrictions in the Memorandum of Association. These stipulations, as they are now found, are appropriate only to companies limited by shares. Clause 3 of the Bill extends these requirements to companies limited by guarantee.

Clause 3 adds a new subsection, 12(1) A that applies stipulations similar to those in s. 12(1) to applicant companies that are limited by guarantee. As companies limited by guarantee do not have a share capital, the proposed s. 12(1)A requires such companies to have what is described in the amending provisions as an ‘initial fund’ which has to be an amount that is to be determined by the Minister. The source of this fund must also be both disclosed and approved by the Minister.

Initial fund is defined in the Bill as an account containing cash contribution that a company limited by guarantee is required to have prior to registration under section 24 of the Act.

Amendments in tandem to the changes made to s. 12 of the Act are made to the provisions of s. 15 so as to bring within its provisions companies limited by guarantee. The amendments also introduce procedures and prescribes forms (for the first time) for companies establishing PHEIS to change their name, the paid-up share capital, initial fund, equity participation, the composition of the board of directors or the company’s Memorandum and Articles of Association. The amended section also makes it an offence to contravene its provisions.

4

14

Minor and only incidental.

6

19

Directs the provisions of s. 19 to the company establishing the PHEI. Currently, they are directed at the PHEI.

The section provides that a PHEI must not enter into an arrangement or agreement to sell, dispose of or to reconstruct; or to take any action which will affect in any material respect, its business relating to education either by amalgamation or otherwise, unless approved by the Minister

7

24(2)

Section 24 lays down the procedures for registration of a PHEI. Under the changes proposed by the Bill, in addition to the information currently stipulated under s. 24 (2), the Registrar General ‘may call for any other information, particulars or documents that he may require’.

8

26(2)

Clause 8 of the Bill amends s. 26 of the Act in two ways. First, where the section now provides that a PHEI shall be identified by the premises used for its purpose, the amendment provides that it shall be identified by the premises registered for its purpose.

The other amendment to s. 26 of the Act adds a new requirement, which is that, in addition to a copy of the certificate of registration being exhibited in a conspicuous part of the premises of the private higher educational institution, ‘the details of the premises registered for its purpose and the approved fee structure of the course of study or training programme (sic) shall be made available and accessible to the public by whatever means.’

9

28

Clause 9 seeks to amend section 28 of Act 555 by requiring PHEIs to obtain approval from the Registrar General, not only to move premises but to add to or modify its premises.

Subsection 28 (2) is amended to ensure that PHEIs submit prescribed forms to seek approvals for modification or addition to premises.

10

30

 Clause 10 substitutes s. 30 with a new section that reads as follows;

“Constitution

30. (1) The constitution of a private higher educational institution shall contain provisions for such matters as may be prescribed.

(2) Subject to the provisions of this Act, every private higher educational institution shall be managed in strict accordance with its constitution.

(3) The constitution shall not be amended without the prior approval of the Registrar General.

(4) Any private higher educational institution which contravenes the provisions of this section shall be guilty of an offence.”

11

31

The Bill makes four changes to the provisions in the Act concerning the chief executive.

First, Clause 11 of the Bill amends s. 31(1) of the Act by making it the obligation of the company establishing the PHEI to appoint the Chief Executive and not the PHEI, as is now provided by s. 31(1).

Secondly, s. 31(2) is amended to make it the responsibility of the Chief Executive to apply to be registered as chief executive. The Act is now silent on the question as to whose duty it is to register the chief executive.

Next, the Bill amends s. 31(3) by enlarging the grounds upon which the Registrar General may refuse to register or cancel the registration of a Chief Executive. A new paragraph 31(3)(f) allows the registration of the chief executive to be cancelled for any other reason that the Registrar General deems proper in the interest of the public or the students.

Finally, the Bill adds a new subsection (4) to s. 31 which makes it an offence for a person to carry out the duties of a chief executive when he is not registered as a chief executive or when his registration has been cancelled under s. 33 of the Act.

12

33A (new)

Duty to Maintain Register

Clause 12 of the Bill adds a new section 33A which imposes a duty on private higher educational institutions to keep and maintain a register in a format prescribed by the Registrar General containing information on ‘(a) the students; (b) the persons who have been appointed to teach in the private higher educational institution; (c) the programmes conducted or provided by private higher educational institutions; (d) the persons who have been conferred with degrees at the doctoral level, including an honorary doctorate; (e) the persons who have been appointed as professors and include persons who have been conferred with the title of Professor Emeritus and (f) any other matter relating to the private higher educational institution which the Registrar General deems necessary.’ The register is to be accessible to the Registrar General as and when he requires it, and to be updated periodically as determined by the Registrar General.

Whilst it may not be unreasonable to require PHEIs to maintain a register of the type prescribed under the new s. 33A, the penal provisions seem to be excessive, if not draconian for a breach of what are only administrative procedures. The proposed section imposes a fine not exceeding 50,000 ringgit or a term of imprisonment up to six months for contravention of any of the provisions of the section. Ironically, the same level of fine and imprisonment is also imposed on a PHEI for providing information that is false, misleading or for intentionally suppressing material facts. A similar provision, s. 22B in the Universities and University Colleges Act 1971, does not contain any punitive measures for breach.

13

36

Penalties Added to s. 36

Clause 13 seeks to amend section 36 of Act 555 by inserting a new subsection 36 (2) that imposes severe penalties for non-compliance of the provisions of s. 36 (1).

The section prohibits a person who has been a director, chief executive or was in any way concerned with the management or business of a PHEI that was closed down from acting in a similar capacity in another PHEI without the approval of the minister.

14

38

Timing of Commencement of Courses.

Clause 14 seeks to introduce a new subsection 1A to section 38 to ensure that a PHEI may only start offering courses after it is registered. The Act is not clear on whether a PHEI could start offering courses after formal approval for the establishment was obtained under s. 6 of the Act. The amendment makes it clear that courses can only be offered after the PHEI is registered.

15

40

Important New Provisions on the Approval of Courses

Section 40 is one of the more important provisions of the Act, affecting as it does the core function of PHEIs, which is the offering of courses of study to the public. Existing provisions empower the Registrar General to impose conditions when approval is given to a PHEI to offer a course of study.

Clause 15 seeks to amend section 40 of Act 555 by inserting new subsections 40 (1F), (1G) and (1H).

Subsection 40 (1F) allows the Registrar General to add, change, cancel or change any of the conditions imposed when approval was granted.

Subsection 40 (1G) provides that the Institutions may apply to the Registrar to vary or alter any condition imposed.

Subsection 40 (1H) stipulates the procedures to be followed by a PHEI when applying to amend or vary a condition.

16

40A (new)

Duty to Renew Approval of Courses

The proposed section 40A requires PHEIs to apply for the renewal of approved courses within six months of the expiry of the approval given under s. 40. A penalty to be determined by the Registrar General shall be imposed for late submissions of applications. Under the proposed s. 40A (3), the Registrar General shall renew an approval to conduct a course of study if the applicant institution has complied with all the conditions imposed by him at the time the course was first approved. However, the section also entitles him to impose new conditions or vary, cancel, alter or add to any of the original conditions when renewing an approval to conduct a course of study or training programme.

17

42

Non-consequential.

18

43

Registrar General’s Power to Exempt Students from Compulsory Subjects

Clause 18 amends s. 43 by inserting a new subsection 43 (3) that allows the Registrar General to exempt any student from taking the compulsory subjects. According to the explanation offered by the Deputy Minister when the Bill was before Parliament, the object of the provision is to exempt postgraduate students from the compulsory subjects.

19

44

Clause 19 seeks to amend s. 44 by rephrasing the section to make it clear that only a PHEI that is a university, university college or a foreign branch campus may award a degree.

20

46

Important Changes to student discipline provisions

Clause 20 seeks to amend s. 46 in a way that makes the provisions relating to the discipline of students more practical to PHEIs.

21

51

Teaching Permits

Section 51 of the Act deals with the issuance of teaching permits. A new s. 4A allows the Registrar General to impose further conditions than already given in s. 51 (4)(a). The amendment seems superfluous and are hardly likely to add to those powers.

Permits for Fields of Study and not Subjects

The other amendment, which appears more useful, allows the teaching permit to be issued for field or fields of study rather than subjects as currently provided.

22

54

Additional Ground for the Revocation of Approval

Clause 22 seeks to amend s. 54 by inserting a new ground for revoking the approval given to establish the PHEI. The new ground is the failure to renew the registration of the PHEI.

23

61

Closing Down Provisions

Clause 23 seeks to amend s. 61 by replacing subsection 61 (1). The proposed amendment to s.61 divides the section into two parts. The proposed section 61 (1) (a) provides that where a private higher educational institution ceases its operation because of a closure order from the MOHE or a winding-up order made against the company as in (ii) above, the board of directors are required to ensure that the requirements to be determined by the Registrar General for the continuation of the education of the students are complied with within a time period as determined by the Registrar General.

The proposed s. 61(1)(b) provides for a closing down brought about voluntarily by a decision of the board of directors of the company establishing the PHEI or a voluntary winding up. In these instances, the board of directors shall ensure that the requirements to be determined by the Registrar General for the continuation of the education of the students are complied with within six months prior to the closing down of a private higher educational institution.

24

62

Revocation of Approval

Clause 24 seeks to amend section 62 of Act 555 by inserting a new subsection 62 (2) which provides the surrender of the certificate of registration will deem the approval of the PHEI to be revoked.

25

75A (new)

The Role of the Company in Relation to the PHEI

Clause 25 seeks to introduce a new section 75A.
75A. Where the Act requires a private higher educational institution to do or prohibits it from doing something, the obligation to comply is imposed on the company to which approval has been given to establish the private higher educational institution.”

26

76

Amendment of section 76

Regulatory legislation such as the Act will typically define the scope and area of its regulation and once that is prescribed, the legislation will seek to prohibit the regulated activities unless they are carried out in accordance with the legislation. Prohibitory provisions may be applied against the institutions regulated or against any person, within or outside the institution. Section 76 serves the latter function. It is not directed at the institutions that are regulated but against all persons. As the section now stands, it contains three prohibitions;

76. (1) No person shall—

(a) establish, form, promote or carry on any activity for the purpose of establishing, forming, or promoting or towards the establishment, formation or promotion of a private higher educational institution;

(b) operate, manage or maintain any class for the teaching and learning of higher education in a private higher educational institution; or

(a) establish, form, promote, operate, manage or maintain a private higher educational institution by the use of the word “University”, “University College” or “branch campus”,

except in accordance with the provisions of this Act.

The Bill adds two further prohibitions;

(b) issue a certificate, diploma or degree to a person without such person having successfully completed his course of study; or

(c) carry out any other activities in connection with higher education,”.

Although the intention behind the additions is apparent, the way the two new subsections are phrased may not, it is submitted, bring about the intended outcomes. It will be observed that section 76 applies to all persons, not just PHEIs. Hence the new 76(1)(d) would prohibit any person from issuing a certificate, diploma or degree to a person without such person having successfully completed ‘his course of study’.

If read literally, this would mean any person may issue a certificate etc. if the person to whom it is issued has ‘successfully completed his course of study’. The term course of study is defined in general terms in the Act without reference to PHEIs.

The proposed 76 (1)(e) prohibiting ‘any other activities in connection with higher education’ may have been cast too widely and may make activities that are wholly legitimate, illegal. To make it meaningful, the proposed s. 76 (1) (d) and (e) would have to be redrafted to narrow their application.

But even this may not be necessary as section 24 (2) of the Universities and University Colleges Act 1971 may have already addressed the concerns underlying the proposed s. 76 (1) (d). The former section reads as follows;

Certain prohibitions in respect of “University” or “University College”

24. (1) No person shall establish, manage or maintain a higher educational institution with the status of “University” or “University College” unless it is a higher educational institution established in accordance with the provisions of this Act or the Private Higher Educational Institutions Act 1996.

(2) No higher educational institution or person shall issue to or confer on any person any degree or diploma purporting to be degree or diploma issued or conferred by a University or University College unless the issue or conferment is in accordance with the provisions of this Act or the Private Higher Educational Institutions Act 1996.

(3) Any person who contravenes subsection (1) or (2) shall be guilty of an offence and shall on conviction be liable to a fine of five thousand ringgit or to imprisonment for a term of three years or to both.

The section circumscribes the qualifications in question by the qualifying phrase, ‘purporting to be degree or diploma issued or conferred by a University or University College unless the issue or conferment is in accordance with the provisions of this Act or the Private Higher Educational Institutions Act 1996’. No doubt, the above section only deals with diplomas and degrees awarded by universities and university colleges, but the same language and approach may be used to incorporate safeguards to certificates and diplomas that are issued by private higher educational institutions that are not universities or university colleges.

27

77

Clause 27 seeks to amend section 77 of Act 555 by replacing the words "section 44" in the section with the word "act." The existing reference to section 44 appears to be a drafting error in the Act.

28

78

Clause 28 seeks to amend section 78 of Act 555 by substituting the words 'and the registration' with the words 'or registration or any conditions imposed in the renewal of registration.'

This is not a substantive amendment. It corrects a lapse in the drafting of s. 78. Unfortunately, the section still suffers from poor phrasing.

29

79

Clause 29 seeks to extend the provisions of s. 78 to “(c) person who, on making any application,”.

30

82

“General penalty

82. Any person who contravenes or fails to comply with any provisions of this Act, shall be guilty of an offence under this Act for which no penalty is expressly provided shall, on conviction, be liable—

1. in the case of a person who is an individual, to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding one year or to both; or
2. in the case of a company, to a fine not exceeding fifty thousand ringgit.”.

31

83

Clause 31 seeks to amend section 83 of Act 555 to increase the penalty for continuing offences from RM500 to RM1,000.

32

85

Clause 32 seeks to amend section 85 of Act 555 by inserting a new paragraph 85 (1) (i), which adds to the list of persons deemed to be guilty of the offence committed by a PHEI a person ‘who was purporting to act in any capacity in paragraphs (1)(a) to (h), or was in any manner or to any extent responsible for the management of any of the affairs of such private higher educational institution, or was assisting in such management.’