Prepared by: Gwen Scheffer, Development Manager Office of International Development, 23rd October International Contracts and Managing Risk

Transcription

1 1

2 Prepared by: Gwen Scheffer, Development Manager Office of International Development, 23rd October 2003 International Contracts and Managing Risk 2

3 Managing Risk through Contracts Overview > Contract formation > Negotiations > Market research > Business structures > The Relationship > Contract & Quality assurance measures > Risk matrix > Financial analysis and transparency > Contract review & legislative change 3

4 Managing Risk through Contracts What s in the process of making a contract? > Process of contract formation > Good Practice > Defining the contract type 4

5 Managing Risk through Contracts What s in the process of making a contract? > balance of power in negotiation > contract formation - commercial objectives The new vision of governance conceives modern states as facilitators instead of service providers particularly true when the welfare state is now turned into a competitive state. This move to academic capitalism brings with it a sharpening of focus on financial returns from all academic activities, not just overseas ventures 1 1 Joshua Mok and Eric Lo, Marketisation and the Changing Governance in Higher Education: A Comparative Study. Journal of the Programme on Institutional Management on Higher Education 2002 Vol 14 No 1 OECD p 53 City University in Hong Kong 5

6 Managing Risk through Contracts Good Practice benchmarks > Clear strategic and operational objectives > Selection of suitable partners > Quality assurance and accreditation measures linked to on-shore program and practices > Risk analysis including financial; fund handling > Returns and strategic value are transparent 2 2 Benchmark 10.6 from Benchmarking: A manual for Australian universities K.R. McKinnon, S.H. Walker and D. Davis, Department of Education, Training and Youth Affairs, Higher Education Division, Commonwealth of Australia, February, 2000, p 132 6

7 Managing Risk through Contracts Good practice benchmarks applied to contracts > Clear strategic and operational objectives > Selecting the other party; defining the proposal > Selection of suitable partners - the decision making process > Managing risk through the negotiations > Business structures; contract terms and conditions > Factors influencing the proposal and business structures 7

8 Strategic objectives: Monash University s Planning Documents > Leading the Way Monash Global Development Framework - Research and Research Training management plan - Learning and Teaching Plan > Global Development Plan > Marketing Plan > Quality at Monash: Values and Principles - University Strategic Development & Capital Development Plans - Support Services Operational Plan - Faculty Operational Plans; Campus Development Plans 8

9 Selection of suitable partners > Market Analysis Risk and essential ingredient identification through thorough market research Location Facilities Target market Product selection and positioning Perceived quality and reputation Academic availability Travel constraints 9

10 Monash activities overseas contracts with other institutions Country No of contracts Partner/Cam pus HongKong 17 P Singapore Monash College + 2 P Malaysia 2 C & P Indonesia Monash College P USA 4 P UK 2 C PNG 1 P South Africa C China Monash College & 1 P Italy C 10

11 IDP projections from Global Student Mobility 2025 IDP "Global Student Mobility in 2025" Country % of total No of Students in Aust HongKong 12 46,600 Singapore 9 39,500 Malaysia ,300 Indonesia ,200 USA UK PNG South Africa China ,000 Italy Vietnam 3 13,300 India 2 8,400 Sri Lanka 1 11,000 11

12 Selection of Suitable partners > Business operations in the foreign jurisdiction > Implications arising out of a partnership > Interpreting tax definitions 12

13 The Licence Fee Model > A Licence to use Monash s intellectual property rights in the use of marks, brand, materials, subject to terms and conditions > Examination papers, invigilation, marking and standardisation with reference to the same course on other campuses > Quality assurance 13

14 Business operations in the foreign jurisdiction services Host principal / other institution Monash A. Payment of licence fee for the Monash name and brand and IP in the materials (royalty tax minimal) Plus B. Payment of Service fees to Monash for attending to QA matters. 14

15 Business operations in the foreign jurisdiction > Revenue split according to a Licence fee model Interpreting tax definitions > Considering cultural differences in the approach to negotiations and contract terms > Collaborative ventures with Chinese education institutions 15

16 Business operations in the foreign jurisdiction > Considering cultural differences in the approach to negotiations and contract terms > Being aware of the possible difference between the black letter law and the living law > The role culture plays in any transaction - whether commercial, political or intellectual - must be understood or predicted (if that is possible) in the specific context of that transaction as well as the broader society or societies in which it takes place 3 3 Tim Lindsey & Howard Dick (2002) Corruption in Asia - rethinking the Governance paradigm Federation Press p12 16

17 Business operations in the foreign jurisdiction Develop a checklist consider if: > The contract conflicts with the legislation > There is no provision for ownership of intellectual property rights > The contract does not include a warranty as to skills > The parties have no direct contractual obligation to comply with laws and third party arrangements > The obligations on one party do not cease if the other party is in default > The jurisdiction to apply to the contract is not clear 4 4 Steven Titmus (2001) Classic Contract Mistakes and how to avoid them Prentice Hall p

18 Quality assurance and accreditation measures > CHEQ (at Monash) institutional self-review guidelines for academic unit review support services and courses faculty quality management system development assistance faculty quality co-ordinators network balanced scorecard and service level agreements new institutional survey instruments special projects: graduate attributes; Course Experience Questionnaire use 18

19 Quality assurance and accreditation measures > CHEQ > Academic Review > Education Committee > CELTS > OQAC > AUQA > AVCC > professional bodies 19

20 Offshore programs linked to onshore programs Whole of Monash principles in Quality at Monash : fitness for purpose professional responsibility Learning Organization diversity devolution and comparable treatment open and informed approach planned and systematic approach self reflection external reference 20

21 Financial risk; implementing safeguards > Guidelines for risk assessment > Testing using financial models > Financial results are transparent 21

22 Developing a risk matrix > political > location > economic > academic > security > public infrastructure > market > business operations > human resources > project management 22

23 Review and Renewal > review legal operations at least annually > amendment through variation or letter > keep a file > regular meetings of operational staff 23

24 SCHEDULE 2 Table 1: Marketing and Recruitment The following tables show the agreed division of responsibilities between MONASH and COLLABORATOR. These responsibilities are not comprehensive and may need to be revised from time to time Task Responsibilities of COLLABORATOR Responsibilities of MONASH General Course Promotion Public Presentations (where mutually agreed) Inquiries from the public Student Orientation Market research Develop marketing strategies and sales campaigns to attract applicants for entry to the Degree in conjunction with MONASH as agreed in marketing plan. Provide marketing support personnel. Prepare advertising and course promotional material for approval by MONASH. Place media advertisements and conduct promotional campaigns. Arrange for the printing of course brochures where required. Maintain WWW page links with MONASH. Conduct telemarketing to follow up on inquiries. Direct mailing to enquirers and targeted audiences. Collaboration with relevant professional bodies to enhance visibility of program. Arrange public and in-company promotional presentations and seminars using visiting faculty staff as appropriate. Arrange and coordinate interviews with MONASH staff when MONASH staff are in xxx. Provide a point of contact for general inquiries. Counsel prospective students. Provide application forms and supporting information to applicants. Record inquiries. Familiarize new students with administrative procedures. Arrange and conduct orientation sessions for new students. Maintain market statistics. Identify potential new markets. Develop marketing strategies and sales campaigns to attract applicants for entry to the Degree in conjunction with COLLABORATOR as agreed in marketing plan. Arrange to provide the Approved Courses brochures, application forms and appropriate materials to assist COLLABORATOR in the promotion and publicity of the program. Approval of all advertisements and course promotional materials. Maintain WWW page links with COLLABORATOR. Co-ordinate promotional presentations in consultation with COLLABORATOR. Conduct interviews with prospective students when MONASH staff are in xxx. Monash staff to attend scheduled biannual recruitment visits and annual career Fair each year. Provide back-up advice to public as required, via , fax and post Provide students with administrative arrangements document. 24

25 The Education Services for Overseas Student Act 2000 (Australia) >Section 5 of the ESOS Act states that an: "Agent of a provider means a person within Australia or outside, who represents or acts on behalf of the provider or purports to do so in dealing with the overseas students or intending overseas students". 25