1731282 (Refugee)

[2023] AATA 4523

1731282 (Refugee) [2023] AATA 4523 (26 October 2023)

DECISION RECORD

DIVISION:Migration & Refugee Division

CASE NUMBER:  1731282

COUNTRY OF REFERENCE:                   Malaysia

MEMBER:Genevieve Hamilton

DATE:26 October 2023

PLACE OF DECISION:  Melbourne

DECISION:The Tribunal affirms the decision not to grant the applicant a protection visa.

Statement made on 26 October 2023 at 3:32pm

CATCHWORDS
REFUGEE – protection visa – Malaysia – fear of harm from bank and loan sharks – borrowed money to pay for medical treatment for children – house and assets auctioned and applicant punched and threatened – no harm to wife or children who have relocated back to family’s village – country information – government and police initiatives – borrowers from loan sharks not a particular social group as defined – decision under review affirmed

LEGISLATION
Migration Act 1958 (Cth), ss 5H(1), 5J(1), 5L, 5LA, 36(2)(a), (aa), (2A), (2B), 65(1)

CASES
Chan Yee Kin v MIEA (1989) 169 CLR 379
MIAC v SZQRB [2013] FCAFC 33

Any references appearing in square brackets indicate that information has been omitted from this decision pursuant to section 431 of the Migration Act 1958 and replaced with generic information which does not allow the identification of an applicant, or their relative or other dependants.

STATEMENT OF DECISION AND REASONS

APPLICATION FOR REVIEW

1. This is an application for review of a decision made by a delegate of the Minister for Immigration and Border Protection to refuse to grant the applicant a protection visa under s 65 of the Migration Act 1958 (Cth) (the Act).

2. The applicant applied for the visa on 3 October 2017. The delegate refused to grant the visa on 30 November 2017.

3. The applicant attended a hearing of the Tribunal on 25 October 2023.  The Tribunal hearing was conducted with the assistance of an interpreter in the Malay and English languages.

CRITERIA FOR A PROTECTION VISA

1. Under s 65(1) of the Act a visa may be granted only if the decision maker is satisfied that the criteria for the visa prescribed in the Act are met.

2. The criteria for a protection visa are relevantly set out in s 36 of the Act.  An applicant must meet one of the alternative criteria in s 36(2). Generally speaking, they must either be a person in respect of whom Australia has protection obligations under the ‘refugee’ criterion (s 36(2)(a)), or on ‘complementary protection’ grounds (s 36(2)(aa)), or be a member of the same family unit as such a person.

Refugee

1. Refugee is defined in the Act.  A person is a refugee if they are outside the country of their nationality (of if they have no nationality, their country of former habitual residence) and, owing to a well-founded fear of persecution, are unable or unwilling to avail themselves of the protection of that country: s 5H(1). 

2. Under s 5J(1), a person has a well-founded fear of persecution if they fear being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, there is a real chance they would be persecuted for one or more of those reasons, and the real chance of persecution relates to all areas of the relevant country.

3. The criterion in s 5J(1) contains a subjective requirement, that an applicant must in fact hold a fear of being persecuted, but also imposes an objective standard, that there be a real chance the person would be persecuted.  A 'real chance' is one that is not remote or insubstantial or a far-fetched possibility: Chan Yee Kin v MIEA (1989) 169 CLR 379.

4. The persecution must involve serious harm such as a threat to the person’s life or liberty or significant physical harassment or ill treatment, significant economic hardship that threatens their capacity to subsist, or denial of access to basic services or capacity to earn a livelihood of any kind, where the denial threatens their capacity to subsist (ss 5J(4) and (5)).  The persecution must also involve systematic and discriminatory conduct.

5. A person does not have a well-founded fear of persecution if effective protection measures are available to them in the receiving country (ss 5J(2) and 5LA). 

6. A person does not have a well-founded fear of persecutionif the person could take reasonable steps to modify their behaviour to avoid persecution (s 5J(3)), which also gives examples of types of modifications that are not required, such as concealing one’s religion, political opinion, race or sexual orientation). 

7. In determining whether the person has a well-founded fear of persecution, any conduct engaged in by the person in Australia is to be disregarded unless they satisfy the Minister that they engaged in the conduct for a reason other than to strengthen their claim to be a refugee (s 5J(6)).

Complementary Protection

1. If a person is found not to meet the refugee criterion, they may still be a person to whom Australia has protection obligations if there are substantial grounds to believe that, as a necessary and foreseeable consequence of being removed from Australia to a receiving country, there is a real risk that they will suffer significant harm.  S 36(2A) defines significant harm as arbitrary deprivation of life, carrying out of the death penalty, torture, or cruel, inhuman or degrading treatment or punishment.  “Real risk” has the same meaning as “real chance”: MIAC v SZQRB [2013] FCAFC 33.

Under s 36(2B) Australia does not have complementary protection obligations where:

• it would be reasonable for the applicant to relocate to an area of the country where there would not be a real risk that they will suffer significant harm;

• the applicant could obtain protection from an authority of the country, such that there would not be a real risk that the non-citizen will suffer significant harm; or

• the risk is one faced by the population of the country generally and not by the applicant personally.

Mandatory considerations

1. In accordance with Ministerial Direction No.84, made under s 499 of the Act, the Tribunal has taken account of the ‘Refugee Law Guidelines’ and ‘Complementary Protection Guidelines’ prepared by the Department of Home Affairs, and country information assessments prepared by the Department of Foreign Affairs and Trade expressly for protection status determination purposes, to the extent that they are relevant to the decision under consideration.

CLAIMS AND EVIDENCE

1. In his protection visa application the applicant said that he was born in Malaysia (Kelantan province) in [Year] and is a Malaysian citizen.  He speaks, reads and writes Malay and English and is ethnically Malay, and his religion is Islam.  He said he was married in 2000 but he did not list any family members and claimed not to be in contact with his family.  He arrived in Australia in July 2017 travelling on a Malaysian passport. 

2. The applicant said he left Malaysia because of a financial problem.  He lost his business which he had for about three years.  He owed a big amount of money to the bank and could not pay it back, and due to the outstanding debt the bank auctioned off his house and assets.  He was still being chased by the bank and all his family members hate him now and refused to help him and his friends do not want to help him either.  The bank would try to put him behind bars.  They can find him all over Thailand (presumably this is meant to refer to Malaysia).  The authorities would not get involved in such personal matters. 

3. At the hearing the applicant said he two children aged [Ages] who both suffer physical and intellectual disabilities.  He said he lived in Johor for 23 years before moving his family back to the family village in Kelantan before coming to Australia.  He said that his children are safe in Kelantan, they cannot walk very far and they do not go out of the house.  They receive a small disability payment from the Government.  As children they were incapable of attending school and there were no special schools near where they lived. 

4. The applicant said he had [siblings], they are all married, and they all live in the same village in Kelantan. 

5. He worked in factories and had a subcontracting business doing [Work task] and related trades.  His wife did not work.  He took out many bank loans in order to pay for the medical treatment for his children and was unable to pay it back.  Under a lot of pressure he put up his house as collateral with a loan shark.  They threatened him and threw paint on his house and car. 

6. The house (in Johor) is mortgaged to the bank.  The Tribunal asked the applicant how he could put his house up as collateral to a loan shark when it was securing a bank loan.  The applicant maintained that this was what he did.  He is still paying off the bank, he owes about 30,000 ringgit.  He borrowed 50,000 from the loan shark.  The Tribunal put to the applicant that he could sell his house to pay off the loans.  The applicant said he did not know how much he owes the loan shark because of the interest that may have accrued.  He lost contact with them when he moved his family to Kelantan and came to Australia.  The Tribunal asked the applicant, in that case, what he feared would happen to him in Kelantan.  The applicant said there was a 50/50 chance he might be harmed.  They threatened to break his arms and punched him, and gave him warnings.  But he confirmed that his family have not been bothered by the loan shark in Kelantan.  He has not paid the loan shark anything since coming to Australia. 

7. The applicant did not report to the police because, he said, he was not seriously harmed.  He did not take pictures of the paint on his house and car. 

8. The applicant claimed that he handed over his bank card and pin number and the loan shark would deduct money as it came in.  That stopped because he stopped receiving payments into that account.  The Tribunal asked the applicant if he had any bank statements showing those deductions.  The applicant said he did not think he had that account any more.  The Tribunal queried the applicant’s uncertainty on this question.  The applicant said it was an inactive account and he had not been using it. 

9. The Tribunal put to the applicant that the country information did not verify that people were actually being seriously harmed if they did not repay loan sharks.  The applicant did not agree that this assessment was accurate. 

10. The applicant said he had no other fears about returning to Malaysia. 

11. The current DFAT report on Malaysia contains the following information. 

Victims of Loan Sharks

Loan sharks or ‘pay-day-financiers’(unlicensed lenders, referred to as ‘Ah Long’ by the Chinese Malaysian community, ‘Chettiar’ by the Indian Malaysian community, and ‘Ceti’ in Malay), carry out money lending activities without a licence, charging high interest rates to do so. Loan sharks operate very publicly in Malaysia and, while the practice is illegal, advertisements listing phone numbers and offers of cash loans appear on public property, including lamp posts and utility boxes. Media report loans carry an annual interest rate of 24 to 60 per cent; others report rates of 30 to 40 per cent per month; or up to 15 per cent per day. In-country sources advise that loan sharks in Malaysia do not seek ‘protection money’.

Sources report loan sharks enter into ‘sell and purchase agreements’ in Sabah, whereby the borrower’s house is used as collateral for the loan. DFAT is aware of reports of houses valued up to MYR 1 million (AUD 320,000) being used as collateral for a loan of MYR100,000 (AUD32,000). If the borrower defaults on their loan, the loan shark exercises the sell and purchase agreement to transfer the house into their name. Sources report lawyers are facilitating the sell and purchase agreements, described as a house sale agreement disguised as a loan agreement, in return for a cut of the house sale profits. Sources claim borrowers agreeing to sign their house over as collateral are under significant duress, or lack sufficient education to understand the agreement they have signed.

DFAT is aware of a case of an individual in peninsular Malaysia who engaged a loan shark to obtain a loan to repay their mortgage, signing the house over as collateral under a ‘sell and purchase agreement,’ after becoming involved in gambling following the death of their spouse. When unable to repay the loan shark, the individual’s family supported them to engage a formal credit agency to obtain a loan to repay the loan shark. DFAT understands loans ranging from MYR200,000 to MYR300,000 (AUD63,000 to AUD95,000) accompanied by payment plans have been arranged by formal credit agencies to repay loan shark debts. However, not all debtors may be aware of the availability of such services.

Sources report that an individual who is unable to service a debt from a loan shark risks threats or actual physical violence, having their home splashed with red paint (culturally understood as a symbol that an individual has defaulted on a loan shark and brought shame to their family), and/or having their families’ physical safety threatened. In February 2021, police arrested three people, believed to be involved in illegal money lending, after they threatened to torch and throw paint on the home of a woman who had allegedly refused to settle a debt of MYR11,000 (AUD 3,500). Sources claim that loan sharks engage gangsters to collect debts and harass and threaten borrowers and their family members, and that borrowers and their family members have been shot and had fingers cut off. Due to the illegal/underground nature of loan shark activity, DFAT is not able to verify these claims. There is significant societal shame associated with not being able to repay a loan shark. Sources report some people see suicide as the only honourable way out of being unable to repay a loan shark debt. DFAT is aware that those in debt to loan sharks have been counselled by intermediaries to place their family in a safe location and travel overseas to earn a foreign income to repay their debt faster, and to reduce risks and shame to their family.

DFAT understands authorities tend to be unsympathetic towards individuals who have accessed loan shark services, regarding them as having participated in an illegal practice. According to local media, the Commercial Crime Investigation Department reported 3,903 cases and arrested 2,698 people in relation to loan scams between January and November 2018, with total case-related losses estimated at MYR36 million (AUD11.4 million). Local media also report loan sharks have become more publicly visible and more ‘corporate’, in recent years, and have increased promotion of their services on social media platforms such as Facebook and WeChat. In October 2019, media reported that the RMP planned to embark on a ‘major war’ against loan sharks, following reports that Ah Long syndicates were becoming more aggressive. DFAT is not aware of any significant enforcement action in this area.

The MCA’s (Malaysian Chinese Association) Public Services and Complaints Department (PSCD) plays an intermediary role between loan sharks and Chinese Malaysian victims of loan sharks who are unable to repay their loans, and reportedly receives an average of 500 to 600 complaints regarding loan sharks each year. According to local media, the MCA reported that 16 cases of people owing loan sharks over MYR2.11 million (AUD670,000) had arisen in the first 19 days of January 2019 alone. Local media also reported that, in 2020, the PSCD received 140 complaints from victims who said illegal money lenders went after their families to try and extort them for payment. In 2015, the PSCD reported over 70 per cent of borrowers were Chinese Malaysian. Sources report the MCA can negotiate loan repayment settlements with repayment rates negotiated down to match the government rate.

The Malaysian Muslim Consumers Association (PPIM), which provides services predominantly for the Malay community has an established call centre that helps to educate (chiefly Malay) people on the dangers of borrowing from loan sharks and suggests alternatives, as well as helping victims to settle their debts. The PPIM maintains a Malay language website (ahlong.ppim.org.my) where people can report loan shark cases, and which also lists details of prior cases. Sources provide vastly differing views on the reasons individuals engage illegal moneylenders. Some claim that up to 80 per cent of borrowers are supporting gambling activities and other debts. Others claim borrowers are public servants trying to cover daily expenses such as children’s education, or businesses excluded from mainstream finance due to insufficient documentation, bankruptcy or a poor credit history.

The Moneylenders Act (1951; amended 2003 and 2011) gives police considerable investigative powers against alleged loan sharks. Police can visit, enter, inspect or search premises without a warrant, and seize moveable properties and business documents to assist with investigations against alleged loan sharks. Individuals involved in illegal moneylending activities in Malaysia can be convicted under Section 5(2) of the Moneylenders Act, which carries a fine of between MYR250,000 and MYR1 million (AUD80,000 – AUD320,000), or a jail term of up to five years, or both. Police have made several recent high-profile arrests and investigations of syndicates. In June 2020, police in Selangor arrested 18 people believed to be involved in loan shark activities. The arrests were part of a larger operation by police, tagged ‘Ops Vulture,’ which involved raids in five locations, culminating in 29 arrests between January and June 2020. In September 2019, the RMP arrested 21 people in Johor allegedly involved in syndicates illegally loaning money. In January 2019, the RMP arrested 13 suspects allegedly involved in a syndicate providing fraudulent loan applications resulting in total bank losses of MYR10.35 million (AUD3.28 million).

The general dampening of the economy during the COVID-19 pandemic may have impacted upon loan sharks. PSCD chief Datuk Seri Michael Chong reportedly said that ‘even illegal money lenders have stopped advertising their services since the start of the MCO because of the uncertainty in getting their money back.’

Very limited research is available on loan sharks and the individuals that engage these services, possibly due to their links to gangs and corruption. DFAT is unable to verify what percentage of borrowers are supporting other illegal activities, their likelihood of seeking police protection, or the level of protection offered by police. DFAT assesses those who are unable to service debts to loan sharks, and their family members, can face societal discrimination due to familial shame, and may also face a real or perceived risk of harassment and violence from loan sharks and/or gangsters. However, DFAT notes formal credit agencies are able to consolidate loan shark debts and provide payment plans, and therefore engaging such agencies is an option to mitigate against potential risks posed to those in debt.

1. AAT report ”Country of Origin Information: Malaysian caseload claim debtors/fear of loan sharks” contains the following relevant information. 

   Loan shark activities have been a persistent and deep-rooted feature of Malaysian society for several decades. Illegal money lending attracts borrowers rejected by formal financial institutions, who do not meet the minimum income requirements for legal loans, or who have too many unpaid outstanding loans to qualify for additional borrowing. Specific groups identified in the Malaysian media who use loans sharks include low-salary civil servants (mostly government officials, military personnel, hospital staff earning under RM 3,000 a month), small start-up business owners like cafes, gamblers, drug abusers, failed businessmen and those living beyond their means

   The Malaysian state recognises the threat that loan sharks represent and a number of government and non-government agencies are tasked with trying to prevent people engaging loan sharks, or to negotiate with loans sharks to settle debts, or to encourage the reporting of loan shark activities to the police. Anecdotal evidence reported in 2018 that seven out of ten borrowers would either lodge a police report or seek assistance from NGOs when an ahlong attempted to collect payments.

   The government’s Credit Counselling and Debt Management Agency (AKPK) offers credit counselling on financial status and budgeting to encourage people to use financial institutions under the purview of BNM, rather than loan sharks. The government in some provinces (Penang) has agreed to repay the loans of its own civil servants, minus interest, to the loan sharks.

   The Malaysian government has acted against illegal money lenders over several decades on diverse fronts, including by legislation, police investigation and prosecution, the removal of loan shark advertisements, and through publicity campaigns.

   Sections 5(2) and 29(B) of the Moneylenders Act 1951 (as at May 2015) state:

   5 (2) Any person who carries on or advertises or announces himself or holds himself out in any way as carrying on the business of moneylending without a valid licence, or who continues to carry on such business after his licence has expired or been suspended or revoked shall be guilty of an offence under this Act and shall be liable to a fine of not less than two hundred and fifty thousand ringgit but not more than one million ringgit or to imprisonment for a term not exceeding five years or to both, and in the case of a second or subsequent offence shall also be liable to whipping in addition to such punishment.

   Harassment or intimidation, etc. of borrower

   29B. (1) Any moneylender who, either personally or by any person acting on his behalf, harasses or intimidates a borrower or any member of the borrower’s family or any other person connected with the borrower at, or watches or besets, the residence or place of business or employment of the borrower, or any place at which the borrower receives his wages or any other sum periodically due to him, shall be guilty of an offence under this Act and shall be liable to a fine of not less than fifty thousand ringgit but not more than two hundred and fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both, and in the case of a second or subsequent offence shall also be liable to whipping in addition to such punishment.

   The police do actively investigate and prosecute illegal money lenders. Police actions against individual loan sharks under Section 5(2) are reported on regularly in the Malaysian media.22 Major operations are undertaken by the police every few years to investigate and prosecute loan sharks. Most recently in October 2019, Inspector-General of Police announced that loan sharks also “could face action under Anti-Money Laundering, Terrorism Financing and Proceeds of Unlawful Activities Act (AMLA)…a multi-prong legal approach”.  Similar police operations against loan sharks occurred in 2014 and in 2017.

   Malaysian authorities respond to the changing tactics of loan sharks. The Urban Wellbeing, Housing and Local Government Ministry, which is responsible for issuing licences and monitoring operations of money lenders under the Moneylenders Act 2011, recognised in 2016 that the issue remained a serious one given the greater use of electronic media, and that extra measures were required to curb illegal lending. The Deputy Minister highlighted measures to educate the public against the use of loan sharks and greater financial assistance to small business to achieve this. He quoted the following statistics on prosecutions and investigations at the time: A total of 306 illegal money lenders have been charged in court since 2011. They were among 905 suspects detained for investigations to 2015.

   Corruption can limit the effectiveness of police action against loan sharks. Some police are reported to work with loan sharks (for payment) to avoid investigations against them.

FINDINGS AND REASONS

1. Based on the information in his application the Tribunal finds that the applicant’s country of nationality is Malaysia. 

2. The applicant did not claim to fear harm due to his race, religion, nationality or political opinion.  S 5L provides that a person is to be a treated as a member of a particular social group (other than the person’s family) if a characteristic, other than a fear of persecution, is shared by each member of the group and the person shares, or is perceived as sharing, that characteristic. The characteristic must be innate or immutable, or must be so fundamental to a member’s identity or conscience that the member should not be forced to renounce it (protected characteristics), or must distinguish the group from society (social perception). 

1. It may be argued that victims of loan sharks constitute a particular social group in Malaysia, putting aside for the moment the question of whether the applicant is such a victim.  The only thing they share is that they have borrowed money from loan sharks.  This is not a characteristic but an action they have taken.  It maybe that some of them share circumstances that make them vulnerable to such lending, but that does not constitute something innate or immutable, or fundamental to a member’s identity or conscience.  Moreover, the country information indicates that loan sharking is widespread and such loans are resorted to by various different occupation groups for various reasons.  Borrowers from loan sharks are not a group distinguished from Malaysian society. 

2. The applicant did not claim that he was at risk of being seriously or significantly harmed due to having children with disabilities, which might be considered membership of a particular social group.  He did say that their care was expensive, but not to the extent that he suffered economic hardship that threatened his capacity to subsist, or denial of access to basic services or capacity to earn a livelihood of any kind threatening his capacity to subsist, or that the family experienced discriminatory conduct. 

1. It follows that the Tribunal does not accept that the applicant faces a real chance of serious harm for any of the reasons specified in s 5J(1).  The applicant therefore does not have a well-founded fear of persecution as required by s.5J(1).  The Tribunal finds that the applicant is not a refugee as defined in s.5H(1). 

2. With regard to complementary protection, having considered the limited evidence, the Tribunal does not accept that the applicant borrowed money from a loan shark to cover his bank debts.  There is no evidence at all of any such transaction before the Tribunal, other than the applicant’s claims and oral testimony.  The applicant’s manner of describing the collateral role of his house was vague and confused.  The house is mortgaged to a bank, and he is in the process of paying this off.  He did not describe it as a second mortgage.  The bank was not foreclosing on him as claimed in his application, the asset is still there available to sell.  Furthermore, the applicant claimed that money was being taken out of his bank account, but that would be readily evidenced by bank statements which the applicant said he could not provide.  Even if the account is inactive those statements might be retrieved, and the applicant’s apparent disinterest in providing such evidence cast doubt on his claims regarding the method of payment, and therefore on whether a loan arrangement actually existed. 

3. It follows that the Tribunal does not accept that the applicant was assaulted or threatened or experienced property damage in connection with a loan shark. 

4. In summary, the Tribunal is not satisfied that the applicant faces a real risk of significant harm as defined in s 36(2A), i.e. arbitrary deprivation of life, carrying out of the death penalty, torture, or cruel, inhuman or degrading treatment or punishment.  Accordingly it is not satisfied there are substantial grounds to believe that he faces a real risk of significant harm as defined in s 36(2A) on return to Malaysia.

CONCLUSION

1. For the reasons given above, the Tribunal is not satisfied that the applicant is a person in respect of whom Australia has protection obligations under s 36(2)(a) or s 36(2)(aa).

2. There is no suggestion that the applicant satisfies s 36(2) on the basis of being a member of the same family unit as a person who satisfies s 36(2)(a) or (aa) and who holds a protection visa.  

3. Accordingly, the applicant does not satisfy the criterion in s 36(2).

DECISION

1. The Tribunal affirms the decision not to grant the applicant a protection visa.

Genevieve Hamilton
Member