Sarab Trading International Pty Ltd (Migration)

[2020] AATA 4949

Sarab Trading International Pty Ltd (Migration) [2020] AATA 4949 (20 October 2020)

STATEMENT OF REASONS

DIVISION:Migration & Refugee Division

APPLICANT:  Sarab Trading International Pty Ltd

CASE NUMBER:  1804606

HOME AFFAIRS REFERENCE(S):          BCC2017/3002414

MEMBER:Karen Synon

DATE AND TIME OF

ORAL DECISION AND REASONS:         20 October 2020 at 10.38am

DATE OF WRITTEN RECORD                 4 November 2020

PLACE OF DECISION:  Melbourne

DECISION:The Tribunal affirms the decision not to approve the nomination.

Statement made on 04 November 2020 at 3:42pm

CATCHWORDS
MIGRATION – Employer Nomination – approval of nominated position – Specialist Manager – genuine position – self-sponsorship – established a wholesale export company – owner and sole director of business – tasks of the nominee fit more appropriately into the occupation of an importer or exporter – decision under review affirmed

LEGISLATION
Migration Act 1958 (Cth), ss 140GB, 140GBA, 359C, 360, 363A

Migration Regulations 1994 (Cth), rr 1.13A, 2.72, 2.73

CASES
Cargo First Pty Ltd v MIBP [2016] FCA 30

STATEMENT OF REASONS

APPLICATION FOR REVIEW

1. This is an application for review of a decision made by a delegate of the Minister for Home Affairs on 7 February 2018 to refuse to approve the applicant’s nomination under s.140GB of the Migration Act 1958 (the Act) and r.2.72 of the Migration Regulations 1994 (the Regulations).

2. The Tribunal gave its decision to affirm the decision under review at the conclusion of the hearing held on 20 October 2020.

3. The following are the reasons for that decision.

4. The applicant applied for approval on 21 August 2017. A nomination of an occupation for a Subclass 457 visa is made under s.140GB of the Act and r.2.73 of the Regulations. Regulations 2.72(3) to (12) prescribe the criteria that must be satisfied for the Minister to approve a nomination by a person.

5. The issue in this review is whether the applicant satisfies r.2.72(10)(f).

6. Relevantly, on 4 August 2020 a letter was issued pursuant to s.359(2) inviting additional updated and current information in relation to all the Regulation 2.72 criteria. The evidence provided in response to this invitation are, where relevant to r.2.72(10)(f) is considered below. In response on 31 August and 2 September the following documents were provided:

   ·A covering email response from representative

   ·ASIC current and historical company extract

   ·Acknowledgement of sponsorship application received letter dated 28 August 2020

   ·Organisational chart showing the nominee as the only employee

   ·Statement of duties of the specialist manager dated 28 August 2020 (detailed at paragraph 11)

   ·Various commercial invoices

   ·Tax Invoice dated 28 August 2020 from the Department of Agriculture, Water and the Environment, evidencing payment for various Export Permits

   ·Contract of employment signed 28 August 2020

   ·Payscale report: Specialist Manager

   ·Indeed report: Export Manager salaries in Australia

   ·PTE Academic test taker score report

   ·Notification of approval as a standard business sponsor (29 September 2020 to 29 September 2025)

   ·Circular to former creditors and statutory bodies dated 7 May 2020 with copy of order terminating the winding up, dated 7 May 2019.

   ·Statement of completion of Master of Business Administration for the nominee dated 7 July 2017

   ·SBS approval dated 29 September 2020

   ·Financial reports as follows:

   o2020 Financial Report recording total sales of $2,289,077, total cost of sales $2,128,117, total income $166,037, total expenses $132,290 and profit $33,747

   o2020 Company Tax Return recording total income $2,294,155, expenses $2,260,408, and profit $33,747.

   o2019 Financial Report recording income $109,361.56, expenses: $55,422.56 and profit from Ordinary activities before income tax: $53,939.

   o2019 Company Tax Return recording total income: $1,861,784, expenses $1,807,845, total profit or loss $53,939.

   oBusiness Activity Statements:

   Ø January – March 2018         Sales: $347,166

   Ø April – June 2018               Sales: $184,057

   Ø Jul – Sep 2018                  Sales: $323,965

   Ø Oct – Dec 2018                 Sales: $497,713

   Ø Jan – Mar 2019                 Sales: $851,746

   Ø Apr – Jun 2019                  Sales: $188,360

   Ø Jul – Sep 2019                  Sales: $132,589 and wages: $11,000

   Ø Oct – Dec 2019                 Sales: $780,354 and wages: $16,500

   Ø Jan – Mar 2020                 Sales: $952,154 and wages: $17,167.

7. The Tribunal also considered all the evidence provided to the Department in support of the application.

8. The applicant gave the following oral evidence relevant to this requirement

   ·     The applicant was born in 1987 and used to work with his father in fruit and vegetables in Lebanon; it is a three-generation business which his grandfather started.  He has two brothers working in the Gulf states (in Kuwait and Qatar) and two brothers in Lebanon all involved in the same business.  He also has extended family in the USA and South Africa.  The applicant explained that he buys fruit and vegetables from Australia and New Zealand, comprising 80% fruit and 20% vegetables, and exports them to the Gulf states.

   ·     The applicant arrived in Australia on a student visa to study a Master of Business Administration at Federation University which he completed in 2016.  When he arrived he was not planning to stay but after finishing his study saw the opportunities that existed.

   ·     He operates the business from his home in Merrylands.  He visits growers.  He confirmed that his previous 457 nomination for an importer/exporter was not approved but he did not know why.  The representative confirmed that this occupation was removed from the skilled occupation list.  The applicant emphasised that he is a Specialist Manager.  He conceded he does have a permanent visa review pending for an exporter/importer position.  The applicant said while his business is exporting, he is a specialist manager and he must understand everything with importing and exporting.

   ·     The Tribunal noted that while delegate appeared to refuse the nomination primarily on the basis that it was a case of self-sponsorship because the applicant had created a migration outcome for himself , the Tribunal, in making its decision, would not consider this issue because there was nothing in the regulations to prevent self-sponsorship nominations.

   ·     Noting that it continued to have some concerns about the genuineness of the position based on the evidence provided thus far, the Tribunal noted that the applicant had specified a highly specialised sub group of Specialist Managers being a ‘Specialist Manager nec’ – ANZSCO Code 139999 and explained the occupations listed in that group.  It invited the applicant to address this.

   ·     The applicant said that as a specialist manager he is running a wholesale export company and has to establish and organise this business.  He needs to plan to find customers and suppliers and grow 10% every year to bring product and facility and work with freight companies, so if product comes from Melbourne, it has to be shipped from Melbourne.  He needs to know about different climate regions and have a supplier for each type of fruit or vegetable.  For example, cherries initially come from more northern regions but, at the end of the season, come from Tasmania and mangos start from Darwin.  If he can find no suppliers in one area, he needs to go there to make contacts and build relationships with suppliers.  He monitors all these steps and hires sub-contractors who must follow Australian laws.  He uses sub-contractors for example with packaging, so he needs to know about packaging on pallets and weights.  For example, if he has 4-5 tons of mangos, he must ensure that they are exported at 8-10 degrees.  He works with transport companies and sub-contracts transport because they do not have their own transport.

   ·     In addition, the applicant does all the budgeting and plans his own budget and works to increase the market share.  He needs to know about the currencies and their fluctuations and how to communicate with each supplier.  He has to understand the different time zones and sometimes works 18 hours a day because he has to talk with customers in the middle of the night.  It is not easy work to create a company this big, especially in the time of Corona.  The applicant emphasised the good relationship he has with suppliers and he has good support from his family overseas.  On special occasions he sends gifts or attends functions of his suppliers and for this the company must have one face; one person representing it.  He has been successful and has not taken any help from the government and, if his company is still making a profit, after taking nothing from the government, then he is a specialist manager.  He noted that the freight cost to Saudi Arabia previously cost $6,000 but now this has increased to $20,000 and this is his biggest market comprising 40% of sales.  He also makes 30% of his sales to Kuwait and 20% to Qatar.  From March he also started exporting to Singapore although has no family contacts there. 

   ·     Asked why he believes his position fits alongside the occupations listed under “Specialist Manager nec’ being Airport Manager; Ambassador; Ambulance Services Manager; Archbishop; Bishop; Harbour Master; and Security Manager (Non-ICT), the applicant responded that he is the only one who runs this company; he started from nothing and now the company generates a profit.  He has increased the annual profit and employs about ten subcontractors.  The applicant said a specialist manager has to plan and he plans for everything he has to do, for example, the seasonal and storage variations of fruit.  He advertises and has a website on which they put the logo and they put their logo on their invoices and on their packaging for some products.  He costs the product allowing for freight expenses, but thinks the most important task of the specialist manager is the responsibility of managing the company.  He did his MBA so meets the requirements of ANZSCO plus every day he meets the requirements of a specialist manager and he repeated, that during this Carona time he has managed everything for example, the air freight has increased so he looked into sea freight but then has to consider whether perishable fruits like cherries can survive 30 days at sea so he has to check on their shelf life.  Also, citrus is great during Carona because it has a long shelf life and is a good fruit to sell during Carona.  He controls the budget and all the profit and loss.  For example, with stone fruit coming into season he must work out how much he invests including freight and transport etc.  Air freight has increased 60-70% and he must have a budget for this because he is a specialist manager.  He must plan for example, in stone fruit season, to make his price competitive.

   ·     The applicant said he travels around every state and every suburb that deals with fruit and vegetables for example, in December there is so much fruit that he needs to sell it fast.  He also has to give promotions to his customers.  He has increased annual revenue.  He attends an event in Germany each year at which he represents the company and also represents it on relevant trade associations, for example NT Mango. He has a good business and he could not have created this from nothing if he was not a specialist manger.

9. Regulation 2.72(10)(f) requires that the position associated with the nominated occupation is genuine.  This was considered in Cargo First Pty Ltd v MIBP [2016] FCA 30, where the Court (at [34]) upheld the Tribunal’s approach of qualitatively assessing the position and comparing this with the occupation nominated in order to determine whether it was genuine.

10. In refusing the nomination the delegate recorded that the evidence provided demonstrated that the nomination was not lodged to fill a genuine skill shortage, but rather was to facilitate a migration outcome for the nominee.  The delegate, when considering the duties of the nominated occupation in the context of the business, was further not satisfied that the duties of the nominated occupation align with the nominated ANZSCO occupation of ‘Specialist Manager nec’

11. The applicant provided the following statement to the Tribunal:

    Sarab Trading International Pty Ltd is an import and export company operating in the agricultural field of fruit and vegetables.

    It does not employ workers but the company has a large number of subcontractors.  Part of my role is to judge and choose appropriate subcontractors for the work.  Additionally my role as the Specialist Manager is to make sure the contractors follow both Australian and the laws and regulations of foreign countries laws.

    One of my duties is to be thoroughly familiar with shipping arrangements overseas in the best time and cost-effective manner possible.

    As a Specialist Manager I need to know how to manage and operate in a fast and rapidly changing environment (for example now with the Covid - 19 crisis and the enormous change in the world).  Australian border and customs have strict requirements about the goods entering and leaving the country, and with the fresh produce I arrange for export any shipment delays cost heavy penalties especially if flights are missed, with penalties from the airlines (freight forwarders).

    I also need to examine how the fastest shipping lines available operate (all vessels have greater delays now because of COVID).  I research the lowest cost carrier which can send in the quickest practical time. I need to follow up my subcontractors to resolve issues with all interested parties.

    It is important that I secure the best relationship possible with clients (purchasers), subcontractors and suppliers to get the best results possible.  I need to know about the various cultures and customs in a number of different parts of the world.  As part of these duties I need to associate with them, participate in meetings (including visits), and of course be able to answer their questions. Australia has a different time zone to most of my customers overseas (who are in the Middle East) so I need to communicate with them during their work times.  I need to be in touch to deal with any emergency or when issues might occur especially during the shipment.  I work on the phone for long hours and in the office to continually check markets, what times are good or bad for purchase and exporting at any given time.  I continually need to make decisions, monitor expenses. I also need to plan ahead and set goals for the future.

    As the Tribunal would know, the Australian dollar continually has its exchange rate changing, I need to follow this up. I need to apply the language of numbers.

    Australia is a very big country as I am exporting and importing fruits and vegetables one of main roles is to visit and find the best growers available. I have suppliers across Australia and have a very good relationship with them (which I need to continually nurture).  I need to build trust and improve relationships by regularly visiting and invite them for gatherings such as Christmas parties, watching the fire work in Sydney and sending gifts on their birthday or any special events so I have to be quite social with them.

    I started to export in January 2016 in Australia.  Since then although I have not visited every state or city, but I have visited many cities, towns and suburbs in Australia such as Cobram, Wagga Wagga Sydney Flemington Markets, Melbourne Epping Market, Brisbane Market, Perth Market, Adelaide Market, Shepperton, Tasmania, Mildura, Griffith, Leeton, Riverina, Limbah, Bundaberg, Darwin, Young, Orange, Canberra, Cairns, Townsville, Launceston and many more places.

    As part of my role as a Specialist Manager, I need to know all those areas and people around plus understand the seasons and know what fruits and vegetables will be available when and in what areas across Australia.

12. By reference to the application form, the Tribunal finds that the applicant nominated an occupation in the Minor Group 139 Miscellaneous Specialist Managers – 139999 – ‘Specialist Manager nec’.

13. ANZSCO records that the minor group 139 Miscellaneous Specialist Managers includes:

    ·         Commissioned Officers (Management)

    ·         Senior Non-commissioned Defence Force Members and

    ·         Other Specialist Managers.

14. Specifically, ‘Other Specialist Mangers’ includes:

    ·         Arts Administrators or Managers,

    ·         Environmental Managers,

    ·         Laboratory Managers,

    ·         Quality Assurance Managers and

    ·         Sports Administrators” and

    ·         Specialist Managers nec

15. The occupations listed under Specialist Manager (nec) are:

    ·Airport Manager

    ·Ambassador

    ·Ambulance Services Manager

    ·Archbishop

    ·Bishop

    ·Harbour Master

    ·Security Manager (Non-ICT)

16. Given the highly specialised nature of this sub-group there is no indicative task list provided and the lead statement or summary only states ”this occupation group covers Specialist Managers not elsewhere classified”.

17. During the hearing Tribunal discussed with the applicant its concerns that the tasks of his occupation appeared to fit more appropriately into the occupation of an exporter rather than the highly specialised subgroup of ‘Specialist Managers nec’ that he nominated.  The applicant maintained the claim that he is a Specialist Manager and explained his duties running his export company of which he is the sole employee.  The oral evidence he provided reflected the written statement he provided to the Tribunal (detailed at paragraph 11).  However, the Tribunal considers that these duties, tasks and responsibilities reflect the ANZSCO lead statement of an Importer or Exporter (Code 133311) as someone:

    ·who plans, organises, directs, controls and coordinates the operations of an importing or exporting establishment.

18. When the Tribunal considers the tasks of an Importer or Exporter set out in ANZSCO there are few tasks which do not encompass the tasks the applicant explained.  In fact, the following ANZSCO tasks of an Exporter appear to be performed by the nominee:

    ·    identifying local and overseas business opportunities

    ·    developing and implementing business plans, and marketing, operating, human resource, pricing and credit policies and procedures

    ·    determining the mix of products and services to be provided and negotiating conditions of trade

    ·    liaising with local and overseas suppliers and distributors about orders and products

    ·    researching regulatory and statutory requirements affecting the importing, exporting, wholesaling and distribution of goods

    ·    monitoring business performance and preparing estimates, financial statements and reports of operations

    ·    appointing agents and distributors

    ·    arranging the shipping of goods into and out of the country

    ·    overseeing the display and sale of merchandise and preparation of product information for customer service staff and customers

    ·    implementing after-sales service procedures

19. While the Tribunal acknowledges that, as the owner and sole director of the business, the nominee also has responsibility for managing the company and for financial and budget matters, these are in addition to those of what the Tribunal considers to be more correctly categorised as an Exporter.

20. The Tribunal does not accept the contention in the written submission received that “the very nature of this residual listing under the ANZSCO categorisation, is that it "soaks up" a variety of Managerial occupations not typically considered and that it is a broad description”.  Even if the Tribunal were to accept this contention it does not accept that a position managing an export business of which the nominee is the only employee can be categorised in the same occupational grouping as occupations as: Airport Manager; Ambassador; Ambulance Services Manager; Archbishop; Bishop; Harbour Master; and Security Manager (Non-ICT).

1. After considering all the written and oral evidence before it the Tribunal is not satisfied that the position associated with the nomination, that of a ‘Specialist Manager nec’ is genuine. For these reasons the requirements of r.2.72(10)(f) are not met.

2. The Tribunal does however accept that there is a need in the business for a paid employee and this decision is not a reflection on the work or value of the applicant company or the fact that the nominee has worked very hard to create and build it especially during a very difficult period this year.  It also appears to provide a valuable service to Australian fruit and vegetable growers.

3. For the reasons given above, the Tribunal is not satisfied that the applicant meets the applicable criteria for the nomination to be approved.

4. Accordingly, the Tribunal affirmed the decision not to approve the nomination.

   Karen Synon
   Member