The Confucius Institute supports Chinese language classes in 13 NSW schools, in part by recruiting and paying the salary of ‘volunteer’ Chinese national classroom assistants.

To address concerns about this arrangement, the New South Wales Department of Education (NSW DoE) last year began a review of its relationship with the Confucius Institute.

The final report found no evidence of inappropriate influence, but raised concerns of such seriousness that the department has elected to end its relationship with the Institute nonetheless.

NSW Greens MP David Shoebridge said that the report was "extraordinarily damning".

"I am glad to see the department is cancelling this arrangement, it is unfortunate they can't cancel it immediately because the secret agreement they entered into has a six-month termination clause," he told the ABC.

"But this is an agreement that should never have been signed by the Coalition Government.

"They were so desperate for cash, and in this case very small amounts of money, they were literally willing to sell out the sovereignty of the State Government."

A major concern identified in the report is that the NSW DoE is the only education department in the world to allow the Confucius Institute to operate within the department itself.

“It is unique for foreign government employees to be working inside an Australian government department,” the report reads.

“And this arrangement has raised concern among commentators (including academics, parents and members of parliament) about the independence of the NSW education system and potential conflicts of interest generated by the arrangement.”

Another issue identified in the report is China’s dominance of the Confucius Institute’s Board of Directors, which appears to be in breach of the initial agreement made between the NSW and Chinese governments.

The terms of the 2013 agreement dictated that both the NSW and Chinese departments of education should have between five and six representatives on the Board of Directors, but there are currently seven Chinese representatives on the board, including two Communist Party officials, and only six from NSW.

The Board is responsible for approving the Confucius Institute’s annual plans and has the authority to appoint the director of the Institute, a position which is funded by the NSW Government.

The report also identified a range of financial contributions made by the Chinese Government to the NSW DoE, specific schools and specific senior officers, which could incentivise those involved to turn a blind eye to the Institute’s activities.

Also of concern is a clause in the agreement between the NSW DoE and the Institute that states that the Institute’s activities must respect the cultural customs and must not contravene the laws of both Australia and China.

This clause has the potential to conflict with the DoE’s Controversial Issues in Schools Policy and could prohibit open discussion about issues such as the Tiananmen Square massacre, the Hong Kong independence movement or the Chinese Government’s human rights record.

In July, the ABC reported that Confucius Institute ‘volunteers’, including those placed in NSW schools, were being vetted by the Chinese Government for their “good political qualities”.

Due to the concerns identified in the report, the NSW DoE will end its relationship with the Confucius Institute at the end of this year.

From 2020, the NSW DoE will pay for replacement classroom assistants at the 13 schools with existing ‘Confucius Classrooms’.

The DoE will also review its arrangements with foreign governments and organisations and establish formal guidelines for the development of all future agreements with these parties.