Some additional links: From
the Globe 'n' Mail, and
two posts from
the Language Log on the issue.
Yeah, that seems to be one problematic portion of the story. But then again, I'm not a legal scholar, so I just wait and see what the courts say about it.
The other, and bigger problem to me is it seems to me to be a waste of everybody's time and effort. There's not really point of testing "native English speakers, to those who hold passports or have lived for 10 years or more in an English-speaking country, and to university graduates of an English-speaking country", since it is almost certain that they are English proficient and Australia and the UK don't have a problem with exempting them as well.