Your sister should retake O levels again in secondary
school.
There can be many factors why she doesn't want to do it in her
secondary school, could it be the environment?
Or is there someone she doesn't like in secondary school? Or is she
just 'paiseh' to stay back? Ask her about this issue too.
If i am her, i will not bother about others. I will convince my
principal to allow me to retake O levels, and get more help in weak
academic areas, and advise her not to slack off, as this could be
the only chance.
Get an adult to talk to the principal, it will be harder for a
principal to reject a parent.
O level results in general are important, university admissions
takes O levels result into account.
Ask her to do something about her studies now, it is a very
important stepping stone, she will never regret having a good O
level result, many courses use O level results as an entry
requirement.
Do not have the mindset to stop studying at Poly/ITE, go to a local
uni, or if not a better overseas univerisity.