In this Gilbert + Tobin Insight we look at the AWB “oil for wheat” scandal, a long and costly saga for ASIC, and the subsequent implications for. AFTER a corporate disaster theres always a gap between public expectations of punishment, and the realities of who gets whacked with what. Shortly after he became Prime Minister of Australia in William Morris Hughes headed for London via North America. He was absent from Australia for more.

Author: Zulukus Mura
Country: Qatar
Language: English (Spanish)
Genre: Career
Published (Last): 4 August 2010
Pages: 396
PDF File Size: 14.3 Mb
ePub File Size: 7.40 Mb
ISBN: 207-5-41510-331-4
Downloads: 4319
Price: Free* [*Free Regsitration Required]
Uploader: Mujora

AWB Limited is a major grain marketing organisation based in Australia.

For much of the 20th and early 21st century, it was an Australian Government entity operating a single desk regime over Australian wheat, meaning it alone could export Australian wheat, which it paid a single price for. In the mids, it was found to have been, through middlemen, paying kickbacks to the regime of Saddam Husseinin exchange for lucrative wheat contracts. This was in direct contradiction of United Nations Sanctions, and of Australian law. The Australian Government also launched a Royal Commissionwhich recommended that criminal proceedings commence against 12 people.

Ultimately, criminal charges were dropped by scandak Australian Federal Police. Several Australian civil cases were however successful. Since the payments were discovered, AWB Limited has undergone a major restructuring, losing its monopoly supply of Australia wheat exports, and appointing an entirely new management.

However, its profitability continues to suffer. Although AWB and by extension the Australian Government were not the only entities to be implicated in the Oil-for-Food scandal, the event earned a place in Australian political consciousness. The Australian Wheat Board was a statutory authority established in The kick-backs scandal engulfed both bodies. This was intended to prevent farmers under-cutting each other on price, and thus assure the highest price for Australian wheat.

The AWB had sold wheat to Iraq sinceand was the single largest supplier of humanitarian goods to the nation during the Oil-for-Food Program. Following the Iraqi invasion of Kuwait inthe United Nations had imposed a financial and trade embargo on Iraq. It was intended to weaken the Iraqi economy so that Saddam could not build up weapons for further wars. UN Security Council Resolution prevented all states and their nationals from making funds available to Iraq.

These sanctions scanxal widely effective, leading to food shortages and international condemnation as the humanitarian crisis became clear. Scnadal response to this, the Oil-for-Food program was begun. It allowed Iraq to sell oil to the rest of the world, provided the returns from this were kept in a UN bank account.

This money could then be used by wab regime, with UN oversight, to purchase a strict list of humanitarian supplies. The Oil-for-Food Program however in itself faced criticism, with many alleging that it was too expensive to administer and liable to abuse.

The program was discontinued on the lead-up to the invasion of Sandal. Alia was established in as a Jordanian-registered transportation company, intended to refurbish Iraqi vessels stranded scanral the coast of Jordan for commercial use.

By having the party exporting goods i. However, transportation services were in fact provided by employees svandal the Iraqi Government, who also negotiated with the humanitarian supplier the size of the commission. Prior toAWB had only been responsible for shipping wheat up to the port of entry in Iraq. However, in July it entered into this new contract with the Iraqi Government that had AWB assume responsibility, through Alia, of transporting wheat to points throughout Iraq.

The money was all coming out of the UN’s escrow account”.

The initial UN investigation was only partly interested in Adb, and was unable to decisively conclude whether it knew that it was breaching sanctions.


The later Australian Scqndal Inquiry was far less charitable. AWB told the UN investigation that it believed the fees it was paying to Alia were genuine transportation fees, and was not aware of its ownership and operations being so tied to the Iraqi Government, nor of the fact that it was paying kickbacks to the regime.

It also produced correspondence between itself and the Australian Department of Foreign Affairs and Trade in which the Department advised it could see “no sdandal from an international legal perspective” that Scanddal could not enter into a commercial agreement with a Jordanian-based company.

Alia’s owner told the UN inquiry that he believed AWB knew his company did not actually provide transportation services, but he had not spoken to AWB about the matter. Aawb General Manager, Othman al-Absi, said that AWB had been very interested in the capacity of Alia to transport wheat, and had asked the Jordanian Government whether Alia was a genuine wwb company.

He later told the Cole Inquiry, “I do not recollect ever being asked by anyone from AWB scandao who owned or controlled Alia, or whether it had connections with the Ministry of Transport. However, Alia’s ownership was public knowledge and was not hidden. The Enquiry concluded that it could not for scandap say that AWB was aware of the arrangement it had entered into with the Iraqi Government, however, much circumstantial evidence suggestion of Alia by the Iraqi Government, sharp rise in its prices, knowledge that prices were determined by the Iraqi Government, lack of logistics detail offered by Alia, curious wording in faxes received by AWB meant it had cause to be suspicious.

AWB representatives admitted in a meeting with the UN investigators that it was ‘debatable’ whether scaneal management should have known of the kickbacks. Mark Emons, the manager of AWB’s Middle East operations, told the inquiry that he, and Dominic Hogan from AWB’s Cairo office, at the very first meeting at which the prospect of certain arrangements were broached in “knew what Iraq was asking was outside the sanctions”. The final report states that there was “no sensible basis for making these payments Under Australian legislation, all shipments to Iraq were banned unless the Foreign Minister at the time, the Alexander Downer was “satisfied that permitting the exportation will not infringe the international obligations of Australia”.

The Cole Inquiry found in “secret evidence” that the ownership of Alia was known since in the departments of Foreign Affairs, Defence and Prime Minister and Cabinet, as indicated by an intelligence report from a “foreign agency”. The invasion took place on 20 March.

By 1 May, the government of Saddam Hussein was defeated, although resistance and insurgency against the military occupation still continued. InIraqi daily Al Mada published a list of persons and entities who were given oil vouchers for helping Saddam Hussein. In response to this, the UN launched an independent inquiry into the program, headed by former U.

Federal Reserve Chairman Paul Volcker. Its terms of enquiry were to “collect and examine information relating to the administration and management of the Oil-for-Food Program The final report was ecandal on the 27 October It accused almost half sccandal the companies operating in Iraq during the time of aqb Oil-for-Food program to have paid either kickbacks or illegal surcharges to secure Iraqi business. The Commission called to the stand many prominent members of the Government, including the then Prime Minister of Australia John Howardthe first Australian Prime Minister to face a judicial inquiry in more than twenty years.

Cole’s findings agreed with the UN Report in scwndal this money was paid, often indirectly, to a Jordanian transportation company, Alia, who kept a small percentage of the fees, and paid the remainder onto Saddam’s government. This breached the sanctions placed on the Iraqi regime.


How the AWB oil-for-food scandal changed Australia’s wheat industry: 10 years since deregulation

The Cole Inquiry concluded that from mid, AWB had knowingly entered into an arrangement that involved paying kickbacks to the Iraqi government, in order to retain its business. The Cole Inquiry recommended that 12 people be investigated for possible criminal and corporations offences over the scandal. The scandal resulted in international condemnation and litigation.

Although the United States successfully pursued criminal charges against several citizens and others in its borders, [18] the Australian criminal investigation into AWB was eventually dropped. Civil charges have however been successful. The growers claimed that AWB used the same techniques to secure grain sales in other markets in Asia and other countries in the Middle East.

In Augustthe Australian Federal Police dropped their investigation into any criminal actions undertaken by AWB and others in this matter.

This decision came after Paul Hastings QC declared the prospect of convictions was limited and “not in the public interest”. The Australian Securities and Investments Commission proceeded with several civil cases against six former directors and officers of AWB; [29] some of which have been discontinued on terms that the parties bear their own costs.

ASIC decided to discontinue the proceedings after forming the view that it was no longer in the public interest to pursue its claims. When the scandal was uncovered, Australia was part of the Coalition of the Willing in Iraq, where scandall had helped depose the government of Saddam Hussein.

The scandal caused significant concern.

AWB oil-for-wheat scandal – Wikipedia

The Australian Government attempted to distance itself from the AWB, who from had been restructured into a private company. The crisis brought about a significant loss of support for the AWB’s monopoly power over the sale of Australian wheat. As early as Februarythe Government expressed displeasure with its monopoly, saying it could be used as a bargaining chip in international trade negotiations.

Two books have so far been published on the scandal. The first was by Stephen Bartos, entitled Against the grain: The second was Kickback: Reference links are dead links and need to be fixed. Looks like a cover up by the Australian Federal Government. From Wikipedia, the free encyclopedia.

Its profitability has suffered. Australia portal Politics portal Iraq portal United Nations portal. The Sydney Morning Herald. Retrieved 29 May Kickbackp. Retrieved 26 May Council on Foreign Relations. Retrieved 25 May Archived from the original on 23 August sscandal Oil for Food Scandal”.

Australian Department of the Attorney-General. Archived from the original on 23 March Retrieved 24 May Archived from the original on 27 May Retrieved 9 July Archived from the original on 16 Scancal Archived from the original on 10 Scanndal Retrieved 24 Sep Retrieved from ” https: Webarchive template wayback links Use Australian English from February All Wikipedia articles written in Australian English Use dmy dates from February All articles with unsourced statements Articles with unsourced statements from May Views Read Edit View history.

This page was last edited on 11 Octoberat By using this site, you agree to the Terms of Use and Privacy Policy. AWB Limited swb undergone a major restructuring, losing its monopoly supply of Australia wheat exports, and appointing an entirely new management.