More on the Australian Wheat Board & the food for oil scandal. Today's AGE editorial:
Dealings with Saddam should be a lesson to Australia
January 19, 2006/AGE editorial
THE commission of inquiry into Australian companies' payments to the regime of former Iraqi dictator Saddam Hussein has wasted no time in exploding the claim that this scandal might be "a storm in a teacup". While a month of evidence is still to be presented, tested and weighed by commissioner Terence Cole, QC, former Australian Wheat Board chairman Trevor Flugge's claim that concerns were exaggerated and the Government's pre-emptive exoneration of AWB both look highly tenuous.
Prime Minister John Howard ordered the inquiry under terms of reference that blatantly shielded his Government from scrutiny. He did so only after UN Secretary-General Kofi Annan urged all countries to act against companies named in the Volcker inquiry report into the oil-for-food program. In one of the world's worst corruption scandals, the finger of blame that was pointed so readily at the UN is now turning back to Australia.
Counsel assisting the inquiry, John Agius, SC, has already secured the first AWB admission of elaborately concealed payments to Iraq that breached UN sanctions.
The first kickbacks involved trucking fees to a Jordanian company without trucks. It was an Iraqi front. Later, as payments escalated, AWB paid a separate "after-sales service fee" and even saw a chance to profit by reclaiming the money from the UN escrow account. In the last three years of Saddam's rule, Iraq received almost $300 million from AWB, which the Volcker report identified as the single biggest source of payments in the oil-for-food scandal.
The extent of consultations on wheat sales to Iraq is also being exposed. AWB chief executive Andrew Lindberg has confirmed he briefed Foreign Minister Alexander Downer in early 2003, a time in the lead-up to war when the minister should have been highly alert to any concerns about deals with the regime. Canadian claims of kickbacks to Iraq had been discussed with AWB by Australian officials. This week's hearings have already shown how inquiries into the AWB deals lead inexorably to questions about the role of Government officials. Acting Prime Minister Mark Vaile simply denies any official wrongdoing. He advised reporters to "let the Cole inquiry run its course, to analyse and look at the information available and to try and establish the facts". For that to be done properly, the inquiry's terms of reference must be widened. If the Government refuses, it can only be for political reasons of self-preservation.
The Government's attitude is a jarring contrast to the Prime Minister's call to pursue good governance and tackle corruption around the world in his address to last September's UN summit of world leaders. When visiting the Solomon Islands, Mr Howard warned even more bluntly that governments must launch "a frontal assault on corruption and poor governance". Right now, his Government is guilty of retreating from these issues. It has also played down an OECD working group's concerns about loopholes in Australian corruption law and compliance activity. Despite having laws against bribing foreign officials based on a 1999 OECD convention, not one charge has been laid. It is also hard to see how Australia can condone "facilitation fees" by making them tax-deductable (the OECD regards these as bribes to foreign officials) and still unblushingly insist on good governance.
Australia still ranks among the least-corrupt nations, as corruption monitors such as Transparency International have repeatedly confirmed. This country does, however, have extensive dealings with nations that are seen as highly corrupt, such as China and Indonesia. This represents a challenge for doing business while maintaining a hard-won reputation for not stooping to corrupt practices. Some leading Australian companies have codes of conduct that do not condone bribes, but accept that payments may have to be made in some circumstances. Under these codes, this must be openly recorded ?- certainly not covered up. Complacency about such issues puts all Australians who do business overseas on a slippery slope. Once there is an expectation that improper payments might be obtained, they are likely to be demanded, as Iraq did, at an ever-increasing rate.
http://www.theage.com.au/news/editorial/dealings-with-saddam-should-be-a-lesson-to-australia/2006/01/18/1137553654184.html
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