May 1, 2006

 

Australia plans changes to wheat export system

 

 

Australia will consider changes to the marketing of wheat exports and their governance once the government receives a report on the legality of kickbacks paid by AWB Ltd to Saddam Hussein's regime, Agriculture Minister Peter McGauran said Saturday (Apr 29).

 

"The status quo can't continue," McGauran told reporters on the sidelines of a World Meat Congress.

 

The government in late 2005 commissioned former state judge Terence Cole to investigate whether AWB officials broke Australian law in paying the kickbacks.

 

A report to the UN in Oct 2005 by Paul A. Volcker, former chairman of the US Federal Reserve Board, found Australia's monopoly wheat exporter AWB paid USUS$221.7 million in kickbacks to Saddam's regime during the operation of a UN oil-for-food programme that ended in May 2003.

 

AWB was the biggest payer of kickbacks to Saddam in the world, Volcker found.

 

The kickbacks were channelled through a Jordanian front company, Alia Transportation, ostensibly as payments for trucking wheat through Iraq.

 

Australia's opposition Labour Party has branded the issue the "wheat for weapons" scandal.

 

Commissioner Cole has already received one extension to his reporting deadline, now scheduled for June.

 

"AWB deceived a great many bodies and governments," McGauran said.

 

These included its own board, internal audit committee, external auditors, external legal counsel, the Wheat Export Authority, the United Nations, growers and "undoubtedly" the government, he said.

 

"It will be for Commissioner Cole to decide on the degree of culpability," he said.

 

Much will depend on the nature of Commissioner Cole's findings and how a responsible government has to respond, especially to maintain the community's confidence in the single desk, which is how the wheat export monopoly is known locally, he said.

 

That said, two issues the government will have to address will be the operation or management of the single desk and its oversight by the regulator, he said.

 

"I would not put a timetable on it, any more than I would put a measure on the degree of change that will be required," McGauran said.

 

The government wants to maintain certainty within the industry so radical overnight changes wouldn't be in the interests of growers, he said.

 

Several propositions about marketing arrangements are coming the government's way from both inside and outside government, with many opinions already received from growers and their organizations, he said.

 

"The government has no policy other than to support the single desk," he said.