November 10, 2005

 

Australia forms royal commission on AWB Iraq wheat issue
 

 

The government Thursday announced a royal commission, the highest form of judicial inquiry in Australia, to investigate possible breaches of domestic law by wheat exporter AWB Ltd. (AWB.AU) and two other local companies in paying kickbacks to the deposed regime of Iraqi dictator Saddam Hussein.

 

The inquiry would also investigate if any person associated with the three companies breached Australian law, and report on whether criminal or other legal proceedings should be started or referred to other Australian jurisdictions, if breaches of law were found.

 

Attorney-General Philip Ruddock said royal commission powers and immunities had been given to the inquiry, to allow it to fully investigate the matter.

 

"These powers enable the inquiry to require witnesses to attend, answer questions and produce documents," he said in a statement.

 

The inquiry would be headed by Terrence Cole, a former Judge of Appeal of the New South Wales Supreme Court, and has been set a deadline to report by March 31, 2006.

 

"The government was concerned to ensure the inquiry be conducted in an independent, timely and comprehensive manner," he said.

 

A report issued Oct 27 on the United Nations oil-for-food programme by Paul A. Volcker, a former chairman of the US Federal Reserve Board, found AWB paid US$221.7 million to Jordanian-based Alia Transportation for transporting wheat through Iraq, but the funds were channeled to Saddam's regime. This amounted to more than 14 percent of the illicit funds collected by the regime under its kickback schemes.

 

AWB was one of about 2,200 companies and individuals from 66 countries that paid a total of US$1.8 billion in illegal kickbacks to Iraq, the report found.

 

AWB has denied knowingly being involved in paying money to the regime through Alia, and said it could have been an unwitting participant in an elaborate scheme of deception devised by the regime.

 

The UN report did not claim outright that AWB knew it was paying kickbacks to the regime, but it maintained AWB should have known what was happening.

 

Both the Australian government and AWB said the UN had full administrative control of the oil-for-food programme and approved AWB dealings.