Kelvin Thomson (Wills, Australian Labor Party, Shadow Minister for Public Accountability and Human Services) Share this | Hansard source

Ever since the Volcker report blew the lid on the AWB scandal, the Howard government has been angling for the verdict ‘AWB guilty, government innocent’. The idea that wheat exports to Iraq and kickbacks to Saddam were AWB’s domain alone is just absurd. We know, for example, that the government’s trade body, Austrade, was involved. Two of its officials met with the 51 per cent owners of Alia—the truckless trucking company—the al-Khawam family. We know that the government’s aid body, AusAID, was involved. Just before the outbreak of war in Iraq, they took over an AWB wheat contract, some 50,000 tonnes of wheat, on board the Pearl of Fujairah. AusAID did not much want to take over the contract; they said it was a bit premature and costly. But the Minister for Trade, Mr Vaile, expressed his displeasure with their view and AWB got their way. AusAID took over the contract lock, stock and barrel—kickbacks included. AWB paid Alia $US2.7 million as a kickback for this contract. We also know that ministers’ offices were alerted to the Tigris deal in communications from the Iraq government.

The fact is that the Howard government was involved in these wheat deals up to its eyeballs. Of course, it had formal legal responsibility. Australian domestic law is clear-cut. The Minister for Foreign Affairs, Mr Downer, was the decision maker responsible for approving AWB contracts with Iraq. He approved 41 contracts over a five-year period. Under the Customs regulations, he was required to satisfy himself and certify that exports to Saddam Hussein’s Iraq did not breach Australia’s obligations to uphold United Nations sanctions against Iraq. He failed dismally in the performance of his ministerial duties. He failed to respond properly to any of the 35 separate warnings the government received about the nature of AWB’s involvement with Saddam Hussein’s regime.

Did the Howard government seek any answers for this monumental incompetence? No. The terms of reference the government gave Commissioner Cole prevented him from making any determinations about whether the Minister for Foreign Affairs had discharged his obligations under Australian and international law. The terms of reference were all about AWB. Let there be no doubt whatsoever about this matter. In March, my colleague the shadow minister for foreign affairs wrote to Commissioner Cole about the terms of reference and received a reply confirming that it did not have terms of reference that enabled it to determine whether ‘a minister has breached obligations imposed upon him by Australian regulation’. Furthermore, the commission said that these matters were significantly different from the commission’s terms of reference. In other words, the commission had no intention of going off on what it saw as a frolic of its own to investigate departments, agencies and ministers. If the government wanted it to do that, it had to alter the terms of reference. To give an indication of how serious and bad this was, I will quote from the Cole report:

It is immaterial that the Commonwealth may have had the means or ability to find out that the information was misleading, or that it ought reasonably to have known that the information was misleading. It is also immaterial that the Commonwealth, at the time it conferred the benefit or advantage, suspected but did not know that the information was misleading.

In other words, none of these things were material because they were outside the inquiry’s terms of reference. In one Yes, Minister episode, Jim Hacker said, ‘I thought these planning inspectors were supposed to be impartial.’ Bernard Woolley replies: ‘So they are. Railway trains are impartial too. But, if you lay down the lines for them, that is the way they go.’ Notwithstanding the severe limitations on it, the commission made two findings pointing to massive bungling in the Department of Foreign Affairs and Trade. Paragraph 30.171 in volume 4 of the report says:

The critical fact that emerges is that DFAT did very little in relation to the allegations or other information it received that either specifically related to AWB or related generally to Iraq’s manipulation of the program.

And again, at paragraph 30.179 in volume 4:

DFAT did not have in place any systems or procedures in relation to how its staff should proceed in response to allegations relating to the breach of sanctions.

So the department had no procedures in place to deal with allegations about kickbacks and did very little about them, at a massive price to Australia’s trading reputation and Australia’s wheat farmers.

Given this, you would think that ministers from the Prime Minister down would be contrite and apologetic. But no: they are cock-a-hoop. They say we should apologise for having the temerity to raise these matters. They revel in their incompetence. ‘I didn’t have a clue,’ they chorus. Last night Minister Downer said:

You don’t know what you don’t know.

He is still trying to impersonate Donald Rumsfeld. Has nobody told him that Donald Rumsfeld has gone? The world has moved on, and it is time Minister Downer moved on too. It is like Frodo Baggins marrying Anna Nicole Smith: the job is too big for him. Donald Rumsfeld is gone, but Minister Downer is still there.

One day after its release, we must ask the question: did the Cole inquiry get to the bottom of the AWB scandal? And the answer is: no, nothing like it. I mentioned earlier that two Austrade officials, Ramzi Maaytah and John Finnin, met with the al-Khawam family, the 51 per cent owners of Alia, to talk about wheat contracts. Do we know any detail about what they discussed? No. Do we know what they reported back to their minister about these discussions? No. We do not know because the Cole inquiry never called them as witnesses. They should have been called. And now, mysteriously, both these Austrade officials have resigned from Austrade. It will make it pretty much impossible to call them before a Senate committee. But the Cole inquiry says that there is no evidence that Austrade knew anything about these deals. This conclusion is plain wrong. To reach it, the Cole inquiry completely overlooked the evidence of the Austrade meeting, and it also ignored the evidence of Othman al-Absi, the Alia official, that Austrade knew all about its wheat deals. It discounted Mr al-Absi’s evidence concerning the Austrade official Mr Ayyash, but at other stages in the report it uses Mr al-Absi’s evidence, treating it as accurate.

The al-Khawam family—the 51 per cent owners of Alia; Saddam Hussein owned the other 49 per cent—have an interesting background. The chairman’s father led a rebellion against the British mandate in Iraq in 1920 and against the British-backed government in 1935. Back then, of course, we were British subjects, but these are the people of the party of Sir Robert Menzies; they are the people who this party was doing business with. Sir Robert would be turning in his grave.

The Cole report also fails to deal with other issues. It did not call the AusAID personnel who took over the AWB contract just before the outbreak of war. So we do not know just how the AusAID personnel were greeted when they contacted Alia to arrange delivery of the wheat, as documents before the Cole inquiry said they did. But we can imagine that not since Pauline Hanson’s ‘Please explain’ would there have been such galloping incomprehension as that which Alia would have shown on receiving such inquiries. Alia, after all, delivered kickbacks not wheat. But did the Cole inquiry investigate these matters? No. No AusAID personnel were summoned as witnesses, so we do not know what AusAID found out about these contracts or what the government’s own aid agency reported back to the minister about them.

I also note the inquiry’s conclusion that there was no evidence that Norman Davidson-Kelly had any influence over the Howard government. Mr Davidson-Kelly was the mastermind of the Tigris deal, an extraordinary scheme to defraud the UN oil for food program. Yet we know that Mr Davidson-Kelly is a long-term friend of the former Leader of the Government in the Senate Robert Hill, and dined with him regularly over a 10-year period. There certainly is evidence that he could have influenced the Howard government.

The Howard government frequently claims that it is the only government around the world taking action in response to the Volcker report. Not true. The Australian’s New York correspondent, David Nason, today reports that people who rorted the oil for food program have been prosecuted or are being prosecuted in a range of countries around the world. In the United States, a New York court found a South Korean businessman guilty of accepting bribes from Saddam Hussein’s regime. He is awaiting sentence and could reportedly serve five to 12 years. A co-conspirator, an Iraqi-American businessman, has also pleaded guilty to offences. Two Texas oilmen have been charged by a federal grand jury in New York with manipulation of the UN program. In Paris, the No. 2 at oil company Total was charged last month with paying illegal commissions to obtain favours for the oil group in Iraq. A former senior Total executive has been charged with similar offences. Both are expected to go on trial next year. In India, the national Enforcement Directorate has asked six people, including India’s former foreign minister, to show cause why they should not be charged over the scandal.

See this speech in context