Bob Brown (Tasmania, Australian Greens) Share this | Hansard source

I move:

That the following matter be referred to the Economics References Committee for inquiry and report by 4 February 2010:

The Reserve Bank of Australia’s subsidiaries, Note Printing Australia and Securency, with particular reference to:

(a)

allegations of payments to overseas agents into offshore tax havens and corruption in securing note printing contracts and what the Reserve Bank, Austrade and the Australian Government knew about the alleged behaviour;

(b)

any investigations conducted into those allegations;

(c)

any actions taken to press charges against past and existing overseas agents; and

(d)

action which may be taken to prevent improper dealings occurring again.

These are extraordinarily serious allegations which go to the behaviour of the Reserve Bank’s subsidiaries Note Printing Australia and Securency. Those allegations include corruption, bribery and the placement of multimillion-dollar sums into offshore tax havens for services that were being bid for by one or other of the agencies. I refer to a report by Richard Baker and Nick McKenzie in the Age newspaper of 23 May this year under the heading ‘Revealed: the RBA’s dodgy global deals’. It says:

The Reserve Bank of Australia has been involved in the payment of multimillion-dollar commissions to shady middlemen in its drive to win bank note printing deals with foreign governments.

Securency Pty Ltd, a Melbourne-based bank note supplier half-owned by the RBA, has made a substantial number of “commission” payments to agents, including some previously implicated in corruption scandals.

The company, which has supplied polymer material to print money in Australia and 26 other countries, is chaired by the RBA’s assistant governor Robert Rankin. Its board has another two RBA appointees, as well as executives from British firm, Innovia Films, owner of the other half of Securency.

Some of Securency’s agents are closely tied to government or central bank officials in countries ranked by Transparency International as highly corrupt.

Several agents have been named in official corruption investigations in Africa and Asia. At least one has a criminal conviction for fraud.

The Reserve Bank of Australia’s own annual report for this year, on page 41, says:

The Board of Securency has measures in place designed to ensure the maintenance of high standards of integrity …

Later on it points to the allegations that I have just enumerated, raised first in the Age. It says this:

The allegations were therefore treated very seriously, and when they were first raised the Board of Securency promptly requested an independent investigation by the AFP. This investigation began immediately and the Board has ensured that all possible assistance has been given to the AFP.

The Board of Securency also engaged an external accounting practice to undertake a thorough independent review of the company’s policies and practices in relation to the use of these agents, to ensure that they remain at best practice. At the AFP’s request, Securency delayed the start of this review until the AFP had completed its initial assessment of the allegations. The review, which is now in progress, is expected to take several months to complete.

In other words, Securency held off an external accounting exercise until after the AFP had completed its initial assessment of the allegations, but the board of Securency itself is now proceeding with a review—that is, an inquiry of its own—into the probity of the behaviour of at least some of its agents and officers. That inquiry is continuing to take place.

I know there is always in these matters some concern, where the Australian Federal Police have been brought in, that the parliament not cross over with investigations that are therefore taking place. I would agree with that. However, it is to be noted that no less than the Nigerian parliament—one of the countries in which Securency is said to have been working to get very highly profitable engagement—has and is undertaking a major inquiry. The Age in fact reported on the 23rd of this month, under the heading ‘Nigeria to act on RBA bribe claim’, the following:

Nigeria’s National Assembly is to investigate the country’s former central bank governor over allegations he was bribed to award a contract to a company controlled by the Reserve Bank of Australia.

Nigeria’s House of Representatives has passed a motion requesting the assembly’s banking and justice committees investigate the Central Bank of Nigeria’s previous administrators for “brazen cases’’ of corruption, money laundering, reckless spending and issuing of non-performing loans.

A resolution read by representative John Halims Agoda and supported by 46 others said: ‘‘The committees are mandated to ascertain the veracity or otherwise of the widely reported claims by the local and international media that a company, Securency, is believed to have paid millions of dollars in bribe money to Nigerian officials to secure the contract to print Nigeria’s new banknotes.’’

The Australian Federal Police has told The Age that it is investigating Securency for alleged bribery after the company paid millions of dollars to two British-based businessmen with high-level Nigerian political contacts to win a banknote contract.

Securency, which is owned by the RBA and British firm Innovia Films, has supplied Nigeria with almost 2 billion polymer strips with which to print the nation’s banknotes.

Nigeria’s main newspapers have recently accused former CBN—

that is, the Central Bank of Nigeria—

governor Chukwuma Soludo of being among those officials suspected of accepting the alleged bribes in 2006—

that is, the bribes from this subsidiary company of the Reserve Bank of Australia. This report goes on to say:

Professor Soludo, who finished his term as CBN boss in May and is now running for governor of a Nigerian state, has vehemently denied the allegations, describing them as “wild”.

Nigeria’s Economic and Financial Crimes Commission is also expected to launch a separate investigation into the bribery claims surrounding the Securency contract.

In other words, there is a parliamentary inquiry going at the same time as the relative crimes commission in Nigeria is considering undertaking an inquiry. I cannot recall, except in the quite different case of the Australian Wheat Board’s involvement in Iraq, a case of such enormous concern for Australian corporations regarding allegations of criminal activity overseas.

It is not just incumbent upon but the responsibility of this parliament and, through this motion, the committee system to investigate these extraordinarily serious charges. The only debate that I think could be held on the matter is whether or not the fact that the Federal Police are investigating these matters ought to make us cautious about the inquiry. However, as I have just put to the chamber, both Securency itself and now the Nigerian parliament are undertaking inquiries at the present time.

I will be very keen to hear submissions from the government and the opposition, who are of course important in allowing this reference to proceed. I would point out that if parts (b) and (c) of the motion present any problem for the government and/or the opposition I would be prepared to amend the motion to delete them. That is the section which would have the inquiry look into any current investigations which are underway.

I do not think it would be an exercise in probity for this parliament to wash its hands of these extraordinarily serious claims, which have now been running for five or six months from the investigative unit of the Age newspaper without countermand that I know of, about major subsidiaries of the Reserve Bank of Australia. There is comment in those articles about the damage being done to the international reputation of the Reserve Bank by inference about the relationship to the Reserve Bank, and I think we should be very sure that we are doing all we can to protect that reputation and that relationship. We in this place know that the worst thing you can do to protect such a relationship is to ignore very serious charges that are being made. I would urge both sides of the Senate to consider these extraordinarily serious accusations and allegations—backed up by a great deal of material, I might add—of misbehaviour, not just in Nigeria and South Africa but in several other countries around the world, by agents employed by subsidiary companies of the Reserve Bank. I point out that senior officials of the Reserve Bank sit on or preside over—or have presided over—the boards of those subsidiary companies.

I have endeavoured through other ways—for example, estimates committees—to have the Reserve Bank governor or other senior officers questioned about these matters, but that has not been possible. I am not prepared to allow the matter to simply rest. It is too serious for that. It is serious enough for every senator to consider it. I believe that an inquiry should be undertaken. We have been able in the past to keep well clear of in any way compromising police inquiries that have proceeded. For any senator who is thinking about the problem of there being a police inquiry concurrent to the Senate establishing an inquiry into these allegations against the subsidiaries of the Reserve Bank, I cite the fact that the collapse of Storm Financial and Opes Prime are matters that are being examined by the Joint Committee on Corporations and Financial Services at the moment while the matter is simultaneously being investigated by ASIC and the police. Forest managed investment schemes are being examined by the Senate Select Committee on Agriculture and Related Industries even though the matter is being simultaneously investigated again by ASIC and, according to media reports, the police could be investigating. The Privileges Committee is currently investigating a matter relating to Mr Grech while the police are also investigating matters pertaining to that person. In 1999, to go back a little, when a fraud of $8.72 million was committed against the department of finance, Senator Faulkner still questioned on the matter—and you can see how difficult it is to deal with such a matter while court proceedings are going ahead.

I think our committee is well able to steer clear of matters that the police might be looking at. We need to look at protecting the name of the Reserve Bank and the high esteem in which it is held. I do not think we can do that by ignoring these extraordinarily worrying charges and allegations that are now in the international press, not just the Australian press. I believe it is the duty, the obligation and the right of the Senate to undertake an inquiry and to try to ascertain the facts of the matter before the efflux of any further time.