Joe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

I move:

That the Senate take note of all answers given by ministers to questions without notice asked by opposition senators today, relating to the oil for food program.

Let me state at the outset that the $300 million wheat-for-weapons scandal has revealed a pattern of negligence on the part of Howard government and its ministers and several attempts to cover up the outcome. The result has been a financial cost to Australia’s wheat industry and farmers—and a cost to its international trading reputation. That is what is put at the feet of the Howard government. They have to accept that that is the outcome.

What they have done, though, is to ensure that the commissioner’s findings have been straitjacketed by his terms of reference. We now have a position where, even despite the straitjacket they placed on the commissioner, the inquiry still concluded that DFAT did very little in relation to the allegations or other information it received. It also found that 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. When you look at the terms of reference, they were confined or straitjacketed in such a way that Commissioner Cole only examined criminal breaches. He made it clear, though, that he was not required to consider whether there had been more general failings on the part of the government. He said:

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.

This government has not only trashed our international trading reputation but also damaged the reputation of wheat farmers themselves. Regarding our international standing, the argument is simple: did Australia have an obligation under international law to implement the UN sanction regime against Iraq? That is the primary question: did Australia have an obligation? The answer is: yes, we did have an obligation. On 6 August 1990, the United Nations Security Council, responding to the armed conflict after Iraq invaded Kuwait, implemented resolution 661, reaffirming earlier demands for a withdrawal of Iraqi troops.

Under article 25 of the charter, all member states of the UN are obliged to carry out the recommendations of the United Nations Security Council. So adherence to both resolution 661 and resolution 986 was required. Did the Australian government implement the resolutions into domestic law? The answer again is yes. According to a joint legal opinion sought by Commissioner Cole, the Australian government made attempts to implement the United Nations Security Council resolutions into Australian domestic law. But the full details of the resolutions were not expressly placed in primary legislation and were instead given effect through regulation.

So the short answer is that the government did seek to implement the sanctions regime and to implement the resolution into domestic law. But did the Australian government properly fulfil its obligations to implement the sanctions regime? This is a more difficult question. The answer to that is no, the Australian government did not properly fulfil its international obligations to implement the sanctions regime—on three grounds. Firstly, the international binding sanctions regime as outlined in paragraph 4 of resolution 661 requires, in part, that member states:

... shall prevent their nationals and any persons within their territories ... from remitting any other funds to persons or bodies within Iraq or Kuwait ...

It was not done. Further, if you consider that the Australian government failed to prevent the corrupt transfer of some $US320 million of aid from the UN escrow account, you can then say prima facie that it did not implement that resolution. Secondly, AWB was, prior to privatisation in 1998, an Australian government entity. This means that the Australian government failed not only in the second instance as a regulator but also, in the primary instance, it wilfully breached the sanctions as a member state and party to the UN charter. (Time expired)

Nigel Scullion (NT, Country Liberal Party) Share this | Link to this | Hansard source

The single thing I will concede from listening to the last speaker is that it is a sad day indeed for Australian wheat growers. I guess it is also a very sad day indeed for the Australian Labor Party, because clearly it was the hope and wish of the Australian Labor Party that Commissioner Terence Cole’s inquiry would in fact lead to the justification of their outrageous allegations during the period of the inquiry that there was some corruption or knowledge of corruption at a government level. It is very interesting that Senator Ludwig would refer continuously to the terms of reference: if only the commissioner had had the capacity to look further, then it would all have been different! That again flies in the face of the facts of the matter and the capacity of his terms of reference.

It is useful to go through the process of events leading to the inquiry to once again inform the Australian public and the Senate of what actually happened, not what was the fantasy or on the wish list of the Labor Party. These events continually amplify this government’s transparency and credibility in this matter. It has to be remembered that it was always the United Nations’ role to approve oil for food contracts, not the role of the Australian government. The Department of Foreign Affairs and Trade did not approve oil for food contracts; the UN did that through the resolution 661 committees. That is well known and on the record. So any allegation that the Australian government was somehow complicit in these matters is absolute rubbish.

The full nature of the oil for food scandal came about, as we know, after the fall of Saddam Hussein some 3½ years ago. The toppling of that dictator and that outrageous regime obviously gave an opportunity not only for a number of freedoms in that country but also for the United Nations to forensically examine, through the Volcker inquiry in April 2004, a whole range of documents from the Iraqi government that unveiled what we now know was widespread corruption. That widespread corruption occurred across 2,200 companies from 22 countries, such was the nature of the entrenched corruption.

The government moved very decisively. We immediately responded to the UN report by setting up an open and public inquiry with royal commission powers. You could not ask for a government to move with more speed, transparency and propriety than we did in this matter. The Cole commission has proved through its deliberations and report that it is the most rigorous, independent and transparent inquiry in the world into matters arising from the Volcker inquiry. I will repeat that: it is the most rigorous, independent and transparent inquiry that has yet been conducted into these matters.

I could go on about the rigour of the Cole inquiry—it worked tirelessly over a full year with 76 days of hearings, hundreds of witness statements and tens of thousands of pages of documents. Commissioner Cole did not resile from that. Those opposite have continued to contend that the terms of reference stymied their fantasy of having the Australian government branded as corrupt. On no fewer than five separate occasions, three of which related to a reporting date and two of which related to the ambit of the inquiry, those terms of reference were changed—and they were changed straightaway. There was absolutely no delay in that.

The attitude of the Australian Labor Party in this was amplified and reflected upon on 2 February when Mr Beazley said on 3AW: ‘We don’t want to see the AWB simply emerge as a scapegoat in this.’ There is plenty of mischief there—plenty of mischief for wheat farmers. But on this day, like on so many others, Labor have missed the mark. They have besmirched Australian wheat growers and continued to pursue a government which has acted with propriety and completely transparently on this matter. The government should be applauded instead of being denigrated in the way that those opposite have done.

Anne McEwen (SA, Australian Labor Party) Share this | Link to this | Hansard source

I also rise to take note of answers by Senator Minchin, Minister representing the Prime Minister. How Senator Minchin—and, just now, Senator Scullion—can stand in this place and pretend that the government and its ministers have come out of the Cole commission process squeaky clean is extraordinary. We have witnessed one of the biggest scandals in Australia’s federal history, and the behaviour of the government is just testament to the incredible deception and incompetence that it continues to foist on the Australian people. This government lied about ‘children overboard’, lied about weapons of mass destruction in Iraq, committed us to a disastrous war and then, when they knew that the dirty dealings in Iraq were going to become public, they ensured that the terms of reference for the Cole commission were framed to protect ministers—Ministers Downer, Vaile, Truss and the rest—who knew, or should have known, what was going on in Iraq. As we know, Commissioner Cole himself has said in writing that, under the terms of reference set by the government, he had no power to make determinations on whether ministers breached their legal obligations under Australia’s prohibited export regulations.

The government is engaging in its usual arrogant trickery, saying that the government did not get its hands dirty, when the issue of ministerial culpability was not even looked at by the commission the government set up. But the Australian people, I am pleased to say, will not be duped by this piece of trickery and they will not believe Senator Minchin’s weasel words today. They know it was Minister Downer who was merrily signing off and approving the 41 dodgy contracts that Australia entered into with the Iraqi government over a period of five years. The Australian people will not be duped. They have seen the monumental expose of corruption, the paying of $300 million of Australian money in bribes to Saddam Hussein—a mass murderer—and the breaching of international sanctions. All of this occurred on this government’s watch and this government did everything it could to cover up an appalling breach of international obligations. It did everything it could to cover up the shameful, disgraceful corruption and incompetence that has now placed in jeopardy our $3.3 billion worth of wheat exports. At a time when Australia’s wheat growers are facing the worst drought in our history, this government’s incompetence has compounded their troubles and destroyed Australia’s reputation in international trade.

The government, when it privatised the Australian Wheat Board, gave AWB a monopoly power and then failed to hold AWB accountable. It failed to ensure that it did not abuse its monopoly power and failed to put in place any measures in any government department or relevant authority to make sure that AWB was doing the right thing by Australia’s farmers. Not only did it fail in that regard but, when the smell of corruption and bribe-paying started to emanate from AWB, the government also ignored the 35 separate warnings its officers and departments received about AWB’s activities in Iraq. There were 35 warnings from 1998 to 2003. Ten of those warnings occurred in the period after we sent our troops into Iraq to support the Americans’ war. When we were sending our men and women to a war that we cannot win, we were funding the enemy against whom we were fighting. When rorting of the UN’s oil for food program was happening, Australia was the biggest rorter of them all.

This was not some one-off aberration; this was a long-term, systematic abuse of our international obligations. The failure of the government to be accountable and the reckless way in which it failed to act because it was afraid of upsetting its doormat friends in the National Party has made Australia subject to international scrutiny for all the wrong reasons. How humiliating to read in the Cole report the results of this government’s reckless failure to manage our participation in international affairs. As Commissioner Cole, in his opening remarks, said:

The consequences of AWB’s actions ... have been immense ... Shareholders have lost half the value of their investment. Trade with Iraq worth more than A$500 million per annum has been forfeited ... Some entities will not deal with the company. Some wheat farmers do so unwillingly but are, at present, compelled by law to do so. AWB is threatened by law suits both in Australia and overseas—

lawsuits that we believe to be to the value of around $1 billion. All of this was on this government’s watch. (Time expired)

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

One of the features of this inquiry of some 12 months with regard to the wheat scandal—and it is a scandal; it is properly dubbed one of Australia’s worst corruption scandals—has been the Labor Party’s shift from allegation to claim to assertion, and the previous speaker epitomises that. When each one was proven false along the way, they have found another reason to whip up an issue, exaggerate—indeed, slur—give false witness and, in fact, lie all along the way. The previous speaker, who is in great denial—

John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

Senator McGauran, I think you should withdraw that.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

That she is in denial?

John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

‘Lie’.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

The Labor Party—

John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

Just withdraw.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

I withdraw and replace it with: many untruths were given and false witness was borne by the Labor Party along the way during this 12-month inquiry. As I said, the previous speaker epitomises all of this. We will have a different opinion, no doubt, about how the Australian people will judge this. I have no doubt that the Australian people have not been fooled by the shrill other side over the past 12 months and will not be fooled now that the report has been handed down.

What the Australian people demand of any government is transparency. The establishment of a commission of inquiry was the government’s bona fides in relation to this issue. The Volcker inquiry established that over 2,000 companies in 66 countries prima facie had been rorting the UN oil for food program. So the government acted. Only three countries established an inquiry. No other country, only Australia, established an inquiry with the powers of a royal commission. Australia stands alone in having established an inquiry with the greatest powers of investigation of any.

This claim that the inquiry did not have the terms of reference to rope in the government, if you like, is absolute rubbish. The Cole inquiry changed the terms of reference some five times along the way, and Mr Cole said that he was not constrained by the terms of reference from investigating the government’s and the department’s involvement in all this. Have you conveniently forgotten all of that? Is that why you have dropped it out of your speeches today? I repeat: Mr Cole said clearly that he was not constrained by the terms of reference with regard to investigating the government’s, any minister’s or any department’s apparent involvement in this oil for food scandal. Moreover, the Prime Minister, the Minister for Trade and the Minister for Foreign Affairs all fronted the Cole inquiry—voluntarily, I should add—to answer questions.

From the time the Volcker inquiry set up a prima facie case with regard to corruption, this government has continued to act with transparency and vigilance right up to the release of the recommendations today. Rest assured, the recommendations handed down by the Cole inquiry will be acted upon speedily and vigorously implemented.

We know the Labor Party never found their smoking gun during the last 12 months, and now they have the audacity, as shown by the previous speaker, to still try and link the government with this corruption case, regardless of what Mr Cole himself has put in writing. I wonder if they have even read the report. They do not want to read it. I recommend that the other side read the findings of the Cole inquiry. If they do, they will find, quite clearly, quote after quote—like those I have before me—that the government did not, in the words of Mr Cole, ‘turn a blind eye’. In fact, at no time did AWB tell the Australian government or the United Nations of the true arrangements: they were deceived. They are the words in the findings of the Cole royal commission. (Time expired)

Question agreed to.