UNLESS you were a follower of the oil for food scandal, you may not have seen any significance in the announcement that former AWB chief executive Andrew Lindberg has been fined $100,000 and disqualified from running companies for a bit over two years.
But it is significant. Between 1999 and 2002, under Lindberg’s leadership, AWB flagrantly disregarded UN sanctions against Iraq, paying $290 million in bribes to the country’s ruthless dictator, Saddam Hussein.
At the time AWB was Australia’s monopoly exporter of Australian wheat and legally obliged to comply with UN sanctions. Bribery is also illegal.
As well, some of the "kickback" money could potentially have been used to purchase weapons that were used by the regime to resist the US-led invasion in 2003 and then by factional groups in the subsequent insurgency.
Exposure of the bribery became a national embarrassment and led to international condemnation and litigation. The Cole royal commission, at which Lindberg suffered a profound but temporary memory loss, recommended 12 people including Lindberg be investigated for criminal and corporations offences. Australia was barred from selling wheat to Iraq for a while. Several lawsuits were initiated, with one ultimately costing the company $39.5 million.
Ten years later, there have been no prosecutions. While the evidence at the Cole commission would have been sufficient to put several people in jail, it was not admissible. The Australian Federal Police, which had responsibility for finding admissible evidence, was apparently not interested.
Lindberg’s settlement, while it involved admissions relating to bribery, was a result of action by ASIC. Similar action against several other former AWB employees is ongoing but unlikely to lead anywhere.
There are two important conclusions from all this. One is that a major corporation engaged in conduct that was not only illegal but seriously contrary to Australia’s national interest, and the responsible individuals have got away with it largely or entirely unscathed.
The other conclusion is that it illustrates the folly of granting an organisation control over a market. AWB would never have used $290 million of its own money to bribe Saddam Hussein. The money it spent on bribes belonged to Australian wheat growers.
This case shows how easily corruption can flourish when markets are distorted. The best safeguard against corruption is a free and transparent market, as our wheat export market has now become. In fact that’s probably the only positive aspect to emerge from the whole sorry saga.
David Leyonhjelm is an agribusiness consultant with Baron Strategic Services. He may be contacted at firstname.lastname@example.org