Officials left 'incorruptible' AWB alone

27 Oct, 2015 04:40 AM
Former AWB chairman Trevor Flugge.
The company was seen as not only having the best wheat but also that the company was 'incorruptible'
Former AWB chairman Trevor Flugge.

ALLEGATIONS of illegal activity by AWB in its contracts with Iraqi wheat buyers, years before the sanction-busting scandal become public, did not cause concern with Australian officials because the company was seen as "incorruptible", a court has heard.

The Victorian Supreme Court also heard that the Department of Foreign Affairs and Trade had a "quiet" word with AWB after discovering the wheat trader had promised to fund a laboratory for one of its Iraqi clients.

DFAT former head of the Middle East Bob Bowker said he received a memo in 2000 detailing serious allegations about AWB's trading in Iraq under the oil for food program in the 1990s but did not refer the allegations to the United Nations or the responsible Australian minister.

This was years before allegations of AWB's bribes to Saddam Hussein's regime came to light in late 2005.

"This was a case where a competitor of AWB was relaying a supposed conversation with Iraqi authorities about the way in which business was being done with AWB and with another company and the allegations themselves were simply an assertion without any evidence in their support."

Professor Bowker said AWB's "enviable reputation in the Middle East" meant the company was seen as not only having the best wheat but also that the company was "incorruptible".

Former AWB chairman Trevor Flugge and former AWB wheat trader Peter Geary have been accused by the Australian Securities and Investment Commission of causing damage to AWB's shareholders by allegedly engaging in secret payments between 1999 and 2003 in breach of international sanctions against Iraq.

The case being heard at the Supreme Court of Victoria by Judge Ross Robson centres on kickbacks allegedly paid by AWB to Saddam Hussein's Iraqi regime wheat buyers during their participation in the United Nations' oil for food program.

Earlier on Monday, former AWB director Warwick McClelland told the court the AWB board saw no problem when it learned millions of dollars were being paid into Iraq for "trucking fees" as this sounded "sensible". He also told the court Mr Flugge had a reputation as a person "of integrity".

The court also heard that Professor Bowker and his team decided to have a "quiet" word with AWB's representatives when they discovered the wheat exporter had promised to fund a laboratory for wheat testingin Iraq which fell outside of the oil-for-food program.

"We took the view that this was an honest mistake on the part of AWB trying to be helpful to its Iraqi customer."


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27/10/2015 6:26:33 AM

This issue has got to be the biggest and most sinister hoax of all time against the most honorable of all authorities and people. The mention in this story of the whole thing being sparked by allegations from a competitor, is evidence of how hollow and sinister the story is. The AWB was simply negotiating the best possible outcome for its grower stakeholders and did so with a legitimate international buyer. What we should be investigating is the basis upon which the US and Australian Governments went to war against Saddam Hussein. They had no proof of WoMD but led us to believe they did.
27/10/2015 6:44:56 AM

Who is sponsoring this case? Why is it being pursued when ex Chief Justice, High Court of Australia Sir Anthony Mason, is reported to have said "a supplier such as AWB could reasonably conclude that the payment in some form of reasonable inland transportation fees to a transport company operating in IRAQ was consistent with the Sanctions Resolution as they came to be interpreted and applied".
27/10/2015 9:22:01 AM

I understood we were at war with them and trading with the enemy was a traitorous action for which the penalty should be / shot at dawn . But big money seems to have won out .
Philip Downie
27/10/2015 10:31:59 AM

Captain we weren't at war at the time there were sanctions against them, very different. The UN were not going to move the wheat from the port to the people so who was? Since it was a dictatorship guess who would make money. These transport restrictions were stupid and un enforceable. There were a multitude of companies breaking "these rules" only AWB was prosecuted, so John H could have a bromance with George Dubyah
Jock Munro
27/10/2015 2:34:20 PM

Yes Howard did not stand up for us. Note Professor Bowker's comments about our "enviable reputation for quality in the Middle East". The merchants that were gifted our industry have soon put paid to that .
Ted O'Brien.
27/10/2015 5:21:01 PM

argis, JT and Philip Downie, absolutely! Who, indeed, is maintaining the prosecution of this case? The payment of "inland trucking fees" was no secret, it was public knowledge. We were told, so the world also was told at the time, that the payments were approved by the UN because sanctions had left Iraq lacking the resources to move the wheat from the ports to the inland cities. AWB Ltd was hung out for the vultures by the Howard government because, having been formed out of the old wheat board, it was regarded as a bastard child, unclean, not a product of their theoretical "free market".
28/10/2015 4:06:58 AM

There people of Iraq had as much right as the rest of us to be fed.When does any nation have the right to starve another?Especially when the sanctions were placed based on so many lies. Money is the real reason behind all wars,the misery and destruction is a mere flesh wound to the military industrial complex.
28/10/2015 5:22:13 AM

Instead of parliament and authorities attacking our marketing people over their negotiations with overseas buyers, they should attend to the absolute mess they have created in Australia where just lifting a container from our wharves costs 5-10 times more than overseas countries and transport is similarly over priced. All this is because our Governments have allowed Unions to totally destroy our manufacturing industries with penalties, phony rules and anti productive measures. But we would rather destroy the few highly efficient businesses we had.
28/10/2015 7:28:36 AM

Since when has Australian Law been decided by some cobbled together group of countries who very questionably set up rules for international trade with any particular nation. In other words, we have a case where a legitimate (not for profit) Australian Trading organisation negotiates a legitimate sales contract to maximise returns to its stakeholders including conditions and payment for inland transport, being tried on the basis of some loosely and arbitrarily crafted foreign conditions which are not Law in Australia.
28/10/2015 8:53:06 AM

Absolutely correct GFA. Rather than Law, the Food for Oil rules were merely a recommended code of conduct which the "bullying countries" with a vested interest in the Oil from Iraq, were trying to impose on various countries engaged in trade with Iraq. When one or more of those country's traders got out negotiated, they then tried to use these code of conduct suggestions as a means of getting the advantage over their competing commercial organisations. When is Australia going to grow up and stop being sucked in by such trickery.


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