The United Nations Independent Inquiry Committee was formed to investigate allegations of corruption and fraud in the UN Oil-for-Food Programme. Paul Volcker's report, released in October 2005, found that AWB was the biggest single source of kickbacks made to the Iraqi government.[citation needed] In exchange for trouble-free disembarkation of wheat purchased under the Oil for food program, AWB paid 'trucking charges' totaling A$300 million to Alia, a Jordanian trucking company. Volcker found that Alia kept a small percentage of the 'charges', and passed the remainder to the government of Saddam Hussein. An accompanying statement released with the report by the Secretary-General of the United Nations, Kofi Annan requested that "national authorities take steps to prevent the recurrence of such practices in the future and that they take action, where appropriate, against companies falling within their jurisdiction".[2]
Establishment of the Cole Inquiry
In response to Volcker's findings, the Australian Government established a Royal Commission to further investigate the claims raised by the UN report. By Letters Patent issued on 10 November 2005 the commission was asked to inquire into and report on:[3]
whether any decision, action, conduct, payment or writing of any of the three Australian companies mentioned in the Final Report ("Manipulation of the Oil-for-Food Programme by the Iraqi Regime") of the Independent Inquiry Committee into the United Nations Oil-for-Food Programme, or any person associated with one of those companies, might have constituted a breach of any law of the Commonwealth, a State or Territory; and
if so, whether the question of criminal or other legal proceedings should be referred to the relevant Commonwealth, State or Territory agency.
Commissioner and Counsel
The Royal Commissioner was Justice Terence Cole AORFDQC, a former Judge of Appeal of the Supreme Court of New South Wales. The Cole Inquiry was the second Royal Commission where Justice Cole was the sole Commissioner. The 2001–2003 Royal Commission into the Building and Construction Industry is commonly referred to as the Cole Royal Commission hence to avoid confusion the 2005–06 Royal Commission is commonly referred to as the Cole Inquiry.
Cole was supported by John Agius SC, Counsel Assisting and three other barristers, Gregory Nell, Michael Wigney and Miles Condon.
The three Australian companies adversely mentioned in the UN report (AWB, Alkaloids of Australia Pty Ltd, and Rhine Ruhr Pty Ltd) were granted leave to be represented by counsel before the Royal Commission
Hearings
Prior to the public hearings the commission held a series of closed hearings in December 2005 and January 2006. Some witnesses who were examined in the closed hearings also gave evidence in the public hearings.
The commission's public hearings commenced on 16 January 2006. During the first six weeks of public hearings evidence led by Agius and cross examination by him of witnesses brought out a series of revelations that showed the conduct of AWB's executives and directors in a very poor light. Apart from interrupting assisting counsel's question to ask witnesses his own probing questions, Cole frequently made reproving comments about the behaviour and evidence of witnesses particularly those in responsible and often highly remunerative positions with AWB and the Wheat Export Authority, who among other things frequently claimed memory loss, inability to locate diaries and notes and notoriously, in the case of former AWB board chairman Trevor Flugge, hearing loss.
On 6 February 2006 the inquiry's terms of reference were extended to include the activities of BHP Billiton in relation to the Oil for Food Program.[4]
On 16 February 2006 Commissioner Cole invited broadcast media into the inquiry's hearing room to record an invitation to anyone with information about kickbacks or the Iraqi oil-for-food scandal to appear before his inquiry. Cole emphasised that this appeal applied to anyone saying: "I am extending a specific invitation to any Member of Parliament, any member of the media, any public servant, or any member of the public who believes that they have information relevant to this aspect of the inquiry to provide any such information to those assisting me".[5]
On 2 March 2006 counsel assisting, John Agius, threatened to serve search warrants on AWB following claims of memory lapses and loss of documents by a former company manager, Andrew McConville. This was countered by counsel for AWB who suggested that the search for documents by the company was being conducted in a rigorous manner and at considerable expense.
On 3 March 2006, Cole applied for the inquiry's terms of reference to be amended to extend the period of the inquiry for up to two months (i.e. from the end of March to May 2006). Prime MinisterJohn Howard indicated the government's agreement to this request two days later.
Howard was asked to write and submit a statement in regard to this matter, and was cross examined on 13 April for 53 minutes. Howard previously stated to a media conference held in Sydney, "If asked I will naturally be happy to appear." "I've said all along that this is an utterly transparent process, which is not protecting the Government, which is designed to get to the truth of this matter and I am more than happy to comply with the request made by the commission."[6]
Outcome
On 28 August 2009 the Australian Federal Police (AFP) decided to drop its investigation into the scandal in which wheat exporter AWB was found to have been funding the Iraqi regime in breach of UN sanctions. It was found that it was not even clear that breaching a UN sanction is a criminal offence and a conviction "was not in the public interest". The decision means no former employee or director of AWB will face criminal charges, although an investigation by corporate watchdog Australian Securities & Investments Commission continued. The AFP announced that the decision to drop the investigation was made after a review of the evidence by senior barrister Paul Hastings QC, who declared the prospect of convictions was limited and "not in the public interest".[citation needed]
In 2009, The Australian reported "It has hardly been a secret that the AFP investigation was under-funded and under-resourced, and it received little co-operation from AWB, which sees itself as a new entity, with all staff associated with the corrupt dealings having left."[7] Hastings told the AFP that in his opinion there was no reasonable prospect of a conviction. It was not even clear that breaching a UN sanction is a criminal offence.[8]
^Cole, Terence. "Summary, recommendations and background"(PDF). Report of the Inquiry into certain Australian companies in relation to the UN Oil-for-Food Programme. p. 197. Archived from the original(PDF) on 22 March 2011. Retrieved 10 March 2011.
to inquire into and report upon the arrangements made for the transport of troops returning from service in South Africa in the S.S. "Drayton Grange" (1902)
on sites for the seat of government of the Commonwealth (1903)
on the Bonuses for Manufactures Bill (1903–1904)
on the butter industry (1904–1905)
on the Navigation Bill (1904–1906)
on the affray at Goaribari Island, British New Guinea, on the 6th of March, 1904 (1904)
on customs and excise tariffs (1904–1907)
on old-age pensions (1905–1906)
on the tobacco monopoly (1905–1906)
1906–1910
on ocean shipping service (1906)
British New Guinea—Royal Commission of inquiry into the present conditions, including the method of government, of the Territory of Papua, and the best means of their improvement (1906–1907)
on secret drugs, cures, and foods (1906–1907)
on postal services (1908–1910)
on insurance (1908–1910)
on stripper harvesters and drills (1908–1909)
on Tasmanian customs leakage (1910–1911)
1911–1920
1911–1912
on the sugar industry (1911–1912)
on the pearl-shelling industry (1912–1916)
on the fruit industry (1912–1914)
1913–1914
to inquire into certain charges against Mr. Henry Chinn (1913)
on Northern Territory railways and ports (1913–1914)
on powellised timber (1913–1914)
upon the Commonwealth electoral law and administration (1914–1915)
on meat export trade (1914)
on food supplies and trade and industry during the war (1914)
1915–1916
on mail services and trade development between Australia and the New Hebrides (1915)
on Liverpool Military Camp, New South Wales (1915)
on the charges made by D. L. Gilchrist concerning the construction of the western section of the Kalgoorlie to Port Augusta Railway (1916)
to inquire into and report upon certain charges against the Administrator and other officers of the Northern Territory Administration (1916)
on Federal Capital Administration (1916–1917)
1917–1918
on Java and the East Indies, Singapore and the Straits Settlements (1917–1918)
on Navy and Defence Administration (1917–1919)
on the war—Australian Imperial Force. Report as to number of members fit for active service and number of reinforcements and enlistments required (1918)
on Public Service administration, Commonwealth of Australia (1918–1920)
upon the public expenditure of the Commonwealth of Australia with a view to effecting economies (1918–1921)
on taxation of leasehold estates in Crown lands (1918–1919)
on the basic wage (1919–1920)
1919–1920
on the sugar industry (1919–1920)
on industrial troubles on Melbourne wharfs (1919–1920)
on late German New Guinea (1919–1920)
to inquire into complaints by the munition worker passengers to Australia by the transport "Bahia Castillo" (1919)
on Northern Territory Administration (1919–1920)
on taxation (1920–1923)
on the increase of the selling price of coal (1920)
upon the loyalty to the British Crown of German Nationals resident in Australia whose property is liable to a charge created by the Treaty of Peace Regulations made under the Treaty of Peace (Germany) Act 1919–1920 (1921)
1923–1924
on the circumstances attending the supposed loss at sea of the steamship "Sumatra" (1923)
in connection with sugar purchases by the Commonwealth through Mr. W. E. Davies in September and October, 1920 (1923–1924)
in connection with joinery supplied to the War Service Homes Commissioner in March, 1920 (1923–1924)
on the method for determining the unimproved value of land held under Crown leases (1924–1925)
on the assessment of war service disabilities (1924–1925)
to inquire into extracts from the reports in Parliamentary Debates of speeches made by Mr. Scullin in the House of Representatives on 7 and 19 August 1924, in relation to land tax matters (1924–1925)
on the finances of Western Australia, as affected by Federation (1924–1925)
1925–1926
on health (1925–1926)
on Norfolk Island affairs (1926)
on certain matters in connexion with the British Phosphate Commission (1926)
to inquire into allegations affecting members of the Parliamentary Joint Committee of Public Accounts in connexion with claims made by broadcasting companies against the Commonwealth Government (1930)
1931–1940
1931–1935
on Jacob Johnson (1931)
on performing rights (1932–1933)
on taxation (1932–1934)
on mineral oils and petrol and other products of mineral oils (1933–1935)
on the wheat, flour and bread industries (1934–1936)
to inquire into and report upon the circumstances associated with the retirement of Lieutenant-Commander Alan Dermot Casey from the Royal Australian Navy (1934)
to inquire into the monetary and banking systems at present in operation in Australia (1935–1937)
1936–1940
on doctors' remuneration for national insurance service and other contract practice (1938)
to inquire into and report upon the contract or contracts with Abbco Bread Co. Pty. Limited for the supply of bread to the Department of the Army, and other matters (1941)
to inquire into circumstances under which certain public monies were used and to whom, and for what purposes such moneys were paid (1941)
an inquiry into a statement that there was a document missing from the official files in relation to "The Brisbane Line" (1943)
to inquire into and report upon certain transactions of the Sydney Land Sales Control Office, and the Canberra Land Sales Control Office of the Treasury (1947)
to inquire into certain transactions in relation to timber rights in the Territory of Papua-New Guinea (1949)
1951–1960
on the Port Augusta to Alice Springs Railway (1951–1952)
on alleged improper practices and improper refusal to co-operate with the Victoria Police Force on the part of persons employed in the Postmaster-General's Department in Victoria in relation to illegal gambling (1962–1963)
