The Guardian 6 December, 2006
Cole's cover-up: A stench of corruption
while small farmers suffer
Bob Briton
Nobody should be surprised at the findings of the inquiry into the $290 million-worth of
sanctions-busting kickbacks by the Australian Wheat Board (AWB). The terms of reference
were designed to protect the Howard Government from a thorough probe of the scandalous
trade with the Hussein regime which, we were told at the time, had links to terrorism and
threatened the world with weapons of mass destruction. Terence Cole, the commissioner
appointed by the government, had already demonstrated his allegiances when he headed a
Royal Commission into the building construction industry in 2001-2002 that proved to be an
anti-union witch-hunt and which led to the establishment of a secret police force targeting
workers in the building industry.
Single marketing desk in danger
The main casualty of the inquiry is likely to be the single desk marketing of wheat overseas which
has been a boon to wheat farmers.
The Labor Party and the Nationals should unite on this issue to protect the interests of small wheat
farmers.
The report has encouraged opponents of a single wheat marketing organisation within the Howard
Government as well as in the US where the wheat marketing lobby is keen to grab Australia's
overseas wheat markets.
Howard has declared that the Cole report "has clear implications for the single desk that gives the
AWB the monopoly to sell wheat overseas". He and others in the Liberal Party are demanding the
break-up of the AWB which has already been privatised. They want all sorts of fly-by-night private
enterprise competitors to be established. While this might help agribusiness monopolies, it will
make life very hard for smaller farmers already battling with drought and who would find it very
difficult to find a reasonable price on monopoly-dominated international markets. They would be
pitted against each other in vicious price-cutting competition to sell their wheat to one of the
marketing desks in Australia.
Prior to 1989, the government's wheat board regulated the domestic wheat sales and found
overseas markets for Australian growers. After that, its role was limited to overseas trade. It was
corporatised in 1998 and finally privatised in 1999. The next obvious step on the neo-liberal agenda
is to take away its monopoly and turn it into just another wheat marketing company. The scandal
surrounding the sanctions-busting trade with the Hussein regime was heaven-sent for supporters of
let-it-rip market forces.
Impact on small farmers
The PM realises the impact such a development could have on small farmers and has been talking
about beefing up the powers of the industry regulator, the Wheat Export Authority, which could
supposedly take over some functions of the AWB. He has hinted that any sacrifices made due to
the loss of the single desk could be made up through negotiations with the WTO, as if the WTO is a
friend of small producers.
Former trade minister and Nationals leader Mark Vale is skewered on his loyalty to Howard while
fearing a backlash from small farmers. Fellow National Party Senator Barnaby Joyce has said that
a single desk remains "absolutely essential".
Howard/Downer let off the hook
Howard and Downer have declared themselves well pleased with Cole's findings. The PM has
even called on the Opposition to apologise for having suggested government ministers knew about
the kickbacks paid to the Hussein regime through inflated transport fees charged by Jordan-based
trucking company Alia and hidden in the books of London shipping agent Ronly. But few in
Australia believe them. An AC Nielsen poll found that nearly 70 percent believe that Howard and
Downer did know about the kickbacks.
The Department of Foreign Affairs and Trade was let off the hook because, Cole maintains, it did
not have procedures in place to deal with the sort of shady dealings engaged in by the AWB. "They
(the AWB) were deceiving us", cried Downer in mock outrage. "They were deceiving the UN. I was
shocked."
It seems that the can will be carried by 11 former AWB staff — including the gun-toting Terry Flugge
and Michael Long who were chosen by the Government in 2003 to advise on the rebuilding of Iraq
as part of the interim coalition government in the occupied country.
BHP also deemed innocent
The other person to be investigated by a special taskforce to be set up by Attorney General Philip
Ruddock is former BHP-Billiton executive Norman Davidson Kelly who was described by Cole as
having "no commercial morality". Cole found that Kelly had cooked up a scam to recover the $5
million cost of a shipment of wheat donated to Iraq in 1996. BHP's "charity" was in fact designed to
get favourable consideration from the Hussein regime to exploit the massive Halfayah oil field in
Southern Iraq.
When it appeared that BHP would no longer be dealing with Hussein, Kelly (who at that stage
headed the BHP's shadow partner Tigris Petroleum) converted the cost of the "donated" wheat into
a "loan" and sought to recover it through the AWB. This was to be done by inflating the cost of
wheat exported under the UN oil for food program. Only the outbreak of Gulf War II prevented the
plan going ahead. While Coles was scathing of Kelly, BHP was deemed innocent of any
wrongdoing.
The Australian public is no doubt disturbed that weeks and months of shocking revelations and
ample evidence that the Department of Foreign Affairs, the Minister for Trade, the Foreign Minister
and the Prime Minister had been receiving warnings of the kickbacks for several years will at best
only lead to the prosecution of a dozen supposedly rogue employees and executives. They are
aware that only the fall of the Hussein regime, the discovery of secret files laying bare AWB's
activities and the findings of UN investigator Paul Volcker prompted the government to set up the
limited inquiry.
Paul Lavaca SC, representing former AWB marketing chief Charles Scott said Cole ran "a circus"
which did not pursue evidence about the Howard Government's knowledge of the AWB's breaches
of UN sanctions. Former Liberal leader John Hewson said that the scandal and the lack of
accountability on the part of the government could make it a "sleeper" issue in next year's election.
Ethicist Simon Longstaff noted the doctrine of ministerial responsibility no longer existed in
Australia.