29.1 The Wheat Export Authority was created as a statutory authority under the Wheat Marketing Act 1989. Its statutory functions are defined in s. 5 of that Act:
Functions and powers of the Authority
(1) The Authority has the following functions:
(a) to control the export of wheat from Australia;
(b) to monitor nominated company B's performance in relation to the export of wheat and examine and report on the benefits to growers that result from that performance.
(2) The Authority has power to do all things that are necessary or convenient to be done in connection with the performance of its functions.[1]
Company B is AWB (International).
29.2 The Wheat Export Authority has compulsory information-gathering powers by which it can require AWB (International), and through it AWB Limited, to provide it with information or documents relevant to the operation of the pools, including the costs of operating them and the returns to growers that result from them.[2] The WEA's power to require AWBI or AWB to provide information to it was not introduced until June 2003 by the passage of the Wheat Marketing Amendment Act 2003.[3] Prior to that time, the advice received by the WEA was that it had no such compulsive powers and had to rely on the agreement of AWBI or AWB to provide such information.[4] The WEA also has the power to request, rather than compel, information relevant to its monitoring function.[5] Pursuant to s. 5C of the Wheat Marketing Act, the WEA prepares an annual report to the Minister for Agriculture, Fisheries and Forestry (which report is confidential) and an annual report to wheat growers. Each of these reports deals with AWBI's performance in relation to the export of wheat and the benefits to growers resulting therefrom.
29.3 The WEA has no statutory function to inquire into the operations of AWB save insofar as those operations affect returns to growers. It does not have power to investigate or control AWB or AWBI generally.
29.4 The WEA obtained market information from AWBI in relation to the WEA's export control and monitoring functions. The information included documents that were already in existence or documentary or oral information or reports prepared by AWBI specifically at the request of the WEA.[6] The WEA produced to the Inquiry all reports received by it and prepared by it dealing with Iraq.
29.5 AWB maintained a database, known as the market profiles database, in which it kept information on the countries with which it dealt.[7] The database for each market was created and maintained by the account manager for that market; in the case of Iraq, the market profiles database was prepared and updated by Mr Hogan until Mr Whitwell took over responsibility for the Iraq market in or about July 2002.[8] Copies of the market profiles for Iraq as at about August 2001, November 2002 and 20 April 2003 were produced by AWB.
29.6 The market brief as at August 2001[9], prepared by Mr Hogan, contains the following:
Contracts are concluded with the IGB on a Free in Truck Basis, delivered to all governorates of IRAQ. The Inland Transport fees (and all discharge fees) are included in the inland transport fee. Inland Transport fees are paid via Alia transport Company in Jordan, who then pay the Ministry of Transport in Iraq. These fees are approved by the UN.[10]
29.7 The August printout states:
Vessels on birth #1, #2 and #4 are discharged directly into road trucks, and the rate is effected by the number of road transports available. This can be an issue during the local Iraqi harvest (May-August), when the Grain Board remove transports from the Port to use moving local production to storage facilities.[11]
29.8 In the November 2002[12] and the 20 April 2003[13] briefs these paragraphs were reproduced in similar terms. None of this material appeared in any of the briefs or reports produced to the WEA by AWBI.
29.9 On 17 September 2002 Mr Herpen sent an email to Mr Sheridan, AWBI's National Pool Performance Manager, with the following request:
Glenn Taylor has asked me to forward the following request onto AWB(I).
Last week Glenn spoke to Tim Goodacre about AWB(I)'s involvement with the Iraq market. As a result of this discussion it is requested AWB(I) provide the following to the WEA:
1. A brief on AWB(I)'s current state-of-play with IRAQ (i.e. what were the recent trade issues in this market for AWB(I) and how were these resolved? What issues in this market remain unresolved for AWB(I), and what strategies does AWB(I) have in place to address these unresolved issues?); and
2. A brief on the scenario/contingency marketing strategies AWB(I) has developed for the Iraq market, given the issues identified in para 1 (above) (e.g. what is AWB(I)'s strategy if Iraq reduced bulk wheat imports from AWB(I) by 50%, 75%, or 100%?).[14]
29.10 Mr Sheridan forwarded Mr Herpen's request to Mr Long and Mr Johnson, noting that he would 'clarify the extent of the information and purpose'.[15] Mr Long forwarded the two emails to Messrs Whitwell, Hogan and Edmonds-Wilson with the message 'Please discuss before we formulate a reply'.[16]
29.11 Mr Herpen subsequently confirmed to Mr Sheridan that the 'context of the request' was 'a general brief for the WEA Board'.[17] Messrs Long, Whitwell, Hogan and Edmonds-Wilson were informed of this in a train of emails.[18]
29.12 On 23 October 2002 AWBI produced a market brief in response to the WEA's request.[19] The brief principally dealt with Iraq's announcement in July 2002 that it would halve its proposed purchase of 1 million tonnes of wheat as a consequence of the Australian Government's position on Iraq, the quality claims, and the contingencies for war. Neither inland transport fees nor their prepayment were mentioned. The 10 per cent after-sales-service fee incorporated in, and paid through, the inland transport fee was not mentioned; nor was there mention of the proposal by AWB to inflate the contract prices to recover the Tigris debt.
29.13 It appears from a draft of the report, prepared by Ms Cattanach, AWB's Research Market Analyst[20], that AWB originally did include mention of the Tigris proposal.[21] The draft noted that the Iraqi Grain Board owed 'Tigris Petroleum US$8 million for cargo of wheat sent to Iraq in 1996'[22] and that:
We have proposed the current rebates for 'Iron powder' should be offset against Tigris Petroleum. We have received a positive response from IGB. ISM [International Sales and Marketing] requires ELG [Executive Leadership Group] direction in regard to this matter.[23]
29.14 The draft was provided by Ms Cattanach to Mr Whitwell for comment around 17 October 2002.[24] Ms Cattanach's email to Mr Whitwell read, in part:
As mentioned previously there are gaps which I'm hoping you can fill if just very briefly. Steve will be reviewing it also & you'll notice I've got a couple of questions on the doc from him too. eg should certain info go to WEA or not?[25]
Next to the paragraph about Tigris just quoted Ms Cattanach noted, 'Steve does WEA need to know this info??'[26]
29.15 The entry about Tigris was removed at the suggestion of Mr Whitwell.[27] He wrote on the draft:
I think we have to separate the issues and do not feel that this issue is in our hands-it is bound up with un sanctions and regime change. I would suggest it should not be in this brief. I would therefore suggest today that the only issues to be resolved with the Iraqis are political to do with govt position and future business. ??[28]
Mr Whitwell was addressing Ms Cattanach and Mr Sheridan, who were responsible for preparation of responses to WEA inquiries and providing the necessary information to it.
29.16 When questioned by Counsel Assisting as to why he had formed the view that the information about Tigris ought not be passed on to the WEA, Mr Whitwell said:
Because in my mind, at October 20, sir, I believed that there were-really the three issues, or the issues that were unresolved, were the political issue between Iraq and Australia; our execution issues-ie, the ships on the water and getting them unloaded smoothly and out, and I think at that point in time we were also chasing a letter of credit; and how we were going to manage the war risk, or the increasing risk of war going forward, and how we were going to manage the exposure of our contracts. I didn't believe the Tigris debt issue to be an issue that was one that was unresolved or a priority for us.[29]
29.17 Mr Whitwell disputed Counsel Assisting's suggestion that this was a deliberate deletion on his part with a view to keeping from the WEA any knowledge as to how it was proposed that AWB might settle the Iron Filings Claim.[30] He also disputed the suggestion that there had been a deliberate decision not to tell the WEA about the Tigris debt.[31]
29.18 On 8 November 2002 (misdated 2003) AWBI provided to the WEA a market brief for the '1st Quarter 2003'.[32] This report did mention that 'all suppliers sell Free in Truck all governorates of Iraq' but did not explain this expression.[33] Costs factored into AWBI prices were listed, but the list did not include inland transport costs or the 10 per cent after-sales-service fee paid through the inland transport fee.[34] It was neither clear nor explicit whether the 'finance' cost included compensation for prepayment of inland transport fees. There was no indication of any payment to Alia or Iraq. The Tigris proposal was not mentioned.[35]
29.19 Mr Taylor did not remember noticing the 'Free in Truck' clause but believed he would have read it.[36] A summation by the WEA secretariat of the key points of the two market briefs dated 14 November 2002 does not mention the FIT clause, supporting Mr Taylor's belief that it went unnoticed.[37] Mr Taylor stated that neither then nor at the time of giving evidence did he understand the meaning of the expression 'free in truck', but he accepted that it was probably related in some way to payment for inland transport.[38]
29.20 A further Iraq brief was sent to the WEA on 17 April 2003[39]-that is, after the contracts inflated to recover the Tigris debt were entered into[40]and after hostilities had commenced.[41] The brief discussed contingency planning and risk minimisation strategies adopted by AWB for the war but did not disclose inland transport payments. In particular, it did not discuss the risk inherent in prepaying transport fees, which had by then eventuated: Alia had been paid transport fees for two vessels and had passed the fees on to Iraq, so that when the vessels were diverted because of the war Alia was unable to repay the transport fees. The Tigris debt recovery, which was then in the process of being implemented, was not disclosed.
29.21 In late 2003 the WEA's Senior Manager Performance Monitoring, Mr Charman, informed the WEA of allegations in the press about 'kickbacks' by AWB.[42] Payments to Iraq, lawful or otherwise, might adversely affect returns to growers. Unlawful payments could seriously damage AWB's reputation in that and other markets and thus have a serious detrimental affect on grower returns.
29.22 On 31 October 2003 Mr Sheridan forwarded to the WEA a briefing note on the allegations recorded in the media and initiated by US Wheat Associates.[43] The note refuted the allegations of 'kickback' payments and described the allegations as 'ludicrous' and 'absolutely untrue'.[44] It stated that a formal complaint had been made to the US Secretary of State and that all contracts 'including pricing aspects' had the approval of the United Nations.[45]
29.23 In November 2003 AWBI provided a further briefing note.[46] Again, Tigris and inland transport arrangements were not mentioned.
29.24 On 11 February 2004 the WEA Board decided that an important subject for examination in its 2004 report was an 'analysis of AWBI policies and procedures in regard to its relationship and conduct in the Iraq market'.[47]
29.25 Between February and June 2004, the WEA requested:
29.26 On 19 March 2004 AWBI provided its 'Guidelines on business conduct' and a booklet on its corporate ethics.[49] In response to the WEA's request to provide a summary of all contracts with Iraq and their execution and payment status and an update to the briefing note on Iraq provided in April 2003, AWBI provided information on the then current contracts-A1670 and A1680.[50] It also provided a schedule of Iraq shipments for the period October 2003 to February 2004.[51] Again, the Tigris dealings and inland transport arrangements were not mentioned.
29.27 On 7 April 2004 AWB provided to the WEA a general explanation of its types of costs. This included 'land freight cost', but there was no explanation of how or when that cost was paid or its quantum in actual or percentage terms.[52] This information was not related specifically to contracts with Iraq.
29.28 In May 2004 Mr Charman became aware of further media allegations referring to inflation of contract prices. The WEA then requested copies of all contracts, as well as advice about whether agency or facilitation payments had been made.[53]
29.29 On 21 May 2004, in preparation for Senate estimates, the WEA asked AWBI for a briefing note about Iraq and the alleged kickbacks. Mr Cooper drafted the briefing note[54], which advised:
Every AWBI contract for the sale of wheat to the Grain Board of Iraq ('GBI') under the Oil-for-Food ('OFF') Program was vetted by the Office of the Iraq Program ('OIP') at the United Nations (UN). The OIP was obliged, under UN Security Council guidelines to determine, among other things, whether the price of goods sold under the OFF program was reasonable. The price and value of every AWBI shipment to Iraq under the OFF program has been examined and declared, by the relevant OIP officials, to be reasonable and acceptable (or in words to that effect).
Prior to July 1999, AWBI sales under the OFF program to GBI were on CIF (Cost, Insurance, Freight) Umm Qasr terms. AWBI's price for wheat shipped under the OFF program factored in contingencies for demurrage costs, war risk premium, interest costs due to delay in processing payments for the wheat by the UN, rejection of cargo by GBI, shrinkage and currency exposure.
From July 1999 to February 2003, the sale price included an inland transport component to cover transport by truck from Umm Qasr to silos within all Governorates of Iraq. The trucking costs were paid to a Jordanian company responsible for that part of the contract. That same trucking company continues to provide all current trucking required for AWBI's wheat exports to Iraq in 2004.[55]
29.30 On 2 June 2004 AWBI provided a further briefing note, advising of the status of the Iraq debt and noting that growers were still due US$98 million.[56] The briefing note did not disclose that AWB had inflated prices in contracts A1670 and A1680 to recover the debt for Tigris.[57]
29.31 At the WEA's 30 June 2004 Board meeting it was noted that AWBI had not provided contracts concerning Iraq and the secretariat was to follow this up.[58] It was also noted that in writing up the 'kickback' allegations in the Performance Monitoring Review report, the WEA 'should only reflect the WEA's responsibilities of reporting on AWBI's export performance, including corporate governance, but indicate the WEA's watching brief on the outcomes of any investigations by appropriate authorities'.[59]
29.32 On 8 July 2004 Mr Sheridan wrote to Mr Long, Mr Whitwell and Ms Scales, advising them that he had 17 Iraq contracts and the relevant UN approvals and customs clearances ready for the WEA and seeking their permission to provide those documents to the WEA.[60] Mr Long replied that he had reviewed the documents and there was 'nothing that hasn't already been seen by DFAT/UN' in the documents; he approved their provision to the WEA.[61] The documents were not, however, sent.
29.33 On 16 July 2004 AWB provided records of agency and facilitation payments, showing there had been none to Iraq.[62] It was not clear whether the payment of transport fees or the 10 per cent after-sales-service fee was considered an agency or facilitation fee by AWBI; in any case, it was not specifically disclosed. It is of note that by at least 23 April 2004 Mr Johnson, the Pool Manager, was referring to the Tigris debt as a 'commission' for Tigris' assistance in obtaining sales.[63] If it were truly regarded as such, this ought to have been advised in response to WEA's request. AWBI had still not provided the Iraq contracts to the WEA.
29.34 On 27 July 2004 the Boards of the WEA and AWBI met.[64] At the meeting they discussed the draft Performance Monitoring Review report, the report to growers, international visits by the WEA, the 2004 review and report, and future Board-to-Board meetings.
29.35 The Boards discussed the status of the WEA's unmet request for copies of Iraq contracts.[65] Because of concerns about confidentiality, AWBI senior management proposed that the WEA attend AWBI's offices to see the contracts and carry out their audit in house.[66]
29.36 At this time the AWBI Board was aware that AWB had been conducting an internal investigation known as Project Rose into its Oil-for-Food contracts with Iraq; this had involved a comprehensive review of all contract arrangements for AWB's export of wheat to Iraq from mid-1999 to 2003, including inland freight arrangements in Iraq.[67] The Board was also aware that Mr Tracey QC had been briefed to advise on whether AWB may have contributed to a contravention by Australia of its obligations under UN Resolution 661 or contravened any Commonwealth or State legislation.[68] The Board did not disclose this information to the WEA.
29.37 On 11 August 2004 Mr Sheridan provided to the WEA a briefing paper previously forwarded to the Australian Government on AWB's involvement in the Oil-for-Food Programme.[69] The paper was supplied to Mr Sheridan by Mr Hargreaves, who was working with Mr Cooper coordinating Project Rose.[70] The paper noted:
3. AWB's supply of wheat to Iraq under the OFF Program
…
…
…
29.38 AWBI did not disclose in the briefing paper that neither the fact nor the amount of the payments for trucking fees made to Alia was shown on the face of any of the 26 contracts. It also did not disclose prepayment of the fees, the fact the fees included a 10 per cent surcharge and that the fees were passed on to an Iraqi instrumentality. Nor did the brief disclose the statement contained in the AWB market brief: 'The inland transport fees are paid via Alia Transport Company in Jordan who then pay the Ministry of Transport in Iraq'.[72]
The Tigris dealings were not disclosed.
29.39 On 11 August 2004 Mr Charman and Ms Duck attended the offices of AWB in Melbourne and were given access to the following documents in a folder:
29.40 The primary purpose of the WEA's review was to confirm that the contract data that had previously been provided to the WEA reconciled with the information previously provided by AWBI, particularly in relation to a net back calculation of an FOB price. However, since the contracts did not separate any of the costs, including inland transport costs, Mr Charman could not have reconciled the FOB amount.[74] In addition, one of the matters Mr Charman and Ms Duck were to review was the allegation that there may have been a 10 per cent kickback to the Iraqi Government or other entities in Iraq.[75]
29.41 Mr Charman instead satisfied himself that the price in the contracts, less such costs as he had previously been advised by AWBI (which did not include inland trucking fees), exceeded the FOB price AWB had also previously advised. He apparently noted that this was above the benchmark price and was accordingly satisfied.[76] In truth, this was no check at all.
29.42 Mr Besley, the WEA Chairman, acknowledged that Mr Charman would have needed to know the contract price and all costs to be deducted from that price in order to establish the true FOB price. He accepted that tests carried out by Mr Charman could not possibly determine if the FOB price obtained by AWBI was the best available for growers: Mr Charman did not have before him the material necessary to calculate the FOB price.[77]
29.43 Mr Charman and Ms Duck also reviewed two letters from the World Food Programme, relating respectively to contracts A1670 and A1680.[78] The letters stated that the World Food Programme had been asked by the Coalition Provisional Authority to deduct the after-sales-service fee of 10 per cent on each contract. On seeing this, Mr Charman asked Mr Sheridan why a 10 per cent reduction had been agreed. Mr Sheridan left the meeting and sought a response from Mr Long or Mr Whitwell.[79] He then returned to the meeting and conveyed the response provided to him by Mr Long or Mr Whitwell[80]:
When the coalition forces came into Iraq the CPA forced a 10% reduction on all suppliers of food imports to Iraq. This was because they wanted to gain credibility and show value to the Iraqis by reducing the costs of goods and services. All suppliers agreed bar one, a Russian company, and that Russian company's contract was cancelled.[81]
Mr Whitwell did not believe he had provided the information to Mr Sheridan.[82]
29.44 Mr Charman accepted Mr Sheridan's explanation. He stated that, because the risk premium incorporated in the contract was so high, a 10 per cent reduction would still deliver a high FOB return against benchmarks. He could see no detriment to growers.[83] It necessarily follows, however, that a reduction of 10 per cent in the contract price results in growers receiving less than they otherwise would.
29.45 Mr Charman and Ms Duck were not told that the prices in the contracts had been increased to recover the Tigris debt from the UN escrow account or that AWB held that recovered money.
29.46 On his return to Canberra, Mr Charman prepared a record of the meeting[84]:
Iraq Sales Contracts
10. AWB(I) provided a folder, for WEA perusal, which contained:
11. The WEA read each document in the folder to verify that the details were consistent with information and data previously obtained by the WEA.
12. There were two letters dated 22 November 2003 from the WFP relating to contracts, A1670 and A1680, which stated that 'WFP have been requested by the CPA [Coalition Provisional Authority] to deduct the after sales service fee of 10 percent on this contract'.
13. AWB(I) explained that the 10 percent deduction was the result of a blanket demand from the CPA of a 10 percent reduction on all contracts for food imports, including wheat:
29.47 On 24 August 2004 Mr Sheridan sent an email entitled 'Iraq query' to Mr Hargreaves and copied it to other employees of AWB, including Mr Cooper and Mr Whitwell.[86] The email enclosed a copy of the WEA's record of meeting on 11 August 2004 and stated:
Peter,
Further to our meeting with WEA on 11 August, they have provided their minutes of the meeting below. They have also requested a written explanation of the 10% reduction in prices requested by CPA:
'… An item that arises from the meeting is that relating to the reason for the 10% reduction in contract price. In addition to the items highlighted in the document, could you please provide a letter or email confirming the advice regarding the CPA's demand for the reduction. This just closes the WEA's audit loop.'
Peter could you provide a written explanation that we can forward to WEA to close this off. I believe Jim does not have an issue with it and suggested you or Chris could draft something??
Happy to discuss,
Steve[87]
29.48 The same day Mr Hargreaves forwarded Mr Sheridan's email to Mr Long, requesting his assistance in preparing a response to the WEA's request.[88] On 28 August 2004 Mr Long asked Mr Whitwell to provide for Mr Hargreaves 'a short note regarding the matter'.[89]
29.49 On 13 September 2004 Mr Sheridan was copied an email to Mr Hargreaves from Mr Whitwell, providing a different account of the 10 per cent Coalition Provisional Authority reduction.[90] The email read:
Peter
sorry for the delay accessing emails has been a nightmare
from best recollection:
I was advised by certain CPA officials that there was a CPA directive to WFP to insist on a 10 pct reduction in ALL contracts that were to be renegotiated and that this was not supplier specific. When I was contacted by WFP in late September to renegotiate the balance of A1680 (approx 300 K) and A1670 (500K) this was again put to me. I protested in the strongest possible terms and took guidance from our contacts in Baghdad who confirmed the determination on this matter.
At the time the consequences of not taking the decision to reduce by 10 pct far outweighed any benefit. We had been carrying the stock in a small 02/03 pool and this was already costing large additional carry costs to supply chain. In addition I had freight contracts that if not executed would incur a loss to the Pool. In addition we also had possible Forex losses associated with not executing the contract. However, by far the most compelling need to execute the contracts was that if we did not then the option of selling the wheat on the open market would have incurred a loss to the pool model of at least USD 30 pmt on the net fob of the Iraq sale (even with the 10 pct reduction) compared to what the market was on the day for an equivalent type of wheat (you may want to check the exact figures if necessary with the Pool pricing team).
I hope this assists[91]
29.50 Mr Whitwell's email did not mention that the reason for the 10 per cent reduction was to remove the after-sales-service fee. This was known to Mr Whitwell and to Mr Long, who was also copied in. Mr Whitwell's email said nothing about moves by the Coalition Provisional Authority to gain credibility or about the demand being unrelated to the alleged kickback claims, both matters the WEA had been told about on 11 August 2004. AWBI did not relay this information to the WEA. Confirmation of the reason for the reduction in contracts A1670 and A1680 was never given to the WEA.[92]
29.51 At the AWBI Board meeting on 14 December 2004, the Tigris matter was first raised with the Board and the disposition of the money collected was discussed.[93] Dr Fuller records a director, Mr Ian Donges, raising the question of whether the WEA should be informed.[94] He noted 'to do' after this item but gave evidence that this may have been superseded by later discussion at that meeting.[95]
29.52 Mr Donges' evidence in this regard was:
A: My recollection of my comments referred to there in Dr Fuller's notes were along the lines that I thought for proper accountability factors the Wheat Export Authority should be informed of the transaction if it went ahead.
Q: What caused you to form that view?
A: Because the Wheat Export Authority is our regulator, and they, of course, take keen interest in all matters to do with AWB International.
Q: What did you think should be disclosed to the Wheat Export Authority?
A: I thought the disclosure should be, if the transaction were to be successfully, I guess, completed-that the $500,000, if it was to happen, should be drawn to the attention of the Wheat Export Authority.
Q: Why?
A: Why?
Q: Yes.
A: Because it was not part of a normal contractual wheat sale.[96]
…
Q: In other words, you made it pretty clear on that occasion that you thought the Wheat Export Authority should be told of what you considered to be an extraordinary transaction?
A: Well I consider it certainly a contractual arrangement that was different to our normal transactional arrangements, contractual arrangements, in terms of selling wheat and being paid for that wheat.[97]
29.53 AWBI did not notify the WEA of the Tigris transaction.
29.54 On 7 April 2005 the WEA secretariat reported to the Board on the IIC investigation. It noted:
29.55 On 8 November 2005 Mr Taylor sent an email to Mr Fuller and Ms Scales, copied to Mr Sheridan, requesting 'a detailed brief on the operation of the escrow account for Australian wheat sales under the OFF program'.[99] In particular, Mr Taylor asked for a brief from AWBI on 'how the payments for transport made under the OFF program worked'.[100]
29.56 On 14 November 2005 AWBI provided to the WEA a document entitled 'Operation of United Nations escrow account Oil for Food Program'.[101] In the document AWBI asserted that it adhered to UN procedures. But it failed to disclose:
29.57 Throughout the Oil-for-Food Programme, the WEA did not have knowledge of the true arrangements between AWB (on behalf of AWBI) and the Iraqi Grain Board. The WEA did not know:
29.58 The WEA did not know of the foregoing because neither AWB nor AWBI told it of those matters. Throughout the period of the Oil-for-Food Programme and until July 2003 there was doubt about the power of the WEA to compel AWBI, and through it AWB, to provide information to it. After July 2003 there was no such doubt.
29.59 Irrespective of its power, the WEA did not probe AWBI or AWB about its contracts with Iraq. Such requests as were made were of a general nature and were unlikely to elucidate or reveal any inappropriate conduct on the part of AWBI or AWB. The WEA accepted what it was told by AWBI and AWB. It accepted AWBI's statements about net back calculations of the FOB price and did not check them. This meant that in reality it was not performing its function of monitoring AWBI's performance in relation to the export of wheat and examining and reporting on the benefits to growers that result from that performance-at least in relation to sales to Iraq.
29.60 I have not examined what part, if any, factors such as the WEA's understanding of its role, the scope and use of its legislated powers, or the adequacy of its management, staff or consultants might have played in its performance in monitoring AWBI's sales to Iraq. That was not within my terms of reference and involves broad policy considerations. It will be apparent, however, from the findings I make that, as long as AWB or AWBI is responsible for the export of Australian wheat, a strong and vigorous regulatory regime will be required. In relation to exports to Iraq, the Wheat Export Authority did not display the necessary strength or vigour.
Issue
The Wheat Marketing Act 1989 imposes on the Wheat Export Authority two functions:
Insofar as those functions include the obligation to monitor performance of proper standards of commercial conduct by AWBI, and through it AWB, the WEA was not successful in so doing in relation to sales to Iraq. A strong and vigorous regulatory or monitoring organisation is required whilst AWBI or AWB is responsible for the export of Australian wheat.
Recommendation 5
I recommend that there be a review of the powers, functions and responsibilities of the body charged with controlling and monitoring any Australian monopoly wheat exporter. A strong and vigorous monitor is required to ensure that proper standards of commercial conduct are adhered to.
29.61 It is an offence under s. 149 of the Criminal Code to obstruct or hinder a Commonwealth public official in the performance of his or her functions as such. Each of Messrs Besley, Taylor and Charman, and Ms Duck, were officers or employees of a Commonwealth authority and thus 'Commonwealth public officials' within the meaning of s. 149.[102] The wilful provision of false, misleading or materially incomplete information in response to a request for information can constitute a hindrance or obstruction. Requests for information by WEA staff appear to have been made in the performance of their statutory functions.
29.62 The WEA's requests for information were of such an unspecific nature and couched in such general terms it cannot be said that failure to provide the information I find was not provided by AWBI or AWB to the WEA constituted an obstruction by AWBI and AWB of WEA officers in the performance of their functions as public officials.
29.63 The conduct of AWB and AWBI towards the WEA did not constitute any breach of a Commonwealth, State or Territory law.
Notes
[1] Wheat Marketing Act 1989 s. 5.
[2] Wheat Marketing Act 1989 s.5D.
[3] Wheat Marketing Amendment Act 2003 Schedule 1 item 2. Section 5D commenced on 22 July 2003: Wheat Marketing Amendment Act 2003 s. 2 and Commonwealth of Australia, Gazette, GN 31 (5/08/2003) 2274.
[4] Senate Rural and Regional Affairs and Transport Legislation Committee, Provisions of the Wheat Marketing Amendment Bill 2002, Senate June 2003 7 [3.15]-[3.16] (footnotes omitted).
[5] Wheat Marketing Act 1989 s.5.
[6] Ex 493, WST.0018.0008 at 0011, para. 17.
[7] T 2673.
[8] T 2673.23 - T 2674.3.
[9] Ex 1400, AWB.0264.0001_R.
[10] Ex 1400, AWB.0264.0001_R at 0010_R.
[11] Ex 1400, AWB.0264.0001_R at 0014_R.
[12] Ex 1401, AWB.0264.0027 at 0042_R, 0058_R.
[13] Ex 1402, AWB.0264.0071_R at 0086_R, 0108_R.
[14] Ex 704, AWB.0405.0200_R at 0200_R-0201_R.
[15] Ex 704. AWB.0405.0200_R.
[16] Ex 704, AWB.0405.0200_R.
[17] Ex 705, AWB.0405.0197_R.
[18] Ex 705, AWB.0405.0197_R.
[19] Ex 464, WEA.0011.0001; Ex 1495, AWB.0267.0256.
[20] Ex 706, AWB.0405.0194_R; Ex 707, AWB.0405.0192.
[21] Ex 1410, AWB.0177.0013_R at 0016_R.
[22] Ex 1410, AWB.0177.0013_R at 0016_R.
[23] Ex 1410, AWB.0177.0013_R at 0016_R.
[24] Ex 707, AWB.0405.0192.
[25] Ex 707, AWB.0405.0193_R.
[26] Ex 1410, AWB.0177.0013_R at 0016_R.
[27] Ex 465, AWB.0142.0283; Ex 1505, AWB.0300.0002 at 0006.
[28] Ex 1505, AWB.0300.0002 at 0006.
[29] T 5808.9-19.
[30] T 5811.32-36.
[31] T 5811.44.
[32] Ex 1495, AWB.0267.0262.
[33] Ex 1495, AWB.0267.0262 at 0264.
[34] Ex 1495, AWB.0267.0262 at 0264.
[35] Ex 1495, AWB.0267.0261.
[36] Ex 493, WST.0018.0008 at 0011, para. 19.
[37] Ex 1569, WEA.0001.0111.
[38] Ex 493, WST.0018.0008 at 0011, para. 19.
[39] Ex 1413, AWB.5024.0348_R; Ex 470, AWB.5024.0344_R.
[40] Contracts A1680 and A1670 were both executed on 11 December 2002.
[41] Hostilities commenced on 19 March 2003.
[42] Ex 495, WST.0018.0029, para. 5.
[43] Ex 466, WEA.0010.0020.
[44] Ex 466, WEA.0010.0021.
[45] Ex 466, WEA.0010.0021.
[46] Ex 1511, AWB.6024.0309_R.
[47] Ex 1415, WEA.0002.0012 at 0014.
[48] Ex 1377, WEA.0010.0006.
[49] Ex 1377, WEA.0010.0006.
[50] Ex 1377, AWB.0267.0148_R at 0160_R.
[51] Ex 1377, WEA.0001.0041_R.
[52] Ex 1569, AWB.0267.0200_R.
[53] Ex 495, WST.0018.0029 at 0030, para. 11.
[54] Ex 472, SHE.0001.0004.
[55] Ex 474, WEA.0001.0067.
[56] Ex 1569, WEA.0001.0038, WEA.0001.0039_R.
[57] Ex 1569, WEA.0001.0039_R.
[58] Ex 1569, WEA.0002.0023_R.
[59] Ex 1569, WEA.0002.0023_R at 0024.
[60] Ex 328, WST.0004.0056.
[61] Ex 328, WST.0004.0056.
[62] Ex 482, AWB.0267.0137; Ex 495, WST.0018.0029 at 0030, para. 12.
[63] T 3844; Ex 327, AWB.0202.0154.
[64] Ex 1411, WEA.0002.0033_R.
[65] Ex 495, WST.0018.0029 at 0031, para. 13; Ex 1411, WEA.0002.0033_R at 0034_R.
[66] T 3690.4-8.
[67] Ex 498, AWB.0338.0050; Ex 1421, JMC.0002.0045_R at 0076_R; Ex 768, AWB.0413.0177.
[68] Ex 768, AWB.0413.0177 at 0182.
[69] Ex 330, AWB.0269.0002; T 3694.6; T3896.13.
[70] T 3694.13.
[71] Ex 330, AWB.0269.0002 at 0003-0004.
[72] See, for example, Ex 1400, AWB.0264.0001_R at 0010_R.
[73] Ex 468, WEA.0002.0193 at 0194.
[74] T 3918.39-3920.3.
[75] T 3870.46.
[76] Ex 495, WST.0018.0029 at 0032, para. 22; T 3901-3902.
[77] T 3919-3920.
[78] Ex 468, WEA.0002.0193 at 0195.
[79] T 3703 - T 3704.
[80] T 3704.43
[81] Ex 495, WST.0018.0029 at 0032, para. 20.
[82] T 5842.14.
[83] Ex 495, WST.0018.0029 at 0032, para. 22.
[84] Ex 495, WST.0018.0029 at 0033, para. 26.
[85] Ex 468, WEA.0002.0193 at 0194-0195.
[86] Ex 329, WST.0004.0057.
[87] Ex 329, WST.0004.0057.
[88] Ex 699, WST.0038.0091.
[89] Ex 699, WST.0038.0091.
[90] Ex 334, AWB.0266.0046_R.
[91] Ex 334, AWB.0266.0046_R.
[92] Ex 698, WST.0038.0001 at 0012, para. 49.
[93] Ex 1239, AWB.0194.0039_R at 0041_R.
[94] Ex 518, WST.0016.0141_R at 0142_R.
[95] T 4144.10-21.
[96] T 5608.21-43.
[97] T 5609.20-27.
[98] Ex 1512, WEA.0002.0010 at 0010-0011.
[99] Ex 480, AWB.0259.0006.
[100] Ex 480, AWB.0259.0006.
[101] Ex 481, WEA.0001.0059.
[102] Criminal Code Dictionary.
