30.1 The Inquiry's terms of reference do not extend to investigating and reporting on whether the actions or conduct of the Commonwealth, or any of its officers, might have constituted a breach of a law of the Commonwealth, a State or Territory. It was made clear, however, that if during the conduct of the Inquiry it appeared there might have been a breach of any Commonwealth, State or Territory law by the Commonwealth or any officer of the Commonwealth related to the subject matter of the terms of reference, I would approach the Attorney-General, seeking a widening of the terms of reference. That situation did not arise.
30.2 It does not follow, however, that it is not relevant to examine what knowledge the Commonwealth, or certain of its officers, may have possessed at material times about the activities of AWB Limited, the terms on which AWB was shipping wheat to Iraq, and whether it was breaching or circumventing the sanctions in any way. Such knowledge may be material when considering any potential liability of AWB or its officers. It may provide a possible defence to certain actions potentially available against AWB or its officers. The consideration of the possible knowledge of the Commonwealth is limited to the circumstances relating to AWB's trade with Iraq. There is no suggestion in the evidence that the Commonwealth possessed any knowledge that the Rhine Ruhr or Alkaloids of Australia contracts included any arrangements relating to the payment of fees to Iraq.
30.3 A number of the offences that might potentially have been committed by AWB or its officers or employees have as one of their elements the deception of Commonwealth officers in the course of their duties, or the obtaining of a benefit, advantage or other gain from the Commonwealth as a result of the making of a false or misleading representation or the provision of misleading information or as a result of some other dishonest or fraudulent conduct towards the Commonwealth. Those offences include the offences created by ss. 29B and 29D of the Crimes Act 1914 (in relation to conduct occurring prior to 24 May 2001) and ss. 134.2, 135.1, 135.2, 135.4 and 136.1 of the Criminal Code. The elements of these and other offences are considered in Appendix 26.
30.4 For offences involving the obtaining of a benefit or advantage by reason of misleading representations or information or some other deceptive or dishonest conduct, the misleading information or deception must operate on the mind of the person to whom it was directed.[103] If that person was the Commonwealth, the misleading information or deception must have been a material cause of the decision by the Commonwealth to confer the benefit or advantage.
30.5 It follows that if, at the time that any misleading information was furnished to the Commonwealth and the benefit or advantage was conferred, the Commonwealth knew that the information was misleading, the person who provided the misleading information could not be convicted of an offence of obtaining the benefit or advantage by reason of the provision of the misleading information.[104] In certain circumstances, however, the person could be convicted of an attempt to commit such an offence.[105]
30.6 In the case of information provided by AWB to the Commonwealth about its wheat contracts with Iraq, if the Commonwealth or certain of its officers knew that the information provided by AWB was false or misleading, it could not be found that such benefit, advantage or gain that AWB obtained from the Commonwealth consequent upon the provision of that information was obtained as a result of the misleading representation or information. Knowledge on the part of the Commonwealth would also make it difficult to establish dishonesty or fraud on the part of AWB.
30.7 It is the actual knowledge of the Commonwealth that the information was false or misleading that is material in considering whether a benefit or advantage was conferred by the Commonwealth by reason of the provision of misleading information. It is immaterial that the Commonwealth may have had the means or ability to find out that the information was misleading[106], or that it ought reasonably to have known that the information was misleading.[107] It is also immaterial that the Commonwealth, at the time it conferred the benefit or advantage, suspected but did not know that the information was misleading.[108] The question is whether the alleged false or misleading statement operated on the mind of the person to whom it was directed-here, the Commonwealth. Accordingly, the question whether the Commonwealth may have had constructive knowledge (in the sense that it ought reasonably to have known the truth or that it had the means and ability to find out the truth) is immaterial. A false statement may still operate on the mind of a person who merely has constructive knowledge so as to result in the person being misled or deceived.
30.8 In considering the knowledge of the Commonwealth in this context, it is important to define the knowledge or information that is, or may be, material. This requires a consideration of the relevant information or statements AWB gave or made to the Commonwealth that might provide the basis for charges under the Crimes Act or the Criminal Code and how it might be said that this information or the relevant statements was or were false or misleading. In short, what are the particulars of any potential offences that might have been committed by AWB that rely on the allegation that AWB misled or deceived the Commonwealth?
30.9 The particulars of potential offences that AWB might have committed are considered in Appendix 26. The primary information that was provided by AWB to the Commonwealth in relation to each wheat contract comprised a UN 'Notification or request to ship goods to Iraq' form[109] and a copy of AWB's short-form contract with the Iraqi Grain Board. These documents were submitted to the Department of Foreign Affairs and Trade, ultimately for transmission to the United Nations.
30.10 The notification form included certain basic information about the contract, including the 'value per item' and the 'total value' of the goods proposed to be shipped. In the case of AWB's wheat contracts, the 'value per item' was the price per tonne of the wheat to be shipped and the 'total value' was the total contract price, being the price per tonne multiplied by the number of tonnes of wheat the subject of the contract. The information in the notification form also included shipping arrangements (border point or point of entry into Iraq) and the means of transport. In AWB's notification forms, the point of entry was invariably specified as Umm Qasr and the means of transport was specified as 'bulk carrier(s)'. Nothing was stated about the inland destinations in Iraq or the method of transportation thereto.
30.11 AWB's short-form contracts that were submitted to DFAT included, amongst other things, the quantity of wheat the subject of the contract, details of the shipment and discharge, and the price per tonne. In most cases the shipment details included that the cargo would be 'discharged Free in Truck to all silos within all Governates of Iraq' at a specified average rate, and the price per tonne was specified as being on terms 'C.I.F., Free in Truck'.
30.12 Full details of the notification forms and contracts AWB sent to DFAT for submission to the United Nations are given in Chapter 11 and Appendix 15. The arrangements between AWB and the IGB in relation to the payment of inland transportation fees and other amounts are discussed in detail in Chapters 13 to 26. The following general conclusions may be drawn about the notification forms and contracts AWB furnished to DFAT:
30.13 This information was information that was material to the decisions and actions taken by officers of DFAT in relation to AWB's contracts and applications to participate in the OFF Programme. The failure to refer to these matters in both the notification forms and the short-form contracts that were submitted to DFAT was capable of rendering the information that was provided misleading in a material respect. It was potentially misleading to specify the price per tonne for the supply of wheat whilst neglecting to inform DFAT that the price incorporated fees not genuinely ancillary to the supply of wheat on the terms disclosed in the contract.
30.14 It is also open to construe the submission of the notification forms and contracts in the circumstances as an implied statement or representation by AWB that the details in the notification form and the accompanying contracts contained the entirety of the terms on which AWB was supplying wheat to the IGB and there were no additional terms or collateral or side agreements relating to the supply. It was potentially misleading and deceptive to furnish the notification forms and contracts without also disclosing the additional terms or collateral arrangements involving the payment of inland transportation fees and other amounts directly or indirectly to the IGB or another Iraqi entity or its nominee.
30.15 It follows that the relevant inquiry in relation to the knowledge of the Commonwealth is whether the Commonwealth, or certain of its officers, had actual knowledge that:
30.16 The Commonwealth can acquire knowledge only by its officers. In this sense, the Commonwealth is in a position analogous to that of a company. In the case where it is alleged that a person obtained a benefit or advantage from a company by reason of the provision of misleading information, the company is not deceived by and the benefit or advantage is not conferred by reason of the misleading information if an employee with requisite status and authority in relation to the conferral of the benefit or advantage, or any employee whose state of mind represents the mind and will of the company, knew that the information was misleading.[111] The principles relating to imputing to a company the knowledge of its officers or employees apply equally to the imputation of knowledge to the Commonwealth.[112]
30.17 In the case of the information provided by AWB to the Commonwealth (the notification forms and its short from contracts), the relevant benefit or advantage conferred by the Commonwealth is one or both of the following:
30.18 The officers with requisite status and authority in relation to the conferral of these benefits or advantages were the officers of DFAT who were responsible for 'processing' AWB's notification forms and contracts for submission to the United Nations, the officers who were delegates of the Minister in relation to the granting of permissions to export to AWB, and the officers who were responsible for recommending and causing the permissions to export to be signed by the delegates. The DFAT officers who fell within this category were Messrs Bowker, Cuddihy and Grenenger and Ms Drake-Brockman, Ms Courtney, Ms Moules, Ms Brodtman and delegates, including Messrs Aitken, Quinn and Richardson and Ms Owens.[113] Since the Minister for Foreign Affairs is the ultimate repository of the power to grant permission under the Regulations, the knowledge of the Minister, Mr Downer, would also be material.
30.19 In addition to the Minister for Foreign Affairs and the specific DFAT officers with authority and responsibilities in relation to the Oil-for-Food Programme, there are other persons whose status and authority at the relevant time was otherwise such that their knowledge would be imputed to the Commonwealth. This would include the Prime Minister and the Minister for Trade.
30.20 The knowledge, or possible knowledge, of other officers of the Commonwealth who were not responsible for receiving or acting on the information furnished by AWB, or whose knowledge cannot relevantly be imputed to the Commonwealth, is not material to whether AWB may have committed the Crimes Act or Criminal Code offences relating to the obtaining of a benefit or advantage from the Commonwealth. It is immaterial that some other officer of the Commonwealth may have possessed some relevant knowledge if that knowledge was not conveyed to the Ministers or the responsible DFAT officers. For example, it would not be relevant that an officer of the Australian intelligence community may have possessed some intelligence about Iraq requiring suppliers of humanitarian goods under the Oil-for-Food Programme to make surcharge payments if that information was not conveyed to the relevant Ministers or DFAT officers. Knowledge by an officer of the intelligence community is not imputed to the Commonwealth in the relevant circumstances.
30.21 The relevant inquiry is whether the Commonwealth knew that the information conveyed to it by AWB was false or misleading at the time AWB conveyed that information to it, and at the time it conferred the relevant benefit or advantage on AWB. The relevant time is therefore the period during which AWB submitted to DFAT the notification forms and contracts that omitted to disclose the arrangements relating to the payment of inland transportation fees and other payments to Iraqi entities and the period during which permissions to export were signed consequent on UN approval of the contracts. That period was from late 1999 to early 2003.
30.22 It is immaterial if the Commonwealth came to possess information about AWB's arrangements relating to the inflation of contract prices and payment of inland transportation fees after early 2003, unless the actions of the Commonwealth on receipt of the information at that later time bear upon the question whether the Commonwealth knew the information during the relevant period. The question whether the Commonwealth's actions when it did receive allegations about these matters in mid to late 2003 could provide the basis for an inference that it knew the information during the relevant period is discussed in detail below.
30.23 There is no direct evidence that anyone at AWB ever told anyone at DFAT that AWB's wheat prices incorporated inland transportation fees or other payments to be made to Iraqi entities, or that its contracts with the IGB were subject to terms or collateral arrangements requiring it to make payments, directly or indirectly, to Iraqi entities or their nominees. Indeed, such evidence as there was on this issue was to the contrary.
30.24 It is unsurprising that the evidence supports a finding that DFAT was not told by AWB or its officers that AWB was paying inland transport fees and after-sales-service fees to Alia for forwarding to Iraq. In 1999 and 2000 AWB went to great lengths to disguise the fact of making such payments. Thereafter, and to the date of the Inquiry, AWB maintained that such payments to Alia were legitimate payments to a legitimate trucking company performing a legitimate service. It rejected all claims of improper payments. In the circumstances, it would be extremely improbable that AWB would have discussed Alia with DFAT or informed DFAT that it was indirectly making payments to Iraq. To have done so would have involved informing DFAT it (AWB) was acting contrary to UN sanctions.
30.25 No document obtained by the Inquiry-either from AWB, DFAT or any other person or entity-constituted or evidenced a communication of the relevant information by AWB to DFAT during the period late 1999 to early 2003.
30.26 DFAT was required by notice to produce to the Inquiry, amongst other things, any document that evidenced, recorded or concerned any communication, written or oral, passing between it and AWB relating to the sale of wheat, the use or engagement by AWB of trucking companies, including Alia, or the sanctions on Iraq.[114] Many thousands of documents were produced by DFAT and examined by the Inquiry. Those documents that constituted or recorded a communication between DFAT and AWB were identified and collated into seven lever-arch folders that were tendered as exhibit 542. No document within exhibit 542 constitutes, or is capable of constituting, an advice or acknowledgment by AWB that it was paying, or had or was being required to pay, inland transportation fees directly or indirectly to the IGB or any Iraqi entity or its nominee. No document refers to Alia or to the fact that AWB was making payments to Alia ostensibly in relation to inland transportation. No correspondence or communication from AWB refers to the fact that the price per tonne in AWB's contracts incorporated amounts referable to the payment of such fees or refers to the fact that AWB had any collateral agreement or arrangement not recorded in the contract in relation to the provision or payment for inland transportation services.
30.27 The only correspondence that referred in any material way to AWB's inland transportation arrangements in Iraq was correspondence between Mr Stott of AWB and Ms Drake-Brockman of DFAT in October and November 2000, in which AWB sought, and DFAT provided, advice about whether DFAT was 'comfortable' with AWB entering into discussions with Jordan-based trucking companies with a view to agreeing to a commercial arrangement relating to the discharge of wheat cargoes. This correspondence, and the evidence relating to whether there were any other communications between AWB and DFAT in relation to it, is discussed in detail below. Suffice it to say that nowhere in the letter Mr Stott sent to DFAT is it revealed that by October 2000 AWB had already entered into arrangements whereby it paid substantial sums per shipment (calculated on a per tonne basis) to Alia, a Jordanian company nominated by the IGB to receive the payments. Indeed, Mr Stott had amended a draft of the letter to specifically delete any reference to the fact that AWB's contracts had incorporated in them a 'predetermined and UN approved transport fee'.[115] Nowhere in this letter is it stated that AWB's contracts with the IGB were conditional on AWB agreeing to make these payments or that the payments were factored into the contract price.
30.28 There were also communications between AWB and officers of DFAT during the period commencing in about mid to late 2003 concerning allegations made by a United States agricultural lobby group, US Wheat Associates, that AWB's wheat prices had been inflated to include payments to the regime of Saddam Hussein. The US Wheat Associates allegations and DFAT's responses are discussed in Chapter 28. Whilst the US Wheat Associates allegations used pejorative terms and suggested that the 'excess' added to the price of the wheat contracts was paid to Saddam Hussein and his family, the basic thrust of the allegations-that AWB's contract prices had been inflated to incorporate amounts that were ultimately paid to the Iraqi regime-was in substance accurate.
30.29 The documentary evidence demonstrates that, far from conceding to DFAT that this may be the case, AWB stridently denied the US Wheat Associates allegations. On 6 June 2003 AWB issued a press release that forcefully denied the allegations, Mr Lindberg describing them as 'absurd, with no foundation and an insult to Australian farmers and damaging to our reputation'.[116] In a letter dated 12 June 2003 from Mr Lindberg to the US Wheat Associates President, Mr Tracey (a copy of which was provided to DFAT officers in the Iraq Task Force[117]), Mr Lindberg wrote that the allegations that '[AWB] contracts with prices inflated by millions of dollars per shipload has provided foundation to the rumours that some of the excess may have gone into the accounts of Saddam Hussein's family' were not true and were unsupported by any evidence.[118] Internal DFAT communications concerning the US Wheat Associates allegations repeatedly state, 'Government has been assured by AWB Ltd that no such kickbacks were paid'.[119]
30.30 The communications concerning the US Wheat Associates allegations occurred after the end of the Oil-for-Food Programme and therefore well after the time DFAT officers and the Minister or his delegate were considering granting permissions to export to AWB. They are, however, relevant insofar as they are inconsistent with any notion that AWB had advised DFAT during the currency of the Programme that its contracts incorporated inland transportation fees and surcharges that were paid indirectly to the IGB or other Iraqi entity via its nominee, Alia. Far from confirming to DFAT that there was some substance in the US Wheat Associates allegations, at least insofar as they alleged that AWB's prices had been inflated to incorporate payments made to the Iraqis by way of inland transportation fees and 10 per cent after-sales-service fees, AWB rejected them as 'baseless and outrageous'.[120] AWB maintained the same position in its communications with DFAT concerning its potential role in an investigation conducted by the United States Senate Committee on Foreign Relations into the Oil-for-Food Programme.[121]
30.31 The first documentary record of any advice by AWB to DFAT to the effect that it had made payments relating to inland transport to a company nominated by the Iraqis is in a letter dated 10 June 2004 from Mr Lindberg to the Minister for Foreign Affairs. In that letter, which was AWB's first formal response to the announcement by the United Nations of the establishment of the Independent Inquiry Committee, Mr Lindberg stated:
Wheat was delivered to Iraq by AWB for distribution to all governates of Iraq in accordance with the Distribution Plan for the relevant Phase of the OFF Programme as approved by the UN. This was reflected in the terms of each AWB wheat sale contract approved by the UN, which provided for the cargo to be discharged 'Free into Truck to all silos within all governates of Iraq'. The Iraq Grains Board (IGB) nominated the preferred trucking supplier and the rate to apply.[122]
Mr Lindberg reiterated to the Minister, however, that at all times AWB had acted with integrity in its dealings with Iraq.
30.32 The revelation-for the first time in explicit terms-that AWB's wheat contracts incorporated the payment of trucking fees to a trucking supplier nominated by the IGB and at rates specified by the IGB, was still at best a half truth. What Mr Lindberg omitted to inform the Minister was that the trucking supplier nominated by the IGB was not itself providing the transport services but was simply channelling the funds paid to it back to the Iraqis. Nor did Mr Lindberg nominate the name of the trucking supplier-Alia. Nor did he inform the Minister that included in the 'transportation fee' was a sum equivalent to 10 per cent of the contract price that AWB knew was not related to any transport cost. The question of whether Mr Lindberg knew at this time that Alia was not providing the trucking but was simply channelling the funds back to Iraq and knew of the 10 per cent after-sales-service fee is dealt with elsewhere. Whatever Mr Lindberg knew, it had been known at a senior level within AWB since November 1999, and the 10 per cent fee had been known to be unrelated to any trucking service since its inception.
30.33 The first correspondence from AWB that identified Alia as the Jordanian transport company to which AWB made payments was a briefing paper relating to the Independent Inquiry Committee investigation that was provided to DFAT in August 2004.[123] In this briefing paper AWB continued to assert that Alia was a legitimate trucking company that provided actual transportation services for AWB. It maintained this position even though it had no contract with Alia, yet had paid it US$223 million. In all its communications with DFAT concerning the IIC investigation, AWB maintained the position that, so far as it was aware, Alia provided transport services and AWB did not know that Alia merely channelled the payments to Iraq. Statements to this effect were made by officers of AWB in meetings with DFAT officers on 27 September 2005[124] and 13 October 2005[125] and with Mr Downer (and DFAT officers) on 4 October 2005.[126] The discussions that occurred at these meetings are addressed further below.
30.34 As late as October 2005, and in the face of findings made by the Independent Inquiry Committee, senior officers of AWB continued to maintain to DFAT and the Ministers that it did not know that Alia did not itself provide any transport services and channelled the inland transportation fees AWB paid to it back to Iraq. In letters to the Ministers for Foreign Affairs and Trade dated 26 October 2005[127] Mr Stewart and Mr Lindberg wrote:
… the Committee has concluded that AWB did not actually know of the matters alleged, namely that the transport company, Alia for Transportation & General Trade ('Alia'), was a 'front company' for the former government of Iraq and that it channelled transport fees to the regime. Nevertheless, the Committee will find that the $200m paid by AWB to Alia for transport fees was 'channelled through Alia to the government of Iraq'. The Committee has found there is insufficient evidence to support a 'knowing' finding and the test by which it assesses the weight of the evidence is one of 'reasonable sufficiency'. This is a lower threshold than tests applied by courts and so the Committee's finding is supportive of AWB's position that it did not know of the matters that have now been uncovered by the Committee's extensive investigations.
30.35 Like its responses to the US Wheat Associates allegations, AWB's communications with DFAT and the Ministers in 2004 and 2005 concerning the Independent Inquiry Committee investigation were inconsistent with AWB having previously advised DFAT during the operation of the Oil-for-Food Programme that it had made or was making payments indirectly to Iraq ostensibly in relation to inland transport. Even when AWB eventually advised DFAT in mid-2004 that its arrangements with the IGB included paying amounts relating to inland transport to a company nominated by the IGB, it continued to maintain that these payments related to transport services provided by that company and continued to deny that it knew that any payments were being made to Iraq.
30.36 With the possible exception of Mr Stott, no past or present officer or employee of AWB claimed to have ever advised anyone at DFAT that AWB's wheat contract prices incorporated inland transportation fees payable to Alia or otherwise indirectly to the IGB or Iraq or that there were arrangements with the IGB collateral to the written wheat contracts that involved paying inland transportation fees, or 10 per cent surcharges disguised within inland transportation fees, to Alia or otherwise indirectly to the IGB or any other Iraqi entity. None of the officers whose duties included communicating with DFAT in relation to substantive issues involved in the contract approval process, or who had some contact with DFAT in relation to AWB's wheat contracts with Iraq, or who otherwise knew what information was being provided to DFAT-such as Messrs Officer, Hogan, or Emons-suggested that they had ever told any officer of DFAT about these matters. Indeed, a number of them positively stated that they did not advise DFAT about the payment of inland transportation fees, including at meetings with DFAT where aspects of AWB's dealings with Iraq were discussed.
30.37 Mr Officer was the General Manager, Global Sales and Marketing, at AWB between late 1995 and early June 2000.[128] In this position he was responsible for AWB's international activities, including sales to Iraq. Mr Emons, the Regional Manager for the Middle East, Africa and Europe, reported to him. Mr Officer's involvement in and knowledge concerning AWB's payment of inland transportation fees is discussed elsewhere in the report. Suffice it to say that he knew that the IGB required AWB to pay inland transportation fees, that AWB's standard contract had to be changed to allow for payment of the fees by increasing the contract price, that the contract price (including the 'uplift' for transport fees) was paid from the UN-controlled escrow account, and that AWB would remit the transport fees to a party nominated by the IGB either directly or via an intermediary.[129]
30.38 Whilst Mr Officer rarely had discussions with DFAT[130], he was on good terms with Mr Bowker, the Director of the Middle East Section of DFAT, and met with him in December 1999 to discuss AWB's marketing strategy for Iraq and the commercial environment in which AWB was operating.[131] He never told anyone at DFAT, including Mr Bowker at the December 1999 meeting[132], about AWB's payment of trucking fees. Nor was he aware of anyone else at AWB advising DFAT about the true contractual relations between AWB and the IGB insofar as they involved the payment of transportation fees:
Q: Are you aware that, after October of 1999, no contract between the AWB and the IGB under the Oil-for-Food Program ever again identified a specific amount as payable on account of discharge costs or inland transport fee or trucking fee?
A: I'm aware as of the January 2000 contract that that was in fact the case. After that, I had left the AWB, I think, when the next contracts were negotiated, so to that extent, yes, that's correct.
Q: Did you, yourself, ever inform anybody at DFAT as to what the full terms and conditions of the arrangements between the IGB and the AWB were-
A: No.
Q: -insofar as they related to the payment of trucking fees-
A: No.
Q: -or inland transport fees?
A: No.
Q: Are you aware of any communication between AWB and any officer of DFAT in which DFAT was told the detail of the true contractual arrangement as between the IGB and the AWB, other than what appeared on the face of the written contracts that were submitted to DFAT?
A: No.[133]
30.39 As Regional Manager of the Middle East, Africa and Europe section of AWB during the period 1996 to June 2000, Mr Emons had regular meetings with DFAT concerning issues that arose in the markets for which he was responsible, including Iraq.[134] In particular, he was requested by the government relations officers of AWB once or twice a year to accompany them to Canberra to give an overview of the various AWB markets to DFAT and other Commonwealth departments.[135] Those meetings did not descend into the details of the contractual arrangements with the Iraqis.[136] He also attended the meeting between Mr Officer and Mr Bowker in December 1999, although Mr Emons was unable to recall that meeting.[137]
30.40 Mr Emons' knowledge of the payment of trucking fees indirectly to Iraq through Ronly Holdings Limited and Alia is discussed in detail elsewhere in the report. He knew AWB was not responsible for trucking within Iraq but was responsible only for payment of a fee to an account nominated by the IGB. Mr Emons did not recall informing DFAT of AWB's arrangements to pay trucking fees at any of the meetings that he attended:
Q: Did you ever, in any of those meetings, inform a DFAT officer of the arrangement that AWB had to pay trucking fees to the Iraqis?
A: I don't recall that happening. I'm not saying it wouldn't have occurred through the government relations officer, but I certainly, myself, don't recall doing it.
Q: Did you ever inform anybody at DFAT that AWB was making the payment via ship owners?
A: No.
Q: Are you aware of any conversation within AWB which indicated that DFAT had been told that the trucking fee was being paid to the Iraqis?
A: I'm sorry, I don't recall any.[138]
30.41 Mr Emons' non-disclosure of AWB's arrangements in relation to the trucking fee payments was deliberate. Mr Emons first learnt about the Canadian complaint from Mr Officer.[139] He was aware that Messrs Flugge, Snowball and McConville met with the Austrade Commissioner in Washington, Mr Nicholas, on 9 March 2000 and the Canadian complaint was discussed.[140] After the meeting, he received an email from Mr Snowball in which Mr Snowball stated, amongst other things, that 'if all the UN wants is some understanding on standard terms and conditions in AWB contracts then I think we have nothing to worry about'.[141] He understood from this that if there was mention of the trucking fee to the UN, there would be an issue and something to worry about[142] and that he was being told to keep this in mind if he was contacted by DFAT.[143]
30.42 Following his receipt of Mr Snowball's email about the Canadian complaint, Mr Emons took a step that was plainly intended to minimise the risk that the United Nations or DFAT would find out about the trucking fee from the IGB. He sent a fax to the Director General of the IGB, advising the IGB that AWB had been questioned by the United Nations about payments by AWB to the 'Jordanian trucking company' and that AWB was concerned that the Canadian Government had taken action within the United Nations to discover the 'manner of AWB payments'. He asked for the IGB's assistance in ensuring that 'no information of a confidential nature is released'.[144]
30.43 Like Mr Emons, from the time Mr Hogan was appointed Regional Manager of the Middle East Section in August 2000, he was involved in communications with DFAT in relation to AWB's wheat contracts with Iraq. He was aware of the procedures for obtaining UN approval of contracts under the Oil-for-Food Programme and the documentation that was submitted to DFAT in that regard.[145] He was involved in sending contracts to DFAT in the course of this process.[146]
30.44 In early August 2000 Mr Hogan wrote to DFAT, seeking its advice in relation to a proposed change in the terms of AWB's wheat contracts and a proposed change in the way contracts were submitted to the United Nations.[147] In each case the advice sought from DFAT was whether the proposed changes would be accepted by the United Nations. Mr Hogan subsequently received written advice from DFAT about these matters and was involved in a telephone hook-up with DFAT personnel to discuss the advice.[148] Mr Hogan did not seek DFAT's advice regarding the payment of trucking fees to Iraq via Alia.[149] There was no discussion about payment of trucking fees to Iraq or payments to Alia during this telephone hook-up.[150]
30.45 In mid-October 2000 Mr Hogan and Mr Stott travelled to Iraq via Jordan. Prior to entering Iraq, Mr Hogan and Mr Stott met with Mr Twisk, from the Australian Embassy in Amman. The discussions with Mr Twisk concerned the current state of affairs in Iraq.[151] Mr Hogan also met with the Trade Minister, Mr Vaile, in Egypt after the visit to Iraq.[152] On none of these occasions were there any discussions about the inland transportation fee or its method of payment.[153]
30.46 Mr Hogan was involved in the drafting of a letter to DFAT concerning AWB entering into discussions with Jordan-based trucking companies. The final version of this letter was signed by Mr Stott. This letter, DFAT's reply and the question of whether there were any discussions between Mr Stott and DFAT about the letter's terms is considered in Chapter 20. Mr Hogan's draft of the letter, dated 27 October 2000, included a reference to the fact that all Iraq contracts were concluded with a 'predetermined and UN approved transport fee'.[154] This reference was removed in the final version of the letter that was settled and signed by Mr Stott and dated 30 October.[155] Mr Hogan's evidence was that in any conversation he had with any DFAT officer between 27 and 30 October he would not have mentioned anything about payment of the inland trucking fee or whether or not it had been approved by the United Nations.[156]
30.47 If there was any intention on the part of officers or employees of AWB to tell DFAT about the payment of inland transport fees to Alia and indirectly to Iraq or to seek DFAT's advice about or attitude to the payment of such fees, an occasion when that would have been expected to have occurred was when AWB was asked by DFAT and Austrade to respond to the Canadian complaint. The facts relating to the Canadian complaint are discussed in detail in Chapter 16.
30.48 The first officer of AWB to respond to the complaint was Mr McConville. His response, when Mr Bowker put the complaint to him in January 2000, was, 'This is bullshit'. He went on to emphatically deny the allegations and tell Mr Bowker that AWB would continue to uphold its responsibilities in relation to Iraq.[157] The second occasion that the complaint was raised directly with AWB was on 9 March 2000, when Messrs Flugge, Snowball and McConville met with Mr Nicholas, the Austrade Commissioner in Washington. On this occasion, Mr Nicholas was assured by the AWB representatives that there were no irregularities in their dealings with Iraq.[158]
30.49 At the meeting with Mr Nicholas, and following it, the question of the alleged irregular payments related to transport fees became subsumed in a request by DFAT that AWB provide to it (and the United Nations) copies of any 'parallel contracts' between AWB and the IGB. This latter issue was able to be resolved by AWB's provision to DFAT of a document setting out AWB's standard terms and conditions in April 2000[159]-a document that revealed nothing about the payment of inland transportation fees by AWB. Mr Bowker had a further conversation with Mr McConville in the context of AWB providing a copy of its standard terms and conditions. During that conversation Mr McConville suggested that AWB's competition were 'throwing mud' at it because 'that is how competition between wheat traders works'.[160]
30.50 AWB's response and what may be inferred from it in relation to the knowledge of the officers involved in response to the Canadian complaint, including Mr Emons, are discussed in Chapter 16. Suffice it to say that, in relation to Messrs Flugge, Snowball and Emons, it may be inferred that they knew the allegations concerning 'irregular payments' related to AWB's payment of inland transportation fees, that the failure to disclose this to DFAT during the March meeting was deliberate, and that Mr Snowball cooperated with DFAT's request for the standard terms and conditions as a way of playing down the issue. As for Mr McConville, there is no evidence that he was aware of the specifics of AWB's contracts, including that AWB was paying inland transportation fees to Alia. It is, however, surprising that he dismissed the allegations put to him by Mr Bowker in such emphatic terms, without raising the matter with those at AWB who were responsible for the Iraq contracts.[161]
30.51 The point of immediate relevance insofar as the knowledge of the Commonwealth is concerned, is that despite the fact that questions had been specifically directed to whether AWB was making 'irregular' payments outside the terms of the Oil-for-Food Programme, AWB did not tell DFAT (or Austrade) anything about the payment of inland transportation fees.
30.52 Another occasion when it might reasonably be expected that AWB would disclose to DFAT that it was making inland transportation payments to Alia and indirectly to Iraq, was in the context of correspondence on the subject of Jordanian trucking companies that occurred in October and November 2000.
30.53 The facts relating to this correspondence are addressed in detail in Chapter 20. The evidence, in summary, establishes the following:
30.54 Ms Drake-Brockman's evidence was that she did not draft the DFAT letter she signed.[170] A number of issues arise in relation to the drafting of the letter and whether, as the letter states, the 'International Legal Division' at DFAT was consulted about the terms of the letter.[171]
30.55 As noted, AWB's request for advice did not convey any information to DFAT about the fact that AWB had been paying, and intended to keep paying, inland transportation fees to Alia and indirectly to Iraq. It is open to infer from the fact that Mr Stott deleted the reference to the 'UN approved transport fee' from Mr Hogan's draft that Mr Stott consciously withheld this information from DFAT. Plainly, the letter of 30 October 2000 does not inform DFAT of the true arrangements between AWB and the IGB in relation to transportation or payment of fees to Alia.
30.56 So far as the knowledge of the Commonwealth is concerned, the more important question is whether there were any conversations between Mr Stott and any DFAT officer about the terms of the letters that revealed to DFAT that AWB was making payments to Alia. The evidence relating to this and the conclusions to be drawn from it are discussed in Chapter 20. The evidence can be summarised as follows:
30.57 A number of issues arise from the evidence relating to DFAT's receipt of Mr Stott's letter and the drafting of the reply ultimately signed by Ms Drake-Brockman. In particular, there are some inconsistencies and unexplained gaps in both the documentary evidence and the evidence of the DFAT officers who were in Ms Drake-Brockman's section at the time. They include the following.
30.58 First, it is apparent that both an unsigned version of Mr Stott's letter and a signed version (with minor differences) were faxed to DFAT. Ms Drake-Brockman's evidence was that she had a specific recollection of having been shown only the unsigned version. Only the unsigned version remained on DFAT's files. No satisfactory explanation for this was provided by any officer of DFAT. It is unusual that both an unsigned and a signed version of the letter was sent to DFAT. This would tend to support one portion of Mr Stott's evidence-that there may have been some discussion about the terms of the letter before it was signed-although it is contrary to a draft unsigned statement taken from Mr Stott by Minter Ellison in 2004, which records, 'I did not discuss the drafts of my letters with DFAT'.[185]
30.59 It is unusual that, on Ms Drake-Brockman's evidence, a reply was drafted in response to an unsigned letter, particularly if the signed version was available. It is unusual that the signed reply was not maintained on any file in the relevant section.
30.60 Second, Ms Drake-Brockman had a clear recollection of how the letter was presented to her by her staff. This included discussions about the terms of the draft reply with both Ms Courtney and Mr Cuddihy. Ms Drake-Brockman's evidence in this regard was not corroborated by either Ms Courtney or Mr Cuddihy. Neither recollected having any role in the preparation of the reply to Mr Stott's letter or having any discussions with Ms Drake-Brockman about it. No DFAT officer who gave evidence to the Inquiry recollected being involved in the drafting of the reply. DFAT's files contain no record of who drafted the reply.
30.61 Third, the reply signed by Ms Drake-Brockman concludes with the sentence, 'International Legal Division has been consulted in the preparation of this response'. Ms Drake-Brockman's recollection was that she was advised by her staff that the Assistant Secretary of the Legal Branch was comfortable with the reply and that, when she asked to see him, she was advised by her staff that he was out of the office and not contactable. DFAT's files contained no record of any consultation between an officer or officers in the Middle East Section and DFAT's International Organisations and Legal Division or Legal Branch in relation to Mr Stott's letter or the reply. The evidence of officers in the Legal Branch was that if the branch had been consulted, a note or written record of any advice provided by the branch would be retained on file. No officer of the Legal Branch who gave evidence or provided a statutory declaration to the Inquiry recalled providing any advice or input into the letter signed by Ms Drake-Brockman.
30.62 These matters reflect on the reliability of the documentary systems within DFAT. They raise a concern that Mr Stott's request for advice and the response may not have been dealt with in the ordinary course. They do not, however, reflect upon whether Mr Stott told DFAT that AWB was making trucking payments to Alia and had been for the past year, that AWB did not have a contract with Alia for provision of trucking, that AWB had no real obligation to arrange trucking services in Iraq, that Alia had been nominated by the IGB as the body to whom fees were to be paid, or that the contract price had been inflated to include the trucking fee.
30.63 Insofar as Mr Stott's alleged conversations with officers of DFAT arise as an aspect of the knowledge of the Commonwealth, my conclusions are as follows:
- There is an absence of any documentary record of such a conversation-an absence for which Mr Stott was unable to provide any rational or logical explanation.[186]
- If Alia was a topic for discussion with DFAT, there is no rational reason why Mr Stott would not have referred to it in his letter or would not have confirmed Ms Drake-Brockman's statements about Alia in a subsequent letter.
- There is no reason why Alia would have been raised in a conversation following the letter when the letter itself makes no reference to it. The letter referred to 'Jordanian trucking companies', not Alia.
- There is an absence of any other evidence capable of corroborating Mr Stott's evidence on this matter. Mr Stott claimed he told his manager, Mr Goodacre, about the conversation with Ms Drake-Brockman.[187] Mr Goodacre did not recall any such conversation[188], although he conceded that it was possible that Mr Stott did.[189]
30.64 Even if Mr Stott's evidence were to be accepted, it does not follow that it should be concluded that he told Ms Drake-Brockman that AWB's wheat prices were inflated to incorporate the payment of an inland transportation fee or that the fee was paid to Alia or that Alia passed on these fees to Iraq. Mr Stott did not claim that he told Ms Drake-Brockman any of those things.
30.65 The evidence does not support the conclusion that in October or November 2000, in the context of Mr Stott's letter and Ms Drake-Brockman's reply, Mr Stott, or anybody else at AWB, told Ms Drake-Brockman, or anybody else at DFAT, that AWB was paying inland transportation fees to Alia and that these fees were incorporated in its contract prices. I find that they did not do so.
30.66 There was a very belated suggestion in the evidence of both Mr Lindberg and Mr Long that, on a visit to Iraq via Jordan in August 2002, they met with the Australian Ambassador to Jordan, Mr Tilemann, and that during that meeting AWB's use of Alia was mentioned. This evidence arose following the tender of a note made by Mr Cooper of meetings that occurred on 1 and 2 June 2005.[190] Mr Cooper's note recorded the words 'AL told Australian Ambassador in Iraq in 2002 of using Alia'. Mr Lindberg's evidence was that at the meeting that occurred on 2 June 2005 between himself, Mr Trewin and members of the Project Rose team he said 'something, by way of an aside, to the effect that I might have mentioned Alia to the Ambassador' during the Iraq trip in August 2002.[191] When examined, however, Mr Lindberg conceded that he said 'might' because he was not sure whether it was mentioned or not.[192] He had not recollected this supposed exchange when he provided his first statement to the Inquiry.[193]
30.67 In a statutory declaration, Mr Long stated that, having had his attention drawn to Mr Cooper's note, he recalled meeting the ambassador at the ambassador's house in Amman on the way into Iraq in August 2002.[194] Mr Long had no specific recollection of the substance of the conversation, but he believed that he and Mr Lindberg told the ambassador about 'the quality claim' and that Mr Cooper's note was 'likely to reflect some of what Andrew said in the course of the conversation'.[195] The basis for Mr Long's statement that this was 'likely' was that 'because meetings such as this inevitably turn to discussions of our [AWB's] business in Iraq'.[196]
30.68 Mr Long's supplementary statement also contains the following passage:
I have known Mr Tilleman in a professional capacity since 2002. It is difficult to have specific recollections of specific conversations but I believe it was well known to Mr Tileman that Alia supplied trucking services to the AWB. On an occasion that I am now unable to date I do recall Mr Tilleman saying to me words to the effect:
'We know Alia, we have entertained them, they are a trucking firm.'
My memory does not allow me to provide the context in which this was said.[197]
30.69 Mr Tilemann had no recollection of being told by Mr Lindberg or Mr Long about Alia-in 2002 or at any other time. He considered it unlikely that he was told anything about Alia because he would remember it if he had. The first he came to know about Alia was in September 2005:
Q: Do you have any recollection of being told in Jordan in 2002 that the AWB were using Alia for transport services from Umm Qasr?
A: No.
Q: No recollection at all?
A: No recollection.
Q: Do you say that it wasn't said to you?
A: I think it is unlikely that it was said to me. That somebody is using the name Alia would have a particular sort of impact, because the name is associated with some very specific moments in Jordanian history and to my knowledge it was not used and the first I ever heard of a trucking company by the name of Alia was in September 2005.[198]
30.70 The evidence of Mr Tilemann is preferred to the evidence of Mr Lindberg and Mr Long in relation to whether or not either of them ever discussed Alia with Mr Tilemann. In relation to the August 2002 meeting, Mr Lindberg's evidence is no higher than that he 'might' have said something about Alia and that he was unsure whether he did. Mr Long's evidence about the August 2002 meeting is at best speculation and based on the fact that conversations with Mr Tilemann usually turned to AWB's business in Iraq. The specific business discussed at this meeting was the quality claim. There is nothing to suggest that the discussion extended beyond that. Mr Long's recollection about the statement made by Mr Tilemann is vague and not specific as to time or context. It was a belated recollection apparently prompted by somebody else's note of a conversation to which Mr Long was not a party. It is not corroborated by any note or other evidence. There is no other evidence that Mr Tilemann, or anyone else at the embassy in Jordan, was aware of Alia or ever reported this fact to DFAT Canberra. In any event, there is no suggestion that Mr Lindberg told Mr Tilemann in August 2002 that AWB was paying monies to Alia as a conduit for paying money to Iraq. I find that neither Mr Lindberg nor Mr Long spoke to Mr Tilemann in 2002 about Alia.
30.71 Following the hostilities in Iraq in early 2003, the Coalition Provisional Authority obtained possession of documents held by various ministries and interviewed people who had occupied positions in the ministries. As a result of these investigations, the CPA made a number of assertions about the inflation of contract prices for humanitarian goods supplied under the Oil-for-Food Programme and the payment of 'kickbacks'. These allegations-including Captain Puckett's memorandum dated 10 June 2003-are addressed in Chapters 25 and 28. The CPA resolved to renegotiate all the outstanding contracts entered into under the Programme and reduce the price by 10 per cent.
30.72 By May 2003 Mr Long had been appointed to the CPA. As further details about the price in AWB's wheat contracts under the Programme emerged, specific allegations were made against AWB by US Wheat Associates. These allegations, and DFAT's written responses to them, are discussed in Chapter 28.
30.73 In this context, Mr Long and Mr Whitwell had a number of conversations with officers of DFAT's newly established Iraq Task Force-in particular, Ms Armstrong. Ms Armstrong's evidence was that, far from acknowledging that AWB's prices had been inflated by the requirement to pay inland transportation fees and that AWB had paid these fees to Alia and indirectly to Iraq, Mr Long and Mr Whitwell denied that AWB had inflated its prices or paid any kickbacks.
30.74 It was not until March or April 2004 that Mr Long and Mr Whitwell advised Ms Armstrong of the fact that AWB's contracts included inland transport, that AWB used a Jordanian trucking company, and that AWB made payments to Jordanian accounts in the name of Alia or Alia transport. Ms Armstrong's uncontradicted evidence was that on 18 March 2004 Mr Whitwell said to her:
AWB entered into a number of contracts with the Iraqi Grains Board. Because of the way in which the UN OFF program was set up, the Iraqis required the contracts to include inland transport and AWB was instructed to use a Jordanian trucking company. The prices were loaded up in the freight costs and insurance and risk premiums. The UN paid the contract.
The cost of freight and associated insurance charges and risk premiums were high and this is why the extra costs were high. Monopolies were charging what they liked-it was not exactly an open bidding system.
AWB paid the Jordanian trucking company. The Jordanian trucking company might have made payments to the Iraqis of their own volition.
AWB advised DFAT of the arrangement with the Jordanian trucking company in 2000.[199]
30.75 In April 2004 Mr Long told Ms Armstrong:
The trucking company would not do anything until it received payment. We had to pay before final UN authentication came in. The Letter of Credit could come through as late as 21 to 25 days after unloading.
We sent remittances to Alia Transport to a Jordanian Bank account. We knew the Jordanian company. It was a legitimate trucking company. The Iraqis handled the negotiations of the freight rates with Alia and advised AWB how much the fee was and the freight rate. It was that rate that went into the contract.[200]
30.76 These statements were made well after the end of the Oil-for-Food Programme and in the context of mounting allegations about inflated contract prices and kickbacks. Mr Long and Mr Whitwell were telling Ms Armstrong about incorporation of the inland transport fee in the contract price and the payments to Alia in this context because DFAT had never been told of this previously. They neglected to tell Ms Armstrong that Alia did not itself provide the transport, that the 'transport fee' included from November 2000 a 10 per cent surcharge unrelated to transport, and that Alia remitted the funds it received to Iraq.
30.77 Statutory declarations from some 112 past or present officers of DFAT were provided to the Inquiry. Some 24 statutory declarations were also provided from present or former officers of other Commonwealth departments. Some officers provided more than one statutory declaration. Of these statutory declarations, 92 were from officers who were on the distribution lists for various cables and addressed nothing more than whether the officer received, read or acted on any of the relevant cables. The significance of these cables is considered below. The balance of the statutory declarations were from officers who had some involvement in the Oil-for-Food Programme, either because they were posted for a period to the Middle East and Africa Branch or to the Australian mission to the United Nations or a relevant embassy. Appendix 27 lists the names of all Commonwealth officers who provided statutory declarations to the Inquiry. Those statutory declarations that deal solely with cables are listed separately in the appendix.
30.78 No DFAT officer stated that he or she was told at any time by anyone from AWB during the currency of the Oil-for-Food Programme that AWB's wheat prices had incorporated in them fees for inland transport payable to Iraq or a 10 per cent after-sales-service fee or that AWB had entered into collateral arrangements that involved it in paying inland transportation fees to Alia or otherwise indirectly to Iraq. Without exception, those officers who were involved in the Oil-for-Food Programme and dealt with AWB stated that they were unaware of these matters until well after the Programme ended.
30.79 It was not put to Ms Drake-Brockman that Mr Stott informed her of any of these matters. Consistent with Mr Stott's evidence, all that was put to Ms Drake-Brockman by Mr Stott's counsel was that after Ms Drake-Brockman sent the 2 November letter to AWB Mr Stott telephoned her and during that conversation she told Mr Stott that DFAT knew of Alia and that she was comfortable with Alia.[201] Ms Drake-Brockman denied that she made these statements to Mr Stott, and I accept her evidence in preference to the evidence of Mr Stott. Even if it were to be accepted that Ms Drake-Brockman did say these words to Mr Stott, it does not follow from this that Mr Stott had informed Ms Drake-Brockman about AWB's payment of inland transportation fees to Alia or that Alia was forwarding those payments on to Iraq.
30.80 I find that during the Oil-for-Food Programme no officer of AWB ever told DFAT or its officers that AWB was paying fees to Alia, that Alia did not provide transport services for the cartage of AWB's wheat, that AWB had no contact with Alia, that Alia had been nominated by the IGB as the recipient of fees, that the contract price included the so-called transport fee, that from November 2000 there was included in the fee a sum equivalent to 10 per cent of the price that was unrelated to transportation, or that Alia was a conduit for the payment of such fees to Iraq. Indeed, the inference to be drawn from the evidence is that on those occasions when AWB's contracts and dealings with Iraq were the subject of discussion between officers of AWB and officers of DFAT, the AWB officers involved deliberately refrained from telling the DFAT officers anything that might have revealed these facts to them. The failure to notify DFAT was by no means accidental. This finding is consistent with the fact that no officer of AWB asserted that he did so inform DFAT and no officer of DFAT said he or she was so informed.
30.81 It follows that, if DFAT did come to possess the relevant information, it did so from sources other than AWB.
30.82 A related question is whether AWB ever told either the Prime Minister or the Ministers for Foreign Affairs and Trade about its arrangements in relation to the payment of inland transportation fees to Alia and indirectly to Iraq. The improbability of it having done so, in circumstances where it had refrained from telling DFAT, is obvious.
30.83 There were a number of occasions during the operation of the Oil-for-Food Programme when AWB had the opportunity to directly advise the Prime Minister or the Ministers for Foreign Affairs and Trade of its arrangements relating to inland transportation fees. First, AWB wrote to the Prime Minister and the Ministers on a number of occasions. Second, senior AWB officers met with the Minister for Foreign Affairs and the Minister for Trade on a number of occasions during the currency of the Oil-for-Food Programme and shortly after it ended. There were also some meetings involving the Prime Minister. AWB did not disclose the relevant information either to the Prime Minister or the Ministers either in its correspondence or during any of the meetings. AWB did not claim to have done so.
30.84 As well as serving notices to produce on DFAT and the Department of the Prime Minister and Cabinet, the Inquiry asked that the offices of the Prime Minister, the Minister for Foreign Affairs and the Minister for Trade produce any documents that evidenced or constituted communications to or from AWB . None of the documents produced pursuant to this request revealed that AWB ever advised the Prime Minister or the Ministers that AWB was inflating the prices in its Iraq wheat contracts by incorporating fees payable to the Iraqis or that AWB was paying inland transportation or any other fees to Alia or otherwise directly or indirectly to Iraq.
30.85 A number of the letters AWB sent to the Ministers are considered in the foregoing paragraphs in the context of the knowledge of DFAT. None of the letters to the Ministers disclosed the existence of the relevant information.
30.86 Letters from AWB to the Ministers during the currency of the Oil-for-Food Programme did not descend at all into any details of AWB's contractual arrangements with Iraq or make any reference to the payment of inland transport fees or any other fees or payments directly or indirectly to Iraq. The letters that followed the end of the Programme-including those that related to allegations made by US Wheat Associates and those that dealt with the IIC investigation and possible findings against AWB-denied the allegations that AWB's wheat prices were inflated or that AWB paid 'kickbacks' to Iraq.[202] The letters in 2004 and 2005 that disclosed that AWB's contracts had incorporated payments referable to trucking and that the IGB had nominated Alia as the trucking company are inconsistent with AWB having previously advised DFAT or the Ministers during the operation of the Oil-for-Food Programme that it had made or was making payments indirectly to Iraq ostensibly in relation to inland transport. Even these letters maintain that Alia provided a transport service to AWB and do not suggest that it simply channelled the fees paid to it back to Iraq.
30.87 There is no evidence that anyone from AWB ever informed the Prime Minister, the Minister for Foreign Affairs, the Minister for Trade or any other Minister of the relevant dealings between AWB, Alia and the Iraqis. No past or present AWB officer claimed in evidence that they informed the Prime Minister or the Ministers about AWB's payment of inland transportation fees or after-sales-service fees and their incorporation in the contract price.
30.88 Senior officers of AWB did meet with the Ministers and the Prime Minister during the Programme and during the period 2003 to 2005, when allegations were being made about AWB's contracts under the Programme. There is no evidence to suggest that officers of AWB disclosed the relevant information to the Ministers or the Prime Minister during any of these meetings. In those instances where formal records were made of the conversations that occurred at the meetings, the records do not reveal that the AWB participants conveyed the relevant information at the meeting.[203]
30.89 Even in mid to late 2005, when it was apparent that the IIC was alleging that Alia was a front company, senior officers of AWB continued to tell the Minister for Foreign Affairs that AWB's payments to Alia were in respect of genuine trucking services provided to it by Alia and that it did not know Alia was making any payments to Iraq. This was the effect of what Mr Stewart and Mr Lindberg told the Minister at meetings on 1 June 2005[204] and 4 October 2005.[205] The record of conversation prepared in relation to the 4 October 2005 meeting includes the following:
2. Mr Downer said the IIC allegations were worse than he had thought. There was evidence presented by the IIC in the most recent letter. Mr Downer noted the letter claimed that Alia was a front company. He enquired what was the role of the Iraqi State Company for Water Transport (ISCWT). Mr Lindberg replied it was the port authority, which had responsibility for discharging goods from ships. Alia was not a front company and had provided transportation services. The AWB had been unaware of any wrongdoing and had used its services in good faith. Mr Downer said AWB needed to provide evidence. Mr Lindberg said AWB had been seeking additional information from the IIC about the claims, before providing a written response to the 26 September letter. The so-called evidence did not support the facts. AWB had provided explanations to the IIC which had been ignored. AWB could demonstrate that it had paid no kickbacks. Nor had AWB breached the sanctions regime. This had been confirmed by independent legal advice both in Australia and overseas (Richard Tracy in Australia and a Cornell University Professor who had previously participated in drafting the sanctions regime).[206]
30.90 AWB's continuing protestations at this late stage-that AWB was merely paying Alia for transport services provided by it and that it knew nothing of Alia paying the fees it received from AWB to Iraq-is inconsistent with any suggestion that AWB had told the Minister the true position in relation to the inland transportation fees at any time.
30.91 The Prime Minister and the Ministers for Foreign Affairs and Trade each provided statutory declarations to the Inquiry and gave oral evidence.[207] The content of their statutory declarations is inconsistent with any notion that they were ever told at any time by anyone from AWB during the currency of the Oil-for-Food Programme that AWB's wheat prices had incorporated in them fees for inland transport or after-sales-service fees of 10 per cent payable to Iraq or that AWB was paying inland transportation fees to Alia or otherwise indirectly to Iraq. Each of them stated that they were unaware of these matters until well after the Programme ended.
30.92 It follows that, if the Prime Minister or the Ministers did come to possess the relevant information, they did so from sources other than AWB.
30.93 In considering the question whether DFAT obtained from sources other than AWB knowledge of AWB's payment of inland transportation fees to Alia, and indirectly to Iraq, and its incorporation of these fees into its contract prices, it is important to emphasise again that it is only the actual knowledge of DFAT that is relevant in assessing any potential defence available to AWB. It is immaterial whether DFAT was in a position to find out, or could have, or should have, discovered the information from some other source.
30.94 DFAT received or had available, or potentially available, to it information concerning Iraq and AWB's wheat sales to Iraq from a number of sources, among them:
30.95 Two questions arise in relation to DFAT's acquisition of knowledge from any of these sources. The first is whether there is direct evidence of the communication to DFAT of the relevant information from any of these sources. The second is, if there is no direct evidence of the communication of the information from these sources, whether knowledge may be inferred from a combination of the information that was known to DFAT and a failure on the part of DFAT to make any inquiry or take any action in relation to that information. In certain circumstances 'a combination of suspicious circumstances and failure to make inquiry may sustain an inference of knowledge of the actual or likely existence of the relevant matter…a failure to make inquiry may sometimes, as a matter of lawyers shorthand, be referred to as wilful blindness'.[208]
30.96 Throughout the operation of the Oil-for-Food Programme DFAT liaised with the UN Office of the Iraq Programme and the 661 Committee via Australia's mission to the United Nations. On at least two occasions DFAT obtained from the United Nations information that was potentially relevant to AWB's actions in paying inland transportation fees.
30.97 The first such occasion was the Canadian complaint. The facts relating to the Canadian complaint, and in particular the information that was communicated to DFAT by the United Nations in relation to it, are discussed in Chapter 16. The information that was conveyed to Ms Moules at the mission by Ms Johnston, the Chief Customs Expert attached to the Office of the Iraq Programme, in January 2000 can be summarised as follows:
30.98 Ms Johnston also conveyed some information about the Canadian complaint to Mr Nicholas, the Australian Trade Commissioner in Washington, in March 2000. That information was essentially the same as the information Ms Johnston had conveyed to Ms Moules, although the account of the complaint that Ms Johnston gave to Mr Nicholas was less detailed than the account she gave Ms Moules.[209] Ms Johnston also raised with Mr Nicholas, as an additional issue, the fact that AWB's short-form contract contained a term that referred to AWB's standard terms and conditions and that this 'implied that additional conditions were attached to the contract, but not included in the paper submitted to the UN'.[210] This was the main focus of the conversation between Ms Johnston and Mr Nicholas.[211]
30.99 There is an issue as to whether Ms Johnston told Ms Moules and Mr Nicholas that irregular payments ostensibly related to transport costs. It is clear from contemporaneous documentation that the information conveyed to Ms Johnston by Lt Colonel Saunders of the Canadian mission included that the additional payments related to transport costs.[212] Ms Johnston did not, however, make notes of her conversations with Ms Moules and Mr Nicholas. Ms Johnston maintained that she conveyed all the information she received from Lt Colonel Saunders to Ms Moules, including the reference to transportation costs[213], and that she conveyed the same information to Mr Nicholas, again including the reference to transportation costs.[214] Ms Moules' evidence, on the other hand, was that nobody from the United Nations in any of their communications with her referred to trucking fees. The only reference was to irregular payment methods.[215] Ms Moules' cable to DFAT in Canberra, recounting her conversation with Ms Johnston, made no reference to transport costs or trucking fees.
30.100 Mr Nicholas' evidence was that Ms Johnston did not say anything to him about the detail of the irregular payments.[216] Mr Nicholas' cable that included detail of his discussions with Ms Johnston and was prepared within a week of those discussions also made no reference to transport costs or trucking fees.[217]
30.101 For the reasons that follow, it is not strictly necessary to make a finding about whether Ms Johnston told Ms Moules and Mr Nicholas that the irregular payments related to trucking or transport. If it was necessary to make a finding on this, there are sound reasons for preferring the evidence of Ms Moules and Mr Nicholas. The most significant factor is that Ms Moules' cable constitutes a detailed contemporaneous record of her conversations with Ms Johnston. Ms Johnston accepted that, but for the absence of any reference to transport costs, Ms Moules' cable was an accurate rendition of what she said to Ms Moules.[218] Ms Johnston's evidence, on the other hand, was based entirely on her recollection of a conversation that occurred over six years ago.[219] Mr Nicholas' cable also contains a fairly contemporaneous record of his conversation with Ms Johnston. Again, it does not refer to transportation costs or trucking fees. It is unlikely that Ms Moules and Mr Nicholas both forgot or neglected by oversight to refer to the fact that Ms Johnston had told them the irregular payments related to transport costs. There was no reason why both Ms Moules and Mr Nicholas would intentionally exclude any reference to transport costs in their cable reports if Ms Johnston had included such details in her conversation. On balance, the likelihood is that Ms Johnston's recollection about a conversation that occurred six years ago was faulty and that for some reason she neglected to tell both Ms Moules and Mr Nicholas that the alleged irregular payments related to transport costs.
30.102 Whether or not the information conveyed to Ms Moules and Mr Nicholas included a reference to transport costs, it was very close to an accurate account of the arrangements that were in place between AWB and the IGB. Most importantly, it included information to the effect that AWB's wheat contract prices were inflated by US$14 per tonne and that this additional component of the price was paid by AWB into a bank account outside Iraq. All that was missing was a specific reference to Alia and, if it is accepted that it was unlikely that Ms Johnston told Ms Moules and Mr Nicholas that the irregular payments related to transport costs, specific reference to the fact that the payments were for inland transportation fees.
30.103 The significant point, however, is that the information that was conveyed to DFAT by the United Nations was put as being no more than an allegation and an allegation in respect of which the United Nations had no way of 'judging the accuracy or otherwise'.
30.104 It was also an allegation that DFAT took up with AWB and that was emphatically denied. The actions taken by DFAT in response to the Canadian complaint are detailed in Chapter 16. In short, the only step taken by DFAT was a step taken by Mr Bowker on his receipt of Ms Moules' 13 January 2000 cable reporting on Ms Johnston's contact with her. The step taken by Mr Bowker was to telephone Mr McConville, AWB's Manager of Government Relations, who emphatically denied the allegations. Mr Bowker did not take the matter up with any other senior officers of AWB or seek a more detailed or considered or written response from AWB. He did not, for example request any information from AWB about the structure of AWB's contract prices and how they were arrived at or whether it made any payments to a Jordanian account. Mr Bowker's belief was that DFAT had neither the power nor the capacity to investigate AWB's commercial arrangements, other than by inquiry of AWB.
30.105 As a result of AWB's denials and the absence of any information gained from any other inquiries, DFAT was in possession of no information to substantiate the allegation or any part of it. It follows that, as far as DFAT was concerned, the allegation was unfounded, and AWB was neither inflating its contract prices nor making irregular payments to an account outside Iraq. It accordingly had no actual knowledge of these matters from that source.
30.106 Any issues regarding the steps taken by DFAT in relation to the Canadian complaint and the adequacy of the inquiries it did make are immaterial unless they support an inference that DFAT actually knew the claims to be true and did not follow up the allegations adequately or at all because it was deliberately turning a 'blind eye'. This is considered further below.
30.107 The United Nations-or at least the United Nations missions of various of its member states, including the United States, the United Kingdom and Norway (in its capacity as chair of the 661 Committee-conveyed some general information to DFAT in relation to attempts by Iraq to manipulate the Oil-for Food Programme and circumvent the sanctions.
30.108 On 9 March 2001 Ms Moules sent to DFAT a cable[220] that referred to and discussed a report by the United Nations Secretary-General on the Oil-for-Food Programme. It also contained Ms Moules' report on information she obtained from consultations with members of the Security Council about the Security Council's discussion concerning the report, which occurred in closed session on 8 March 2001.[221] Ms Moules' report on the Security Council's discussions included the following:
The UK and U.S. laid the blame for the shortcomings in the operation of the program on the Iraqi regime. The U.S. said it was obvious the Government of Iraq did not support the Oil-for-Food Program and wanted it to fail. The UK said Iraq needed to order more supplies, pump more oil, stop manipulating the Program, and stop blackmailing companies by demanding surcharges.
- Concerning the issues of surcharges, in addition to Iraq's attempt to add surcharges to oil prices (O.UN10270) Iraq has, according to UN officials, begun demanding kickbacks and illegal commission on contracts for humanitarian supplies. We asked the Norwegian Mission (whose PR chairs the Sanctions Committee) if and how the committee intended to address this issue. Norway said that although 'everybody knows about the kickbacks', given the lack of hard evidence (clearly surcharges are not reflected in any of the documentation processed by the UN) it was difficult to address the issue directly. However Norway was considering having a committee letter circulated containing a general reminder to all member states of the illegality of companies paying surcharges to Iraqi purchasers.
30.109 Three points may be made about this information. First, it did not relate directly to AWB and its contracts under the Oil-for-Food Programme, although it does refer generally to contracts for humanitarian supplies. Second, the information about Iraq demanding kickbacks and illegal commissions is again in the nature of an allegation, in the sense that, as the Norwegian mission pointed out, there was a lack of 'hard evidence' to support the claims. Third, the United Nations, in performing its export examination of contracts submitted to it for approval, had not detected any excessive pricing showing that prices included surcharges.
30.110 It is apparent, however, that Ms Moules appreciated the risk that AWB might be the subject of Iraq's attempts to circumvent the sanctions. Less than two weeks after the 9 March 2001 cable, Ms Moules was contacted by Mr Snowball and asked to provide some advice in relation to the payment of port fees in Iraq. The terms of Mr Snowball's request for advice and Ms Moules' response are addressed in Chapter 12. One of Ms Moules' cables to DFAT in Canberra, reporting on her efforts to clarify the issue of port fees, includes the following passage:
The current environment of increased scrutiny of the operation of the Oil-for-Food program and heightened awareness of attempts by Iraq and by some suppliers to circumvent the sanctions regime underlines the importance of AWB adhering closely to the current regulations concerning the payment of port fees. It is not yet clear whether AWB will be placed under further pressure by Iraqi agents to pay port fees in a manner inconsistent with sanctions, and AWB New York has said it will stay in touch with us if needed regarding forthcoming shipments. Iraq's interest in keeping port fees outside the Oil-for-Food Program appears self-evident from the Iraqi delegation's approach to us, though we would note that there was no suggestion in the casual nature of Iraq's approach that the issue of port fees is being linked to AWB's securing of future wheat contracts.[222]
30.111 It is self-evident that general information that Iraq was alleged to be involved in manipulation of the Oil-for-Food Programme and that AWB may be put under pressure by Iraqi agents to pay port fees in a manner inconsistent with the sanctions is not the same as specific information that AWB had inflated its contract prices to facilitate payment of inland transportation fees to Alia and, indirectly, Iraq.
30.112 During the period 1998 to 2004 agencies within the Australian intelligence community produced a number of intelligence reports that, in general terms, concerned issues or events relating to the Oil-for-Food Programme. Pursuant to notices to produce served on agencies within the Australian intelligence community, a number of reports were produced to the Inquiry and inspected by counsel and solicitors assisting. Of the reports inspected, 15 documents were found to be of relevance. Public interest immunity was claimed by the Commonwealth on behalf of the Australian intelligence community in respect of the 15 for the reasons set out in confidential statutory declarations provided by the heads of the agencies that produced the relevant reports.[223] The claim for public interest immunity was upheld[224], and the reports were tendered as a secret exhibit (secret exhibit 4). However, I prepared a document that distilled the content of the relevant reports and their distribution, without disclosing the source of the information within them or any other matters adverse to the public interest. The distillation was in the following terms:
1. In 1998 the AIC held unassessed intelligence indicating that Alia Corporation (Alia), based in Jordan, was part owned by the Iraqi Government and that it was involved in circumventing United Nations sanctions (sanctions) on behalf of the Iraqi Government.
Distribution
The intelligence reports comprising this information were distributed on or about the date of their creation to other AIC members. Each was also distributed on or about that date to the Department of Foreign Affairs and Trade (DFAT), various areas of the Department of Defence including the International Policy Division and the Office of the Deputy Secretary Intelligence and Security (Defence), the Office of the Inspector-General of Intelligence and Security (IGIS) and to the Department of the Prime Minister and Cabinet (PMC)
2. By the first quarter of 2000 the AIC held unassessed intelligence indicating that Alia received fees in Jordan for the discharge and inland transport within Iraq of goods purchased by Iraq under the Oil for Food Program (OFFP). It received these fees as agent for the Iraqi Government. The fees, less a small commission, were paid into accounts accessible by Iraq in violation of sanctions. The amounts involved were very substantial.
Distribution
The intelligence report comprising this information was distributed on or about the date of its creation to other AIC members. It was also distributed on or about that date to DFAT, Defence, IGIS and PMC.
3. By November 2000 the AIC held unassessed intelligence indicating that Iraq's transport charges for humanitarian goods under the OFFP had been very substantially increased. Alia was one means by which these transport fees were paid to Iraq. The AIC also held unassessed information that such fees would probably be used for procurement purposes outside Iraq.
Distribution
The intelligence reports comprising this information were distributed on or about the date of their creation to other AIC members. Each was also distributed on or about that date to DFAT and Defence. Only 3 of the 4 were sent to IGIS and PMC; the reports sent to IGIS and PMC did not contain the intelligence on the increased transport charges or the probable use of fees for procurement outside Iraq.
4. By March 2001 the AIC held unassessed intelligence of endeavours by Iraq to breach sanctions by, amongst other methods, collecting commission on contracts for humanitarian goods imported into Iraq under the OFFP. It included unassessed information that Iraq violated sanctions by charging a 'commission' of at least 10% on imported humanitarian goods under the OFFP and that the 10% commission was rigidly enforced.
Distribution
The intelligence reports comprising this information were distributed on or about the date of their creation to other AIC members. Each was also distributed on or about that date to DFAT, Defence and IGIS. One report was distributed to PMC; this report did not contain the intelligence that the 10% commission was being rigidly enforced.
5. By September 2001 the AIC held unassessed intelligence indicating that inland transport fees for humanitarian goods, including fees paid through Alia, were proposed to be increased very substantially by Iraq. This increase was on top of the 10% commission already paid and the fees were payable in advance of delivery. The proposed increase in transport fees was to apply to all humanitarian goods delivered under the OFFP through the port of Umm Qasr.
Distribution
The intelligence report comprising this information was distributed on or about the date of its creation to other AIC members. It was also distributed on or about that date to DFAT, Defence and IGIS.
6. By December 2002 the AIC held unassessed intelligence that Iraq was enforcing the 10% commission on imports under the OFFP and that one means by which it continued to be paid was by payment into accounts in Jordan.
Distribution
The intelligence report comprising this information was distributed on or about the date of its creation to other AIC members. It was also distributed on or about that date to DFAT, Defence, Customs, the Australian Federal Police, the Office of the Foreign Minister, the Office of the Minister for Trade, the Prime Minister's Office, the Australian embassy in Washington and the High Commission London.
7. Between June 2003 and January 2004 the AIC held unassessed intelligence that the former Saddam regime had forced suppliers under the OFFP to pay Iraq the 10% commission.
Distribution
The three intelligence reports comprising this information were distributed on or about the date of their creation to other AIC members. Each was also distributed on or about that date to DFAT. Two of the reports were distributed to Defence, the Australian Embassy Washington and the High Commission London. One was distributed to the Australian Representative Office Baghdad, one to Treasury and one to the Department of Industry, Tourism and Resources.
8. The intelligence held by the AIC between 1998 and 2004 did not mention any Australian company by name. Unassessed intelligence held in November 2003 included that not all large companies had agreed to pay the Iraqi imposed surcharges, and cited as an example wheat imports from Australia.
Distribution
The intelligence report comprising the information held in November 2003 was distributed on or about the date of its creation to other AIC members. It was also distributed on or about that date to DFAT, Defence, the Australian Embassy Washington, the High Commission London and the Australian Representative Office Baghdad.
9. None of the details or particulars of information contained in secret exhibit 4 is inconsistent with the distillation above save that the details above do not include details of the distribution of the certain documents within secret exhibit 4 after the commencement of this Inquiry.[225]
30.113 Senior officers of the Office of National Assessments[226] and DFAT[227] provided the following additional evidence in relation to the documents in secret exhibit 4 or the context in which these reports were prepared and distributed:
30.114 As set out in the distillation, exhibit 641, each of the reports in secret exhibit 4 was distributed to DFAT. Intelligence reports distributed to DFAT during the relevant period were received and disseminated in the following way:
30.115 In relation to the reports in secret exhibit 4 before late 2002, only very limited records of the names of individual DFAT officers who were on the internal DFAT distribution list or who may have accessed one of the reports electronically had been retained by DFAT or the intelligence agencies concerned. The only written receipts held by DFAT related to two reports; one of those receipts specified that the report was to be distributed to two individual officers.[255] Those officers were the then director of the Middle East Section and a director of another geographic section in another division of DFAT.[256] The intelligence agencies themselves also had very limited records of the internal DFAT distribution list. The agency that had provided most of the reports in secret exhibit 4 to DFAT in an electronic format had no record of the distribution list.[257] The second agency that provided reports to DFAT electronically had retained some limited records of who opened documents after the middle of the second half of 2002.[258] Those records that did remain did not establish that any of the delegates or relevant officers from the Middle East Section of DFAT opened electronically any of the reports in secret exhibit 4.
30.116 None of the delegates of the Minister for Foreign Affairs who signed permissions to export in relation to relevant AWB shipments, including Ms Drake-Brockman and Mr Bowker, recalled seeing or being provided with any of the reports in secret exhibit 4.[259] Nor did any of the officers of the Middle East and Africa Branch during the relevant period who received and sent to the United Nations copies of AWB's contracts and notification forms, including Ms Courtney, Mr Cuddihy and Mr Grenenger.[260] Nor were any of the delegates or relevant officers of the Middle East Section aware during the relevant period of the substance of the contents of the reports in secret exhibit 4, other than in respect of some immaterial matters or matters that were the subject of public knowledge or discourse.[261]
30.117 Even if the relevant delegates or officers did receive and read any of the reports in secret exhibit 4 or otherwise became aware of the substance of the content of these reports, it would not follow that they came to possess information or knowledge that AWB was inflating the prices in its Iraq wheat contracts by incorporating an inland transportation fee or that AWB was paying inland transportation fees to Alia, or otherwise indirectly to Iraq. It is apparent from the distillation that none of the reports contained that information. None of the reports referred to AWB. None of the reports referred specifically to the inflation in the price in wheat contracts under the Programme, although one report that referred to wheat cited wheat imports from Australia as being an example of some large companies not agreeing to pay Iraqi-imposed surcharges.[262]
30.118 The intelligence reports do, however, refer to Alia and its involvement with Iraq in the circumvention of sanctions and the exploitation of the Oil-for-Food Programme. They also refer to the imposition by Iraq of fees relating to inland transportation of humanitarian goods imported to Iraq under the Programme and note that Alia was one means by which these transport fees were to be paid to Iraq. The question whether the existence and potential availability of this information to DFAT, taken together with other surrounding information, facts and circumstances could support an inference that DFAT was turning a blind eye to AWB's potential involvement in the sort of activities referred to in the report is dealt with below.
30.119 In addition to DFAT, notices to produce documents were served on a large number of other Commonwealth departments, agencies or authorities, among them the Department of Agriculture, Fisheries and Forestry; the Department of Defence; Treasury; the Attorney-General's Department; the Department of the Prime Minister and Cabinet; the Wheat Export Authority; AusAID; Austrade; and the Australian Customs Service. These notices broadly required the production of any documents constituting or relating to communications between the department or agency and AWB or other departments or agencies or their Ministers concerning wheat sales by AWB to Iraq, Alia, the payment of inland transportation or other fees to Alia or indirectly to Iraq, and the possible breach of sanctions by AWB. The offices of the various Ministers responsible for these departments, authorities and agencies were also asked to produce any documents within the terms of the notices to produce.
30.120 A large number of documents were produced by the departments, agencies or authorities and the offices of their Ministers. None of the documents produced to the Inquiry revealed that any of the departments, agencies or authorities or their responsible Ministers possessed information to the effect that AWB was inflating the prices in its Iraq wheat contracts by incorporating fees payable to the Iraqis or that AWB was paying inland transportation or any other fees to Alia or otherwise directly or indirectly to Iraq. There is no suggestion that any such information was communicated by any of these departments, agencies or authorities or their Ministers to DFAT or the Ministers for Foreign Affairs and Trade or the Prime Minister.
30.121 The functions or responsibilities of some authorities or agencies did bring them into contact, or potential contact, with AWB or AWB (International) in relation to its wheat sales to Iraq or payments relating to such sales. The agencies or authorities with the most direct contact with AWB were the Wheat Export Authority and Austrade.
30.122 The functions and powers of the Wheat Export Authority and its involvement with AWB and AWB (International) are discussed in Chapter 29. Suffice it to say that the authority's functions included control of the export of wheat from Australia and monitoring the performance of AWB (International). Its powers included the power to compel AWB (International) to provide information or documents relating to certain matters.
30.123 During the relevant period the Wheat Export Authority, in the performance of its functions and the exercise of its powers, obtained information and documents from AWB (International) that included information about AWB's wheat sales to Iraq. The documents provided by AWB (International) to the Authority included market briefs for August 2001 [263] , October 2002 [264] , November 2002 [265] and April 2003. [266] Whilst these market briefs specified that AWB's contracts with the IGB were on a free in truck basis, delivered to all governorates of Iraq, they did not elaborate in any way on this condition. They did not, for example, disclose the amount of the costs associated with this condition or what percentage of the contract price these costs accounted for, or that AWB, purportedly pursuant to this condition, paid an inland transportation fee determined (without negotiation) by the IGB to a company nominated by the IGB (namely, Alia) or that Alia was an agent for Iraq and paid the inland transportation fee to Iraq. Nor did the later reports disclose that the contract price in contracts A1670 and A1680 had been inflated to incorporate a substantial sum referable to a debt allegedly owed by the IGB for a shipment of wheat that had been made in 1996.
30.124 In late 2003 and late 2004, following the publication of allegations concerning the payment of kickbacks to the Iraqi regime under the Oil-for-Food Programme, the authority made specific requests for information from AWB (International) concerning AWB's Iraq contracts. In response, AWB (International) provided a number of briefing notes to the authority. These briefing notes provided some more detail about the inclusion of trucking costs in the contract prices but again omitted material information concerning the costs and how they were paid. In a May 2004 briefing note[267] prepared by Mr Cooper, the following passage appears:
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.
30.125 The briefing note did not include details of the amount or percentage of the 'inland transport component', or advise the authority that this 'component' was not specified in the contracts, was imposed by the IGB and was not negotiated by AWB, or that the Jordanian trucking company was not in fact 'responsible for that part of the contract' (at least in relation to all contracts under the Programme) because it did not provide any trucking services but instead passed on the fee to the Iraqis. Nor was the authority told the name of the Jordanian trucking company. The authority was first notified that the trucking company was named Alia in August 2004.
30.126 There are grounds for concluding that the failure of AWB to fully advise the authority of the inclusion in its contract prices of inland transportation fees, the nature of those fees and the manner of payment, was deliberate and was not a result of mere oversight. For present purposes, however, it need only be noted that at no material time was the authority in possession of the relevant information concerning the inland transportation fees. It was accordingly in no position to, and did not, convey any of this information to DFAT.
30.127 The Australian Trade Commission, or Austrade, is a statutory authority established by the Australian Trade Commission Act 1985. Its functions include to facilitate and encourage trade between Australia and foreign countries by representing the trading and commercial interests of Australia in foreign countries and assisting Australian companies in trade negotiations and obtaining and making available to Australian companies information relating to export trade.[268] Austrade is within the Foreign Affairs and Trade portfolio and reports to the Minister for Trade.
30.128 During the period August 1994 to January 2003 Mr Ayyash was a locally engaged staff member of Austrade in Amman, Jordan.[269] He was responsible for Austrade's activities in Jordan, Syria, Iraq and Palestinian areas and reported to the Australian Trade Commissioner based in Saudi Arabia or Dubai. His role with Austrade was to provide assistance and facilitation for Australian companies wishing to do business in any of the countries or territories covered by his post. His role with Austrade brought him into contact, albeit limited contact, with AWB. He also had regular contact with staff from the Australian Embassy in Amman.
30.129 Mr Ayyash's contact or involvement with AWB was essentially limited to organising transport for AWB officers travelling into Iraq. He acted once as a 'kind of post office' by couriering wheat contracts to AWB at the request of the IGB.[270] Mr Ayyash did not obtain any information or have any communications with AWB or its employees or agents concerning the Oil-for-Food Programme, the export of wheat to Iraq, permissions to export under the Customs (Prohibited Exports) Regulations, or any payments made to any Iraqi government official or entity.[271] He also knew nothing about Alia or any other Jordanian trucking company or about the use by AWB of any trucking company in Jordan.[272] Nobody from AWB ever discussed with him trucking, the use of trucks, trucking companies or anything to do with Alia.[273] He did not have any meetings or discussions with anyone he knew to be an officer or employee of Alia[274], including Mr Al Absi. He knew nothing about any payments made by AWB to Alia or otherwise indirectly to Iraq.[275]
30.130 The documents produced by Austrade do not disclose that Mr Ayyash reported any relevant communication with, or information about, AWB to his superiors or DFAT. Nothing in the documents produced by Austrade suggests that Austrade had any knowledge of these matters independently of Mr Ayyash. Nor was there any communication between DFAT and any other person at Austrade that touched on any of these matters.
30.131 DFAT officers-particularly those in overseas postings-had access to and obtained information relating to the Oil-for-Food Programme from various foreign associations, authorities or other bodies. If the information was of significance, it would usually be reported back to DFAT in Canberra by cable. From about mid-2003 DFAT was made aware of allegations by at least two foreign associations or authorities that AWB had, or might have, inflated its wheat contract prices under the Oil-for-Food Programme to facilitate the payment of fees or kickbacks to the Iraqis. The allegations emanated from US Wheat Associates and the Coalition Provisional Authority in Iraq. The allegations were made after conclusion of all contracts under the Programme.
30.132 The allegations against AWB made by US Wheat Associates and other persons or bodies in the United States are discussed elsewhere in this report. Following is a brief summary of the allegations and DFAT's response to them.
30.133 On 3 June 2003 US Wheat Associates, a US-based grain industry peak body that represented the interests of US wheat growers, wrote to the then US Secretary of State, Mr Powell, a letter that contained allegations that the AWB had been involved in 'price gouging' and overcharging in its wheat contracts under the Oil-for-Food Programme. The substance of the letter was published in the US publication Congress Daily on 4 June 2003.[276] This information came to the attention of a DFAT officer attached to the Iraq Task Force, Mr Walker. On 6 June 2003 Mr Walker sent to the Australian Embassy in Washington a cable that stated, in part:
START OF SUMMARY
We are very concerned at egregious allegations made by US Wheat Associates against AWB Ltd that the latter paid bribes to the Saddam regime in exchange for wheat export contracts under the Oil-for-Food Program. Grateful Ambassador raise the matter at a senior level with the US Administration, noting our concern that AWB Ltd's international reputation could be damaged by the unfounded claims, and reiterating our expectation that Australian and US Wheat exporters will compete fairly on an open Iraqi market. Grateful you also clarify the status of any US plans to reactivate export enhancement programs for Iraq.
END OF SUMMARY
1. US Wheat Associates (USW) Director of Public Affairs, Dawn Forsythe, has alleged publicly that AWB Ltd's contracts for the export of wheat to Iraq under the Oil-for-Food Program (OFF) were over-priced and, while being careful to avoid directly accusing AWB Ltd of making payments to the Saddam regime, strongly hinted that this was the case. Forsythe alleged that this lack of transparency provided grounds for the renegotiation of AWB Ltd's existing wheat contracts under the OFF against US competition. USW has written to Colin Powell in similar terms and made this correspondence public. Forsythe's comments were widely reported in the Australian media on 5 June. Mr Vaile has responded strongly to the allegations. AWB Ltd has threatened USW with a defamation suit in US courts, unless USW fully retracts the statements publicly and in a further letter to Secretary Powell.
…
3. We have registered with the US embassy in Canberra (DCM Owen) our deep regret that USW has chosen to embark on this egregious public campaign to denigrate AWB Ltd.
4. Mr Vaile has advised the media that our embassy in Washington will be raising the matter with Secretary Powell. Grateful if the Ambassador could make appropriate representations drawing on the following talking points:
* Allegations by US Wheat Associates that AWB Ltd paid kickbacks to the Saddam regime in exchange for wheat contracts are outrageous.
- USW have made this allegation in a letter to US Secretary of State Colin Powell, now published on the internet, and are conducting a media campaign to discredit AWB Ltd.
* Government has been assured by AWB Ltd that no such kickbacks were paid.
- USW is not claiming they have any evidence either, and is making speculative allegations based on their interpretation of the price of the contracts.
- AWB Ltd is unaware of how USW obtained commercial-in-confidence information about prices and is very concerned at this development.
* AWB's contracts were openly negotiated with the Iraqis against international competition through a transparent multilateral process, the UN Oil-for-Food Program (OFF).
- Many other countries have been exporting wheat to Iraq under the OFF (e.g. Canada, Russia, France, Syria, India)
- AWB Ltd's contracts were approved by the UN's Iraq sanctions committee (on which the US has always been represented).
- AWB Ltd have made clear that the contract price included not just the price of the bulk wheat, but also costs for internal distribution within Iraq, equipment for discharging the wheat, and premiums for a range of financial and execution risks such as payment after delivery, allowances for significant shipping delay, and poor unloading facilities.[277]
30.134 Mr Walker drafted this cable, under the 'close guidance' of more senior officers in the Iraq Task Force, on the basis of exchanges with AWB officials and his understanding that the AWB contracts had been approved by the relevant UN structures.[278] Mr Walker did not claim to have made any further inquiries into the allegations independent of his discussions with AWB officials. The talking points referred to in the cable were drawn from a document also drafted by Mr Walker.[279] Mr Walker's immediate supervisor at DFAT was Ms Armstrong. Ms Armstrong was also aware of the US Wheat Associates allegations and was aware that Mr Walker had contacted AWB and been assured that its contracts were not overpriced or inflated and that AWB had not paid any kickbacks.[280] The response of both Ms Armstrong and Mr Walker was also influenced by the fact that the allegations by US Wheat Associates were not supported by any evidence or substantiating facts.[281]
30.135 A number of other cables between DFAT in Canberra and the embassies in Washington and Baghdad during 2003 refer to US Wheat Associates allegations and the diplomatic response to the allegations that was managed by DFAT. Similar allegations were picked up and publicised by other persons or bodies in the United States during 2003, including some US Senators. DFAT's response to these allegations, and the resultant diplomatic response, were essentially the same as the response to the US Wheat Associates allegations-namely, to refute the allegations on the basis of AWB's strong denials. Among the cables referring to the response to the allegations in the United States during 2003 were the following:
30.136 During the period that US Wheat Associates was making allegations against AWB, Ms Freeman was a counsellor at the Australian Embassy in Washington. She, together with Mr Thawley, the Ambassador, and Mr Baxter, the Deputy Chief of Mission, was involved in Australia's diplomatic response to the allegations. Her evidence was that over a number of months from about April 2003 Mr Hockey, AWB's General Manager, Public Affairs, provided her with information aimed at demonstrating that AWB did not overprice the wheat it sold to Iraq, contracts had been openly negotiated with the Iraqis, and the prices charged by AWB included additional costs for distributing wheat to all governorates of Iraq.[290] There were a number of considerations that led her to accept AWB's denials of the US Wheat Associates allegations. In summary, they were:
30.137 It was also important to Ms Freeman that no evidence had been put forward by US Wheat Associates to back up its claims:
Mr Tracy [President of the US Wheat Associates] did not provide any evidence supporting his allegations against AWB or the Australian government to me or, to my knowledge, anyone else. I was not independently aware of any information or material that gave me reason to believe that Mr Tracy's allegations might have any basis in fact.[294]
30.138 The evidence of Mr Baxter was to the same effect. Mr Baxter was also involved in responding to Senator Daschle and the other US Senators who had picked up the US Wheat Associates allegations; he was also involved with the US Senate Permanent Subcommittee for Investigations.
Throughout 2003 and 2004 the issue of the Australian Government's support for the single desk marketing arrangements for wheat was the subject of strong criticism from US agricultural interests and became a highly sensitive issue in the negotiations underway on a bilateral free trade agreement between Australia and the United States. The Embassy sought to ensure that unsupported allegations by commercial competitors of Australia did not become accepted as fact in the Washington policy community and that any investigations of those allegations be handled fairly and openly. Following the conclusion of the Iraq war several congressional inquiries, with overlapping terms of reference, were set up to investigate the OFFP. There was strong competition among the leaders of the various committees to attract favourable publicity to their inquiries and boost their political positions. There had been widespread criticism of the United Nations within congress in the period leading up to the establishment of the various congressional inquiries and OFFP provided a focus for those seeking to expose corruption in the UN.[295]
30.139 In the context of ascertaining DFAT's knowledge of whether AWB had inflated its contract prices to facilitate the payment of inland transportation and other fees indirectly to Iraq, the significant point that emerges from the evidence relating to the US Wheat Associates allegations is that, like the Canadian complaint, the information DFAT obtained was no more than an allegation or a series of related allegations. These allegations, at least as far as DFAT was concerned, were unsupported by evidence or supporting facts, were potentially motivated by competitive forces and political considerations, and were emphatically rejected by AWB. Since DFAT accepted AWB's assurances that the allegations were unfounded, it had no actual knowledge that AWB had in fact been involved in the alleged conduct.
30.140 The US Wheat Associates allegations were also made at a time effectively after the end of the Oil-for-Food Programme, or at least after the time that DFAT was called upon to consider AWB's wheat contracts and to decide whether permission to export ought be given under the Customs (Prohibited Exports) Regulations. Information or knowledge obtained or acquired by DFAT after the effective end of the Programme could only be relevant to any defence AWB might have if it could provide the basis for an inference that DFAT possessed the information or knowledge during the currency of the Programme-that is, at the time of the alleged misleading or deceptive statements or conduct by AWB.
30.141 The scope of any power DFAT might have to conduct inquiries in relation to allegations that Australian companies had breached sanctions may be open to debate. In fact, DFAT conducted no inquiries about the allegations beyond seeking AWB's response. Acting on AWB's assurances, it strenuously defended AWB and took extensive diplomatic action to rebut the allegations. DFAT's response is, however, immaterial to the question whether DFAT had actual knowledge of AWB's conduct unless the nature of DFAT's response is able to support an inference that DFAT was deliberately turning a 'blind eye' to the allegations because it already knew the facts. This is considered further below.
30.142 The information DFAT obtained from the Coalition Provisional Authority during 2003 and 2004 was of a similar nature to the US Wheat Associates allegations, albeit from a source that might reasonably have been regarded as less likely to be influenced by competitive motivations than US Wheat Associates.
30.143 On 12 June 2003 Mr Long sent an email to various officers of AusAID and DFAT. By this time the Coalition Provisional Authority had appointed him an advisor to the Ministry of Trade in the Interim Iraqi Administration. Mr Long's email included a memorandum of instruction from Captain Blake Puckett of the Coalition Provisional Authority to 'Ministry Advisors' in relation to the renegotiation and reprioritisation of contracts entered into under the Oil-for-Food Programme.[296] The memorandum included the following passage:
As you know we have been working with OCPA ministry liaisons, the UN and Ministry representative to process these OFF program contracts. We are asking you to work with your ministry and the appropriate UN agency to do the following:
…
II. Identify which contracts have a kickback or surcharge (often 10%). We need to know what percentage kickback or 'after sales service fee' was involved under the 'Extra Fees' category. Your Ministry is likely aware of the charge so please work with them to identify and indicate on the matrix.
30.144 Ms Armstrong received a copy of Mr Long's email. The possibility that contracts under the Programme might have included some sort of kickback to the regime was not new information to her.[297] She was aware of the US Wheat Associates allegations and AWB's denial of them. She also did not regard Captain Puckett's memorandum as a communication to the Australian Government that the Coalition Provisional Authority believed or even suspected that AWB's contracts contained a kickback:
Q: Did you take Captain Puckett's memorandum as a way of conveying the message to you?
A: No, not at all. The memorandum was provided to all Coalition Provisional Authority ministerial advisers to the interim Iraqi authority. It included no mention of any Australian contracts and no specific mention of AWB. I saw that very much as a generic advice that was being prepared across the whole range of the Oil-for-Food Program contracts.
Q: Do you say that DFAT, to the best of your knowledge, never received any advice from the CPA or the World Food Programme that the contracts 1670 or 1680 had contained a kickback?
A: To the best of my understanding, we received no such advice.[298]
30.145 Ms Armstrong took three steps upon receiving Captain Puckett's memorandum.[299] First, she sent a copy of the email to Mr Whitwell of AWB. Second, she instructed Mr Walker to advise the Baghdad post and the UN mission that DFAT should make strong representations on behalf of AWB in relation to the reprioritisation of the remaining Oil-for-Food contracts. Third, she instructed Mr Walker to contact DFAT's post in Baghdad to ask that someone at the post speak with Captain Puckett about the reprioritisation process and the issue of kickbacks or surcharges and inform Captain Puckett that AWB had strongly refuted any suggestion that it had been involved in kickbacks.
30.146 In response to the last of these requests, Ms Venamore, then Deputy Head of Mission at the Australian Embassy in Baghdad, subsequently attended a briefing by Captain Puckett. She reported on the briefing in a cable to DFAT in Canberra dated 23 June 2003. The cable included the following passages:
START OF SUMMARY
The CPA's small new office on Oil-for-Food has tasked Ministries to sort through approved and funded contracts to check against priorities. Contracts which have been neither approved nor funded as of UNSCR 1483 will not proceed under OFF.
END OF SUMMARY
Blake Puckett, a captain in the U.S. Army's civil affairs command and running the CPA's OFF work, briefed us on the CPA's approach to its obligations under UNSCR 1483.
…
5. Every contract since phase 9 included a kickback to the regime from between ten and nineteen percent. The CPA was advising Ministries to tell companies with contracts that the 'after sales service fee', which was usually to be deposited in offshore banks, would be remitted to them.
…
COMMENT
8. The recent establishment of the office played out through some hesitant answers from Puckett, and at times extensive discussion on issues with his colleagues. Two of the three staff of the office have been in place only a few days. Policy on some aspects of CPA management of OFF is likely to go through some refinement in coming months.[300]
30.147 Mr Whitwell also responded to Ms Armstrong's email that forwarded Mr Long's email and Captain Puckett's memorandum.[301] In his email reply Mr Whitwell provided comments in relation to numerous issues raised in Captain Puckett's memorandum. However, he made no comment about the paragraph relating to kickbacks or surcharges. Ms Armstrong did not attribute any significance to this.[302]
30.148 Ms Armstrong made no further inquiry herself of either AWB, the World Food Programme or the Coalition Provisional Authority in relation to the contention in Captain Puckett's memorandum. It did not occur to her at the time that the AWB contracts should be subjected to any rigorous examination by DFAT.[303] Ms Armstrong gave the following explanation for why that was so:
Q: Did you have the capacity at that time to rigorously examine the AWB contracts?
A: No, I didn't, and I think if we were going to do something like that to actually launch an investigation, we probably would have sought more authority. If I could say in regard to that paragraph, while I agree it is definitive, my assessment of this cable was very much defined or led, I think, by the comment in paragraph 8, where it was made clear by the post that the office had only recently been established, that they were still very much in an establishment phase. I took a view that that paragraph 5 statement really needed to be tested. In light of the comments, the very firm denials that we had from AWB, I really thought that the CPA perhaps needed to test that assumption that they were best placed to test that assumption, and I knew that that testing of that assumption was occurring in Baghdad.
We couldn't see, from Canberra, how they could make such a definitive statement at this particular point in time. The CPA was, at this time, in June, in a state of great chaos, actually. They had only been in Baghdad a relatively short time. Documents were only just starting to come forward. In no way, I think, could they have made any definitive assessment of all the documents that might have been available on the Oil-for-Food Program in just two months, I think, after the coalition authorities got into Baghdad, and I really felt that that was something that we really needed to see properly tested.
I had an understanding, of course, that this was going to happen. One of the things that we as a coalition partner, in concert with the Coalition Provisional Authority, were doing was going through very rigorously all the documents that were coming forward, and you might recall that initially we were looking for WMD, but we were also looking for where Saddam's assets had gone to, and in the course of all of that I felt that if there were any documents that might relate to any untoward behaviour or illegal activity on the part of Australian companies they would inevitably come forward, but I thought it was far too early for the CPA to be making categorical statements like that.[304]
30.149 Ms Armstrong was influenced by her belief that, if AWB contracts were to undergo reprioritisation and renegotiation, they would be 'specifically examined and vetted by the Coalition Provisional Authority, with the assistance of the Iraqi officials, and the relevant UN agencies, including the World Food Programme for the purpose, amongst others, of ascertaining whether they involved kickbacks of any kind.' She was of the view that AWB's contracts would be 'examined and tested by the competent authorities, including the 661 Committee which was ultimately responsible for giving the final approval for the outstanding wheat contracts'.[305]
Ms Armstrong also took into account that no specific allegations were being made regarding AWB contracts, that no specific allegations were being made that AWB had been involved in paying kickbacks[306] and that the Coalition Provisional Authority had not conveyed to the Australian Government any such allegation.[307] She was also aware of the recent and strong public denials by AWB in the media and to the Australian Government, rejecting such allegations.[308]
30.150 Ms Armstrong had a number of conversations in the latter part of 2003 and into early 2004 with Mr Long and Mr Whitwell of AWB about the reprioritisation process and the renegotiation of the two remaining AWB contracts under the Programme. In each of the conversations with Mr Whitwell that touched on the allegations concerning kickbacks, Mr Whitwell denied that AWB's contracts incorporated or involved kickbacks.[309] Indeed, Mr Whitwell told Ms Armstrong the Coalition Provisional Authority accepted that the two contracts being renegotiated did not incorporate kickbacks and the authority did not insist on a 10 per cent reduction of the contract price but rather accepted only a very nominal reduction. Ms Armstrong took the view that a reduction of significantly less than 10 per cent was consistent with advice that Mr Whitwell had given her to the effect that the Coalition Provisional Authority had accepted that AWB had not paid any kickbacks.[310]
30.151 In addition to Australian advisers working for ministries, such as Mr Long, there were a number of other Australians who were seconded to or retained by the Coalition Provisional Authority in Iraq. Between May and November 2003 and March and July 2004 an Australian Defence Force officer, Colonel Kelly, was seconded to the Office of General Counsel in the Coalition Provisional Authority.[311] In the course of his duties in 2004 Colonel Kelly acquired information from a variety of sources about the Oil-for-Food Programme and the mechanisms that had been used to corrupt it.[312] He became aware that 'illicit' payments were made to the Iraqi Government by virtually all parties who entered into contracts under the Programme, that these payments were outside the terms of the Programme and that they were used by the Iraqi regime for purposes other than humanitarian purposes. The payments included after-sales-service fees amounting to 10 per cent of the contract price and inland transportation payments made to Jordanian companies that were channelled back to Iraq.[313] He formed the opinion that anyone involved in significant and regular contracts and dealings under the Programme must have been aware of the after-sales-service fee demanded by the Iraqi regime and inland transportation fee payments and that AWB, as the largest supplier of food under the Programme, was almost certainly directly and knowingly involved in making these payments.[314]
30.152 Between March and July 2004 Colonel Kelly regularly reported the detail of his activities, insofar as they related to the Oil-for-Food Programme, to the deputy head of the Australian mission in Baghdad, Ms Venamore.[315] Colonel Kelly reported to Ms Venamore that those in the Coalition Provisional Authority with access to the paperwork believed that any company doing business in Iraq through the Programme could not have escaped being involved in some kind of inappropriate action, whether or not they were aware of it.[316] Ms Venamore reported this observation to DFAT in Canberra in a cable dated 19 May 2004. In an email on the same day Colonel Kelly informed Ms Venamore that '[it] looks like the jig is up on AWB and the OFF scandal'.[317] Colonel Kelly also advised Ms Venamore that in his opinion it was almost certain that AWB would be caught up in the investigations relating to the Oil-for-Food Programme.[318] Ms Venamore thought that the email meant that information had emerged which might implicate AWB. Neither in that email nor subsequently did Colonel Kelly provide to Ms Venamore any such evidence.[319]
30.153 Upon his return to Australia in July 2004 Colonel Kelly debriefed DFAT and officers from the Attorney-General's Department about his knowledge and involvement in the investigations surrounding the Oil-for-Food Programme.[320] A number of participants at this meeting who provided statutory declarations to the Inquiry had marginally differing recollections about what Colonel Kelly said at this meeting. It is unnecessary to resolve these differences. It is clear that by the date of this meeting, officers of both DFAT and the Attorney-General's Department were well aware of the allegations relating to the manipulation of the Oil-for-Food Programme, that various agencies or bodies had been investigating, or would be investigating, the alleged manipulation of the Programme, that it was likely that AWB's conduct would come under close scrutiny in those investigations, and that AWB's potential exposure or vulnerability related to payment of service fees through transport companies of between 10 and 30 per cent.[321]
30.154 DFAT regarded the Authority's contentions about contracts under the Programme involving kickbacks as unproven allegations subject to further investigation by the Authority. It did not amount to actual knowledge on the part of DFAT that AWB's contracts had been inflated or that AWB had made payments to the Iraqis.
30.155 Like the US Wheat Associates allegations, the information DFAT received from the Coalition Provisional Authority was largely after the effective end of the Oil-for-Food Programme. It emerged at a time when DFAT's role in relation to the Programme related only to liaising with the responsible parties in relation to the reprioritisation of contracts that had been entered into under the Programme and did not involve the sending of AWB contracts to the United Nations or the giving of permission to export. It is therefore not relevant to the availability of any defence unless it can support an inference that DFAT knew the information at an earlier stage.
30.156 DFAT did not conduct any inquiries into the information it received from the Coalition Provisional Authority. It did not investigate AWB's contracts with these allegations in mind. Whether DFAT's response could, taken together with other relevant circumstances, support an inference that it knew about AWB's actions in relation to payments to Iraq during the currency of the Oil-for-Food Programme is discussed below. The conclusion I have reached is that it does not support such an inference.
30.157 All the delegates who signed permissions to export relating to AWB's wheat shipments and all relevant DFAT officers who were in the Middle East Section of DFAT and were involved in 'processing' AWB's contracts, UN notification forms and applications for permission to export provided statutory declarations to the Inquiry. All stated, in substance, that at no time during the currency of the Oil-for-Food Programme did they know that the Iraqi Grain Board or the Iraqi Government had required AWB to pay money, either directly or indirectly, to it in relation to inland transportation or after-sales-service fees. All but one officer, Ms Courtney, stated, in substance, that they did not know about Alia or that AWB paid inland transportation or other fees to Alia or that Alia paid these fees on to Iraq.
30.158 The only DFAT officer who stated that she knew anything about Alia was Ms Courtney. In her statutory declaration, Ms Courtney stated:
When I saw the name 'Alia' in newspaper reports of the Cole Inquiry over the last few weeks in relation to the Jordanian trucking company used by AWB I recognised the name and now believe that it was a name that I heard in that context during the time I worked in the Middle East Branch in 2000 and 2001. I had no knowledge of that name beyond that. I have no recollection of a conversation with Mr Stott about Alia, nor do I recall a conversation with AWB where the name Alia was mentioned. I have no knowledge of the Department having looked into Alia. I do not recall when I became aware of the name Alia. I do not recall seeing a document where that name was mentioned.
30.159 Her oral evidence was to the same effect:
Q: Let's take this slowly. You read the name Alia in the newspaper reports and you recalled that you had heard the name Alia as a trucking company whilst you were working in the Middle East branch?
A: Heard or read.
Q: Heard or read of it-as a trucking company?
A: Yes.
Q: As a Jordanian trucking company?
A: Yes.
Q: Did you hear or read of it as a Jordanian trucking company that was being used by AWB?
A: Yes.
Q: That was material that you heard or read whilst you were in the Middle East branch between 2000 and 2001?
A: That is my recollection.
Q: Do you say that you cannot remember whether you were told that or whether you read it?
A: That's right.
Q: Might it be both?
A: If I don't remember, I don't remember. I am sorry.
Q: You just don't know how you came by that information?
A: If I knew, I would tell you. I don't. I just was familiar with the name, and it certainly-all the things I have said are correct.[322]
30.160 In addition to not knowing how she came to possess this information or knowledge, Ms Courtney had no recollection of ever discussing it with any other DFAT officers.[323]
30.161 Ms Courtney's evidence concerning her knowledge of Alia is anomalous and unsupported by any other evidence. It is difficult to see how she could have come to learn about Alia from discussions with other DFAT officers in circumstances where all other relevant DFAT officers who worked in the Middle East Section knew nothing about Alia and therefore could not have told her about it. It is equally difficult to see how Ms Courtney could have learnt about Alia from AWB in circumstances where no past or present officer of AWB claimed to have discussed Alia with Ms Courtney and where the evidence points strongly to the fact that those AWB officers who knew anything about Alia deliberately refrained from telling DFAT anything about it.
30.162 There is also no evidence to support the proposition that Ms Courtney learnt about Alia by reading a document. Putting aside the reports disseminated to DFAT by the Australian intelligence community, there is no evidence of DFAT being in possession of any document that refers to Alia. In relation to the intelligence reports, whilst the reports refer to Alia, none of them refers at all to AWB or AWB's use of Alia. Even if Ms Courtney had read the intelligence reports, they would not have conveyed to her that Alia was a Jordanian trucking company being used by AWB. In any event, Ms Courtney could not recall having seen any of these reports whilst she worked at DFAT:
Q: Finally, would you have a look at our folder of secret exhibits. I think in preparation for giving evidence you have had an opportunity to look at these documents, have you not?
A: Yes.
Q: Prior to preparing to give evidence before this inquiry had you seen any of those documents?
A: Not to my recollection.
Q: Prior to giving evidence before this inquiry were you aware of the substance or content of any of those documents?
A: Only insofar as it may have mirrored other sources of information, such as newspapers or public documents.
Q: Were you aware of the substance or content of any of those documents in relation to AWB?
A: No.[324]
30.163 There is no material suggesting that any 'newspapers or public documents' during the period that Ms Courtney was at DFAT published information that Alia was a trucking company used by AWB.
30.164 Ms Courtney did not accept that her recollection that she knew about Alia was a vague recollection.[325] She also did not accept that it was possible that she had heard about Alia as a Jordanian trucking company and that, when she read in more recent newspaper reports concerning this Inquiry that it was a company used by AWB, she fused the two matters together.[326] Nevertheless, and without in any way suggesting that Ms Courtney's evidence was untruthful, there are sound reasons for doubting the reliability of her recollection. Her recollection is vague to the extent that she is unable to recall anything about how or in what circumstances she came to learn about Alia. It is a recollection about her state of mind five years ago and it is unaided by any note or other memory prompt. It also does not sit well with all the other available evidence about DFAT's knowledge of Alia and the absence of any DFAT documentation from the time recording anything about Alia.
30.165 I am unable to accept Ms Courtney's evidence about Alia. However, even if Ms Courtney's evidence about Alia were to be accepted, it does not establish that DFAT knew all the relevant information about AWB's use of Alia. Ms Courtney does not suggest that she knew that AWB's contract prices were inflated to incorporate fees paid to Alia or that Alia did not itself provide any trucking for AWB, or that Alia paid the trucking fees it received from AWB to Iraq. Nor is there any evidence that Ms Courtney conveyed any such knowledge to the officers at DFAT who made relevant decisions about AWB's contracts, in particular the delegates who signed permissions to export.
30.166 The analysis of the evidence of DFAT's sources of information and the communications in fact received and read by DFAT officers demonstrates that there is no direct evidence that DFAT actually knew the relevant information during the currency of the Oil-for-Food Programme. In summary, the direct evidence establishes the following:
30.167 The remaining question is whether the evidence of what was communicated to DFAT, coupled with the evidence of DFAT's response or reaction to this information and other surrounding facts and circumstances, is capable of supporting an inference that, despite the denials of the relevant DFAT officers, DFAT actually knew about AWB's payment of inland transportation fees to Iraq via Alia. That inference would be available only if the evidence demonstrated that DFAT was intentionally turning a 'blind eye' to the allegations and intelligence it had received by not investigating them further because it already knew what any further investigations or inquiries would reveal. As a matter of shorthand, such conduct is often referred to as wilful blindness. That expression should not, however, deflect attention from the fact that the relevant question is whether DFAT actually knew the relevant information, not whether it ought to have known or had the means to discover it.
30.168 Although I summarise below a number of events and circumstances that occurred over a lengthy period encompassing both some of the period of the Oil-for-Food Programme and events in the period after that Programme had ended, it is not a correct approach to consider such events and circumstances cumulatively. Events and circumstances do not necessarily build on preceding events or circumstances so as to magnify or render more important the second or later event or circumstance. That is so for at least two reasons. First, any relationship between a series of events is time related. Whether a relationship exists at all between two events is critically time dependent. Second, any relationship between events depends on whether it is appropriate to regard an earlier event as still being of currency when the later event occurs. An event regarded as resolved or satisfactorily explained or answered may not have the necessary currency at the time of the happening of the later event for it to be appropriate to associate the two. It is not permissible to use hindsight to seek to establish a relationship between events when, in reality, at the time of occurrence of a later event a relationship with an earlier one was not apparent or did not exist.
30.169 With that caution, in summary, the primary facts that could possibly support an inference of wilful blindness on the part of DFAT, put at their highest, are as follows.
30.170 These facts must also be considered in the light of DFAT's role in relation to the Oil-for-Food Programme. This is addressed in detail in Chapter 12. In short, DFAT was the primary, if not the sole, point of liaison between Australian companies that participated in the Oil-for-Food Programme and the United Nations. It received and submitted AWB's contracts and notification forms to the United Nations. As delegates of the Minister for Foreign Affairs, DFAT officers signed permissions to export under the Customs (Prohibited Exports) Regulations. In doing so, they were required to be satisfied that permitting the exports would not infringe Australia's international obligations. They relied on the United Nations' inspection and approval of Australian companies' contracts under the Programme and did not see any real role for themselves in this process. If the United Nations approved a contract as not infringing Resolution 661 and as being appropriate for payment from the escrow account, export approval was given.
30.171 The critical fact that emerges is that DFAT did very little in relation to the allegations or other information it received that either specifically related to AWB, or related generally to Iraq's manipulation of the Programme. DFAT's response to the information and allegations was limited to seeking AWB's assurance that it was doing nothing wrong. The question is whether the only reasonable inference to be drawn from this lack of action on the part of DFAT is that DFAT was turning a blind eye to the information because it already knew that AWB was involved, wittingly or unwittingly, in the conduct as alleged.
30.172 That inference is not available. Rather, DFAT's lack of action is explicable for a number of reasons that do not involve actual knowledge by DFAT of AWB's wrongdoing.
30.173 First, DFAT understandably regarded AWB as a company of the utmost integrity; it had been a Commonwealth statutory authority until recent times, and was highly unlikely to have been involved in any conduct that was in any way untoward or improper. This was explained by Mr Bowker, the DFAT officer who was given primary responsibility for responding to the Canadian complaint:
I was well aware, from that experience [of the commercial issues which Australian companies frequently address in the Middle East] of the importance of integrity in business dealings on the part of those Australian and other companies wishing to engage in high-level business activity. It was most unlikely, in my view, that AWB, which enjoyed an enviable reputation for integrity in the Middle East, would be likely to jeopardise that reputation and its stature. It had considerable experience in the region of dealing with commercial activities, and I am sure it would have understood the consequences of being perceived to be willing to lower its standards.[327]
30.174 Mr Bowker believed that AWB was reliable in terms of its adherence to sanctions:
In my experience, AWB had been careful to observe the requirements as explained to them by the department in regard to dealings with Iraq. I base that partly on the open manner in which they dealt with us concerning the transport of gold bullion from Iraq in 1990, which was an issue requiring close consultation with the Australian Government and it occurred at a time when I was in Jordan. I was therefore fully familiar with that process.[328]
30.175 This view or opinion of the integrity of AWB was not unique to DFAT. Ms Johnston from the United Nations also considered at the time that AWB 'had an excellent reputation within the program of cooperation with the program'.[329] It was a view also shared by the Prime Minister[330] and the Ministers for Foreign Affairs[331] and Trade.[332]
30.176 DFAT's belief about AWB's honesty and integrity at the relevant time was a belief that was reasonably held. It understandably tempered its response to both the Canadian complaint and the contentions and allegations by the Coalition Provisional Authority and US Wheat Associates. It also explained the willingness on the part of DFAT to accept the categorical denials by AWB without conducting any independent investigations, even assuming it had the power to do so.
30.177 Second, DFAT saw its role as including supporting Australian economic interests and Australian companies who were involved in international trade.[333] The allegations it received emanated from countries that were major competitors of AWB and Australia's international wheat trade. Officers of DFAT knew this. It was pointed out to DFAT by AWB. These circumstances caused DFAT to view the allegations with some scepticism.
30.178 Third, in responding to the allegations or information it received, DFAT did not consider it was an investigatory agency or that its role encompassed investigating alleged breaches of the sanctions, or that it was equipped or empowered to conduct investigations beyond seeking information from the Australian company concerned. DFAT's role, and specifically whether it extended to investigating alleged breaches of the sanctions regime, is explored in Chapter 12. Suffice it to say that both Mr Bowker, who was primarily responsible for responding to the Canadian complaint, and Ms Armstrong, who was involved in DFAT's response to the Coalition Provisional Authority and the US Wheat Associates allegation, believed that they were not empowered to investigate allegations beyond seeking advice from the company concerned.[334]
30.179 DFAT did not have in place any systems or procedures in relation to how its staff should proceed in response to allegations relating to the breach of sanctions. No specific officer was given responsibility for responding to or investigating such matters. It does not appear that there was in place any protocol, if DFAT was not itself proposing to investigate, for referring matters for investigation to other agencies such as the Australian Federal Police or that staff were given any instructions about how, if at all, they could investigate such allegations or what resources were available to them. It must be acknowledged that for DFAT to refer a matter to the Australian Federal Police would be a serious matter, particularly in the absence of any evidence of breach of sanctions or the law. There was no evidence provided in support of the Canadian complaint.
30.180 Fourth, an additional compelling reason to doubt the availability of any inference that DFAT knowingly turned a blind eye to AWB's actions is that it is difficult, if not impossible, to see what possible motive DFAT would have for turning a blind eye or how DFAT could conceivably see that turning a blind eye would advance either AWB's or Australia's interests in any way. That is all the more so because there is no evidence to suggest that DFAT's lack of action was the result of complicity with AWB. If DFAT was turning a blind eye, it was doing so at its own volition and not at the behest of AWB.
30.181 Whilst it may be that it was in Australia's economic interests for AWB's wheat trade to Iraq to continue, it could never have been in Australia's interests for the trade to continue if it involved Australia breaching its international obligations. Mr Bowker explained how DFAT's and Australia's interests in supporting Australia's economic interests and its international obligations were not contradictory:
Q: Is it because you didn't really want a full inquiry at that stage as to whether or not AWB was making these irregular payments to the Iraqis?
A: No. There were two factors guiding our approach to our role as a department, and, indeed, as a portfolio. The first was to support Australian economic interests, including, obviously, in regard to Iraq. Our second concern was to uphold the integrity of and pursue Australia's interests within the multilateral system. The two objectives were not contradictory. They were mutually complementary. Our concern was to provide the best service that we could to Australian companies within the framework of Australian Government policy and within the framework allowed by UN sanctions. If there had been evidence of a departure on the part of AWB or any Australian company, then we would have taken the evidence of that-not allegations, but evidence of that-to the government to consider what steps it may wish to take.[335]
30.182 Ms Armstrong also denied that it could have been in DFAT's or Australia's interests to turn a blind eye to any allegation against AWB:
Q: What do you say to a suggestion that might be made that your interest, as you saw it, might have been to turn a blind eye to any suspicious material which you saw?
A: I would refute that.
Q: Why is that?
A: I believe, as Australian public servants, we have obligations under the Australian Commonwealth Code of Conduct for public servants and also under various different legislation, if we find evidence where Australian Commonwealth officials or Australian companies might be engaged in improper activity, that we need to take the proper steps to deal with it, which I believe would involve some form of reporting, and in this case ministers were extremely focused on the matter of the reprioritisation of the wheat contracts. They were also very concerned to ensure that our obligations as the Australian Government coalition ally were properly met, and I think if there was any suggestion that we-or that I-if I was to uncover any suggestion of improper activity in regard to United Nations-our obligations under the United Nations resolutions, I would have had a duty to pursue it, follow it up and to report it.
Q: Would you have seen it in any way to be in your interest not to have disclosed any suspicious material-that is, in your own personal interest?
A: No, not at all.
Q: Would you have seen it to be in any way in Australia's interest or in the interests of the Department of Foreign Affairs and Trade not to disclose any material that you saw as suspicious?
A: Not at all.[336]
30.183 Fifth, DFAT had been astute to give proper advice, when asked, regarding the operation of the UN sanctions and the Oil-for-Food Programme. Australian government policy was to support the sanctions. It would have been an extraordinary contradiction of that policy for DFAT to have determined to act contrary to that policy, and the advice it gave, by disregarding departures from that policy and advice. There is no evidence that it did so.
30.184 Sixth, during the period with which I am concerned-June 1991 to March 2003, being the period during which the Oil-for-Food contracts pursuant to which payments were made to Iraq-only one event occurred that came to DFAT's attention. That was the Canadian complaint. It was forcefully denied by AWB. In addition, there was the unassessed intelligence information. The evidence is clear that no one in the Australian intelligence community, let alone DFAT officers, regarded the scattered information available as of sufficient importance to seek to draw the available material together, let alone to assess its credibility. It was drawn together only by this Inquiry after an extensive discovery process. Its credibility was never established at the time. It now has credibility only by the application of hindsight and with the knowledge gained from the Independent Inquiry Committee's final report and material discovered in this Inquiry.
30.185 The evidence does not support an inference of actual knowledge on the part of DFAT. There is no direct evidence of actual knowledge.
30.186 Accordingly, I find that DFAT, and its officers, did not have knowledge that:
30.187 I have already concluded that on no relevant occasion during the currency of the Oil-for-Food Programme did AWB ever inform the Prime Minister or the Ministers for Foreign Affairs or Trade that its contracts with Iraq incorporated an inland transportation fee or that it paid an inland transportation fee, or any fee however described, to Alia or otherwise indirectly to Iraq. The only remaining question is whether it is open to conclude that the Prime Minister or the Ministers obtained this knowledge from any other source.
30.188 The Prime Minister's evidence was that at no time during the currency of the Oil-for-Food Programme did he know that the Iraqi Grains Board or the Iraqi Government had required AWB to pay money indirectly to it, ostensibly in relation to inland transportation fees, either via Alia or any other Jordanian trucking company or companies, or that any money that was paid by AWB to Alia or any other trucking company in that regard was paid to the Iraqis. Nor did the Prime Minister believe that he knew anything about a requirement imposed by the Iraqi Government on participants in the Oil-for-Food Programme, or specifically AWB, to pay a 10 per cent 'after-sales-service' fee.[337]
30.189 There is no basis for doubting the Prime Minister's evidence.
30.190 There is no evidence to suggest that the Prime Minister possessed any such information at any material time.
30.191 By reason of his position, the Prime Minister was at least one step further removed from the relevant information than were the Minister for Foreign Affairs and the Minister for Trade. AWB's participation in the Oil-for-Food Programme and its wheat sales with Iraq were within the portfolio responsibly of DFAT and the Ministers for Foreign Affairs and Trade. Neither the Prime Minister nor the Department of the Prime Minister and Cabinet were directly responsible for issues arising in relation to these matters, though one of the issues that was of interest to both the Prime Minister and the Government during the Oil-for-Food Programme was whether or not Iraq was abiding by the sanctions imposed on it and whether or not Iraq might be manipulating the Programme so as to accumulate for itself a source of funds to be used for nefarious activity.[338]
30.192 The only evidence that could support a conclusion that the Prime Minister was aware of anything to do with AWB's participation in the Oil-for-Food Programme was that he was listed on the distribution list for some of the cables relating to the Canadian complaint and his office was on the distribution list for one of the reports within secret exhibit 4.
30.193 The Prime Minister did not have provided to him all the cables that were received in his office as a consequence of the Prime Minister being included on the distribution list for the cable. Cables that included the Prime Minister on the distribution list were (at least from about mid-2001) considered first by the Department of the Prime Minister and Cabinet, which would then send the Prime Minister's Senior Adviser (International Relations) either a summary or a list of cables it considered the adviser should consider. Prior to 2001 the cables were accessed electronically in the first instance by the Senior Adviser (International Relations).[339] The adviser would then scan or skim the cables, or the list or summary, read some of the cables and form a view whether any of the cables should be brought to the attention of the Prime Minister based on the adviser's experience and appreciation of the issues that warranted the Prime Minister's attention.[340] Only a very small proportion of the very large number of cables directed to the Prime Minister's office were brought to the attention of the Prime Minister in this way.[341] No written record of those cables that were shown to the Prime Minister was kept before about 2003.[342]
30.194 The Prime Minister's Senior Adviser (International Relations) during the currency of the Oil-for-Food Programme did not recollect reading any of the relevant cables or bringing them to the attention of the Prime Minister. The Prime Minister's evidence, based on his own recollection and upon searches conducted by his staff at his request, was that he did not read any of the relevant cables, and that he did not believe that any of the cables were brought to his attention during the currency of the Oil-for-Food Programme.[343] He would not have expected that the cables would have been brought to his attention, given the 'context of the time'.[344] The 'context of the time' included that there was no belief anywhere in the Government at the time that AWB was other than a company of great reputation, that there was nothing by way of hard evidence in relation to any of the allegations in the cables, and that the cables suggested that the matters were going to be dealt with.[345] It would also have been expected that those things would have been dealt with by DFAT.[346]
30.195 In relation to the intelligence materials in secret exhibit 4, as distilled in exhibits 584 and 641, the Prime Minister's evidence was that he did not read or become aware of any of the unassessed intelligence in the exhibit or the substance of any of the information distilled from it.[347]
30.196 Whilst some unassessed intelligence was made available to the Prime Minister's office and read by one of his advisers, it was rare for unassessed intelligence to be drawn directly to his attention. The Prime Minister estimated that he might be shown about 10 items of unassessed intelligence in a year, and those items tended to relate to active questions of national security or matters relating to particularly sensitive issues.[348]
30.197 Only one of the items in secret exhibit 4 was recorded as having been distributed to the Prime Minister's office. The Prime Minister assumed from his inquiries of staff in his office that this item was accessed by one of his advisers but not drawn to his attention.[349]
30.198 There is no basis for concluding that the Prime Minister knew or was made aware during the currency of the Oil-for-Food Programme that AWB was inflating its wheat prices to incorporate inland transportation fees, or other fees however described, or that AWB was paying money to Alia or otherwise indirectly to Iraq. I am satisfied, on the material before me, that the Prime Minister did not have that knowledge.
30.199 The evidence of the Minister for Foreign Affairs was that he did not know and was not any time aware during the period from about 1999 to 2003 of anything about any of the following matters:
30.200 There is no basis for doubting Minister Downer's evidence.
30.201 There is no evidence to suggest that Minister Downer possessed any such information at any material time.
30.202 The Minister's primary source of information in relation to anything to do with the Oil-for-Food Programme was DFAT. I have already concluded that DFAT did not know any of the relevant information. It is difficult to see how, in those circumstances, the Minister could have been told or otherwise have come to know the information.
30.203 The main ways in which DFAT formally communicated with the Minister were by cable distributed to the Minister and in ministerial submissions or briefings. There is no evidence of any communication between any DFAT officer and the Minister concerning AWB's contracts under the Oil-for-Food Programme that is not recorded in either a cable or a ministerial submission.
30.204 The Minister was on the 'for information' distribution list for a number of the cables discussed that dealt with the Canadian complaint, Iraq's attempts to circumvent the sanctions regime, the Coalition Provisional Authority's contentions concerning contracts under the Programme and the US Wheat Associates allegations about AWB. It does not follow, however, that these cables were brought to the Minister's attention or that he read them.
30.205 The procedure in the Minister's office in relation to cables during the relevant period was that, whilst a large number of cables (estimated at up to 250) were received in the Minister's office each day, only a small fraction of them were brought to the Minister's attention. Most of the cables were delivered electronically and were read first by the Minister's advisers for the purpose of selecting those they judged to be sufficiently important, relevant or of interest (from a policy perspective) to be shown to the Minister.[351] The Minister would receive in hard copy and read only those cables selected by his advisers.[352] He estimated that when he was in Canberra or his Adelaide office he received about 25 cables daily and that he received fewer when he was overseas.[353] The Minister also received a daily summary of each cable that included him on the distribution list.[354] No record was kept of the cables that were put before the Minister.
30.206 The Minister's evidence was that he rarely read the cable summaries, but did read the cables that were provided to him.
Q: Mr Willox has given evidence that you received a daily summary of the cables. Is that the current practice?
A: I receive it. I very seldom read it, but I receive it-I receive two. One is a category A summary and the other is a category B summary. Category B are more highly classified cables than category A.
Q: Which are you more likely to read?
A: I don't read the summaries unless I have a good deal of time, I'm stuck on a plane, I've run out of everything else to read, I might read the summaries. I [really do][355] read the cables that are provided to me in the package-20, 25, 30, it would depend on the day, it depends on the circumstances, it depends on what issues I'm dealing with.
Q: I don't want to take this entirely in a vacuum. You have a department and you have a ministerial office. Are there people within your department or within your office who are assigned the task of reading the cables?
A: Yes, of course. Action officers in the department read the cables that are relevant to them, their particular sections, branches or divisions. People in my office are assigned different tasks. Somebody in my office, as I explained earlier, looks after the Middle East; somebody looks after Europe; somebody looks after international organisations, the United Nations; somebody looks after economic affairs, and so on.
Q: When you determine that you don't have the time to read the cable, or cables, on any particular day, do you make that determination in the expectation that others will have or would have or should have read the cables?
A: Oh, look, I know that relevant people in my office will have read the specific cables relevant to their areas of responsibility and that people in the department who are the action officers in relation to the cables will have read those cables.[356]
30.207 In relation to the cables dealing with the Canadian complaint and the US Wheat Associates and Coalition Provisional Authority allegations, the Minister's chiefs of staff during the relevant period had no recollection of passing any of the relevant cables to the Minister, in accordance with the practice in the office.[357] The Minister had no recollection of having any of the cables provided to him or brought to his attention, including the 9 March 2001 cable authored by Ms Moules.[358] In respect of most of the relevant cables, the Minister's evidence was that he did not consider the contents of the cables were likely to have been judged sufficiently urgent for the cables to have been shown to him and that he considered it unlikely for various reasons, including that he was on leave or overseas as at the date of the cable, that the cables were brought to his attention.
30.208 The Minister was, however, aware in general terms of the content of some of the cables. In relation to the Canadian complaint, the Minister was 'aware in general terms that allegations had been made in relation to Australian wheat exports to Iraq, and that they were being addressed by the Department of Foreign Affairs and Trade'.[359] He was also generally aware of the US Wheat Associates allegations.[360]
30.209 No ministerial submission provided to the Foreign Minister conveyed to him that AWB had incorporated inland transportation fees in its contract prices and that it was paying those fees indirectly to Iraq, via Alia or otherwise. The first ministerial submission that referred to the fact that AWB had any dealings at all with a Jordanian trucking company was a Ministerial Submission dated 30 March 2004 from Mr Quinn, then head of the Iraq Task Force.[361] That submission referred to the various investigations being conducted into the Oil-for-Food Programme, including the investigation to be established by the United Nations, and included the following passage relating to AWB:
4. While AWB Ltd is not included in an Iraqi Ministry of Oil list of companies and individuals alleged to have profited from the OFF program, as the largest single OFF supplier it is unlikely to escape scrutiny. The investigation may look particularly closely at contracts issued from OFF Phase 8 (1998) identified by the CPA as the phase when the so-called 10 per cent kickback was introduced. At that time AWB was still under government purview. AWB Ltd has strenuously denied US Wheat Associates' allegations that it paid kickbacks to the regime, advising that the relatively high prices for OFF-contracted wheat reflected the costs of insurance, on-the-ground distribution and technical support, not just the cost of acquiring and shipping the grain. The Iraqi Grains Board delegation currently in Australia has advised that AWB has acted with propriety at all times in Iraq. The company concedes, however, that the Jordanian company handling the local transport might, of its own volition, have provided kickbacks to the regime. Given the gravity of the allegations we have suggested to AWB Ltd that they may wish to provide more formal advice on their position to the Government. AWB Ltd is bound by the Commonwealth Criminal Code, which contains offences relating to bribery and corruption by Australian companies and their officials overseas.
30.210 The Minister noted on the ministerial submission, 'This worries me. How were AWB prices set and who set them? I want to know about this'.
30.211 The Minister's notation plainly demonstrates that he was unaware of these matters at any time before he received the ministerial submission. On 16 June 2004 the Minister received a copy of a letter from the Managing Director of AWB dated 10 June 2004 that purported to be a 'formal advice' on AWB's position, although it did not provide any information about how AWB's prices were set and who set them.[362] He never received a sufficient response to the query he noted on the ministerial submission:
Q: Can you offer any explanation as to how it came about that, even after the receipt of this letter from AWB, the letter of June 2004, your request went unanswered?
A: The advice I've been given by the department is that the response had come from AWB Limited; that is, the 10 June letter.
Q: One doesn't necessarily have to be experienced in government to know that if a minister writes something in such definitive terms, 'I want to know about this', one would expect normally that the minister's staff would make sure that he does, or she does in that case. Do you know what was done in response to your request that you wanted to know that information beyond the receipt of the letter from AWB?
A: No, I don't.[363]
30.212 DFAT's response to the Minister's request for information about how AWB set its prices, which appears to have been to accept that AWB's denial of wrongdoing was a sufficient response, may have been inadequate. However, this circumstance does not provide the basis for any inference of knowledge on the part of the Minister. Indeed, the Minister's response plainly demonstrates that he did not know AWB was inflating its contract prices so as to allow it to make payments indirectly to the Iraqis.
30.213 The only other potential source of information for the Minister was the intelligence from the Australian intelligence community. Only one of the documents within secret exhibit 4 was distributed to the Minister's office. The practice in the Minister's office in relation to intelligence was similar to the practice in relation to cables. Not all intelligence received in the Minister's office was shown to the Minister. The intelligence was first considered by one of the Minister's advisers and only shown to him if it was judged by the adviser to be sufficiently important. No record was kept of what intelligence reports were shown to the Minister.[364] Unassessed intelligence was rarely brought to his attention.
Q: Does somebody in your office have responsibility for determining whether or not documents such as those-in other words, documents of a time [sic] similar to that in secret exhibit 4-ought to be brought to your attention?
A: Yes, again, it's the individual advisers in the individual areas of responsibility. Crude intelligence, though, raw intelligence, doesn't very often come to me. It does occasionally, but it doesn't very often. The sort of intelligence that I get is assessed material, assessments.[365]
30.214 The Minister's evidence was that he had not previously seen any of the documents in secret exhibit 4 and he was not aware of the substance of those documents. Nor was he aware of any of the unassessed intelligence distilled in exhibits 584 and 641.[366]
30.215 There is no basis for concluding that the Minister knew, or was made aware during the currency of the Oil-for-Food Programme that AWB was inflating its wheat prices to incorporate inland transportation fees, or any other fees however described, or that AWB was paying money to Alia or otherwise indirectly to Iraq. I am satisfied, on the material before me, that Minister Downer did not have that knowledge.
30.216 The Minister for Trade was in a position very similar to that of the Minister for Foreign Affairs. Like the Minister for Foreign Affairs, the Minister for Trade's primary source of information in relation to anything to do with the Oil-for-Food Programme was cables and ministerial submissions from DFAT. As has already been concluded, DFAT did not itself know the relevant information about AWB's dealings with the Iraqis and Alia and therefore could not have communicated this information to the Minister.
30.217 The Minister for Trade's evidence was that he did not know the relevant information during the currency of the Oil-for-Food Programme:
At no time during the relevant period (1999-2003) did I know that the Iraqi Grains Board or the Iraqi Government had required AWB to pay money to a Jordanian trucking company or companies (including Alia for General Transportation-'Alia') ostensibly in relation to inland trucking companies. I had no knowledge that AWB had any relationship with a Jordanian trucking company, or Alia specifically, during the relevant period. I did not meet with any Iraqi Government or Iraqi Grains Board official during the relevant period. I have no recollection that any employee or agent of AWB ever discussed with me the detailed nature of AWB's arrangements to deliver wheat to Iraq.[367]
30.218 There is no basis for doubting Minister Vaile's evidence.
30.219 There is no evidence to suggest that Minister Vaile possessed any such information at any material time.
30.220 The Minister for Trade's evidence was that cables were not the principal means by which DFAT provided him with information or requested him to make decisions in his areas of responsibility. The principal means of transmitting advice and information to him was through the ministerial submission system.[368] The Minister's understanding was that where a cable recommended that some action or information be brought to his attention, DFAT would prepare a ministerial submission to transmit that information to him. He was aware that staff in his office would from time to time ask DFAT to prepare ministerial submissions as a result of them reading a cable.[369] The Minister was, however, also given oral briefs in relation to information that his staff may have received and on occasion was provided with hard copies of cables.[370]
30.221 The procedures in place in the Minister for Trade's office in relation to the dissemination of cables were not significantly different from those in the Minister for Foreign Affairs' office. The Minister was not provided with copies of all cables that were received in his office because of the Minister's inclusion on the distribution list. The Minister's evidence was that where cables were specifically brought to his attention it was generally only 'due to the very specific nature of the cable relating to international travel arrangements or reports of media comments made in the international press by Trade Ministerial colleagues'.[371] The general procedure was that cables received in the Minister's office were read by the Minister's advisers or liaison officers from DFAT or Austrade, for the purpose of them determining whether the cables were significant or required action by the Minister. If a cable was determined to be sufficiently important, the cable would then either be provided to the chief of staff, who would consider whether it was of sufficient significance to show to the Minister, or provided directly to the Minister.[372] The procedure was slightly different when the Minister was overseas: generally the ambassador or mission staff in the country where the Minister was travelling would give the Minister and his staff hard copies of all cables that included the Minister on the distribution list.[373] No record was kept of the cables that were drawn to the Minister's attention.[374]
30.222 The chiefs of staff in the Minister for Trade's office for most of the period during which the relevant cables were sent to the Minister's office had no recollection of receiving or reading the relevant cables, although the chief of staff for the period from March 2002 to February 2003 recalled that 'intelligence cables' relating to the Middle East and Iraq would have been shown to the Minister because 'these were important matters in the lead-up to the war'.[375] The Minister had no recollection of receiving any of the relevant cables, although he was generally aware of the content or subject matter of a number of the cables. Specifically:
30.223 In relation to the 23 June 2003 cable that referred to the Coalition Provisional Authority contentions, the Minister had no recollection of ever being advised that concerns had been raised about contracts containing a 10 per cent kickback, either specifically against AWB or more generally for all Oil-for-Food contracts, and had never heard of Captain Puckett or his 10 June 2003 memorandum.[383] He did not consider that he had direct ministerial responsibility for the Oil-for-Food Programme or the Coalition Provisional Authority, which may explain why this information was not specifically brought to his attention.[384]
30.224 As was the case with the Minister for Foreign Affairs, the first ministerial submission to the Minister for Trade that referred to the fact that AWB had any dealings at all with a Jordanian trucking company was the ministerial submission dated 30 March 2004 from Mr Quinn.[385] This was the first time the Minister became aware that AWB was using a Jordanian trucking company.[386] The reference in the background portion of the submission to the fact that the trucking company may have paid kickbacks of its own volition created a concern for the Minister, but he believed AWB's denials and believed that this matter was best investigated by the UN inquiry:
A: When I read that and became aware of that, as you say, the concession by the company that the local transport company might, of its own volition, have paid kickbacks to the regime, it did create concern, but I recall also that over a period of time AWB had strenuously denied allegations and, again, on the front of this ministerial submission the note was that AWB denies any involvement in direct payment of kickbacks. I still accepted that then, but took the view that the UN, given that that's what the submission was about, was about to conduct an inquiry and that that would be tested as part of that inquiry.[387]
30.225 The first time the Minister became aware of Alia was from a DFAT ministerial submission dated 4 April 2005 that dealt with the Volcker Inquiry.[388]
30.226 The Minister's recollection was that he had not previously seen any of the documents in secret exhibit 4 and that he was not previously aware of the substance or content of these documents or the distillation of secret exhibit 4 in exhibits 584 and 641.[389]
30.227 Only one of the items in secret exhibit 4 included the Minister for Trade on the distribution list. The Minister's inquiries with his staff indicated that a former departmental liaison officer from DFAT who was attached to his office may have been in receipt of that intelligence report and that officer may have made the decision not to show it to him[390] because it was regarded as unimportant to his ministerial responsibilities.[391]
30.228 There is no basis for concluding that the Minister for Trade knew, or was made aware during the currency of the Oil-for-Food Programme, that AWB was inflating its wheat prices to incorporate inland transportation fees, or other fees however described, or that AWB was paying money to Alia or otherwise indirectly to Iraq. I am satisfied, on the material before me, that Minister Vaile did not have that knowledge.
30.229 Between 20 July 1999 and 6 July 2005 the Minister for Agriculture, Fisheries and Forestry was the Hon. Warren Truss. The Minister's department had no responsibility for and played no part in the matters related to the Oil-for-Food Programme. The Minister for Agriculture was, however, the statutory recipient, pursuant to the Wheat Marketing Act 1989, of an annual confidential report from the Wheat Export Authority regarding the operation of the wheat pool. Those reports did not mention any matters relevant to this Inquiry.
30.230 Minister Truss was not called to give oral evidence because he played no material part in the Oil-for-Food Programme. However, on the last day of hearings, a letter dated 5 April 2000, addressed to the Iraqi Minister of Trade, signed by Mr Flugge and delivered to the Iraqi Minister of Trade became available and was tendered. It stated that subsequent to a meeting between Minister Saleh and Mr Flugge in October 1999 in Baghdad, Mr Flugge had undertaken to:
… pass your comments regarding Iraq/Australia trade to our Government in Canberra and in particular to the Minister for Agriculture. This I have done and as such my comments met with a very positive response from the Australian Government.
As a consequence of my discussion with the Minister, the Australian Government in now undertaking an extensive review of policy in terms of Iraq and the region. Without wishing to prejudge the conclusions of this review I am confident that we will see recognition for the importance to Australian farmers of the relationship between Iraq and Australia.
While in Baghdad I will ask AWB to discuss the recent communication from United Nations concerning trucking fees. As you are aware both the Canadian and American Governments have raised this issue with the United Nations. It is our intention to remain committed to the terms of trade agreed between IGB and AWB. The Australian government equally supports this commitment to our trade.
30.231 Mr Flugge gave no evidence of discussions with Minister Truss or regarding the matters referred to in the passage quoted.
30.232 A statement was sought and obtained from Minister Truss and became exhibit 1425. Having considered the statement, neither Counsel Assisting nor Counsel for AWB or any individual sought to cross-examine Minister Truss.
30.233 The undisputed evidence of Minister Truss was thus:
6. During the period from 1999 until 2003 (the relevant period)
(a) I had no knowledge of Alia for General Transportation (Alia);
(b) I had no knowledge that AWB had at any time dealt with a Jordanian trucking company or companies, whether Alia or otherwise; and
(c) I had no knowledge that the Iraqi Grains Board (IGB) or the Iraqi Government had required AWB to pay money to any Jordanian trucking company or companies, including Alia, whether ostensibly in relation to inland trucking or transportation or otherwise.
7. During the relevant period I had no knowledge that the IGB or the Iraqi Government had required AWB to pay money, directly or indirectly, to it, whether ostensibly in relation to inland trucking or transportation or otherwise.
8. During the relevant period I had no knowledge that any of the money paid by AWB to Alia or any other Jordanian trucking company was paid, whether advertently or inadvertently on the part of AWB, to the Iraqis.
9. During the relevant period I did not know anything about Alia, or any connection, whether formal or informal, that it had with the Iraqi Government.
10. During the relevant period I had no knowledge about any requirement imposed by the Iraqi Government on participants in the Oil-for-Food Programme, or specifically on AWB, to pay a 10% 'after sales service fee', whether separately or as an adjunct to payments for inland trucking or transportation.
11. No officer, employee or agent of AWB ever advised me that AWB had directly or indirectly, (whether by Alia or any other method) made payments to Iraq during the relevant period. Every representative of AWB who spoke with me during the relevant period as to any allegations that money paid by AWB might have made its way to Iraq denied those allegations.
30.234 Minister Truss acknowledged he may have had discussions with AWB representatives about the wheat trade between Australia and Iraq. He said:
On several occasions Mr Flugge or other representatives of AWB discussed with me allegations that had been made by US Wheat Associates concerning the terms of Australia's wheat trade with Iraq. In this context there may also have been some discussions as to complaints or inquiries made by the United Nations or Canada. Every representative of AWB who spoke with me about these matters consistently denied that there was any substance in the allegations, complaints or inquiries. Their position was always to the effect that the allegations, complaints or inquiries had been made with the intention of prejudicing Australia's wheat trade with Iraq. I was informed that AWB had taken the same position in its dealings with the Wheat Export Authority.
30.235 There is no basis for doubting Minister Truss' evidence.
30.236 There is no basis for concluding that the Minister knew, or was made aware during the currency of the Oil-for-Food Programme, that AWB was inflating its wheat prices to incorporate inland transportation fees, or any other fees however described, or that AWB was paying money to Alia or otherwise indirectly to Iraq. I am satisfied, on the material before me, that Minister Truss did not have that knowledge.
30.237 I make the following findings in relation to the Commonwealth's knowledge of the relevant actions of AWB during the currency of the Oil-for-Food Programme.
30.238 First, there is no evidence that any of the relevant officers of DFAT-the delegates of the Minister for the purposes of the Customs (Prohibited Exports) Regulations or any of the officers who forwarded AWB wheat contracts and notification forms to the United Nations under the Programme-had actual knowledge that AWB had inflated its contract prices to incorporate inland transport fees, or any other fees however described, or that AWB paid fees to Iraq indirectly via Alia or any other transport company. AWB never advised DFAT of these matters, and there is no direct evidence that DFAT obtained the information from any other source.
30.239 Second, although DFAT received some information concerning allegations that AWB had engaged in such activities, these allegations were dismissed by DFAT as being unsupported by evidence and as being contrary to express denials by AWB. The allegations that DFAT became aware of included the Canadian complaint to the United Nations, allegations by US Wheat Associates and others in the United States, and a contention by the Coalition Provisional Authority that all Oil-for-Food Programme contracts had been inflated with a 10 per cent after-sales-service fee payable to the Iraqis. Such matters do not support an inference that DFAT deliberately turned a blind eye to the allegations because it already knew what any investigations would disclose.
30.240 Third, during the currency of the Oil-for-Food Programme the Australian Intelligence Community acquired intelligence about Iraq's manipulation of the Oil-for-Food Programme and Alia's involvement in that manipulation. However, the information provided in the unassessed intelligence reports in secret exhibit 4 was not regarded as being of sufficient importance to be the subject of a specific assessment report by the intelligence assessment agencies (such as the Office of National Assessments) and did not specifically relate to AWB or its wheat sales to Iraq. The DFAT officers responsible for the Oil-for-Food Programme and the issuing of permissions to export did not read the relevant intelligence reports.
30.241 Fourth, there is no evidence that any of the Prime Minister, the Minister for Foreign Affairs, the Minister for Trade or the Minister for Agriculture, Fisheries and Forestry were ever informed about, or otherwise acquired knowledge of, the relevant activities of AWB. Nobody from AWB ever so advised any of them, and there is no evidence that they acquired this knowledge from any other source, via DFAT, the Australian intelligence community or otherwise.
30.242 It follows that, if charges relating to misleading or obtaining by deception benefits from the Commonwealth are potentially available against AWB or any of its officers-based on the allegation that AWB did not disclose to the Commonwealth anything about its payment of inland transportation fees indirectly to Iraq or its incorporation of such fees in its contract prices-there is no evidence supporting any possible defence that the Commonwealth was not misled or deceived because it already knew these matters.
[103] Kassis v Katsantonis [1984] 3 NSWLR 330; R v Laverty [1970] 3 All ER 432; R v Royle [1971] 1 WLR 1764; R v Kovacs [1974] 1 WLR 370; R v Davies [1982] 1 All ER 515; R v Perera [1907] VLR 240 at 244; R v Gulyas (1985) 2 NSWLR 260.
[104] R v Laverty [1970] 3 All ER 432; R v Royl; R v Kovacs [1974] 1 WLR 370; R v Davies [1982] 1 All ER 515; R v Perera [1907] VLR 240 at 244; R v Gulyas (1985) 2 NSWLR 260; Kassis v Katsantonis [1984] 3 NSWLR 330.
[105] Kassis v Katsantonis [1984] 3 NSWLR 330; R v Roebuck (1855) Dearsley & Bell 24; 169 ER 900; R v Mills (1857) Dearsley & Bell 207; 169 ER 978; R v Hensler (1870) 11 Cox CC 570.
[106] R v Jessop (1858) Dearsley & Bell 442; 169 ER 1074; R v Woolley (1850) 1 Denison 559; 169 ER 372; R v Wickham (1839) 10 Adophus & Ellis 34; 113 ER 14.
[107] The circumstance that a person ought reasonably to have known something is commonly referred to as 'constructive' knowledge.
[108] R v Miller (1992) 95 Cr App R 744.
[109] Some Notification forms were completed by AWB. Others were completed by DFAT on the basis of information or draft Notification forms provided by AWB: see Chapter 12.
[110] Contract No. A4653 (Ex 1480, AWB.0058.0414_R); Contract No. A4654 (Ex 1481, AWB.0058.0415_R); Contract No. A4655 (Ex 1482, AWB.0044.0042_R); Contract No. A4822 (Ex 542, DFT.0006.0153).
[111] Police v Carradine (1996) 66 SASR 584; R v Roziek [1996] 1 WLR 159; [1996] 1 Cr App R 260.
[112] Western Australia v Watson [1990] WAR 248.
[113] A few isolated Permissions to Export were also signed by Messrs Doran, Williams and Hennessy and Ms Birgin.
[114] Notice to Produce No. 4 dated 1 December 2005.
[115] See paragraph 34.55 below.
[116] Ex 610, DFT.0013.0040.
[117] Ex 601, DFT.0013.0019 at 0025, para. 13; see also Ex 542, DFT.0006.0038.
[118] Ex 542, DFT.0006.0039; also Ex 88, AWB.0214.0001.
[119] Ex 542, DFT.0007.0188 and DFT.0006.0176.
[120] Ex 610, DFT.0013.0040; Ex 542, DFT.0006.0176.
[121] Ex 542, DFT.0007.0210; DFT.0007.0222; DFT.0007.0224.
[122] Ex 542, DFT.0007.0191; Ex 622, DFT.0013.0016.
[123] Ex 330, AWB.0269.0002 at 0004; Ex 542, DFT.0007.0201 at 0203.
[124] Ex 542, DFT.0008.0125.
[125] Ex 542, DFT.0008.0143.
[126] Ex 542, DFT.0008.0132.
[127] Ex 506, DFT.0001.0459; Ex 507, AWB.0338.0141.
[128] Ex 228, WST.0003.0001_R at 0001_R, para. 4.
[129] Ex 230, WST.0007.0014_R at 0020_R - 0021_R, para. 33.
[130] T 6098.13-17.
[131] Ex 565, DFT.0013.0057, para. 4; T 4581.24-40.
[132] Ex 565, DFT.0013.0057, paras 4-5.
[133] T 2313.29 - T 2314.9
[134] T 1917.19-25.
[135] T 1917.27-34.
[136] T 1917.36-39.
[137] T 1917.12-25.
[138] T 1917.41 - T 1918.8.
[139] Ex 96, WST.0006.0001 at 0009-0010, para. 58.
[140] T 1918.19-22.
[141] Ex 121, MAE.0002.0091.
[142] T 1921.17-43.
[143] T 1922.5-14.
[144] Ex 122, AWB.0136.0524; see also Ex 122, AWB.0136.0526.
[145] Ex 142, WST.0005.0001 at 0043, paras 155-157.
[146] Ex 150, AWB.0069.0060; Ex 151, AWB.0069.0061; Ex 215, AWB.0069.0073_R - 0076_R.
[147] Ex 149, AWB.0106.0092.
[148] T 2034.6 - T 2035.3.
[149] T 2031.17-33.
[150] T 2035.5-14.
[151] T 2040.34-43.
[152] T 2040.42-43.
[153] T 2040.24-29; T 2041.7-13.
[154] Ex 159, AWB.0106.0107 at 0108.
[155] Ex 77, WST.0004.0003; T 2051.33 - T 2053.5.
[156] T 2091.29 - T 2092.5.
[157] Ex 565, DFT.0013.0057 at 0058, para. 7.
[158] Ex 701, DFT.0013.0599, para. 5; Ex 702, DFT.0013.0702_R at 0703_R, para. 14.
[159] Ex 124, DFT.0001.0438 and DFT.0001.0439_R-0441_R.
[160] Ex 565, DFT.0013.0057 at 0058, para. 8.
[161] Mr McConville's evidence was that it was likely that he would have spoken with Mr Officer or Mr Emons, though he had no recollection of doing so: T 3785.16-44; T 3788.1. Mr Officer had no recollection of discussing the Canadian complaint with Mr McConville: T 6072.7. Mr Emon's evidence was that he had no knowledge of the Canadian complaint until the March 2000 meeting with Mr Nicholas: T 1918.15-17.
[162] Ex 142, WST.0005.0001 at 0026, para. 88; T 2614.36-39.
[163] T 2049.6-27; Ex 197, AWB.5010.0037-38.
[164] Ex 159, AWB.0106.0107.
[165] T 2053.1 - 2054.9; T 2293.43 - T 2294.28.
[166] Ex 581, AWB.0106.0110-0111.
[167] Ex 297, AWB.0173.0261 (unsigned); Ex 581, AWB.0106.0110-0111 (signed).
[168] Ex 578, DFT.0013.0157_R at 0158_R, para. 13.
[169] Ex 582, DFT.0001.0013.
[170] Ex 579, DFT.0013.0176_R at 0177_R, para. 9.
[171] Ex 582, DFT.0001.0013.
[172] T 2304.2 - 13. Compare Ex 1337, AWB.9001.0212 at 0217, para. 7.5.
[173] T 2303.43 - 45.
[174] T 2631.45 - 46.
[175] T 2091.29 - T 2092.5.
[176] Ex 579, DFT.0013.0176_R, para. 7.
[177] T 4813.44 - 4814.2.
[178] Ex 588, DFT.0013.0140_R at 0142_R, para. 12.
[179] T 4769.7 - 12.
[180] T 4769.19 - 35.
[181] T 2296.35 - 39.
[182] Ex 198, WST.0001.0137 at 0145-0146, para. 30.
[183] T 2296.37-39.
[184] Ex 579, DFT.0013.0176_R at 0178_R, para. 14.
[185] Ex 1337, AWB.9001.0212 at 0217, para. 7.5.
[186] T 2300.37 - T 2301.43.
[187] T 2301.32 - T 2302.23.
[188] T 3387.22-25.
[189] T 3389.34-40.
[190] Ex 685, AWB.0393.0003 at 0004.
[191] Ex 767, WST.0038.0171 at 0172, para. 8.
[192] T 6516.30 - 34.
[193] T 6517.20 - 23.
[194] Ex 784, WST.0038.0169, para. 3.
[195] Ex 784, WST.0038.0169, paras 3 and 4.
[196] Ex 784, WST.0038.0169, para. 4.
[197] Ex 784, WST.0038.0169, para. 5.
[198] T 6340.35 - T 6341.2.
[199] Ex 600, DFT.0013.0003 at 0006, para. 21.
[200] Ex 600, DFT.0013.0003 at 0006-0007, para. 26.
[201] T 4861.28-31.
[202] Ex 542, DFT.0007.0191, DFT.0007.0210; Ex 506, DFT.0001.0459; Ex 845, DFT.0026.0083; Ex 507, AWB.0338.0141.
[203] Ex 542, DFT.0036.0013_R, DFT.0008.0125; DFT.0006.0125; Ex 771, DFT.0028.0114; Ex 845, DFT.0026.0163.
[204] Ex 763, DFT.0028.0113; Ex 771, DFT.0028.0002 at 0012, para. 48; Ex 510, DFT.0008.0063; T 6410 - T 6415.
[205] Ex 845, DFT.0026.0163.
[206] Ex 845, DFT.0026.0163, para. 2.
[207] Ex 764, DFT.0027.0002; Ex 931, DFT.0033.0008; Ex 771, DFT.0028.0002, DFT.0028.0014-0156, GOV.0003.0018-0021; Ex 841A, DFT.0033.0102_R, DFT.0036.0027_R, DFT.0036.0029_R; Ex 775, PMC.0003.0001, PMC.0003.0008-0083, PMC.0003.0097-0317; Ex 856, DFT.0033.0041; T 6433 - T 6458; T 6529 - T 6599; T 6632 - T 6647.
[208] Pereira v DPP (1989) 82 ALR 217.
[209] T 6762.11-15.
[210] Ex 965, WST.0032.0001_R at 0005_R, para. 28.
[211] T 6762.4-9.
[212] Ex 546, UNO.0006.0030; Ex 547, UNO.0006.0037.
[213] T 6735.19-32.
[214] T 6762.34-44.
[215] Ex 543, DFT.0013.0622 at 0625, para. 9(b).
[216] T 5781.13-16.
[217] Ex 701, DFT.0013.0600.
[218] T 6736.34-37.
[219] T 6736.39-T 6737.3
[220] Ex 878, DAF.0002.0095.
[221] Ex 877, DFT.0033.0097_R at 0098_R, para. 7.
[222] Ex 394, DFT.0001.0193 at 0194.
[223] Secret Exhibits 1, 2 and 3.
[224] TRH Cole AO RFD QC, Reasons by Commissioner <http://www.oilforfoodinquiry.gov.au/agd/WWW/rwpattach. nsf/VAP/(0C3FC6E500CE9F81CFAAA22DF670141F)~REASONS+14+March+2006.pdf/$file/REASONS+14+March+2006.pdf> (14/03/2006) .
[225] Ex 641, GOV.0003.0018.
[226] Ex 573, GOV.0002.0037 and GOV.0002.0047; Ex 583, GOV.0002.0068; Ex 642, GOV.0003.0024. These statutory declarations were adopted by the Director-General of the Office of National Assessments: T 6421.40 - T 6422.2.
[227] Ex 757, DFT.0013.0663_R.
[228] Ex 573, GOV.0002.0037 at 0040, para. 18.
[229] Ex 757, DFT.0013.0663_R at 0664_R, para. 6; T 6379.38 - T 6380.45.
[230] Ex 583, GOV.0002.0068 at 0070, para. 12.
[231] Ex 583, GOV.0002.0068 at 0070, para. 13.
[232] Ex 573, GOV.0002.0037 at 0042, para. 23.
[233] Ex 573, GOV.0002.0037 at 0041, para. 20; Ex 757, DFT.0013.0663_R at 0064_R, para. 5.
[234] T 6383.4-9.
[235] Ex 757, DFT.0013.0663_R at 0671_R, paras 30-31.
[236] Ex 573, GOV.0002.0037 at 0041, para. 21; Ex 757, DFT.0013.0663_R at 0672_R, para. 32.
[237] Ex 573, GOV.0002.0037 at 0041-0042, para. 22.
[238] Ex 573, GOV.0002.0037 at 0042, para. 24.
[239] Ex 573, GOV.0002.0037 at 0043, para. 26; T 6397.35 - T 6398.25.
[240] Ex 573, GOV.0002.0037 at 0043, para. 28.
[241] Ex 642, GOV.0003.0024 at 0027 para. 17.
[242] Ex 642, GOV.0003.0024 at 0027-0028, para. 18.
[243] Ex 757, DFT.0013.0663 at 0665 para. 9; T 6382, 5-8; T 6383.11-31.
[244] T 6370.41 - T 6371.22.
[245] T 6371.24-34.
[246] T 6372.26 - T 6373.46; Ex 757, DFT.0013.0663_R at 0666_R, para. 11.
[247] T 6374.40-44; Ex 757, DFT.0013.0663_R at 0671_R, para. 28; see, for example, Ex 645, GOV.0003.0041 and Ex 646, GOV.0003.0042.
[248] T 6374.46 - T 6375.10; Ex 757, DFT.0013.0663_R at 0667_R, para. 14.
[249] T 6375.12-27.
[250] T 6375.29 - T 6376.29; Ex 757, DFT.0013.0663_R at 0667_R, paras 15-16.
[251] T 6376.31-45.
[252] T 6376.47 - T 6377.18.
[253] T 6377.20-31.
[254] T 6377 - 6379.
[255] T 6378.26-30; T 6379.5-10.
[256] T 6395.2-6.
[257] T 6378.37-44; T 6394.36-47.
[258] T 6379.12-25.
[259] T 4822.2-9; T 4611 - T 4613.
[260] T 4667 - T 4673; T 4780 - T 4781.
[261] T 4822.7-9; T 4611 - T 4613; T 4667 - T 4673; T 4780 - T 4781.
[262] Ex 641, GOV.0003.0018 at 0020-0021, para. 8.
[263] Ex 1400, AWB.0264.0001_R.
[264] Ex 1410, AWB.0177.0013_R.
[265] Ex 1447, AWB.0267.0262_R, AWB.0267.0257.
[266] Ex 1508, WEA.0001.0114_R; Ex 470, AWB.5024.0344_R.
[267] Ex 472, SHE.0001.0004; Ex 474, WEA.0001.0067.
[268] Australian Trade Commission Act 1985, section 8.
[269] Ex 989, DFT.0037.0052 at 0052, para. 2.
[270] Ex 989, DFT.0037.0052 at 0053, para. 10.
[271] Ex 989, DFT.0037.0052 at 0054, para. 12.
[272] Ex 989, DFT.0037.0052 at 0056, paras 18-19.
[273] Ex 989, DFT.0037.0052 at 0057, para. 21.
[274] Ex 989, DFT.0037.0052 at 0057-0058, para. 25.
[275] Ex 989, DFT.0037.0052 at 0059-0060, paras 30-32.
[276] Ex 542, DFT.0006.0026.
[277] Ex 890, DFT.0025.0049.
[278] Ex 936, DFT.0013.0554 at 0561, para. 27.
[279] Ex 542, DFT.0007.0188.
[280] Ex 600, DFT.0013.0003 at 0004, para. 9; Ex 936, DFT.0013.0554 at 0559, para. 21.
[281] Ex 600, DFT.0013.0003 at 0004, para. 9; Ex 936, DFT.0013.0554 at 0559, para. 21.
[282] Ex 636, DFT.0021.0001 at 0020-0022.
[283] Ex 636, DFT.0021.0001 at 0023-0025.
[284] Ex 771, DFT.0028.0049.
[285] Ex 636, DFT.0021.0001 at 0035-0037.
[286] Ex 771, DFT.0028.0053.
[287] Ex 815, DFT.0021.0040.
[288] Ex 542, DFT.0006.0176.
[289] Ex 771, DFT.0028.0062.
[290] Ex 845, DFT.0023.0060 at 0061-0062, paras 7-14.
[291] Ex 845, DFT.0023.0060 at 0064, para. 23.
[292] Ex 845, DFT.0023.0060 at 0063 para. 18.
[293] Ex 845, DFT.0023.0060 at 0063, para. 19-20.
[294] Ex 845, DFT.0023.0060 at 0060 para. 5.
[295] Ex 815, DFT.0023.0004 at 0005, para. 7.
[296] Ex 609, DFT.0013.0038.
[297] T 4952.29 - T 4953.25.
[298] T 4949.45 - T 4950.13.
[299] Ex 601, DFT.0013.0019 at 0023-0025, paras 9-12.
[300] Ex 771, DFT.0028.0047.
[301] Ex 542, DFT.0006.0031.
[302] T 4956.29-43.
[303] T 4954.38-45.
[304] T 4954.47 - T 4955.42.
[305] Ex 601, DFT.0013.0019 at 0023 para. 10.
[306] T 4950.2-3.
[307] T 4949.6-8.
[308] Ex 601, DFT.0013.0019 at 0022 para. 7(h).
[309] Ex 600, DFT.0013.0003, paras 13, 15, 17, 21, 23.
[310] Ex 601, DFT.0013.0019 at 0026, para. 16.
[311] Ex 862, GOV.0001.0008 at 0009 paras 4-7.
[312] Ex 862, GOV.0001.0008 at 0010, para. 8.
[313] Ex 862, GOV.0001.0008 at 0010, para. 8.
[314] Ex 862, GOV.0001.0008 at 0011-0012, para. 12.
[315] Ex 862, GOV.0001.0008 at 0012, para. 14; Ex 934, DFT.0023.0298 at 0299, para. 4.
[316] Ex 934, DFT.0023.0298 at 0300, para. 11.
[317] Ex 862, GOV.0001.0008 at 0013, para. 18; GOV.0001.0024.
[318] Ex 862, GOV.0001.0008 at 0013, para. 18; Ex 934, DFT.0023.0298 at 0301-0302, para. 14.
[319] Ex 934, DFT.0023.0298 at 0302-3 para. 18.
[320] Ex 862, GOV.0001.0008 at 0013, para. 18.
[321] Ex 862, GOV.0001.0008 at 0015-0016, para. 24; Ex 892, DFT.0023.0195 at 0197, para. 9; Ex 834, DFT.0023.0183 at 0185, para. 20; Ex 828, AGD.0003.0002 at 0004, paras 16-17.
[322] T 4754.26 - T 4755.9.
[323] T 4756.8-28.
[324] T 4780.44 - T 4781.15.
[325] T 4782.3-10.
[326] T 4757.17-23.
[327] T 4580.24-34.
[328] T 4584.35-42.
[329] T 6738.5-8.
[330] T 6640.8-15.
[331] T 6535.32-39.
[332] T 6448.46 - T 6449.20.
[333] T 4591.25-39.
[334] T 4623.13-21; T 4940.3-8.
[335] T 4591.22-39.
[336] T 4940.15 - T 4941.1.
[337] Ex 775, PMC.0003.0001 at 0004-0005, para. 21.
[338] T 6635.25-38.
[339] Ex 894, DFT.0013.0543 at 0543-0545, para. 5.
[340] Ex 775, PMC.0003.0001 at 0001-0002, para. 5; Ex 894, DFT.0013.0543 at 0543-0545, para. 5; Ex 858, GOV.0001.0001 at 0001-0002, paras 3-9; Ex 932, GOV.0001.0005 at 0005, para. 5.
[341] Ex 775, PMC.0003.0001 at 0001-0002, para. 5; Ex 894, DFT.0013.0543-0545, para. 5; Ex 858, GOV.0001.0001 at 0001-0002, paras 3-9; Ex 932, GOV.0001.0005 at 0005, para. 5.
[342] T 6639.5-16.
[343] Ex 775, PMC.0003.0001 at 0003, para. 9; T 6638.46 - T 6639.42.
[344] T 6639.44 - T 6640.6.
[345] T 6640.8-15.
[346] T 6640.21-34.
[347] Ex 775, PMC.0003.0001 at 0004, para. 18.
[348] T 6643.36-44.
[349] T 6643.13-17.
[350] Ex 771, DFT.0028.0002 at 0008-0009, para. 34.
[351] Ex 771, DFT.0028.0002 at 0002, para. 3; Ex 758, DFT.0013.0578 at 0578-0579, para. 4; Ex 945, DFT.0013.0590 at 0590-0592, paras 3-7; Ex 912, DFT.0013.0583, para. 4.
[352] Ex 771, DFT.0028.0002 at 0002, para. 3(d).
[353] Ex 771, DFT.0028.0002 at 0003, paras 4-5.
[354] Ex 758, DFT.0013.0578, para. 4(c); T 6401.21 - T 6403.37; Ex 945, DFT.0013.0590 at 0590-0591, para. 4.
[355] T 6566.44-6567.6.
[356] T 6564.2-38. 'Rarely' was corrected to 'really' T 6566.44-6567.6.
[357] Ex 758, DFT.0013.0578, paras 2-3; Ex 945, DFT.0013.0590 at 0593, para. 10; Ex 912, DFT.0013.0583 at 0584-0586, paras 9-11.
[358] Ex 841A, DFT.0033.0102_R, para. 4.
[359] Ex 771, DFT.0028.0002 at 0003, para. 8.
[360] Ex 771, DFT.0028.0002 at 0006-0007, paras 23-25.
[361] Ex 542 and 619, DFT.0007.0148.
[362] Ex 85, EXH.0001.0087; also Ex 542, DFT.0007.0090 at 0091; Ex 622, DFT.0013.0016.
[363] T 6562.37 - T 6563.5.
[364] T 6565.33-45.
[365] T 6565.47 - T 6566.9.
[366] Ex 771, DFT.0028.0002 at 0008, para. 31.
[367] Ex 764, DFT.0027.0002 at 0009, para. 11.
[368] Ex 764, DFT.0027.0002 at 0003, paras 5-6.
[369] Ex 764, DFT.0027.0002 at 0003, para. 6.
[370] T 6435.41 - T 6436.13.
[371] Ex 764, DFT.0027.0002 at 0003, para. 6; T 6436.9-13.
[372] Ex 812, GOV.0002.0004_R at 0004_R-0005_R, paras 7-12; Ex 857, GOV.0002.0030_R at 0031_R, paras 7-9.
[373] Ex 812, GOV.0002.0004_R at 0006_R, para. 17.
[374] Ex 812, GOV.0002.0004_R at 0005_R-0006_R, para. 14; Ex 857, GOV.0002.0030_R at 0032_R, para. 13.
[375] Ex 812, GOV.0002.0004_R at 0007_R, para. 18.
[376] Ex 764, DFT.0027.0002 at 0004, para. 7a.
[377] T 6436.21-37.
[378] T 6437.23-33.
[379] Ex 764, DFT.0027.0002 at 0004, para. 7a.
[380] T 6439.20-30.
[381] Ex 764, DFT.0027.0002 at 0005-0007, paras 7i. and 7p.
[382] Ex 764, DFT.0027.0002 at 0007, para. 7p; T 6443.3-21.
[383] Ex 764, DFT.0027.0002 at 0006, para. 7n.
[384] T 6445.18-23; T 6446.18-41.
[385] Ex 542 and 619, DFT.0007.0148.
[386] Ex 764, DFT.0027.0002 at 0009, para. 12.
[387] T 6449.10-20.
[388] Ex 764, DFT.0027.0002 at 0009-0010, para. 13.
[389] Ex 764, DFT.0027.0002 at 0008, para. 8.
[390] T 6447.32-41.
[391] Ex 764, DFT.0027.0002 at 0008, para. 9.
