Australia’s Cole Commission inquiry, which kicked off in January 2006 and whose investigation is ongoing, is currently the key story keeping the Oil for Food affair in the international eye.

The Volcker report, published in October 2005, revealed the involvement of more than 2,200 companies in the payment of bribes and kickbacks to Saddam Hussein’s regime during the programme, which ran from 1996 to 2003.

According to the Financial Times, Australia has granted the Cole Commission authority to investigate claims originating in the Volcker report that AWB, Australia’s monopoly wheat exporter, secured imports in Iraq via the payment of US$ 221.7 million to a Jordanian front company that channelled these funds directly to Saddam Hussein.

The question being unravelled by the Commission is the level of knowledge among Australian government officials and AWB executives that these payments were either kickbacks or illegal under UN-imposed sanctions. AFP reported that the Federal government maintained that it had no proof that AWB was paying kickbacks until the appearance of the Volcker report.

As the Sydney Morning Herald and other national dailies report on the commission’s scrutiny of increasingly senior government officials such as Trade Minister Mark Vaile and Foreign Minister Alexander Downer, no one has yet admitted to impropriety or culpability.

AWB’s share price and the future of Australia’s wheat export contracts with Iraq represent the most serious fallout of the commission to date. The Australian reported that AWB stocks are down 40 percent since the inquiry began, whilst an article in the Sydney Morning Herald outlined how the corruption allegations have thwarted the closure of a deal between Australian grain growers and Baghdad.

In the midst of the scandal’s impact on business, the Centre for Australian Ethical Research (CAER) issued a report throwing light on the country’s corporate culture. It revealed that only half of Australia’s top 100 companies have policies prohibiting bribery. This figure compares unfavourably to the UK, where 92 percent of companies explicitly prohibit bribe giving and receiving, the United States (80 percent) and Europe (91 percent).

Noteworthy also is that the Australian stock exchange (ASX) currently does not include corruption in its Principles of Good Governance and Best Practice. The Principles demonstrably influence the issues included in public company statements of ethics.

The inquiry continues in Sydney.

For a direct link to the Cole Commission’s webpage, please go to: http://www.ag.gov.au/agd/WWW/UNOilForFoodInquiry.nsf/(Home+Only)/HOME