Cole Inquiry

This article is about the royal commission into the involvement by certain Australian companies in the UN Oil-For-Food Programme. For the royal commission into the building industry, also headed by Justice Cole, see the Royal Commission into the Building and Construction Industry.

Alleged corruption and fraud in the UN Oil-for-Food Programme by Australian companies
Also known as	AWB oil-for-wheat scandal
Inquiries	UN Independent Inquiry Committee (Volcker Inquiry); Royal Commission of Inquiry into certain Australian companies in relation to the UN Oil-For-Food Programme (Cole Inquiry)
Commissioner	The Honourable Justice Terence Cole AO RFD QC
Inquiry period	10 November 2005 (2005-11-10) – 27 November 2006 (2006-11-27)
Constituting instrument	Royal Commissions Act 1902 (Cth)
Website	www.oilforfoodinquiry.gov.au

The Inquiry into certain Australian companies in relation to the UN Oil-For-Food Programme, or less formally, the Cole Inquiry, was a Royal Commission established by the Australian government pursuant to the Royal Commissions Act 1902 (Cth) to investigate "whether decisions, actions, conduct or payments by Australian companies mentioned in the Volcker Inquiry into the United Nations Oil-for-Food Programme breached any Federal, State or Territory law."

The inquiry commenced on 10 November 2005 and was overseen by a sole Royal Commissioner, The Honourable Justice Terence Cole AO RFD QC. Justice Cole handed the commission's five volume report to the Governor-General on 24 November 2006; and the report was tabled in parliament on 27 November 2006.

Background

Main article: Oil-for-Food Programme

The Volcker Inquiry was set up to investigate the systematic corruption of the Oil-for-Food Programme (or Program) by the Arab nationalist and Arab socialist government of the fifth President of Iraq, Saddam Hussein.

The Volcker Inquiry

The United Nations Independent Inquiry Committee was formed to investigate allegations of corruption and fraud in the UN Oil-for-Food Programme. Paul Volcker's report, released in October 2005, found that AWB Limited (AWB) was the biggest single source of kickbacks made to the Iraqi government. In exchange for trouble-free disembarkation of wheat purchased under the Oil for food program, AWB paid 'trucking charges' totaling A$300 million to Alia, a Jordanian trucking company. Volcker found that Alia kept a small percentage of the 'charges', and passed the remainder to the government of Saddam Hussein. An accompanying statement released with the report by the Secretary-General of the United Nations, Kofi Annan requested that “national authorities take steps to prevent the recurrence of such practices in the future and that they take action, where appropriate, against companies falling within their jurisdiction.”^[1]

Establishment of the Cole Inquiry

In response to Volcker's findings, the Australian Government established a Royal Commission to further investigate the claims raised by the UN report. By Letters Patent issued on 10 November 2005 the commission was asked to inquire into and report on:^[2]

whether any decision, action, conduct, payment or writing of any of the three Australian companies mentioned in the Final Report (“Manipulation of the Oil-for-Food Programme by the Iraqi Regime”) of the Independent Inquiry Committee into the United Nations Oil-for-Food Programme, or any person associated with one of those companies, might have constituted a breach of any law of the Commonwealth, a State or Territory; and
if so, whether the question of criminal or other legal proceedings should be referred to the relevant Commonwealth, State or Territory agency.

Commissioner and Counsel

The Royal Commissioner was The Honourable Justice Terence Cole AO RFD QC, a former Judge of Appeal of the New South Wales Supreme Court. The Cole Inquiry was the second Royal Commission where Justice Cole was the sole Commissioner. The 2001-2003 Royal Commission into the Building and Construction Industry is commonly referred to as the Cole Royal Commission hence to avoid confusion the 2005-06 Royal Commission is commonly referred to as the Cole Inquiry.

Cole was supported by John Agius SC, Counsel Assisting and three other barristers, Gregory Nell, Michael Wigney and Miles Condon.

The three Australian companies adversely mentioned in the UN report (AWB Limited, Alkaloids of Australia Pty Limited, and Rhine Ruhr Pty Ltd) were granted leave to be represented by counsel before the Royal Commission

Hearings

Prior to the public hearings the commission held a series of closed hearings in December 2005 and January 2006. Some witnesses who were examined in the closed hearings also gave evidence in the public hearings.

The commission's public hearings commenced on 16 January 2006. During the first six weeks of public hearings evidence led by Agius and cross examination by him of witnesses brought out a series of revelations that showed the conduct of AWB Limited's executives and directors in a very poor light. Apart from interrupting assisting counsel's question to ask witnesses his own probing questions, Cole frequently made reproving comments about the behaviour and evidence of witnesses particularly those in responsible and often highly remunerative positions with AWB Limited and the Wheat Export Authority, who among other things frequently claimed memory loss, inability to locate diaries and notes and notoriously, in the case of former AWB Limited board chairman Trevor Flugge, hearing loss.

On 6 February 2006 the inquiry's terms of reference were extended to include the activities of companies in the BHP Billiton Group and associated companies in relation to the Oil for Food Program.

On 16 February 2006 Commissioner Cole invited broadcast media into the inquiry's hearing room to record an invitation to anyone with information about kickbacks or the Iraqi oil-for-food scandal to appear before his inquiry. Cole emphasised that this appeal applied to anyone saying: "I am extending a specific invitation to any Member of Parliament, any member of the media, any public servant, or any member of the public who believes that they have information relevant to this aspect of the inquiry to provide any such information to those assisting me".^[3]

On 2 March 2006 counsel assisting, John Agius, threatened to serve search warrants on AWB Limited following claims of memory lapses and loss of documents by a former company manager, Andrew McConville. This was countered by counsel for AWB Limited who suggested that the search for documents by the company was being conducted in a rigorous manner and at considerable expense.

On 3 March 2006, Cole applied for the inquiry's terms of reference to be amended to extend the period of the inquiry for up to two months (i.e. from the end of March to May 2006). Prime Minister John Howard indicated the government's agreement to this request two days later.

Prime Minister John Howard was asked to write and submit a statement in regard to this matter, and was "cross examined" on 13 April for 53 minutes. Howard previously stated to The Sydney Morning Herald, "If asked I will naturally be happy to appear." "I've said all along that this is an utterly transparent process, which is not protecting the Government, which is designed to get to the truth of this matter and I am more than happy to comply with the request made by the commission."

Outcome

On 28 August 2009 the Australian Federal Police (AFP) decided to drop its investigation into the scandal in which wheat exporter AWB was found to have been funding the Iraqi regime in breach of UN sanctions. It was found that it was not even clear that breaching a UN sanction is a criminal offence and a conviction "was not in the public interest". The decision means no former employee or director of AWB will face criminal charges, although an investigation by corporate watchdog Australian Securities and Investment Commission continued. The AFP announced that the decision to drop the investigation was made after a review of the evidence by senior barrister Paul Hastings QC, who declared the prospect of convictions was limited and "not in the public interest".

In 2009, The Australian reported "It has hardly been a secret that the AFP investigation was under-funded and under-resourced, and it received little co-operation from AWB, which sees itself as a new entity, with all staff associated with the corrupt dealings having left."^[4] Hastings told the AFP that in his opinion there was no reasonable prospect of a conviction. It was not even clear that breaching a UN sanction is a criminal offence.^[5]

References

↑ "Home page". Inquiry into certain Australian companies in relation to the UN Oil-For-Food Programme. Commonwealth of Australia. 2005.
↑ "Terms of Reference". Inquiry into certain Australian companies in relation to the UN Oil-For-Food Programme. Commonwealth of Australia. 10 November 2005.
↑ "Broadband video clip" (video). ABC TV (Australian Broadcasting Corporation). 16 February 2006.
↑ Cole, Terence. "Summary, recommendations and background" (PDF). Report of the Inquiry into certain Australian companies in relation to the UN Oil-for-Food Programme. p. 197. Retrieved 10 March 2011.
↑ "Federal police drop AWB investigation". The Australian.

External links

Inquiry into certain Australian companies in relation to the UN Oil-For-Food Programme - inquiry's website
The Commissioner's reports - five volumes (PDF and HTML available)
Wheat Export Authority
Royal Commissions Act 1902 (Cth)
Independent Inquiry Committee into the Oil for Food Programme - Volker Inquiry website

Commentary

Overington, Caroline (4 March 2006). "More than a cuckold". The Weekend Australian.
Ackland, Richard (14 April 2006). "This inquiry is only half the job" (opinion). The Sydney Morning Herald.
Marr, David (14 April 2006). "Deceit by the truckload: Part 1". The Sydney Morning Herald. - in depth report on the Cole Inquiry and the evidence before it
Wilkinson, Marian (16 April 2006). "Deceit by the truckload: Part 2". The Sydney Morning Herald.
"Cash Crop: Part One" (transcript). Four Corners (ABC TV). 10 April 2006.
"Cash Crop: Part Two" (transcript). Four Corners (ABC TV). 17 April 2006.
Flint, David. "The call to widen the Cole Inquiries Terms of Reference" (opinion). The Australian.
Weisser, Rebecca. "The systemic failure of Australian Department of Foreign Affairs and Trade to prevent AWB's corrupt contracts" (opinion). The Australian.

Royal Commissions of the Commonwealth of Australia

1901–1920

1901–1910

1901–1905	to inquire into and report upon the arrangements made for the transport of troops returning from service in South Africa in the S.S. "Drayton Grange" (1902) on sites for the seat of government of the Commonwealth (1903) on the Bonuses for Manufactures Bill (1903–1904) on the butter industry (1904–1905) on the Navigation Bill (1904–1906) on the affray at Goaribari Island, British New Guinea, on the 6th of March, 1904 (1904) on customs and excise tariffs (1904–1907) on old-age pensions (1905–1906) on the tobacco monopoly (1905–1906)

1906–1910	on ocean shipping service (1906) British New Guinea—Royal Commission of inquiry into the present conditions, including the method of government, of the Territory of Papua, and the best means of their improvement (1906–1907) on secret drugs, cures, and foods (1906–1907) on postal services (1908–1910) on insurance (1908–1910) on stripper harvesters and drills (1908–1909) on Tasmanian customs leakage (1910–1911)

1911–1920

1911–1912	on the sugar industry (1911–1912) on the pearl-shelling industry (1912–1916) on the fruit industry (1912–1914)

1913–1914	to inquire into certain charges against Mr. Henry Chinn (1913) on Northern Territory railways and ports (1913–1914) on powellised timber (1913–1914) upon the Commonwealth electoral law and administration (1914–1915) on meat export trade (1914) on food supplies and trade and industry during the war (1914)

1915–1916	on mail services and trade development between Australia and the New Hebrides (1915) on Liverpool Military Camp, New South Wales (1915) on the charges made by D. L. Gilchrist concerning the construction of the western section of the Kalgoorlie to Port Augusta Railway (1916) to inquire into and report upon certain charges against the Administrator and other officers of the Northern Territory Administration (1916) on Federal Capital Administration (1916–1917)

1917–1918	on Java and the East Indies, Singapore and the Straits Settlements (1917–1918) on Navy and Defence Administration (1917–1919) on the war—Australian Imperial Force. Report as to number of members fit for active service and number of reinforcements and enlistments required (1918) on Public Service administration, Commonwealth of Australia (1918–1920) upon the public expenditure of the Commonwealth of Australia with a view to effecting economies (1918–1921) on taxation of leasehold estates in Crown lands (1918–1919) on the basic wage (1919–1920)

1919–1920	on the sugar industry (1919–1920) on industrial troubles on Melbourne wharfs (1919–1920) on late German New Guinea (1919–1920) to inquire into complaints by the munition worker passengers to Australia by the transport "Bahia Castillo" (1919) on Northern Territory Administration (1919–1920) on taxation (1920–1923) on the increase of the selling price of coal (1920)

1921–1940

1921–1930

1921–1922	on the matter of uniform railway gauge (1921) on pillaging of ships' cargoes (1921) on Cockatoo Island Dockyard (1921) upon the loyalty to the British Crown of German Nationals resident in Australia whose property is liable to a charge created by the Treaty of Peace Regulations made under the Treaty of Peace (Germany) Act 1919–1920 (1921)

1923–1924	on the circumstances attending the supposed loss at sea of the steamship "Sumatra" (1923) in connection with sugar purchases by the Commonwealth through Mr. W. E. Davies in September and October, 1920 (1923–1924) in connection with joinery supplied to the War Service Homes Commissioner in March, 1920 (1923–1924) on the Navigation Act (1923–1925) on national insurance (1923–1927) on the method for determining the unimproved value of land held under Crown leases (1924–1925) on the assessment of war service disabilities (1924–1925) to inquire into extracts from the reports in Parliamentary Debates of speeches made by Mr. Scullin in the House of Representatives on 7 and 19 August 1924, in relation to land tax matters (1924–1925) on the finances of Western Australia, as affected by Federation (1924–1925)

1925–1926	on health (1925–1926) on Norfolk Island affairs (1926) on certain matters in connexion with the British Phosphate Commission (1926)

1927–1928	on wireless (1927) on the Edie Creek (New Guinea) leases (1927) on the Moving Picture Industry in Australia (1927–1928) on the Constitution (Australia)

1929–1930	on the coal industry (1929) to inquire into allegations affecting members of the Parliamentary Joint Committee of Public Accounts in connexion with claims made by broadcasting companies against the Commonwealth Government (1930)

1931–1940

1931–1935	on Jacob Johnson (1931) on performing rights (1932–1933) on taxation (1932–1934) on mineral oils and petrol and other products of mineral oils (1933–1935) on the wheat, flour and bread industries (1934–1936) to inquire into and report upon the circumstances associated with the retirement of Lieutenant-Commander Alan Dermot Casey from the Royal Australian Navy (1934) to inquire into the monetary and banking systems at present in operation in Australia (1935–1937)

1936–1940	on doctors' remuneration for national insurance service and other contract practice (1938) regarding the contract for the erection of additions to the General Post Office, Sydney (1939)

1941–1960

1941–1950	to inquire into and report upon the contract or contracts with Abbco Bread Co. Pty. Limited for the supply of bread to the Department of the Army, and other matters (1941) to inquire into circumstances under which certain public monies were used and to whom, and for what purposes such moneys were paid (1941) an inquiry into a statement that there was a document missing from the official files in relation to "The Brisbane Line" (1943) to inquire into and report upon certain transactions of the Sydney Land Sales Control Office, and the Canberra Land Sales Control Office of the Treasury (1947) to inquire into certain transactions in relation to timber rights in the Territory of Papua-New Guinea (1949)

1951–1960	on the Port Augusta to Alice Springs Railway (1951–1952) on television (1953–1954) on espionage (1954–1955)

1961–1980

1961–1970

on alleged improper practices and improper refusal to co-operate with the Victoria Police Force on the part of persons employed in the Postmaster-General's Department in Victoria in relation to illegal gambling (1962–1963)
on loss of HMAS Voyager (1964)
on the statement of Lieutenant Commander Cabban and matters incidental thereto (1967–1968)
into exploratory and production drilling for petroleum in the area of the Great Barrier Reef (1970–1975)

1971–1980

1971–1975	Aboriginal Land Rights Commission (1973–1974) Australian Post Office Commission of inquiry (1973–1974) of Inquiry into land tenures (1973–1976) on petroleum (1973–1976) of Inquiry into the maritime industry (1973–1976) Independent Inquiry into Frequency Modulation Broadcasting (1973–1974) of Inquiry into transport to and from Tasmania (1974–1976) on Australian Government Administration (1974–1976) on human relationships (1974–1978) on intelligence and security (1974–1977) into alleged payments to maritime unions (1974–1976) to inquire into and report upon certain incidents in which Aborigines were involved in the Laverton area (1975–1976) on Norfolk Island (1975–1976)

1975–1980	of Inquiry into drugs (1977–1980) of Inquiry into matters in relation to electoral redistribution Queensland, 1977 (1978) of Inquiry into the efficiency and administration of hospitals (1979–1981) of Inquiry into the viability of the Christmas Island phosphate industry (1979–1980) on the activities of the Federated Ship Painters and Dockers Union (1980–1984)

1981–2000

1981–1990

1981–1985	of Inquiry into Drug Trafficking (1981–1983) into the activities of the Australian Building Construction Employees' and Builders Labourers' Federation (1981–1982) into Australian meat industry (1981–1982) of Inquiry into the activities of the Nugan Hand Group (1983–1985) on the use and effects of chemical agents on Australian personnel in Vietnam (1983–1985) on Australia's security and intelligence agencies (1983–1985) of Inquiry into compensation arising from social security conspiracy prosecutions (1984–1986) into British nuclear tests in Australia (1984–1985) of inquiry into alleged telephone interceptions (1985–1986)

1986–1990	of inquiry into Chamberlain convictions (1986–1987) into grain storage, handling and transport (1986–1988) into Aboriginal Deaths in Custody (1987–1991)

1991–2000

of Inquiry into the Australian Secret Intelligence Service (1994–1995)
of Inquiry into the leasing by the Commonwealth of accommodation in Centenary House (1994)
of Inquiry into the relations between the CAA and Seaview Air (1994–1996)

2001–present

2001–2010	into HIH Insurance (2001–2003) into the Building and Construction Industry (2001–2003) to Inquire into the Centenary House Lease (2004) Inquiry into certain Australian companies in relation to the UN Oil-For-Food Programme (2005–2006) Equine Influenza Inquiry (2008)

2011–present	into Institutional Responses to Child Sexual Abuse (2013–present) into the Home Insulation Program (2013–present) into trade union governance and corruption (2014–present)

Royal Commissions Act 1902 (Cth)

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