The AWB – The Financial Review Column

“There are none so blind as those who will not see.” So said Goldie Hawn in the 1972 film, “Butterflies are Free.” That sentiment can describe those federal ministers claiming they had no reason to investigate corruption by the Australian Wheat Board. John Howard defended this inaction last month when he said, “there was no evidence as distinct from anything else that was put to the government that anything corrupt was occurring”. There were only serious suspicions, accusations and allegations which the government did not want to investigate.

Crass ignorance – another term for negligent naivet© – also applies to the Wheat Export Authority. The WEA was established in 1999 in order, using its words, “to control the export of wheat from Australia and to monitor AWB (International) Ltd’s performance in relation to the export of wheat.” Legislation gave WEA access to wheat contracts which it assessed in order “to understand them and to know the impact they have on growers.” The authority employs seven or eight staff whose sole job is to oversight AWB.

You might thus think that the WEA could deepen our understanding of AWB corruption revealed by the Cole Inquiry. But when quizzed at the Senate Estimates Committee hearings on November 1, last year, the authority had nothing to say.

Senator Rachel Siewert, Australian Greens Senator for Western Australia, asked the chair of WEA, Tim Besley, the first key question: “Were you aware that the AWB had entered into commercial arrangements with the Jordanian Trucking Company?” Besley said “No”. Later Besley added, “There was no indication of it (a Jordanian transport company) at all.”

Senator Christine Milne, Greens Senator for Tasmania, continued the pursuit. “When the transport fee costs went up 400 per cent, did you ask any questions about why that might have been the case since you were given oversight?” But Besley knew nothing: “We did not know that. That is not the kind of information we had.”

A third attempt was made by ALP Senator Kerry O’Brien. “So the wheat Export authority was not aware of the arrangements made by AWB(I) for the transportation and delivery of wheat within Iraq.” For the third time, Besley denied any knowledge.

Besley was confident of his answers because, as he said, the WEA and AWB have a close, continuing dialogue. This extends to board discussions which Besley told Senators were “productive, and getting more productive”. In fact, relationships between regulator and AWB Ltd “are sensible, open and frank”. Senators had nothing to be alarmed about.

But last week, Besley wrote to the chairman of the Senate committee, Senator Bill Heffernan, to advise that his “answer was factually incomplete”. You might ask what part of “No” could be factually incomplete. It was plain wrong.

Besley’s letter acknowledged that WEA indeed knew AWB “was supplying wheat into Iraq under an arrangement that included over land transport by a Jordanian trucking company.” It also knew that prices achieved by AWB for the wheat it exported to Iraq were well above global benchmark prices.

WEA actually knew quite a bit about AWB’s transport services, but its newly found knowledge has its own problems. Besley told Senators that there were very few wheat export sales that are not FOB. “In fact,” Besley said, “I cannot remember any.” The term FOB – Free on Board – refers to contracts where the supplier is only obliged to place the goods on board the ship. All arrangements thereafter – including any land transport in the country of destination – are the responsibility of the buyer.

You might ask what WEA staff at the Senate estimates were doing while Besley was misleading Senators. The chief executive officer of the authority, Glen Taylor was at Besley’s side. He might have whispered corrections, scribbled a note or even politely interrupted. Instead, he allowed his chairman to err relentlessly.

And why has it taken three and a half months for the “factually incomplete” answers to be rectified? It would have been nice to learn whether WEA chose not to see or whether it was just incompetent. At least it has less to monitor now that AWB has been banned from Iraq. But we might never know the answer: the government is preventing the Senate from questioning the matter during these sittings. There are none so blind as those who will not look.

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Living in Canberra
15 years ago

One of the senators should have asked the WEA guys something along the lines of “what exactly is it you do for the $1m odd of taxpayer funding you get each year?”

Proper scrutiny of AWB activities is obviously not one of their activities.

Note to Peter Costello – there’s $1m or so you can rip out of budget spending.