Cole Inquiry

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The Cole Inquiry, formally the Inquiry into certain Australian companies in relation to the UN Oil-For-Food Programme was a Royal Commission set up by the Government of Australia in November 2005. Its purpose was 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 Volcker Inquiry was set up to investigate the systematic corruption of the Oil for Food program by Saddam Hussein.

The commission's five volume report was tabled in parliament on 27 November 2006

Contents

[edit] Background

Main article: Oil-for-Food Programme

[edit] 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 was the biggest single source of kickbacks made to the Iraqi government.[citation needed] In exchange for trouble-free disembarkation of wheat purchased under the Oil for food program, AWB paid 'trucking charges' totaling $AU300 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]

[edit] 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:

(a) 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

(b) if so, whether the question of criminal or other legal proceedings should be referred to the relevant Commonwealth, State or Territory agency. [2]

[edit] Commissioner and Counsel

The Royal Commissioner was the Honourable Terence Cole QC a former Judge of Appeal of the New South Wales Supreme Court. The Cole Inquiry was the second Royal Commission Cole had headed. The 2001-2003 Royal Commission 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

[edit] 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] Broad Band Video Clip from ABC TV)

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 (ie. 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."


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[edit] Commentary